Showing posts with label multinationals. Show all posts
Showing posts with label multinationals. Show all posts

Friday, 9 March 2018

Two perspectives on global economic and social inequality

So you thought trade agreements were really about win-win free trade?

John F. Kennedy School of Government Harvard University, Dani Rodrik, excerpts from What Do Trade Agreements Really Do?, February 2018:

As trade agreements have evolved and gone beyond import tariffs and quotas into regulatory rules and harmonization, they have become more difficult to fit into received economic theory. Nevertheless, most economists continue to regard trade agreements such as the Trans Pacific Partnership (TPP) favorably. The default view seems to be that these arrangements get us closer to free trade by reducing transaction costs associated with regulatory differences or explicit protectionism. An alternative perspective is that trade agreements are the result of rent-seeking, self-interested behavior on the part of politically well-connected firms – international banks, pharmaceutical companies, multinational firms. They may result in freer, mutually beneficial trade, through exchange of market access. But they are as likely to produce purely redistributive outcomes under the guise of “freer trade…..

The consensus in favor of the general statement supporting free trade is not a surprise. Economists disagree about a lot of things, but the superiority of free trade over protection is not controversial. The principle of comparative advantage and the case for the gains from trade are crown jewels of the economics profession. So the nearly unanimous support for free trade in principle is understandable. But the almost identical level of enthusiasm expressed for the North American Free trade Agreement—that is, for a text that runs into nearly 2,000 pages, negotiated by three governments under pressures from lobbies and special interests, and shaped by a mix of political, economic, and foreign policy objectives—is more curious. The economists must have been aware that trade agreements, like free trade itself, create winners and losers. But how did they weight the gains and losses to reach a judgement that US citizens would be better off “on average”? Did it not matter who gained and lost, whether they were rich or poor to begin with, or whether the gains and losses would be diffuse or concentrated? What if the likely redistribution was large compared to the efficiency gains? What did they assume about the likely compensation for the losers, or did it not matter at all? And would their evaluation be any different if they knew that recent research suggests NAFTA produced minute net efficiency gains for the US economy while severely depressing wages of those groups and communities most directly affected by Mexican competition?

Perhaps the experts viewed distributional questions as secondary in view of the overall gains from trade. After all, opening up to trade is analogous to technological progress. In both cases, the economic pie expands while some groups are left behind. We did not ban automobiles or light bulbs because coachmen and candle makers would lose their jobs. So why restrict trade? As the experts in this survey contemplated whether US citizens would be better off “on average” as a result of NAFTA, it seems plausible that they viewed questions about the practical details or the distributional questions of NAFTA as secondary in view of the overall gains from trade.

This tendency to view trade agreements as an example of efficiency-enhancing policies that may nevertheless leave some people behind would be more justifiable if recent trade agreements were simply about eliminating restrictions on trade such as import tariffs and quotas. In fact, the label “free trade agreements” does not do a very good job of describing what recent proposed agreements like the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), and numerous other regional and bilateral trade agreements actually do. Contemporary trade agreements go much beyond traditional trade restrictions at the border. They cover regulatory standards, health and safety rules, investment, banking and finance, intellectual property, labor, the environment, and many other subjects besides. They reach well beyond national borders and seek deep integration among nations rather than shallow integration, to use Robert Lawrence’s (1996) helpful distinction. 

According to one tabulation, 76 percent of existing preferential trade agreements covered at least some aspect of investment (such as free capital mobility) by 2011; 61 percent covered intellectual property rights protection; and 46 percent covered environmental regulations (Limão 2016)…..

Consider first patents and copyrights (so-called “trade-related intellectual property rights” or TRIPs). TRIPs entered the lexicon of trade during the Uruguay Round of multilateral trade negotiations, which were completed in 1994. The US has pushed for progressively tighter rules (called TRIPs-plus) in subsequent regional and bilateral trade agreements. Typically TRIPs pit advanced countries against developing countries, with the former demanding stronger and lengthier monopoly restrictions for their firms in the latter’s markets. Freer trade is supposed to be win-win, with both parties benefiting. But in TRIPs, the advanced countries’ gains are largely the developing countries’ losses. Consumers in the developing nations pay higher prices for pharmaceuticals and other research-intensive products and the advanced countries’ firms reap higher monopoly rents. One needs to assume an implausibly high elasticity of global innovation to developing countries’ patents to compensate for what is in effect a pure transfer of rents from poor to rich countries. That is why many ardent proponents of free trade were opposed to the incorporation of TRIPs in the Uruguay Round (e.g., Bhagwati et al. 2014). Nonetheless, TRIPs rules have not been dropped, and in fact expand with each new FTA. Thanks to subsequent trade agreements, intellectual property protection has become broader and stronger, and much of the flexibility afforded to individual countries under the original WTO agreement has been eliminated (Sell 2011).

