Il-kontabilità tal-banek għall-ħsara ambjentali

Meta niddibattu l-ħsara ambjentali li qed tiżdied kontinwament madwarna nagħmlu tajjeb li nippuntaw subgħajna lejn ir-regolaturi nkompetenti u lejn ir-regħba tal-hekk imsejħa żviluppaturi. Wasal iż-żmien li ma dawn inżidu l-banek, għax huma l-banek li jiffanzjaw il-proġetti ta’ żvilupp u allura huma jagħmlu din il-ħsara possibli. Anke l-banek, għaldaqstant għandhom l-obbligu li jerfgħu ir-responsabbiltà fuq spallejhom għall-ħsara ambjentali li qed isseħħ: huma qed jiffinanzjawha.

Meta neżaminaw ir-rapporti annwali tal-banek lokali ewlenin hu ċar li dawn huma nteressati biss fil- profitti. Kontinwament taparsi jħossu għall ambjent. Dan jagħmluh biss u esklussivament biex jipproteġu r-reputazzjoni tagħhom.

Il-banek ipinġu lilhom infushom bħala li qegħdin hemm biex ikunu ta’ għajnuna. Regolarment iroxxu ftit flus favur numru ta’ kawżi ġusti. Iżda minkejja din is-sensittività  artifiċjali lejn setturi diversi tal-komunità, il-profitt jibqa’ dejjem prijorità fuq il-lejaltà lejn in-nies u lejn il-komunità.

L-attitudni tagħhom lejn proġetti ta’ żvilupp hi indikattiva ta’ dan. Il-banek rarament jindikaw fl-istqarrijiet pubbliċi inkella fir-rapporti tagħhom jekk u kif jagħtu każ ta’ impatti ambjentali u soċjali meta jkunu qed jikkunsidraw li jgħinu biex ikun iffinanzjat xi proġett ta’ żvilupp.  

Fl-aħħar rapport annwali tiegħu, per eżempju, l-HSBC jirreferi għal dawk li jissejħu Equator Principles. Dawn l-Equator Principles huma sett ta’ kriterji miftehma fuq skala internazzjonali bejn banek u istituzzjonijiet finanzjarji. Huma qafas regolatorju volontarju dwar kif l-istituzzjonijiet finanzjarji għandhom jeżaminaw u jagħtu piz lir-riskji soċjali u ambjentali assoċjati ma’ proġetti li jkunu quddiemhom għall-finanzjament.  Jistabilixxu l-kriterji minimi li għandhom ikunu applikati huma u jittieħdu deċiżjonijiet dwar dawn ir-riskji.  Fost affarijiet oħra, dawn l-Equator Principles jitkellmu dwar kif il-banek u l-istituzzjonijiet finanzjarji għandhom jiddjalogaw mal-utenti (stakeholders) dwar azzjoni effettiva biex ikunu ndirizzati ir-riskji ambjentali u soċjali minn proġetti li jkunu quddiemhom għall-finanzjament.

L-HSBC, sal-lum, ma ippubblikax rapporti jew xi tip ta’ informazzjoni oħra dwar il-mod prattiku kif il-bank qed japplika dawn il-prinċipji f’Malta. Għad irridu naraw kif il-bank qed jassigura ruħu li r-riskji ambjentali u soċjali ġew identifikati u ndirizzati u speċifikament kif il-klijenti żviluppaturi tal-bank qed jiddjalogaw mal-utenti (stakeholders).

Fir-rapport annwali tal-Bank of Valletta, min-naħa l-oħra, insibu spjegazzjoni tal-miri tal-Ġnus Magħquda dwar l-iżvilupp sostenibbli, deskrizzjoni dwar il-kawżi ġusti appoġġjati mill-bank u rendikont tal-azzjoni mittieħda biex il-friegħi tal-bank ikunu effiċjenti fl-użu tal-enerġija u joperaw b’mod li ma jagħmlux ħsara ambjentali. Ir-rapport jiddeskrivi ukoll is-servizzi tal-bank biex il-klijenti tiegħu ikollhom aċċess aħjar għal finanzi biex jimplementaw diversi miżuri ambjentali. Ir-rapport tal-BoV ma jagħmel l-ebda referenza għall-Equator Principles jew xi qafas regolatorju alternattiv.

