Thursday, September 29, 2016

Super funds under pressure to end executive bonuses linked to more fossil fuel projects

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Source: "Digging Deeping" from Market Forces

Australia's big superannuation funds are under pressure to veto bonuses to energy company executives who are rewarded for expanding traditional fossil fuel or carbon emitting projects.

A report from the environmental advisory firm Market Forces says super funds are "hoodwinking" investors by voting for multi-million dollars bonuses despite committing themselves to climate friendly policies.

Market Forces executive director Julien Vincent says superannuation funds are being hypocritical in approving bonuses for energy executives whose remuneration is explicitly linked to pursuing and establishing new fossil fuel exploration projects.

"It's an absolute hypocrisy for funds to be saying they are helping to steer the economy in a direction that's compatible with limiting global warming and the incentivise more fossil fuel exploration on behalf of their members," Mr Vincent told The World Today.

"Super funds love to tell their members that they're engaged on climate change and they're working with companies to get results and transform companies and transform the economy.

"But what we've found is that they're actually voting for the executives of fossil fuel companies to get fat bonuses to go and explore for more fossil fuel reserves when we've got far more than we can actually burn for a safe climate."

The report identifies seven ASX-listed energy companies that have awarded bonuses relating to new fossil fuel projects including Santos, Oil Search and Karoon Gas Australia.

The report titled "Digging Deeper" urges superannuation funds to use their voting power at Annual General Meetings to vote against bonus deals.

"Super funds actually this money on behalf of millions of Australians so this is actually our money being used to vote for fossil fuel executives getting bonuses to damage the environment and worsen climate change," Mr Vincent said.

"It's the old adage - money talks. And we're talking about assets worth about 20 percent of the ASX. That's a huge chunk of change there and that's very influential.

"Many investors have started writing to companies saying you either need to change your business model or do the decent thing and start returning capital to shareholders."

The Australian Council of Superannuation Investors has rejected the claims of hypocrisy contained in the report.

An ACSI spokeswoman told the ABC the council is "is engaging with resources companies on behalf of its members on the transition to a low carbon economy."

ACSI is also calling on companies "to provide greater levels of transparency around the way bonuses are calculated to enable an informed assessment to be made."

Wednesday, September 28, 2016

China trade deal allowing dumping of cheap steel on Australia needs to go, report urges

The federal government is facing calls to remove a special trading deal that allows China to dump cheap steel and aluminium on the Australia market.

A study by the McKell Institute released today says Australia's decision in 2004 to award China "market economy" status has backfired and Australian companies are being damaged by the predatory dumping of products at below market cost.

The call to review World Trade Organisation (WTO) rules on China's access to Australia's market comes as big steel producers like Bluescope and Arrium struggle to complete in a world of too much cheap steel.

Source: McKell Institute report on Australias' anti-dumping framework
Australian Workers Union national secretary Scott McDine seized on the McKell study and pointed to major construction in central Sydney as evidence to the damage caused by steel and aluminium dumping.

"We've got Darling Harbour and the convention centre. There is not one scrap in that whole contruction of Australian steel. That is Chinese and Korean steel," Mr McDine told the ABC's AM program.

"There is not one bit of steel out of the Port Kembla steelworks and not one bit of steel out of the Arrium steelworks in Whyalla in there."

Mr McDine said Australia needs to act on parts of the "China accession protocol" under WTO rules which will expire at the end of the year to prevent China's ability to dump products without paying appropriate duties.

"It seriously needs to be debated by Australia as an absolute necessity and it needs to be done by the end of this year," Mr McDine said.

"The rest of the OECD nations around the world have not given China market status. It is now becoming increasingly apparent that will not be the case at the end of 2016."

Predatory dumping from China hurts businesses of all sizes including the Australian company Capral which manufactures aluminium products like windows and doors to industrial customers.

Managing director Tony Dragicevich told AM that over the past decade China has flooded 40 percent of the local market.

"It's made life extremely difficult. We've had to lay off a number of people over the years, we've had to close a factory and our employee numbers have reduced significantly," Mr Dragicevich said.

"Our business has not been able to pay a dividend to shareholders for the past 13 years and that's made it difficult to raise capital and to continue to invest.

"Australia is currently one of only three developed countries which consider China as a market economy  and that means Australia is a reasonably easy target."

The Australian government recognised China as a "market economy" in the leadup to the China-Australia Free Trade Agreement which came into effect last December.

However the Department of Foreign Affairs & Trade says the recognition "has not prevented Australia from remedying injurious dumping of products from China."

"The Australian Government is committed to a strong anti-dumping regime to ensure our manufacturers and producers can compete against imports on a level playing field".

The spokesman said investigations into alleged dumped products from China are treated on a case by case basis by the Anti-Dumping Commission.