Second, consider restrictions on nations’ ability to manage cross-border capital flows. Starting with its bilateral trade agreements with Singapore and Chile in 2003, the US government has sought and obtained agreements that enforce open capital accounts as a rule. These agreements make it difficult for signatories to manage cross-border capital flows, including in short-term financial instruments. In many recent US trade agreements such restrictions apply even in times of macroeconomic and financial crisis. This has raised eyebrows even at the International Monetary Fund (IMF, Siegel 2013). Paradoxically, capital account liberalization has become a norm in trade agreements just as professional opinion among economists was becoming more skeptical about the wisdom of free capital flows. The frequency and severity of financial crises associated with financial globalization have led many experts to believe that direct restrictions on the capital account have a second-best role to complement prudential regulation and, possibly, provide temporary breathing space during moments of extreme financial stress. The IMF itself, once at the vanguard of the push for capital-account liberalization, has officially revised its stance on capital controls. It now acknowledges a useful role for them where more direct remedies for underlying macroeconomic and financial imbalances are not available. Yet investment and financial services provisions in many FTAs run blithely against this new consensus among economists. A third area where trade agreements include provisions of questionable merit is socalled “investor-state dispute settlement procedures” (ISDS). These provisions have been imported into trade agreements from bilateral investment treaties (BIT). They are an anomaly in that they enable foreign investors, and they alone, to sue host governments in special arbitration tribunals and to seek monetary damages for regulatory, tax, and other policy changes that reduce their profits. Foreign investors (and their governments) see ISDS as protection against expropriation, but in practice arbitration tribunals interpret the protections provided more broadly than under, say, domestic US law (Johnson et al., 2015). Developing countries traditionally have signed on to ISDS in the expectation that it would compensate for their weak legal regimes and help attract direct foreign investment. But ISDS also suffers from its own problems: it operates outside accepted legal regimes, gives arbitrators too much power, does not follow or set precedents, and allows no appeal. Whatever the merits of ISDS for developing nations, it is more difficult to justify its inclusion in trade agreements among advanced countries with well-functioning legal systems (e.g. the prospective Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and European countries).

Read the full paper here.

So you thought globalisation was a good idea?

Harvard Business Review, Lucas Chancel, 40 Years of Data Suggests 3 Myths About Globalization, 2 March 2018:

Globalization has led to a rise in global income inequality, not a reduction
Inequality between individuals across the world is the result of two competing forces: inequality between countries and inequality within countries. For example, strong growth in China and India contributed to significant global income growth, and therefore, decreased inequality between countries. However, inequality within these countries rose sharply. The top 1% income share rose from 7% to 22% in India, and 6% to 14% in China between 1980 and 2016.

Until recently, it has been impossible to know which of these two forces dominates globally, because of lack of data on inequality trends within countries, which many governments do not release publicly or uniformly. The World Inequality Report 2018 addresses this issue, relying on systematic, comparable, and transparent inequality statistics from high-income and emerging countries.

The conclusion is striking. Between 1980 and 2016, inequality between the world’s citizens increased, despite strong growth in emerging markets. Indeed, the share of global income accrued by the richest 1%, grew from 16% in 1980 to 20% by 2016. Meanwhile the income share of the poorest 50% hovered around 9%. The top 1% — individuals earning more than $13,500 per month — globally captured twice as much income growth as the bottom 50% of the world population over this period.

Income doesn’t trickle down

The second belief contests that high growth at the top is necessary to achieve some growth at the bottom of the distribution, in other words that rising inequality is necessary to elevate standards of living among the poorest. However, this idea is at odds with the data. When we compare Europe with the U.S., or China with India, it is clear that countries that experienced a higher rise in inequality were not better at lifting the incomes of their poorest citizens. Indeed, the U.S. is the extreme counterargument to the myth of trickle down: while incomes grew by more than 600% for the top 0.001% of Americans since 1980, the bottom half of the population was actually shut off from economic growth, with a close to zero rise in their yearly income. In Europe, growth among the top 0.001% was five times lower than in the U.S., but the poorest half of the population fared much better, experiencing a 26% growth in their average incomes. Despite having a consistently higher growth rate since 1980, the rise of inequality in China was much more moderate than in India. As a result, China was able to lift the incomes of the poorest half of the population at a rate that was four times faster than in India, enabling greater poverty reduction.

The trickle-down myth may have been debunked, but its ideas are still rooted in a number of current policies. For example, the idea that high income growth for rich individuals is a precondition to create jobs and growth at the bottom continues to be used to justify tax reductions for the richest, as seen in recent tax reform in the U.S. and France. A closer look at the data demands we rethink the rationale and legitimacy of such policies. 

Policy – not trade or technology – is most responsible for inequality

It is often said that rising inequality is inevitable — that it is a natural consequence of trade openness and digitalization that governments are powerless to counter. But the numbers presented above clearly demonstrate the diversity of inequality trajectories experienced by broadly comparable regions over the past decades. The U.S. and Europe, for instance, had similar population size and average income in 1980 — as well as analogous inequality levels. Both regions have also faced similar exposure to international markets and new technologies since, but their inequality trajectories have radically diverged. In the U.S., the bottom 50% income share decreased from 20% to 10% today, whereas in Europe it decreased from 24% to 22%.

Rather than openness to trade or digitalization, it is policy choices and institutional changes that explain divergences in inequality. After the neoliberal policy shift of the early 1980s, Europe resisted the impulse to turn its market economy into a market society more than the US — evidenced by differences on key policy areas concerning inequality. The progressivity of the tax code — how much more the rich pay as a percentage — was seriously undermined in the U.S., but much less so in continental Europe. The U.S. had the highest minimum wage of the world in the 1960s, but it has since decreased by 30%, whereas in France, the minimum wage has risen 300%. 

