Newsflash. The government doesn’t need to break up power companies in order to tame prices. The ACCC says so



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Victoria’s Loy Yang brown coal power station at night. Breaking up generation companies might do little to bring prices down.
Shutterstock

Tony Wood, Grattan Institute

Who wouldn’t want cheaper power?

And who wouldn’t enjoy a bit of a stoush between the big bad generators and the government, trying to break them up on our behalf?

Even if it was largely tangential to keeping prices low.

The “big stick” of forced divestiture, where the government through a court could order an energy company to sell off bits of itself, never made it to a vote in the final chaotic fortnight of parliament just finished.

It will be the subject of a Senate inquiry that will report on March 18. After that, parliament is set to sit for only seven days before the election, so its possible it’ll never happen, under this government.

The government’s bill is good in parts

Parts of its Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill are uncontroversial.

The main trigger was the Australian Competition & Consumer Commission’s June report, Restoring Electricity Affordability and Australia’s Competitive Advantage.

It found against forced divestiture, but thought along similar lines to the government in some respects.

The legislation presented to parliament this month bans three types of misconduct:

  • electricity retailers’ failing to pass on cost savings
  • energy companies’ refusing to enter into hedge contracts (agreements to buy and sell at a particular price) with smaller competitors
  • generators’ manipulating the spot (short term) market, for example by withholding supply.

It imposes civil penalties for the first, forces companies to offer contracts for the second, and provides for divestiture orders for the third, after they have been recommended by the government and approved by the Federal Court.




Read more:
Consumers let down badly by electricity market: ACCC report


There are good reasons for the government to act on the three behaviours, although each of the its proposed solutions raises concerns.

The ACCC wants something similar but different

Firstly, the ACCC did not identify the legislation’s first target as a major cause of high prices. They did observe that it is complicated to shop around and the offers are confusing, and sometime next year Australian governments will force retailers in some states to offer fairer default offers at an affordable price.

But it not clear why the energy sector has been singled out as an industry whose retailers have to pass on cost savings, and not supermarkets or banks or airlines or petrol stations, or any other kind of industry.

Secondly, the ACCC most certainly did raise concerns about dominant generator-retailers preferring not to enter into hedge contracts with competitors, particularly in South Australia.




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It recommended that the Australian Energy Market Commission impose a “market making obligation” forcing large, so-called gentailers to buy and sell hedge contracts.

Its recommendation has the same intent as the one proposed by the government, although it has the advantage of being administered by a regulator that already exists.

Thirdly, the ACCC also concluded that concentration in the wholesale market means higher prices. Its report focused on the bidding activity of the Queensland government owned generator Stanwell Corporation.

Manipulation isn’t a major price driver

The Grattan Institute identified market manipulation by generators as a contributor to higher prices in our July 2018 report Mostly working: Australia’s wholesale electricity market.

But we found it made a much smaller contribution than high gas and coal prices and the closure of ageing coal generators.

We recommended a rule change to constrain generators’ bidding practices in specific circumstances.




Read more:
Why the free market hasn’t slashed power prices (and what to do about it)


The ACCC recommended giving powers to the Australian Energy Regulator to investigate and fix such problems.

It considered a divestiture mechanism of the kind in the government’s leglislation, but rejected it as extreme.

Its own less extreme recommendations would “if implemented, be a better means to restore competition to a level which serves consumers well”.

Breaking up corporations is a broader question

There may well be a case for breaking up corporations whose size prevents or substantially lessens competition. It happens overseas.

The government cites the example of the United States Sherman anti-trust legislation. It has been in place since 1890 and has been famously used to break up Standard Oil and AT&T. The ACCC does not have this power.

There is debate about whether it would work in the much smaller market of Australia.




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Allan Fels, a former head of the Australian Competition and Consumer Commission a believes it would.

But quite sensibly he argues it should apply across the board, including sectors such as banking in light of the findings of the royal commission.

Ian Harper, who led the government’s 2015 competition review, is less convinced. However, he says if a divestment power is introduced, it should be introduced broadly.




Read more:
Harper Review: a mixed basket for Coles and Woolworths


It’s worth considering divestment powers broadly, rather than rushing to introduce them in one sector of the economy in what was to have been the leadup to Christmas because of a concern that its prices were too high.

The ACCC has already delivered a comprehensive report on the means to bring them down.

The government would be better served acting comprehensively on its recommendations.The Conversation

Tony Wood, Program Director, Energy, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Revealing how much tax companies pay doesn’t move markets or reduce tax avoidance


Roman Lanis, University of Technology Sydney; Brett Govendir, University of Technology Sydney; Peter Wells, University of Technology Sydney, and Ross McClure, University of Technology Sydney

The public disclosure of information that Australia’s largest companies give to the Australian Taxation Office (ATO) on their tax returns doesn’t sway investors’ decisions and doesn’t reduce corporate tax avoidance, our research shows.

We examined the first three releases of ATO tax transparency data in 2014, 2015 and 2016, along with financial statement data and share price movements for 244 listed companies. Under the Tax Laws Amendment Act 2013 the ATO is required to disclose total revenue, taxable income, and income tax payable for these companies.




Read more:
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When these companies first disclosed tax return data there was a significant negative reaction in stock prices for firms with lower effective tax rates. But the reaction wasn’t limited to companies that disclosed. This suggests investor concerns about either spill-over effects for other businesses, or a more aggressive stance on tax avoidance from the ATO.

However, for the second and third releases of ATO data, there was no reaction from the financial markets at all, not even for those firms included in the disclosures.

