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	<title>Paul McKay, Author at Corporate Knights</title>
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	<title>Paul McKay, Author at Corporate Knights</title>
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		<title>Total desperation</title>
		<link>https://corporateknights.com/leadership/total-desperation/</link>
					<comments>https://corporateknights.com/leadership/total-desperation/#respond</comments>
		
		<dc:creator><![CDATA[Paul McKay]]></dc:creator>
		<pubDate>Wed, 12 Mar 2014 13:00:51 +0000</pubDate>
				<category><![CDATA[Leadership]]></category>
		<category><![CDATA[Supply Chain]]></category>
		<category><![CDATA[Winter 2014]]></category>
		<category><![CDATA[Fossil fuels]]></category>
		<category><![CDATA[Oil]]></category>
		<category><![CDATA[oil spill]]></category>
		<category><![CDATA[Paul McKay]]></category>
		<guid isPermaLink="false">http://ck.topdrawer.net/?p=986</guid>

					<description><![CDATA[<p>Perhaps angels could not attend the memorial service of Quebec billionaire Paul Desmarais Sr. in December, but many among the high and mighty came to</p>
<p>The post <a href="https://corporateknights.com/leadership/total-desperation/">Total desperation</a> appeared first on <a href="https://corporateknights.com">Corporate Knights</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>Perhaps angels could not attend the memorial service of Quebec billionaire Paul Desmarais Sr. in December, but many among the high and mighty came to fill the ancient pews of Montreal’s magnificent Notre-Dame Basilica and pay final respects.</p>
<p style="color: #444444;">Among them were Canadian Prime Minister Stephen Harper, former prime ministers Jean Chretien, Paul Martin and Brian Mulroney, five Quebec premiers, former French president Nicolas Sarkozy, and corporate dealmakers from across North America, Europe and Asia.</p>
<p style="color: #444444;">The eulogies summarized a man who was smart and scrappy in his youth, yet unfailingly courteous and charming in his last decades – especially when escorting guests at his secluded, ornate chateau-estate in Sagard. A personal net worth estimated at $4.4 billion can buy such Renaissance-era replicas.</p>
<p style="color: #444444;">Desmarais’s corporate locus was the aptly named Power Corp., which controlled legions of leading Canadian and U.S. insurance companies, mutual funds and holding companies, each of which in turn took valuable positions in yet more companies.</p>
<p style="color: #444444;">Think former newspaper baron Conrad Black, but without the scornful bombast, debt-plagued vanity press and recently discarded Florida jail jumpsuit. When Desmarais completed a corporate coup, it occurred at a bare whisper. He refrained from making newspapers like La Presse a personal pulpit. And he never faced prosecutors in a courtroom for criminal fraud or fleecing his own shareholders. Call him the mild-mannered mogul.</p>
<p style="color: #444444;">But no man is a saint. This is the story of one rogue oil company the powerful Desmarais family has controlled, but failed to properly govern, for decades.</p>
<p style="color: #444444;">In December 1999, disaster struck the French Atlantic coast region of Brittany when a Maltese-flagged oil tanker called the MV Erika foundered in high seas, broke apart, and sent 20,000 tonnes of crude lapping toward prized beaches and fishing grounds. The slick eventually contaminated 400 kilometres of coastline, killed thousands of birds and marine animals, and dealt a body blow to regional fisheries and tourism.</p>
<p style="color: #444444;">It was the single worst oil spill in European history. The escaped oil belonged to French oil giant Total S.A. In a common industry practice, it had hired the Erika to deliver a cargo of crude across international waters, delegated the ship-worthiness inspection to an Italian company, and allowed it to be shipped under a flag of convenience.</p>
<p style="color: #444444;">When Total was charged in French civil and criminal courts for the oil spill damages, it sought legal immunity on the grounds that the French courts lacked jurisdiction (since the Erika sank in international waters), and that the insolvent Italian inspection company or untraceable ship owner were solely liable.</p>
<p style="color: #444444;">Facing intense fury from the French public, press and many politicians for its cunning courtroom evasions, Total belatedly paid some $260 million for cleanup costs, and another $200 million in 2008 after a French court found it criminally liable for the Erika oil spill. Yet the legal ordeal did not end then. The oil company formally sought to have that criminal judgment overturned, but lost that appeal in 2012.</p>
<p style="color: #444444;">The Erika case was infamous in France, but only a handful of Canadians knew that the Desmarais family has held the controlling block of shares in Total S.A. since the 1980s, and is still the guiding force behind its global operations. Paul Desmarais Jr., CEO of Power Corp., is a current Total director and proxy for key share and voting rights.</p>