Access to higher education is costly and highly unequal in the U.S., whereas it is free in several European countries. Indeed, when Bavarian policymakers tried to introduce small university fees in the late 2000s, a referendum invalidated the decision. Health systems also provide universal access to good-quality healthcare in most European countries, while millions of Americans do not have access to healthcare plans.

Monday, 5 February 2018

The Australian Face of UK-based Noble Caledonia Cruise Line

The Noble Caledonia Limited cruise line would like the option of extending the number of its cruise days this coming October when it boards its UK passengers on the MV Caledonian Sky for its Australian Coastal Odyssey down the east coast of Australia.

This “small” cruise ship of 4,200 gross tonnage, dead weight of 645t, 90.6m in length, 15.3m wide, with a 4.25 maximum draft, will enter the Port of Yamba-Clarence River across a difficult bar at the river mouth in a month where coastal storms and strong wind warnings are not uncommon.

A ship with a reputation for damaging reefs will attempt this crossing in close proximity to a culturally important reef protected by Native Title.

It will ignore potential risk - not just to the ship and marine environment but to race relations in the Clarence Valley should the ship’s captain collide for a third time with a mapped underwater natural feature.

Noble Caledonia will be sending its cruise ship into the Clarence River estuary because it can – reaping the benefit of insistent and persistent lobbying of the NSW Berejiklian Government by the international cruise industry.

Which included meetings last year between Minister for Roads, Maritime and Freight & Nationals MP for Oxley Melinda Pavey and Royal Caribbean (28 February & 8 June), Carnival Australia (10 March, 8 June & 8 July), Carnival Global (21 March), Norwegian Cruise Lines (8 June), Cruise Line International Association (8 June & 21 June). As well as meetings between cruise ship industry representatives and Deputy Premier, Minister for Regional NSW, Minister for Skills, Minister for Small Business, Nationals MP for John Barilaro, Minister for Tourism and Major Events, and Assistant Minister for Skills, Nationals MP for Northern Tablelands, Adam Marshall. Minister for Trade, Tourism and Major Events and Minister for Sport, Nationals MLC Niall Blair and, Minister for Transport and Infrastructure, Nationals MP for Bega Andrew Constance.

However, the then predominately British and Swedish owner-shareholders of Noble Caledonia Limited (UK) went one step further when they first contemplated a move into Australian waters. 

They formed a partnership with the APT Group (owned by wealthy Victorian businessman Geoff McGeary) in 2012 - thereby providing themselves with a number of Australian beards and the lobbying services of a political donor to the Liberal Party of Australia who had through this partnership become a significant shareholder in the cruise line.

Meet these alleged beards………………..

Christopher Phillips "Chris" HALL  – Group Managing Director of Noble Caledonia Limited and Noble Caledonia Holdings Limited since 7 May 2015, as well as Group Manager APT Group since July 2014 – allegedly still resident in Australia.

Ross Malcolm KEMP – Group Finance Director of  Noble Caledonia Limited and Noble Caledonia Holdings Limited since 9 October 2014, as well as Group Finance Director APT Group since 2012 – allegedly still resident in Australia.

Tuesday, 2 January 2018

Senate Inquiry into Corporate Tax Avoidance continues to sit in 2018

"Exxon’s primary Australian company is directly owned by a shell company in the Netherlands and the Dutch company is owned by another subsidiary in the Bahamas." [Tax Justice Network submission to Senate Economics References Committee Inquiry into Corporate Tax Avoidance]

ExxonMobil Australia Pty Ltd operates under the brands ExxonMobil Australia, Esso and Mobil. It declared no taxable income in 2013-14, 2014-15 and 2015-16 despite having generated a total income during these years of 24.7 billion within this country.  [Based on Australian Taxation Office Report of Entity Tax Information data]

The Senate Economics References Committee Inquiry into Corporate Tax Avoidance commenced on 2 October 2014 and continues to sit until 30 May 2018.

The Inquiry’s 154 submissions to date make for interesting reading and can be accessed here (1 to 127 ) and here (128 to 154).

Monday, 11 December 2017

Adani Group still cannot find financial backers for Galilee Basin mega coal mine

Indian multinational, the family-owned Adani Group, appears to have financed its Queensland mining venture with debt.

The book value of Adani Enterprises' Carmichael mine project was just under US$2.3bn by mid-2017. While latest report shows its debt has risen by almost US$400m to US$3.83bn.

This debt is further complicated by fraud allegations and investigations by the Indian Government.

The Guardian, 7 December 2017:

Adani’s operations in Australia appear to be hanging on by a thread, as activists prove effective at undermining the company’s chances of getting the finance it needs.

China seems to have ruled out funding for the mine, which means it’s not just Adani’s proposed Carmichael coalmine that is under threat, but also its existing Abbot Point coal terminal, which sits near Bowen, behind the Great Barrier Reef.

The campaign against the mine has been long. Environmentalists first tried to use Australia’s environmental laws to block it from going ahead, and then failing that, focused on pressuring financial institutions, first here, and then around the world.