Il-Lombard Bank, min-naħa l-oħra, fl-aħħar rapport annwali tiegħu jemfasizza l-attenzjoni tal-management biex jimminimizza l-impatti ambjentali mill-operazzjonijiet tiegħu. Jgħidilna li hu ukoll jgħin kawżi ġusti! L-anqas il-Lombard Bank ma jirreferi għall- Equator Principles jew xi linji gwida oħra dwar x’għandu jsir biex il-klijenti żviluppaturi jkunu sorveljati aħjar mill-bank.

Fuq livell ta’ Unjoni Ewropeja il-Bank Ċentrali Ewropew għadu kif approva dokument b’linja gwida dwar ir-riskji klimatiċi u ambjentali li hu applikabbli għas-settur bankarju kollu fl-Unjoni minn din is-sena. Primarjament dan id-dokument jirrigwarda ir-riskji klimatiċi.

Il-banek għandhom responsabbiltà li jassiguraw illi meta jiffinanzjaw proġetti ta’ żvilupp, il-finanzi li jipprovdu ma jkunux użati biex issir jew biex tkun aċċelerata ħsara ambjentali u/jew soċjali. Meta din il-ħsara ambjentali u/jew soċjali sseħħ, ir-responsabbilta m’għandiex tintrefa biss mill-iżviluppatur u mir-regolaturi imma ukoll mill-bank. Għax anke l-bank għandu jkun kontabbli. Wara kollox hu l-bank permezz tal-finanzjament li jipprovdi li jagħmel l-iżvilupp possibli. Kull meta l-banek ikunu kompliċi fi ħsara ambjentali u/jew soċjali ikollhom huma wkoll jerfgħu r-responsabbiltà. Mingħajr l-involviment tagħhom, wara kollox, il-ħsara ma isseħħx!

Ippubblikat fuq Illum: il-Ħadd 29 ta’ Awwissu 2021

Holding banks to account for environmental damage

When discussing the current environmental onslaught developing around us, we rightly focus on incompetent regulators and greedy developers. It is about time that we also address the role of the banks: they make environmental degradation possible as they generally finance the development works which cause the said degradation. As a result, it is about time that banks too shoulder their responsibility for the ever-increasing environmental degradation.

Going through the annual reports of the major local banks it is more than clear that banks are only interested in profits. They engage in continuous greenwashing in order to try and minimise their reputational damage.

The banks portrait themselves as being there to help. They regularly sprinkle some cash to sponsor worthy causes. Notwithstanding this artificial sensitivity towards various sectors of the community, profits always take a priority over people in the banks’ operations.  Financing of development projects are a case in point. Banks rarely indicate in their public statements and reports whether and to what extent they factor in environmental and social considerations when deciding whether to make finance available for any particular development project.

HSBC, for example, refers to the applicability of the Equator Principles in its latest annual report. The Equator Principles are a risk management framework adopted by a number of financial institutions “for determining, assessing and managing environmental and social risk in projects.” They are intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.  Among other matters the Equator Principles deal with stakeholder engagement and require effective action dealing with environmental and social risks by developers who seek financial facilities from banks.

HSBC has not to date publicly reported on the matter as to the practical manner in which it applies these principles in Malta. We have yet to see how the bank establishes that environmental and social risks have been assessed and specifically the extent to which the bank ensures that proper stakeholder engagement has been carried out by its developer clients!

The Bank of Valletta annual report on the other hand gives us its take on the UN’s Sustainable Development Goals, describes at some length the worthy causes which it supports and explains the action taken to ensure that its branches are energy efficient and environmentally friendly. It also describes its services which facilitate client access to finance environmentally friendly initiatives. The Bank of Valletta Annual Report does not make any reference to the Equator Principles.

