The financing of Fawlty Towers

Townsquare.Fawlty Tower

The saga of the Mrieħel and the Townsquare towers is now entering a new phase, with the planning appeal stopwatch due to start ticking shortly –  most probably towards the end of the month. It is known that, so far, Sliema Local Council and a number of environmental NGOs will be appealing against the 4 August decision of the Planning Authority to approve the “Fawlty Towers” at Mrieħel and Townsquare Sliema .

Financing of the projects is next. The banks cannot increase their already substantial exposure to loans that are dependent on building speculation. Consequently, the developers will inevitably have to seek the involvement of private citizens and, possibly, institutional investors. Most probably, the process for financing the projects has already commenced; it will involve the issuing of bonds to the public and will normally be sponsored by a bank and a stock-broking agency.

The bank or banks and stockbrokers sponsoring the bond issue will have to ensure that the bonds are subject to an “appropriateness and suitability testing” subject to such direction as the Malta Financial Services Authority  may consider necessary and suitable. Also, in the light of past local unpleasant experiences, the Authority will undoubtedly be guided by the need to ensure  that prospective investors fully understand the inherent risks of the proposed investments.  It will also ensure that detailed information is published in the form of a suitable prospectus in which the small print is both legible and understandable.

Those who finance the high-rise projects should shoulder responsibility for their impact together with the Planning Authority and the developers. They will potentially make it happen, so they should carry the can. It is important to get this message through: those who will invest in the Gasan and Tumas bonds intended to finance the “Fawlty  Towers”  should receive more than a monetary return on their investment. The moment they sign up they will also assume co-responsibility – with the developers, the Planning Authority, the bank or banks and the sponsoring stockbrokers – for this projected development .

Word is going around on the need to boycott the services and products placed on the market by the Gasan and Tumas Groups. Journalist Jürgen Balzan, writing in Malta Today described these services and products as being wide-ranging (hotels, car-dealerships, gaming, finance and property) which easily impact on the daily life of a substantial number of Maltese citizens. However, such a boycott’s only link with  the “Fawlty  Towers”  would be through the owners.  It would be preferable for a boycott to have a direct link with the offensive action.  In this context, the forthcoming bond issue to finance the “Fawlty  Towers”  presents itself as a suitable opportunity.

A boycott is a non-violent instrument of protest that is perfectly legitimate in a democratic society. The boycotting of the forthcoming bond issue would send a clear message that people will not be complicit in further ruining the  urban fabric of Sliema and ensure that development at Imrieħel is such that the historic landscape is fully respected.

A social impact assessment, if properly carried out, would have revealed the apprehensions of the residents in particular the residents on the Tignè peninsula. But, unfortunately, as stated by Sliema Green Local Councillor Michael Briguglio, the existing policy-making process tends to consider such studies as an irritant rather than as a tool for holistic management and community participation.

We have had some recent converts on the desirability of social impact assessments, such as Professor Alex Torpiano, Dean of the Faculty for the Built Environment at the University of Malta. Prof. Torpiano, in an opinion piece published by the Malta Independent this week, stressed that spatial planning in Malta needs a social-economic dimension. Unfortunately, I do not recollect the professor himself practising these beliefs as the leading architect in the MIDI and Cambridge projects on the Tignè peninsula,  a stone’s throw from Townsquare!

Investing in this bond issue is not another private decision: it will have an enormous impact on the community.

Responsibility for this ever-increasing environmental mess has to be shouldered by quite a few persons in Malta. Even the banks have a very basic responsibility – and not one to be shouldered just by the Directors: the shareholders should also take an interest before decisions are taken and not post-factum.

I understand that the Directors of APS Bank have already taken note of the recent  statements regarding the environment by  Archbishop Charles Scicluna. As such, it stands to reason that APS will (I hope) not be in any way associated with the financing process for the “Fawlty  Towers”.  However, there is no news as yet from the other banks, primarily from the major ones – ie Bank of Valletta and HSBC.

This is a defining moment in environmental action in Malta. It is time for those that matter to stand up to be counted – and the sooner the better.

published by the Malta Independent on Sunday – 21 August 2016

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Gasan mhux mejjet bil-ġuħ

Delimara floating gas stirage terminal

L-anqas ta’ Tumas m’huma mejta bil-ġuħ.