<p style="color: #444444;">It is doubtful any of the Desmarais clan knew the Erika had a badly corroded hull before it left on its fateful sailing, or chose that particular Maltese rust-bucket, or approved a shoddy ship inspection report. But what is telling is that Total spent a decade, and a fortune in legal fees, denying liability for the calamity the Erika caused others on the French coast. And that the tragedy did not compel its powerful directors to adopt a far tighter code of governance. Or instil tougher due diligence measures to prevent future marine oil accidents.</p>
<p style="color: #444444;">In the spring of 2012, Total’s mammoth gas drilling platform in the North Sea reported a serious, deep natural gas leak. Slated to be a saviour and to reverse slumping company revenues, the Elgin project became known as the “well from hell.” The blowout caused Total share values to plummet $10 billion in mere days. The leak took several weeks to plug, put the expensive, state-of-the-art North Sea rig out of commission for a year, and halted production at the Elgin and adjacent Franklin projects off the Scotland coast.</p>
<p style="color: #444444;">Total’s North Sea blowout was traced to deep-sea pipe corrosion, which the company claimed last March was understood and preventable. But in October, corrosion-induced pipeline leaks knocked out a huge new oil project under the Kazakhstan portion of the Caspian Sea just as it was being commissioned by a consortium led by Total.</p>
<p style="color: #444444;">The $40 billion Kashagan oil deposit is one of the world’s biggest, richest discoveries in recent years. The project partners include Total, ExxonMobil, Royal Dutch Shell and Italian oil company Eni. Despite companies with such experience and deep pockets, the ominous corrosion leaks put Total’s Caspian project in peril and its oil revenues in limbo, and hammered company stock.</p>
<p style="color: #444444;">These three examples – the 1999 Erika oil spill, the 2012 North Sea natural gas leak and the 2013 Caspian pipeline cracks – are particularly pertinent because Total has leased vast tracts of northern Alberta to dig up the greasy black bitumen known as oil sands, and export it for decades via the proposed Northern Gateway pipeline to oil tanker terminals on British Columbia’s spectacular, pristine coast.</p>
<p style="color: #444444;">Total announced plans last November to increase output from its $8 billion Joslyn oil sands site in northern Alberta from 100,000 barrels per day to 160,000 barrels per day. It also holds a joint-venture interest (with Suncor and Teck Resources) in the $13.5 billion Fort Hills oil sands project (estimated production 180,000 barrels per day), and another with ConocoPhillips called Surmont, which is ramping up oil sands output to 136,000 barrels per day.</p>
<p style="color: #444444;">Given these heavy bets on oil sands output, Total’s worst nightmare is having no pipelines to carry the crude to ocean export terminals. So it has pre-booked capacity on the proposed Keystone XL pipeline, which would link Alberta to Total’s diesel refinery in Port Arthur, Texas. And it is one of the companies that put up $10 million to help Enbridge get regulatory approval for the Northern Gateway pipeline across B.C.</p>
<p style="color: #444444;">But the Keystone XL option may already be dead. With major stateside refineries at full capacity, U.S. companies and politicians are now pressing Washington for unrefined oil export licences – and fast losing interest in aiding oil sands competitors from Canada or sharing tight U.S. pipeline and refinery capacity.</p>
<p style="color: #444444;">If the Keystone XL pipeline dies from such disinterest, then the Northern Gateway pipeline becomes the equivalent of a desperate Hail Mary touchdown pass for companies like Total. With Alberta oil sands output predicted to triple in the next two decades, pressure on Ottawa to ensure pipeline approvals will intensify. (This is even as a growing chorus of investors wake up to the risks of such projects becoming stranded assets in an increasingly carbon-constrained world, in which Total currently has the seventh-largest carbon reserves of all oil and gas companies.)</p>
<p style="color: #444444;">How far will Total go with its lobbying efforts? Will it push too far?</p>
<p style="color: #444444;">In May 2013 French prosecutors recommended criminally charging Total and its CEO, Christophe de Margerie, for corruption and embezzlement relating to secret oil deals with the Iranian government in the 1990s. Both the company and CEO have denied the criminal charges, saying Total acted at all times in accordance with applicable laws. The case has not yet proceeded to trial, and no convictions have been registered.</p>
<p style="color: #444444;">In a related, simultaneous U.S. court action, however, the U.S. Justice Department fined Total $398 million for bribing Iranian officials to obtain valuable oil concessions there, and violating the Foreign Corrupt Practices Act. It was the fourth-largest penalty ever paid under the statute.</p>