The news that Beijing has left Adani out to dry comes as on-the-ground protests against construction of the mine pick up. Two Greens MPs, Jeremy Buckingham and Dawn Walker, have been arrested in Queensland for disrupting the company’s activities.

Is China’s move the end of the road for Adani’s mega coalmine in Australia, and will the Adani Group be left with billions of dollars in stranded assets?.........

While threats to reputational damage were not effective against Adani Group, since it is family-owned, the same was not true of Australian banks, which were targeted heavily by activists.
And one by one, each of the big four Australian banks ruled out financing the mine.

The first of the big four banks declared it would not lend to the project two years ago. NAB distanced itself from the mine in September 2015 and ANZ followed suit in December.
Then in April this year Westpac became the third of the big banks to rule out funding the project, drawing criticism from resources minister, Matthew Canavan, who said the bank had a conflict of interest because of its interest in other coal-producing regions, and called for a boycott of the bank.

Undeterred, and in the face of a large campaign by environmental groups, the Commonwealth bank followed suit in August this year.

By then Adani had seen the writing on the wall, and had shifted to seek finance from overseas institutions. It entered negotiations with the state-owned China Machinery Engineering Corporation (CMEC), which was thought to raise the potential of subsidised Chinese government loans.

The Australian government, which was seeking to give Adani its own subsidised loan, had supported the company’s efforts in China, according to a freedom of information request by the Australia Institute that reveals “several hundred pages” relating to formal representations to foreign financiers by the Department of Foreign Affairs and Trade…….

Friday, 8 December 2017

It should come as no surprise that the Adani Group is offering traditional owners compensation which is well below industry standard

We, the Wangan and Jagalingou people, are the Traditional Owners of the land in Queensland’s Galilee Basin. Corporate conglomerate, Adani, wants to use our ancestral lands for their Carmichael coal mine.
We do hereby firmly REJECT a Land Use Agreement with Adani for the Carmichael mine on our traditional lands.
We DO NOT consent to the Carmichael mine on our ancestral lands.
We DO NOT accept Adani’s “offers” to sign away our land and our rights and interests in it. We will not take their “shut up” money.
We will PROTECT and DEFEND our Country and our connection to it." []

ABC News, 1 December 2017:

A hotly contested deal between Adani and traditional owners of its proposed Carmichael mine site in Queensland's Galilee Basin would deliver compensation "well below" what most big miners pay, according to a new analysis.

The Wangan and Jagalingou (W&J) people would only get 0.2 per cent of Adani's earnings from the mine, less than half the industry average, respected mining industry outfit Economics Consulting Services has found.

Its report, obtained by the ABC, was commissioned by six W&J representatives whose looming court challenge to the deal stands as the final legal hurdle to Adani's contentious mega-mine.

It found the W&J people would earn up to $145 million over 30 years, out of the project's estimated $77.4 billion in gross revenue, a share which was "well below industry benchmark standards".

The benchmarks for such deals usually ranged from 0.75 per cent to 0.35 per cent.

Only 11 per cent of the deal would come to the W&J people in cash, up to $17.4 million over 30 years, or about $2,300 a year per adult member of the clan.

Report author Murray Meaton, who was awarded an Order of Australia in 2014 for services to the mining industry, found the benefits to the W&J people would be "dramatically lower" if job promises for locals fell short as they did "in most jurisdictions and agreements".

To gain finance for the $21 billion project, Adani needs an Indigenous Land Use Agreement (ILUA) with the W&J people, or it must call on the Queensland Government to forcibly extinguish any native title claim over the mine site in the Galilee Basin…….

The Adani supporters in the W&J have argued the mine is inevitable and they need to seize the miner's offer to economically benefit their people, including some who live in Queensland's more disadvantaged communities.

However, the anti-Adani group object to the destruction of their ancestral lands and culture, and contest the legitimacy of the meeting that approved the Adani deal.

The dispute will go to trial in the federal court in Brisbane in March.

The case has pushed back Adani's deadline on clinching finance for the project, which remains in doubt.

Wangan and Jagalingou have been defending their country in court since at least 2008.

The Guardian, 3 December 2017:

Traditional owners opposed to the Adani Carmichael coalmine have filed an application for an injunction with the federal court to prevent the native title tribunal from signing off on an Indigenous land use agreement before the outcome of a court challenge.

The application was filed following a meeting of the W&J traditional owners council in Brisbane on Saturday, where the 120 attendees voted against the Ilua for the fourth time since it was proposed in 2012.

Echo NetDaily, 6 December 2017:

North Coast Greens MLC Dawn Walker and NSW Greens mining spokesperson Jeremy Buckingham were arrested yesterday by Queensland police after taking part in a blockade of the Adani Carmichael coal mine rail construction site at Belyando, 270km west of Bowen.

The MPs were arrested at 6:35am along with a dozen other climate activists and charged with trespass unlawfully on a place of business.

Ms Walker said, ‘It was a very important day for me, stopping work on the Adani mine and being arrested with climate activists who understand the importance of preventing this destructive project from going ahead,’ said Greens MP Dawn Walker.