Għax bla ma trid bilfors tasal għall-konklużjoni li mejtin bil-ġuħ meta tisma’ l-aħbar li s-self ta €350 miljun ghall-power station ta’ Delimara mal-BoV u tlett banek oħra ser ikun garantit mill-Gvern ta’ Malta minflok ma jiggarantuh huma u l-membri l-oħra li baqa’ tal-konsorzju s-Socar tal-Azerbajgan u s-Siemens.

Minn meta l-hawn il-Gvern jagħmel tajjeb għall-garanziji tal-kuntratturi tiegħu?

Mill-bidu nett kien jidher li hemm xi ħaġa mhux f’postha f’Delimara.

L-ewwel Joseph wiegħed li l-power station bil-gass ser tkun lesta sa sentejn mill-elezzjoni, inkella jirreżenja. Is-sentejn għaddew. Ma lesta xejn u ma rreżenjax.

Imbagħad fallew il-Gasol – li kellhom 30% sehem fil-proġett, il-partners ewlenin tal-proġett.

Issa daħal il-Gvern biex ikun garanti għas-self li hemm bżonn għall-proġett. Garanzija bhal din, normalment jagħmilha l-kuntrattur li jkun qed jieħu ħsieb il-proġett.

Hemm xi ħaġa tinten ħafna. Għax la Gasan u l-anqas ta’ Tumas m’huma mejtin bil-ġuħ. Kemm huma kif ukoll is-Socar u s-Siemens għandhom x’jagħmel tajjeb għas-self li ġie negozjat mal-BoV u l-banek l-oħra!

 

Il-Bank of Valletta, jsodd it-toqob

House of the 4 Winds

 

Bħalissa d-diskussjoni politika hi dwar min kien mistieden għall-ikel tlett snin ilu. Ikliet mistura u ikliet magħrufa. Kif ukoll dwar min iktar seta kien preżenti. Dwar min serva l-ikel u dwar min maxtar.

Mera mera fuq il-ħajt: min hu l-iktar maħmuġ għid? Il-mera ma tafx lil min ser taqbad temmen, tant ilha tisma’ affarijiet. Imn’alla li l-mera ma titkellimx għax kieku min jaf kemm toħroġ bi stejjer bejn affidavit u ieħor, bejn libell u ieħor.

Smajna b’donazzjonijiet li jidhru bħala ħlas għal reklami kif ukoll dwar dak il-loan imdaqqas mal-BoV li spiċċa ma tħallasx. Tkun storja tajba kieku tkun magħrufa bl-egħruq u x-xniexel. Għax donnu li l-BoV għandu d-destin li jsodd it-toqob finanzjarji ta’ dawk li huma komdi f’dan il-pajjiż.

Sadd it-toqob tas-self tad-Daewoo. Sadd it-toqob tal-Air Malta biex jixtru l-fuel. Sadd it-toqob tal-magħżulin għall-power station tal-gass f’Delimara. Sadd it-toqob ta’ min irid jirtira kmieni mix-xogħol, imma żamm id-dritt biex jidħol lura.

Sabuħ għal snienhom lill-BoV.

Fil-BOV bil-benefiċċju tal- “early retirement”, iżda tista’ tiġi lura !

BOV HQ

 

Il-Bank of Valletta qiegħed fl-aħbarijiet. M’humiex aħbarijiet li jagħmlu l-ġid  lill-bank.

Mhux qed nitkellem dwar il-garanzija għas-self dwar il-power station ta’ Delimara, jew il-garanzija għall-avvanzi biex l-Air Malta tixtri l-fuel, iżda dwar l-iskema ta’ irtirar kmieni.

Kif, qrajna, l-ftehim kollettiv tal-Bank jagħti dritt lill-bank li jkollu skema ta’ irtirar kmieni mix-xogħol (early retirement). Il-punt mhux jekk Michael Falzon ġiex mogħti inqas jew iktar minn Fenech Adami inkella xi ħaddieħor b’kunjomu Borg Costanzi (ismijiet li ssemmew fil-Parlament). Iżda jekk skema ta’ irtirar kmieni fil-BOV tagħmilx sens.

Hemm xi sens li tħarreġ lin-nies u fl-eta ta’ madwar ħamsin sena tħallashom biex jitilqu? Il-bank qed iberbaq il-“kapital uman” tiegħu apparti l-kapital finanzjarju.  Dan apparti li għadni ma nistax nifhem kif tieħu l-benefiċċju minn skema biex tirtira kmieni u mbagħad iżżomm id-dritt li tidħol lura. Jew irtirajt kmieni jew ma irtirajtx.