<p style="color: #444444;">Total agreed to pay the $398 million bribery penalty, but conceded no guilt. Instead, its chief financial officer merely remarked: “These settlements, the outcome of which are customary in the United States, allow us to put an end to this investigation.”</p>
<p class="last-paragraph" style="color: #444444;">Sinking oil tankers. Deep-sea blowouts. Corrosion-cracked Caspian pipelines. Bribery schemes. If one of the most powerful, politically connected Canadian dynasties cannot or will not responsibly govern a company like Total S.A. from inside the boardroom, then who on the outside can?</p>
<p>The post <a href="https://corporateknights.com/leadership/total-desperation/">Total desperation</a> appeared first on <a href="https://corporateknights.com">Corporate Knights</a>.</p>
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			</item>
		<item>
		<title>Biodiversity in a bottle</title>
		<link>https://corporateknights.com/natural-capital/biodiversity-in-a-bottle/</link>
					<comments>https://corporateknights.com/natural-capital/biodiversity-in-a-bottle/#respond</comments>
		
		<dc:creator><![CDATA[Paul McKay]]></dc:creator>
		<pubDate>Mon, 22 Jul 2013 18:37:25 +0000</pubDate>
				<category><![CDATA[Food]]></category>
		<category><![CDATA[Natural Capital]]></category>
		<category><![CDATA[Spring 2013]]></category>
		<category><![CDATA[Forests]]></category>
		<category><![CDATA[Nature]]></category>
		<category><![CDATA[Science]]></category>
		<guid isPermaLink="false">http://ck.topdrawer.net/?p=1315</guid>

					<description><![CDATA[<p>Utterly unperturbed, Lili Ana Rodrigues gently pries open the roof of a hand-made wooden bee box and slices off paper-thin peaks of charcoal-coloured parchment that</p>
<p>The post <a href="https://corporateknights.com/natural-capital/biodiversity-in-a-bottle/">Biodiversity in a bottle</a> appeared first on <a href="https://corporateknights.com">Corporate Knights</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p class="first" style="color: #444444;">Utterly unperturbed, Lili Ana Rodrigues gently pries open the roof of a hand-made wooden bee box and slices off paper-thin peaks of charcoal-coloured parchment that look like miniature mountains. She then carefully inserts a plastic syringe into what should be the dangerous, inner domain of several hundred wild bees.</p>
<p style="color: #444444;">The inner hive is in fact pulsating with tiny yellow-and-black Melipona bees. Humming squadrons quickly take formation to alight on her hand and hair. As nectar is drawn up into her chef’s syringe, then dabbled onto a spoon for strangers to taste, more Meliponas arrive and seem poised to attack the invaders. But instead, the stingerless bees merely tickle as they crawl across human arms and eyebrows, apparently foraging for some new exotic blossom to savour and pollinate. No doubt they are dismayed to taste only salty sweat, since they lose interest and quickly disappear.</p>
<p style="color: #444444;">By contrast, the amber gold nectar they produce glides across the palate like liquid silk. More fluid than honey made from domestic bees, it transmits a translucent sparkle and has a unique lemony finish and a tart hint of acidity to temper the natural sugar. Only a single drop is needed to trigger a delighted grin.</p>
<p style="color: #444444;">Nobody knows that better than Richardson Frazao, a Brazilian biologist who has become a leading scientific authority on the wild bees of the Amazon. He is also the field manager of an innovative program to protect the Meliponas and the biodiverse habitat they both depend on and sustain.</p>
<p style="color: #444444;">Rodrigues’s 70 wild bee boxes, built in a grove of tropical fruit and nut trees some 200 kilometres from the equatorial port of Belem, Brazil, serve as the most successful pilot project among a dozen poor, remote communities in the eastern Amazon. Each hive produces about one litre per year, which Rodrigues bottles and sells as nectar. She also uses the wax-like propolis to make distinctly scented soap, shampoo and cosmetic products.</p>
<p style="color: #444444;">The annual income this generates for her family is modest by Brazilian standards, and meagre by North American or European standards. But in a region ravaged by high unemployment, such self-generated income is a domestic godsend.</p>
<p style="color: #444444;">More strategically, Rodrigues’s income from wild nectar husbandry is higher – and more sustainable – than the only alternative: being paid low wages to slash, burn and raze tropical forests for lumber and cattle interests. To date, some 70 million hectares have already fallen in Amazonia, and her small land holding is on the northern front of approaching clear-cuts.</p>
<p style="color: #444444;">The bulwark against this, Frazao has calculated, will be rural communities that replicate Rodrigues’s example and discover that they can earn higher, more enduring incomes by protecting their forests rather than being temporarily hired to help destroy them.</p>