‘I was proud to stand with traditional owners who have said ‘no means no’ to Adani, and made it clear they will not be surrendering their land and water to this coal corporation.

‘Although this mine is miles from anywhere, the eyes of all Australia are on it. We have travelled days to get here but believe many more will follow.

Tuesday, 5 December 2017

U.S. court directs four American tobacco companies to publicly set the record straight on the dangers of their products

World Health Organisation (WHO), Statement, 29 November 2017:

GENEVA - In major victories for tobacco control efforts, four U.S. tobacco companies are publishing court-ordered “corrective statements” to set the record straight on the dangers of their products, while a major French bank has announced it will divest its interests in the tobacco industry.

Dr Douglas Bettcher, Director of WHO’s Prevention on Noncommunicable diseases department, says these moves reinforce to the world the need for accelerated action to protect people from tobacco.

“The tobacco control community has been saying for decades that tobacco kills, is addictive and that its manufacturers have known this, while profiting from the suffering of millions of their customers,” says Dr Bettcher. “But by being ordered by the courts to issue these corrective statements in American newspapers and on TV stations, the industry itself has been forced to come clean and acknowledge once and for all that its tobacco products kill.”

The publication of the corrective statements, which started 26 November 2017, follows a lawsuit filed by the U.S. Justice Department in 1999 under the Federal Racketeer Influenced and Corrupt Organizations law. The Federal Court first ordered tobacco companies to implement these corrective statement adverts in 2006, but years of tobacco industry appeals blocked their publication.

But last month, a U.S. court directed that four American companies, Philip Morris USA, R.J. Reynolds Tobacco, Lorillard and Altria, publish the corrective statements on the health effects of tobacco use, second-hand smoke, the false sale and advertising of low tar and light cigarettes as less harmful than regular cigarettes, that smoking and nicotine are highly addictive, and that they have designed cigarettes to enhance the delivery of nicotine.

The statements, appearing in advertisements paid for by the tobacco industry, were ordered to appear in more than 50 U.S. newspapers, as well as on American television stations.

Also, on 24 November, French bank BNP Paribas announced that it would stop its financing and investment activities related to tobacco companies, including producers, wholesalers and traders.

In its announcement, the bank acknowledged the efforts by WHO, and the focus of the WHO Framework Convention on Tobacco Control (WHO FCTC), to ensure people have access to the highest standard of health and “the importance of measures regarding the reduction of demand and supply in order to meet this objective.”

BNP is the latest financial institution to declare it is ending its association with the tobacco industry, including Axa SA and the Bank of New Zealand.

“The message we must take from all this is that the industry cannot be trusted, not now, and not in the future when it tries to market new products as less harmful, like heat not burn, and by funding new organizations that purport to be working for a smoke-free world,” says Dr Bettcher.

The admissions by the U.S. tobacco companies that its products kill and are designed for addiction should strengthen national tobacco control efforts, including implementation by governments of commitments in the WHO FCTC.

To assist in country-level implementation of the WHO FCTC, WHO has introduced the MPOWER package of technical measures and resources, each of which reflects one or more of the demand reduction provisions of the Convention.

These include monitoring tobacco use and the impact of prevention policies; protecting people from tobacco smoke by introducing smoke-free public and workplaces; offering people help to quit tobacco use; warning about the dangers of tobacco use, including by implementing graphic health warnings and plain packaging; enforcing bans on tobacco advertising, promotion and sponsorship; and raising excise taxes on tobacco.

Thursday, 19 October 2017

So troubled multinational Serco's staff are going to answer phone calls made to Centrelink in a Turnbull Government pilot program?

Multinational Serco Group plc registered in England and Wales, with revenue in 2016 of an est. $5 billion and an underlying trading profit of est. $139 million, has made the news again.

One of its subsidiaries, SERCO CITIZEN SERVICES PTY LTD1 ABN:89 062 943 640, won this $53.75 million federal government contract commencing 7 September 2017:

CN ID: CN3460117
Agency: Department of Human Services
Publish Date: 11-Oct-2017
Category: Temporary personnel services
Contract Period:
7-Sep-2017 to 29-Oct-2019
Contract Value (AUD): $53,752,454.80
Description: Centrelink Call Centre Enhancements Initiative

On 11 October 2017 it was reported that the Minister for Human Services Alan Tudge stated this contract was for a pilot commencing in late October 2017 would help reduce Centrelink call wait times.

An est. 250 Melbourne-based Serco staff will take calls about welfare payments in the three-year pilot program.

Of course Serco will comply, Minister.

Just as it has on every single contract in the past......