Lombard Bank in its latest annual report emphasises that it takes great care in minimising the environmental impacts of its operations. It also stresses its extensive contributions and initiatives to a number of worthy causes. Lombard Bank does not refer to the Equator Principles or any other benchmark or standard which it applies when dealing with its developer clients.

On an EU level the European Central Bank has very recently approved a “Guide on Climate-Related and Environmental Risks” applicable to the banking sector throughout the European Union as from this year.  As its title indicates it is primarily concerned with climate-related risks.

Banks have a responsibility to ensure that when financing development projects, the finance made available is not utilised to cause or accelerate environmental and/or social damage. Whenever such environmental and/or social damage arises it is not just the developers and the regulators which should shoulder responsibility for the said damage. Even banks should be held to account. They make it possible! Banks should pay the price whenever they are collaborators in the ever-increasing environmental degradation. They make it happen!

Published in The Malta Independent on Sunday : 29 August 2021

Carmelo Abela u s-serqa tal-HSBC

Hu diffiċli biex nemmen li Carmelo Abela kien involut jew b’xi mod assoċjat mal-attentat tas-serqa tal-HSBC Ħal-Qormi.

Il-fatt li hu avversarju politiku ma jagħmlux kriminal.

Il-fatt li ma naqblux fuq diversi aspetti tal-politika ma jiġġustifikax dak li qed jingħad dwaru.

Dan ma jnaqqas xejn mill-gravità tal-allegazzjoni ta’ Ċensu Muscat, il-Koħħu, li għandha tibqa’ tkun investigata bir-reqqa.

Jibqa’ mistoqsija waħda, għalissa. Carmelo Abela għandu jirriżenja jew le minħabba din l-allegazzjoni? Riżenja, f’dawn iċ-ċirkustanzi tfisser azzjoni biex tnaqqas il-ħsara li din l-allegazzjoni qed tagħmel lis-sistema politika. Mhux ħsara lill-Labour jew lill-PN imma lill-pajjiż kollu.

Li tirriżenja f’dawn iċ-ċirkustanzi mhux dikjarazzjoni ta’ ħtija, iżda dikjarazzjoni ta’ irġulija. Ma saritx, u probabbilment ma issirx minħabba li fil-politika Maltija ma hawnx serjetà. Kieku kella issir malajr jibda jingħad (bla ġustifikazzjoni): qed tara kif għandu x’jaqsam.

Il-klima politika f’dan il-pajjiż, sfortunatament, ma tħallix lil Carmelo Abela jaqbad it-triq tal-irġulija. Li beda l-passi legali kontra l-kummenti dijaboliċi ta’ Jason Azzopardi kien about time. Imma dak biss mhux biżżejjed.

A Christmas carol for Jason Azzopardi

i-am-the-ghost-of-christmas-past

 

Just like Ebenezer Scrooge, Jason Azzopardi is haunted with scenes from his past. Scrooge had to deal with the Ghost of Christmas Past while Jason has been spotlighted by the Auditor-General in three separate reports. These deal with issues forming part of the political responsibilities which he shouldered when part of the Lawrence Gonzi Cabinet.

The first report was presented one year ago and dealt with the issuance of encroachment permits on the eve of the 2013 general election.  The Auditor-General then commented on Minister Jason Azzopardi’s intervention in the issuance of encroachment permits, emphasising that his intervention was “unwarranted”.

Pompous as ever, Jason Azzopardi insisted that he acted within the parameters of the law. He was not capable of recognising that he erred. Nor was he publicly chastised in any way by his own political party which has called for everybody’s resignation, except his own.

Two other reports were published by the Auditor-General last week.  Both deal with government land: its acquisition in one case, its transfer in another.

The first report investigates the acquisition of 233, 236 and 237, Republic Street Valletta.  The Auditor-General, in this investigation identified significant shortcomings in the process of negotiation, critically and negatively conditioning Government’s negotiating position. “This serious shortcoming,” states the Auditor-General, “was raised in concerns raised by the Permanent Secretary,” who was over-ruled.