Il-BOV qed iberbaq ir-riżorsi u jista’ juża’ flus il-bank ferm aħjar minn hekk, mhux biss fl-interess tal-bank innifsu iżda anke fl-interess tal-impjegati tiegħu.

Anke l-Greċja, sa ftit ilu, kinet mimlija skemi ta’ irtirar kmieni!

 

Snippets from AD’s electoral manifesto: (1) Corporate Social Responsibility

Environment

The following extract is taken verbatim from Chapter 14 of AD’s Electoral Manifesto

Corporate Social Responsibility (CSR)
In today’s world various organisations publish reports on a regular basis in which they list their impacts primarily on the community in which they operate.
In Malta only two companies do so, Bank of Valletta and Vodafone. To date they have published two editions of their reports. Each of these publications is of a positive nature but in every case there is room for improvement both in the policy direction as well as in content.
It is necessary that all companies listed on the Stock Exchange as well as parastatal organisations such as Enemalta and the Water Services Corporation together with all companies employing more than 1000 employees publish such information. It is important to underline that environmental reporting is as important as financial reporting and hence it should also be audited.

L-estratt segwenti hu mehud kelma b’kelma mill-Manifest Elettorali ta’ Alternattiva Demokratika (Kaptlu 14)

Responsabbiltà Soċjali tal-Industrija u n-Negozju (CSR)
Fid-dinja tal-lum huma diversi l-organizzazzjonijiet li jippubblikaw fuq bażi regolari rapporti li fihom jelenkaw f’dettall l-impatti tagħhom prinċipalment (iżda mhux biss) fuq il-komunità fejn joperaw.
F’Malta huma żewg kumpaniji biss li jagħmlu dand: il-Bank of Valletta u Vodafone. S’issa ppubblikaw żewg edizzjonijiet tar-rapporti tagħhom. Kull wieħed minn dawn il-pubblikazzjonijiet hu ta’ kontribut pożittiv imma f’kull każ hemm lok għal titjib kemm fid-direzzjoni politika kif ukoll fil-kontenut tar-rapport.
Huwa neċessarju li dan ikun estiż għall-kumpaniji kollha elenkati fil-Borża kif ukoll għall-Korpi Parastatali bħall-Enemalta u l-Korporazzjoni għas-Servizzi tal-Ilma flimkien ma’ dawk il-kumpaniji fis-settur privat li jimpjegaw iktar minn 1,000 ruħ. Huwa importanti li jkun sottolineat li r-rappurtaġġ ambjentali huwa importanti daqs dak finanzjarju u għaldaqstant għandu jkun ukoll soġġett għal proċess tal-verifika.

BOV to share its experiences in investor relations

The Bank of Valletta CEO Mr Charles Borg has been appointed Director of the World Savings Bank Institute. This was reported by the timesofmalta.com early this afternoon.

It is always a pleasure to note the increasing number of Maltese professionals who are recognised on a global level for what they are worth.

In particular Mr Charles Borg will be able to share with the global community the experience of BOV of dealing with its clients. It is such a rewarding experience as can be amply confirmed by investors in the La Valette Multi Manager Property Fund.

Reflections on an Environment Policy

The current debate on what should form part of a National Environment Policy is a healthy exercise. It is focusing not only on the different aspirations of each citizen but also on the role of each one of the towns and villages which together constitute this country.

The environmental issues we face are the result of the manner we organise our lives both individually and as a community. In fact it can be safely stated that the manner in which economic activity has been organised throughout time has created different environmental and social impacts.

The exercise at this point in time is hence the clear identification of these impacts and subsequently seeking the best manner in which they can be tackled. This is done on two fronts: firstly through the formulation of an environment policy and secondly by integrating this environment policy with economic and social policy within the National Strategy for Sustainable Development (NSSD).

The NSSD has already been formulated and approved by Cabinet almost three years ago after a long process of consultation. It established targets and objectives which have unfortunately been ignored by the same Government which has approved them. This necessarily leads to the conclusion that these exercises can be a waste of time as their only purpose seems to be an exercise to prove that the new hands on deck can do things in a better way than those they have replaced. 

The National Environment Policy Issues Paper identifies a number of areas which are to be tackled but excludes a number of important ones. What is in my view objectionable and bordering on the insulting is the ignoring by the Issues Paper of the NSSD. It also ignores matters which have been tackled by the NSSD as well as the specific targets identified. This the NSSD did after extensive consultation with civil society, which the Issues Paper promises to go through again.