Stolen Laptop Exposes Personal Data on 207,000 Army Reservists. Serco held the data on reservists as part of its contract with the U.S. Army’s Family and Morale, Welfare and Recreation division. As a result, Dahms said, some of the data on the missing laptop may belong to dependents and spouses of U.S. Army reservists, 13 May 2010

Serco's paper trailer raises accountability questions. Crikey has taken a closer look at the extent that Serco contracts outsources to other companies and can reveal that millions of dollars from the detention contract has ended up in some startling places, 1 November 2010

Serco employee suspected of Victoria Police breach. Man accused of adjusting 67,541 traffic infringement records, 15 April 2011

Serco operates and maintains a surprisingly large and diverse range of services in both the UK and Australia, as well as in several other countries. Its website lists some examples of the scale of its operations including: traffic management systems covering more than 17,500kms of roads worldwide, managing 192,000 square miles of airspace in five countries, managing education authorities on behalf of local governments, and providing defence support services worldwide.[2] Serco also manages a number of hospitals, prisons and detention centres, and is involved in a host of other services.[3]…..Focussing on the company Serco, there have been numerous reports of instances where its service provision has been sub-standard, high-cost, has eliminated diversity, or has lacked accountability. Putting this focus on Serco’s faults is not to say that it is any more prone to failures than other corporations in this area, or that it is always unsuccessful in its service provision. Rather, the point is to show clearly the dangers of privatisation, and why it must not be accepted as a universal good, 7 March 2012

Sources in the justice system blamed the foul-up on staffing issues at Serco. One said: "This sort of thing happens every week." The seven-year PECS deal has turned into a horror show for Serco. It faces allegations that it doctored transfer records to flatter its performance, with five Serco staff under investigation by the City of London police. That is not its only problem contract. There are separate claims that, along with rival outsourcer G4S, it overcharged taxpayers on a deal to put electronic tags on criminals, 17 October 2013

Private contractors Serco has agreed to repay £68.5million to the taxpayer after over-charging for tagging criminals. The firm was investigated by the Ministry of Justice over claims that together with rival company G4S it over-charged for tens of thousands of criminals, including those who had left the country, been returned to prison or even died, 19 December 2013

Outsourcing giant Serco is embroiled in a fresh misuse of public funds scandal after a company it set up overcharged NHS hospitals millions of pounds, 27 August 2014

Serco is failing, but is kept afloat thanks to Australia's refugee policy. It’s a sign of the times that a company like Serco, with murky financial statements masking its true economic shape, is continually rewarded for failure by new and larger contracts, 11 November 2014

Serco turned 'blind eye' to corruption in UK immigration jail, court hears, 26 February 2015

Serco has brought a culture of profiteering, bullying, intimidation and corruption to Mt Eden prison, a Whangarei barrister says.The comments come as controversy surrounds the private company that operates the prison, and with Corrections boss Ray Smith revealing a third incident at the facility has left him no choice but to seek legal advice in regards to the contract, 24 July 2015

On Monday, Serco was fined $NZ500,000 ($A328,750) and was prohibited from overseeing operations at the correctional facility while an internal investigation took place. The fine came after six disturbing videos — shot on a smartphone and smuggled inside the prison — surfaced on YouTube earlier this month. The videos showed prisoners participating in organised ‘fight clubs’ as large groups of fellow inmates watch on. Inmates were also seen blatantly smoking and drinking alcohol in the videos, which were captured without the knowledge of staff. However, the NZ prison officers union said bosses knew about the fight club for up to 18 months, but did nothing about it, 29 July 2015

A GUARD at the Wickham Point Detention Centre in Darwin has been fired after it was found he was trying to coerce female detainees into having sex with him. Serco, the company contracted to run Australia’s immigration facilities, said in a statement to the NT News that a detainee services officer from Wickham Point was dismissed in late May following two separate complaints from female detainees, 6 August 2015

Serco targets further cost cutting as it seeks to keep its profits on track. Serco boss Rupert Soames has said the company still has costs to cut before it is trading at full strength, as the firm enters the middle stage of its five-year turnaround plan. He said that there were plans to further reduce overheads and make Serco’s processes more efficient, as well as bringing down some of its IT costs. “We’ve still got a lot of costs that we have to get out of the business,” he said, 3 August 2017.


1. Serco provides care and welfare services, on behalf of the Department of Immigration and Border Protection, to people living in Australian onshore immigration centres whilst their visa status is resolved. Since 2009, more than 61,000 individuals have been in our care, representing more than 20 different cultural and linguistically diverse communities. Within the Australian justice system, Serco operates three prisons: the Southern Queensland Correctional Centre (Queensland) with 400 beds, Acacia Prison (Western Australia) with 1400 beds and the Wandoo Reintegration Facility (Western Australia) with 80 beds.

Wednesday, 30 August 2017

CBS Corporation announces deal to buy Network Ten

CBS Corporation, media release, 27 August 2017:

 Deal to Buy Network Ten Will Accelerate CBS’ Global Growth Strategy in Key English-speaking Market
Acquisition Also Paves the Way to Launch
CBS All Access in Australia

SYDNEY, AMSTERDAM AND NEW YORK – August 27, 2017 – CBS Corporation (NYSE: CBS.A and CBS) has agreed to acquire Network Ten, one of three major commercial broadcast networks in Australia, it was announced today by Chairman and CEO Leslie Moonves. This transaction adds Network Ten to CBS Corporation’s global content and distribution portfolios. In addition to core linear channel TEN, the deal includes digital terrestrial television channel (DTT) ELEVEN, which CBS already owns a 33 per cent stake, the DTT channel ONE and Network Ten’s rapidly growing digital platform, TENPLAY.