<p style="color: #444444;">His daring plan has the backing of the Peabiru Institute (a science-oriented foundation based in Belem), the Netherlands’ Royal Tropical Institute, Conservation International and The Nature Conservancy. All agree that Frazao’s wild bee initiative may be the most effective way to protect remaining Amazon forests, restore biodiversity and promote economic equity among some of Brazil’s poorest peoples.</p>
<p style="color: #444444;">That is a lot of weight to rest on the delicate wings of an insect barely bigger than a fingernail. But the saving grace is that there are billions of them, in hundreds of species, each of which has been selected through evolution to pollinate distinct trees, flowers and shrubs. That means they are the lynchpin of biodiversity.</p>
<p style="color: #444444;">In the densest parts of still-intact Amazonia forests, Frazao has recorded up to 79 species of Melipona bees in a single hectare. This confirms a jaw-dropping level of indigenous forest biodiversity there, but it is by no means an isolated example.</p>
<p style="color: #444444;">Of the 20,000 wild bee species globally, there are some 400 known species of Melipona bees in the Amazon basin, which extends into Peru, Bolivia and Ecuador. About 10 new species are discovered each year. Frazao himself may soon be credited with one if independent tests verify his discovery.</p>
<p style="color: #444444;">Shy with strangers, but quick to flash a genial smile – especially within tasting distance of Melipona nectar – Frazao hopes to maximize community bee projects by combining science and social engagement.</p>
<p style="color: #444444;">“I get lots of pleasure from identifying wild bees, and from doing pure science,” the PhD candidate says during a translated interview in his Peabiru Institute office. “But science is only part of the solution. The other part is to show communities the real value of biodiversity, and to empower them to protect it.”</p>
<p style="color: #444444;">To that end, since 2006, Peabiru and global foundations have helped finance more than 2,000 bee box placements with 350 families in 16 remote communities. There, typical cash incomes average less than $3 per day. The recipients include indigenous tribes, Afro-Brazilian slave descendants called Quilombolas, and the rural poor.</p>
<p style="color: #444444;">In each setting, Frazao looks for entrepreneurial champions, like Rodrigues, to ignite community interest with bottom-line economics. A typical bee box costs $25 to make with local labour and materials, but yields nectar worth up to $90 each production season. The bee pollination also increases the nearby yields of edible fruits and nuts, which can be harvested for subsistence food or sold for cash.</p>
<p style="color: #444444;">As with domestic bees, Melipona hives can be split and transplanted to new bee boxes, which in turn can be divided again. So, in the manner of bank bonds paying compound interest, Frazao and Peabiru Institute hope to soon see their original investments (jointly shared by Peabiru and community associations) accelerate in scale and value.</p>
<p style="color: #444444;">They have plans to enlist Brazil’s network of embassies and globally famous chefs to promote the “Amazon Amber” Melipona nectar; sell the scented soap and cosmetics under special labels; and scale up production by using solar-powered extractors where power grids don’t exist. Long-range goals include a portable, commercial-grade honey processing unit, which also refrigerates the nectar so it does not crystallize or ferment before it can reach outside markets.</p>
<p style="color: #444444;">However, Frazao cautions, the health of the wild bees and the forests they sustain will remain the highest priority. Their plan includes carefully confining each Melipona species to its endemic location, not mixing species in adjacent bee boxes or districts, and resolving not to torque production beyond the natural limits defined by evolution.</p>
<p style="color: #444444;">“As more poor communities join in wild nectar production, they will fight to protect and even begin restoring native tropical forests,” predicts Joao Meirelles, a noted Amazon scholar, author and founder of Peabiru. “The numbers are on our side. Every hectare saved can support 50 to 80 Melipona species, and up to 500 bee boxes with a foraging range of 600 hectares.”</p>
<p style="color: #444444;">Frazao nods, adding: “My dream is that these Amazon communities can position themselves in a market where they are paid proper value for their work and unique, high-quality product, while at the same time protecting their forest and biodiversity.”</p>
<p class="last-paragraph" style="color: #444444;">And does the scientist who works with bees all day dream of otherworldly Melipona nectar at night? A surprised, faintly guilty grin telegraphs his answer.</p>
<p>The post <a href="https://corporateknights.com/natural-capital/biodiversity-in-a-bottle/">Biodiversity in a bottle</a> appeared first on <a href="https://corporateknights.com">Corporate Knights</a>.</p>
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