 

Eco-taxation

One such case refers to the use of economic instruments to attain environmental objectives. The Issues Paper queries whether and to what extent there is agreement  with the use of such instruments to further environmental objectives. Simultaneously with the publication of the Issues Paper, Finance Minister Tonio Fenech through the pre-budget document was lauding the idea of introducing a carbon tax and the possible utilisation of the proceeds to affect a tax shift. This is in the spirit of the former EU Commission President  (French Socialist) Jacques Delors’ 1993 EU White Paper entitled “On growth, competitiveness and employment. The challenges and ways forward into the 21st century”.

So whilst the Environment Ministry is requesting our opinion on the use of eco-taxation (and other instruments) it seems that the Finance Ministry is dead-set to proceed.  Do these two Ministries form part of the same government? 

Both the Environment Ministry and the Finance Ministry would do well to go back in time to the debate on the introduction of the eco-contribution (2003-05) where they could identify a number of issues raised by civil society.

Should fiscal objectives be the purpose of environmental taxation or would it rather be environmental improvement? All over the globe governments declare that their aim in applying eco-taxation is environmental improvement. Yet they resist transferring political responsibility for environmental taxation from the Finance Ministry to the Environment Ministry. Such a move would lend credence to statements on the environmental objectives of eco-taxation and would ensure that the design of specific measures is more in line with encouraging changes in behaviour. Retaining political responsibility for environmental taxation at the Finance Ministry on the other hand signifies that the objective is to tax behaviour but not  to change it. This reluctance is generally reflected in the manner  in which eco-taxes are designed. Fiscal policy makers pay attention to the fact that changing behaviour would mean drying up a source of revenue. Hence eco-taxes designed for fiscal objectives are intended not to affect the elasticity of demand. This is done by selecting items in respect of which there are no alternatives and thus irrespective of tax added to the price there is no alternative to purchasing the product or service. The eco-contribution exercise clearly illustrates this argument.

 

Environmental nuisance 

The Issues Paper has failed to project an understanding that environmental issues can be most effectively tackled at a micro-level. In fact the Issues Paper adopts an exclusively macro approach and does not give any weight to the real life issues. Issues of environmental nuisance are the ones which the man in the street feels strongly about. These include primarily noise, air quality and odour nuisance caused by neighbours in residential areas. They could range from an air conditioner fixed below your bedroom window to a neighbour’s fireplace chimney spewing smoke right into your living room or a bakery belching black smoke onto your washing line. Or the newly opened restaurant or snack bar in a transformed ground floor flat whose operator wouldn’t care less about where the odours from his kitchen end up.    

Information

Access to environmental information is an important aspect of environment policy. Yet the drafters of the Issues Paper ignored it. The environmental information aspects of the Åarhus Convention have been incorporated into Maltese legislation as a direct result of Malta’s EU accession. This legislation provides a mechanism through which the citizen requests the release of information which up till then would be withheld by the authorities. This is a very primitive form of governance. The state should release information without having its hand forced to do it. This is the minimum required in an age of transparency and accountability. 

Policy proposals and other initiatives must be buttressed by studies which not only justify the proposal or initiative but which also identify the resulting impacts and the manner in which these can be addressed. Studies must be published at an early stage and not in the final stages of a discussion. Otherwise the public debate cannot be fruitful.

Transparency and accountability

Transparency and accountability are not only duties of the state. They are also a responsibility of private enterprise.  Corporate Social Responsibility (CSR) reporting is one way in which private enterprise informs the public on its activities. It is a function as important as financial reporting. Financial reporting having been accepted by society for quite a long time as a reporting requirement.

In Malta currently two companies publish a CSR report. Vodafone (Malta) and Bank of Valletta (BOV) have already published two editions of their CSR report. There has been considerable improvement in the information made available by Vodafone (Malta) in its second report, but BOV’s reporting  can be substantially improved.

The environment policy should identify the type of organisations that should have the duty to report publicly and on a regular basis on their environmental and other impacts. By organisations I understand not just industry and business but also public corporations, government departments and local authorities. A reasonable first step would be for companies quoted on the stock exchange to take the lead followed by public bodies such as Enemalta, Water Services Corporation, Heritage Malta and Air Malta.

CSR reporting should be guided by international standards such as the Global Reporting Initiative G3 guidelines and should be subject to auditing in order to verify that the statements made reflect what the organisation is really up to. 