Notwithstanding the corrective measures subsequently taken, the process remained flawed. This, emphasised the Auditor-General, represented a fundamental weakness in the process of negotiation (with HSBC), “effectively limiting Government’s bargaining power”.  Bad governance at its worst!

The second report deals with the investigation on the transfer of land at Ta’ L-Istabal, Qormi.   The Auditor-General concluded that “failure in terms of good governance, to varying degrees, is a recurring theme that emerged” throughout his review of the matter. The Auditor-General also noted “extraordinary haste” when as a result of problems being identified authorisations were obtained and contracts signed in a matter of two days.

The Auditor-General lists a number of public officers as being responsible for the mess created when conditions attached to a contract concerning government property were cancelled illegally without Parliament’s approval in terms of legislation regulating the disposal of government land.

Describing this mess, the Auditor-General states that he “did not find any direct evidence of political pressure exerted in the processes reviewed.” The emphasis obviously is on the words “direct evidence” as reading through the report it is amply clear that a selection of the top brass within the civil service would not act in such blatant defiance of the law unless they had at least tacit approval of the holders of political office to which they were responsible. The civil service officials mentioned by the Auditor-General as being directly responsible are: The Director General, the Notary and the Assistant Director Contracts of the Government Property Division.

The Auditor-General makes this very important consideration: “ …………… an element of political pressure was asserted by the Chair Vassallo Builders Group Ltd, who alleged that Marsovin Ltd had prior agreement with the ‘Minister’ and the GPD. The Director Marsovin Group Ltd negated this allegation, as did the Minister of Finance, the Economy and Investment and the Parliamentary Secretary for Revenues and Land, who indicated that they were not aware of the case at the time. Queried in this respect, the Chair Vassallo Builders Group Ltd indicated no knowledge of who the ‘Minister’ was. While the NAO cannot rule out pressure being exerted by any of the aforementioned, or possibly by other persons who did not come to this Office’s attention, the facts of the case render immediately evident that pressure was in fact exerted to the detriment of Government’s interests.”

Ultimately the responsibility for this mess lies on Jason Azzopardi’s lap. He has a lot of pending explanations. He will obviously not resign as clearly he only pays lip service to good governance.

In addition, this report from the Auditor-General possibly throws some light on another incident: the loan of €250,000 by a certain Nazzareno Vassallo to the PN’s commercial arms on the eve of the 2013 general elections. We were then informed that the loan was of a commercial nature on commercial terms.

The proof of the pudding is in the eating. How can anyone believe Jason Azzopardi and his political party preaching adherence to good governance when as recently as 2012 they made a mess on all that they could lay their hands on?

Referring to Joseph Muscat’s gross administrative incompetence and the scandals popping up every other day is no solution. The more we unravel from the past the more clear it becomes that both the Labour Party and the Nationalist Party, each in its own way, as a result of their shady methods of operation, cannot be trusted with the reins of power.

published in The Malta Independent : Tuesday 27 December 2016

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

Swiss cheese

Swiss cheese 2

Michael Falzon and Ninu Zammit, retired for some years from politics, are back in the news for the wrong reasons. Tax evasion and false declarations.

They have tried to give some explanations. Michael Falzon has attributed his accumulated investments in HSBC Geneve to his professional earnings from overseas clients between 1975 and 1985. Zammit went one further: in addition to professional earnings in approximately the same timeframe, he has stated that they have also accrued as a result of his land dealings.

It is news that Ninu Zammit had substantial earnings from his profession. Back in the 80s, in his income tax return he used to declare that he barely earned a minimum wage. Way back in the 80s a thick book used to be published by the Commissioner of Inland Revenue listing the income declared and the income tax paid in Malta by all taxable persons. I distinctly remember  that the book used to indicate that Ninu Zammit was one of the poorer chaps on the island then!

I do remember some years back reference to the company LENI Enterprises Co Ltd co-owned between Ninu Zammit and another member of his family. Maybe some enterprising journalist could carry out searches into the assets and liabilities of LENI Enterprises Co Ltd which could  possibly lead to some very interesting results.