At the same time, by leveraging Network Ten’s linear and digital assets, CBS will also launch CBS All Access, the Company’s digital subscription video on-demand service, in the Australian market. This marks another international territory announced for CBS All Access this month. The Company recently unveiled plans to make the service available in Canada next year.
“Network Ten is a prime broadcasting asset with over half a century of experience and brand equity in Australia,” said Leslie Moonves, Chairman and CEO, CBS Corporation. “We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar.”

“Network Ten and CBS have enjoyed a close working relationship for nearly two decades, and now CBS will continue to provide Network Ten with access to the very best in U.S. content. We also look forward to working with the outstanding team at Network Ten to enhance and expand on its great legacy of Australian news, drama, reality and sports programming,” said Armando Nuñez, President and CEO, CBS Studios International. “This acquisition not only presents CBS with considerable broadcasting opportunities in Australia, but also allows for further multi-platform distribution and growth.”

The transaction will be completed in accordance with the Australian voluntary administration process and is subject to certain regulatory approvals.

About CBS Corporation:

CBS Corporation (NYSE: CBS.A and CBS) is a mass media company that creates and distributes industry-leading content across a variety of platforms to audiences around the world. The Company has businesses with origins that date back to the dawn of the broadcasting age as well as new ventures that operate on the leading edge of media. CBS owns the most watched television network in the U.S. and one of the world’s largest libraries of entertainment content, making its brand — “the Eye” — one of the most recognized in business. The Company’s operations span virtually every field of media and entertainment, including cable, publishing, radio, local TV, film, and interactive and socially responsible media. CBS’ businesses include CBSTelevision Network, The CW (a joint venture between CBS Corporation and Warner Bros. Entertainment), CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Consumer Products, CBS Home Entertainment, CBSInteractive, CBS Films, Showtime Networks, CBS Sports Network, Pop (a joint venture between CBS Corporation and Lionsgate), Smithsonian Networks, Simon & Schuster, CBS Television Stations, CBS Radio and CBS EcoMedia. For more information, go to

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Monday, 21 August 2017

I wonder if Liberal and Nationals MPs and senators remember that Adani's corporate structure in Australia is allegedly also geared towards siphoning money into tax havens?

The Guardian, 16 August 2017:

A global mining giant seeking public funds to develop one of the world’s largest coal mines in Australia has been accused of fraudulently siphoning hundreds of millions of dollars of borrowed money into overseas tax havens.

Indian conglomerate the Adani Group is expecting a legal decision in the “near future” in connection with allegations it inflated invoices for an electricity project in India to shift huge sums of money into offshore bank accounts.

Details of the alleged 15bn rupee (US$235m) fraud are contained in an Indian customs intelligence notice obtained by the Guardian, excerpts of which are published for the first time here.

The Directorate of Revenue Intelligence (DRI) file, compiled in 2014, maps out a complex money trail from India through South Korea and Dubai, and eventually to an offshore company in Mauritius allegedly controlled by Vinod Shantilal Adani, the older brother of the billionaire Adani Group chief executive, Gautam Adani.

Vinod Adani is the director of four companies proposing to build a railway line and expand a coal port attached to Queensland’s vast Carmichael mine project.

The proposed mine, which would be Australia’s largest, has been the source of years of intense controversy, legal challenges and protests over its possible environmental impact.

Expanding the coal port to accommodate the mine will require dredging an estimated 1.1m cubic metres of spoil near the Great Barrier Reef marine park. Coal from the mine will also produce annual emissions equivalent to those of Malaysia or Austria according to one study.

One of the few remaining hurdles for the Adani Group is to raise finance to build the mine as well as a railway line to transport coal from the site to a port at Abbot Point on the Queensland coast.

To finance the railway Adani hopes to persuade the Northern Australia Infrastructure Facility (Naif), an Australian government-backed investment fund, to loan the Adani Group or a related entity about US$700m (A$900m) in public money.

Adani family’s Australian corporate structure…..

ABC News, 14 March 2017:

Up to $3 billion from Adani's planned Carmichael coal mine will be shifted to a subsidiary owned in the Cayman Islands if the controversial project goes ahead, an analysis of company filings shows.

An "overarching royalty deed" gives a shell company rights to receive a $2-a-tonne payment, rising yearly by the inflation rate, beyond the first 400,000 tonnes mined in each production year for two decades.

The company with this entitlement is ultimately owned by Atulya Resources Limited, a secretive entity registered in the Cayman Islands, and controlled by the Adani family.

"In plain English, the upshot for the Adani family is [that] if the mine goes ahead, they receive a $2-a-tonne payment, so up to $3 billion, via a Cayman Islands company, a company owned in a tax haven," says Adam Walters, principal researcher and Energy Resource Insights.

With a production capacity of 60 million tonnes or more a year, that amounts to about $120 million per annum in payments, increasing each year in line with the CPI, potentially flowing offshore.

"I would describe it as a structure that means that the Adani family enriches themselves if the mine goes ahead but that other shareholders are impoverished," associate professor Thomas Clarke, director of the Centre for Corporate Governance at UTS told the ABC.

"The worry is that this may be just the beginning.

"That the Adani family have the ability to shift cash and assets around at will and in the future they may well do so at the cost of shareholders and the Queensland economy."