Alternattiva Demokratika, AD, the Green Party in Malta has earlier this month published a document in reply to the National Environment Policy Issues Paper which lists and discusses the areas missed out by the said Issues Paper.  In addition to focusing on the urgent need to implement the NSSD, environment information, environmental nuisance and environment information it also points out the need to tackle the uptake of environmental management systems such as ISO 14001 and the Eco-Management and Audit Scheme (EMAS) Regulations of the European Union, light pollution, contaminated land, environmental and sustainability planning at a locality level better known as Local Agenda 21,  the role of civil society and environmental NGOs in environment policy and environment  research.  

We hope that when the environment policy is drafted it will include the widest possible list of issues and will tackle them in an holistic manner keeping in mind the parameters established in the National Sustainable Development Strategy.                 

Alternattiva Demokratika considers that environment policy is one of several instruments through which improvement in the quality of life can be attained. Protecting the environment signifies that we better our quality of life. It also signifies that each one of us acts in a responsible manner. However primarily it must be government which leading the way should act in an appropriate manner in order that it leads by example.

 published in

The Independent on Sunday, October 17, 2010, Environment Supplement

BOV’s CSR : The next step

This was originally published on the 5 January 2008 as an article in The Times

BOV’s CSR: The next step

 

Bank of Valletta is to be congratulated on the recent publication of its second Corporate Social Responsibility Report covering 2007.

In its mission statement BOV defines its commitment as being that of playing a leading and effective role in the country’s sustainable development “whilst tangibly proving ourselves to be responsible and caring citizens in the community in which we operate”. The objective of the CSR report is hence that of informing the community as to the manner in which the bank is acting as a responsible citizen. The bank’s CEO makes this even more clear in his statement on page four of the report. In fact, he rightly underlines that while the bank is responsible towards its shareholders it is also accountable towards society.

This is the crux of CSR: the accountability of business towards all stakeholders, the community at large. Profits generated on their own are not a measure of success, as the business of business is not just business!

The bank has ploughed back into the community 1.31 per cent of its profits (Lm350,000 or €815,500) through engagement in seven pillars of activity, namely the arts and culture, heritage, environment, sports, social, education and business sectors.

In particular, BOV has assisted Heritage Malta in preserving the Tarxien Temples. It has furthermore supported the restoration programme at Palazzo Falson, Mdina.

Reading through the BOV 2007 CSR report one encounters many a positive note as to the manner in which the bank is being eco-efficient. First on the list is its Santa Venera centre which, through both design and operation, is energy-efficient. Its Marsascala branch has, during 2007, been equipped with photo-voltaic panels, thereby contributing to an annual reduction of three tonnes of CO2 emissions as a minimum. The other branches await their turn.

BOV recycles its paper and has taken the first steps which will eventually lead to a paperless administration. Furthermore, it makes use of recycled toners and cartridges, not only contributing to less waste going to landfill but also paying less eco-taxes as a result. Reducing environmental impacts has a positive financial impact too!

The BOV report does not mention the environmental impacts generated by the use of transport (by both the bank and its employees). Nor is any reference made to the use of water in its branches, including the collection and utilisation of rainwater.

BOV has also sponsored a number of environmental initiatives aimed at the environmental education of the community.

While BOV is setting a good example which should filter through the business community, this should be seen as only a first step. In addition to improving the management of its direct environmental impacts, thereby reducing them, BOV can move forward, in the process retaining its leading role in banking CSR in Malta.

BOV should, on the basis of this eco-efficient experience, move on to new initiatives that address the eco-effectiveness of the banking system. In addressing its corporate responsibilities, BOV as any exemplary citizen would undoubtedly ask whether its services are being misused. In particular, whether any of its customers have used its services to contribute towards the ever-increasing national environmental deficit.

It would be interesting if in a future report we could read about environmental criteria applied in the consideration of requests for business loans, including those utilised to finance the construction industry. Additional interesting information would be whether BOV has refused its services to any client on the basis of environmental criteria.

The financial balance sheet on its own does not measure progress. It is only concerned with profits. The environmental and social balance sheets need to be addressed too, thereby having a “triple bottom line” approach to measuring progress.

Through its 2007 CSR report, BOV has proven that it is serious about managing its direct impacts. It now needs to move further by managing its upstream and downstream impacts. Managing its upstream impacts signifies addressing the environmental impacts generated by its suppliers – hence the introduction and maintaining of a green procurement service. Managing its downstream impacts would address the environmental impacts of those using its services. When this is done successfully BOV would be eco-effective, as a result contributing to a reduction of Malta’s environmental deficit.

BOV has taken the lead. I hope others will follow because profits and principles can co-exist.