Politics and dealings in land were never a good mix. History has proven time and again that such a mix generally produces the worst possible cocktail.

Both Falzon and Zammit have avoided criminal proceedings by making use of one of the amnesties launched over the years. By paying a fine and repatriating their Swiss funds they have been absolved of criminal action relative to tax evasion and infringement of currency rules.

Michael Falzon, when cornered,  admitted his role and in anticipation of the full story in the Sunday papers published his side of the story. Ninu Zammit, on the other hand, was arrogant and argued that his financial affairs were now in order and that as he was no longer in politics he should be left alone.

Both Falzon and Zammit occupied ministerial office. Falzon was minister for nine years between 1987 and 1996. Zammit was parliamentary secretary for nine years (1987-96) and a minister for another ten years (1998-2008). During these years, as from 1994, they filed annual declarations in terms of the Ministerial Code of Ethics supposedly declaring their assets. These declarations were filed in the Cabinet Office and subsequently the Prime Minister notified Parliament by presenting a copy of such declarations for its scrutiny.

It now results that Michael Falzon and Ninu Zammit through false declarations misguided Prime Ministers, Cabinet and Parliament.  No amnesty has or will absolve them of this.

Up till the time of writing, no public apology has been made by either Falzon or Zammit.

It is also unfortunate that so far, Parliament has no available remedy for  this serious breach of the Ministerial Code of Ethics by these two former Cabinet members.

Pending on Parliament’s agenda is a Bill entitled Standards in Public Life Bill. When approved into law this Bill will provide for the appointment of a Commissioner and a Standing Committee with the authority to investigate breaches of statutory or ethical duties of persons in public life.

In its present format, this Standards in Public Life Bill provides for investigations into ethical breaches such as those committed by Michael Falzon and Ninu Zammit only when the persons committing such breaches are still Members of Parliament.

Article 13 of the proposed Act in fact authorises the Commissioner for Standards in Public Life to examine declarations made pursuant to the Ministerial Code of Ethics. Unfortunately, the proposed Act does not contemplate action against former Members of Parliament.  Nor does it empower investigations on misdemeanours  going back more than two years.

Hopefully Parliament will revisit the Bill and amend it to empower the Commissioner and the Standing Committee to investigate similar cases. Falzon and Zammit should be made to pay for their false declarations to Cabinet and Parliament by being stripped of their Ministerial pensions. Anything less will make the Ministerial Code of Ethics resemble Swiss cheese.

published on The Malta Independent: 25th February 2015

Learning to use chopsticks

chopsticks

We have been told that it is most worrying that China could acquire a share in our energy corporation. It is worrying, we are told, due to the strategic importance of the sector.

We tend to forget that Malta has plenty of foreign investments in other strategic sectors. Another one wouldn’t change much would it?

Our only airport is run by Austrians.

Gambling has been left to  Greek Intralot.  Banking is heavily influenced by global HSBC ironically originating from Hong Kong, the tip of the Chinese mainland.

The public  transport fiasco has an Anglo-German fingerprint through Arriva.

LPG Gas is controlled by Italians through GASCO.

The Freeport is controlled by a Franco-Turkish alliance for the next 65 years. (CMA-CGM and Yildirim Group)

When its Austria, Greece, Anglo-German interests, Italian investments, Franco -Turkish controls, or global HSBC then its globalisation.

The Chinese interest is part of the same process.

Obviously the details of the memorandum of understanding signed earlier this week are not yet known. Hence a proper discussion would have to wait until such details are known. There will surely be positive and negative impacts. China stands to gain. Whether Malta’s potential gains are adequate is still to be seen as we have only been fed titbits of information.

China obviously stands to gain through establishing a stronger foothold in Malta and within the EU.  Whether it will be similarly positive for Malta is still to be seen.

Some Chinese companies are world class. They provide stiff competition to international firms such as Lahmeyer International the one time consultants to the Malta Resources Authority and to Enemalta Corporation. Some of these Chinese companies have reached the same grade in World Bank blacklists !

We have been there before.

It may turn out not to be so difficult to learn to use chopsticks after all !