He said the billions flowing to the Adani private company would come at the expense of minority shareholders in the company listed on the Bombay stock exchange which ultimately owns the Carmichael mine.

How Adani acquired the right to this multi-billion-dollar revenue stream is a tale in itself.

In 2010, Adani Mining Pty Ltd bought the coal tenement that is set to become the Carmichael mine from the now defunct Linc Energy.

Part of the sale involved Adani Mining giving Linc Energy an "overriding royalty deed" which entitled it to receive $2-a-tonne for all coal mined beyond the first 400,000 tonnes in any production year.

Linc Energy informed investors at the time could be worth "over $120 million per annum" and up to $3 billion over the course of the royalty right.

But in August 2014, in dire financial straits, Linc Energy agreed to sell the royalty deed back to Adani at a fire sale price: just $150 million.

The obvious course would have been to extinguish the royalty deed, because it represented a multi-billion-dollar liability for the mine which is ultimately owned by Adani Enterprises Ltd, the Bombay-stock exchange listed company.

Instead, the royalty deed "was assigned by Linc Energy Limited to Carmichael Rail Network Pty Ltd as trustee for Carmichael Rail Network Trust," notes in financial reports of Adani Mining Pty Ltd say.

Carmichael Rail Network is one of a group of companies behind the proposed North Galilee Basin rail line, which Adani is currently seeking a subsidised loan of up to $1 billion from the Federal Government's Northern Australia Infrastructure Facility to build.

"What this means is that one of the companies currently seeking up to $1 billion in public subsidy is going to profit to the tune of up to $3 billion if the mine goes ahead," Mr Walters said.

Adani Mining Pty Ltd, the proponent of the Carmichael mine and the holder of its environmental approvals, appears to have lent Carmichael Rail the funds to buy the royalty deed.


The Guardian, 21 August 2015:

We know that Abbott loves coal and thinks that it is “good for humanity”. Is that why he is prepared to back a financially risky project?

Is it the “10,000” jobs that government ministers say will come from the project (remembering that Adani’s own consultant has said that those numbers were vastly overblown and that Carmichael would result in less less than 1500 jobs).

Could it be the prospect of cash from coal royalties? Maybe.

Does the substantial media coverage from the mine just give the Abbott Government another opportunity to tell the public that all environmentalists are economic saboteurs who want to take away people’s jobs and come in the dead of night to steal your babies? Possibly.

But could there be another causal factor that has contributed to the way Australian politicians have forcefully backed Adani for so many years?

Could that other factor be the close relationships that the company has managed to forge at the highest levels with Australia’s political leaders?

Whenever an Australian leader sets foot in India, it seems that a meeting with Gautam Adani is never more than a figurative (and sometimes literal) flight in a private jet away.

There’s evidence of this going back at least as far as October 2010 and its there in the records of trade missions tabled before parliaments.

Let’s peruse together.

In October 2010, Queensland’s then Premier Anna Bligh travelled to India on a trade mission to promote the state’s bid to host the Commonwealth Games and “strengthen Queensland’s position as an ally and destination for future trade and investment in the eyes of the Indian market and nation leaders”.

report tabled to the Queensland Parliament shows that Bligh’s first official meeting with Indian figures was with Adani, where the company’s owner Gautam Adani and his international development executive Harsh Mishra got to quiz the Premier about policies relating to rail lines, underground coal gasification and support for mining in the Galilee Basin.

Bligh also “agreed to attend the opening” of Adani’s offices in Brisbane later that month and extended an invitation for Adani to meet with its co-ordinator general when they were next in Brisbane.

After Campbell Newman won power for the Liberal National Party in Queensland, he led a trade mission to India too.

While there, Newman joined former Labor Resources Minister Martin Ferguson and a 76-strong business delegation for a tour of an Adani port and a power plant, reportedly getting there on a private jet.

The report on the trade mission, tabled to Parliament, shows that Mr Adani then hosted a lavish reception at his home for the entire delegation.
Judging by one freelance photographer’s images, the event was quite an affair with much handshaking all-round.

The event was part of “OzFest” – Australia’s “largest cultural festival” for which Adani was a “platinum sponsor”

In 2013, the Queensland Government was again in India for a trade mission led by then Deputy Premier Jeff Seeney and, again, the Adani company was on hand.

Seeney’s delegation travelled with Adani executive Harsh Mishra to visit an Adani-owned port and power station before Seeney had a private lunch with the company.

Later that same day, Seeney met with Gujarat Chief Minister Narendra Modi (now the Indian Prime Minister) and… Gautum Adani.

Mr Adani then hosted a private dinner with Seeney “which included Adani Group senior executives and members of Mr Adani’s family”.

But it’s not only Queensland politicians who have sought out Adani company bosses while on missions to India.

Former New South Wales Premier Barry O’Farrell met with Gautam Adani during a trade visit to India in December 2013.

Current NSW Premier Mike Baird also went on a trade mission to India earlier this year. You can probably guess by now the name of one Indian billionaire he met with.

Gautam Adani is also a co-chair of the Australia-India CEO Forum – an initiative of the Australian High Commission.

Trade minister Andrew Robb attended the last meeting in New Delhi. I don’t know if they had dinner (but if I was a betting man….)