In combination, these results suggest that the ATO disclosures provide little new or useful information to investors about corporate tax strategies. It also shows the information the ATO currently discloses doesn’t lead to increased enforcement, and so, investors have little expectation of any increase in corporate tax payments.

What companies have to disclose to the ATO

The aim of the Tax Laws Amendment Act was to increase public scrutiny of company tax strategies through increased transparency, and ultimately discourage tax avoidance. Although only limited to the largest firms, these disclosures are exceptional.

Apart from some Scandinavian countries that have public disclosure of all tax return information, Australia’s legislation is unique. For example, the information is disclosed by the ATO rather than the companies themselves, and it’s mandatory rather than voluntary.

The disclosed information also allows us to estimate the magnitude of corporate tax avoidance among these companies.

However, the tax transparency law is still yet to meet its stated aim. This may be due to the type of information disclosed.




Read more:
To really tackle corporate tax evasion we need a public register


The information disclosed under the current legislation was chosen with no public consultation, discourse or input. So it’s unclear whether the decision to include only certain information has been politically driven. Neither the government nor the ATO cite any research to support their choice of data to be released.

Our study demonstrates that the success of any scheme to improve company tax transparency relies on new information about corporate tax strategies being revealed. It also requires an expectation of some consequences. These could include an increase in the costs of corporate tax avoidance, such as increased scrutiny from the ATO, or additional costs to justify tax-reducing corporate structures.

The ConversationUnfortunately, it seems Australia’s law on this doesn’t meet these hurdles, and the politics of addressing corporate tax avoidance has stifled an attempt to develop an effective policy to counter it.

Roman Lanis, Associate Professor, Accounting, University of Technology Sydney; Brett Govendir, Lecturer, Accounting Discipline Group, University of Technology Sydney; Peter Wells, Professor, Accounting Discipline Group, University of Technology Sydney, and Ross McClure, PhD Candidate, casual academic, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.

To value companies like Amazon and Facebook, we need to look beyond dollars and assets


John Dumay, Macquarie University; Maurizio Massaro, Università degli Studi di Udine, and Muhammad Nadeem

Investors and business people usually value companies based on the balance of assets and debts at the end of a financial year. But our research found they should be valuing their employees’ ability to innovate while using their existing physical assets.

This is what actually creates value for our economy. For example manufacturing, an example of using assets to create value, is on the decline in Australia. Contrast this to services, using the skills of employees, which are increasing.

We came up with a modified way to predict the value of companies, removing the emphasis on assets and instead using measures of spending on research and development and copyrights.

We tested this revised model with accounting data from companies in countries like China, Malaysia, Russia, South Africa and Turkey. We also tested it with companies in more developed countries like Australia, Austria, Netherlands, Singapore and Sweden.

Research and development was positively associated with return on assets in Australia, Austria, the Netherlands, Singapore, Sweden, China, South Africa and Turkey, according to the model. This means that companies in these developed and emerging economies use their resources more efficiently because of their investments in research and development and copyrights.

For some of the biggest technology companies like Amazon and Facebook, the unique combination of their people, their invented systems and processes, and their physical presence creates value for the company and their investors.

If we can improve how we predict potential economic value, we can help companies and our economy to grow and become more efficient.

Traditional accounting methods

Today, the traditional accounting system has lost its relevance, because many of the resources companies use to do business cannot be owned and become an asset.

Traditionally companies calculate how much they own (assets) and subtract how much they owe (liabilities). The remaining amount, or book value, is what the company is worth.

But people are a key resource in any company, yet companies do not own people. The wages paid to them are an expense, but their value cannot be recorded in the company’s accounts.




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Similarly, accounting rules state that most research and development is expensed when it occurs, meaning it is counted as a cost immediately. The problem is that investments in people and research and development may not pay off until the future.

What this means for long-term investments

Amazon, for example, is spending billions of dollars on research and development. This would involve spending money on intangible resources such as copyrights, market research, branding and designing systems and processes. It will also invest in marketing to potential customers, training staff and hiring managers.

According to current accounting rules, most of these costs are treated as expenses now. It is only physical assets such as buildings, computers, furniture and equipment that are counted as a cost over time.




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Companies may be misleading investors by not openly assessing the true value of assets


However, Amazon’s investment in its new distribution network is likely to reap significant returns in the future. The fact that accounting reports analyse the past year, six months or quarter, shows how accounting is too focused on the short term. In the long term, Amazon is actually worth about 25 times more than accounting suggests.

Because investors are interested in the future returns from their investments, not what was spent in the past, the stock market values most modern companies at several times their book value. This makes modern accounting even less relevant in explaining economic value.

A new approach

Our research found that to understand how economic value is created, you need to look at what businesses are spending on long term resources such as research and development and copyright and treat it as an investment, rather than a cost.

Even if a company is not making a profit because it is investing in research and development in the short term, this does not mean it is not capable of making money in the long term.

Many companies like Amazon never made a profit in their early years as they burned cash to create their foothold in the market. But their investors were convinced these companies would create economic value by way of profits and increased share prices in the future.

The ConversationIf we look beyond the book value of companies, we can truly understand how they create economic value.

John Dumay, Associate Professor – Department of Accounting and Corporate Governance, Macquarie University; Maurizio Massaro, Assistant Professor, Università degli Studi di Udine, and Muhammad Nadeem, Lecturer

This article was originally published on The Conversation. Read the original article.

What should Australian companies be doing right now to protect our privacy


David Glance, University of Western Australia

Australians are increasingly concerned about how companies handle their personal data, especially online.

Faced with the increasing likelihood that this data will be compromised, either through cyber attacks or mishandling, companies are now being forced into a more comprehensive approach to collecting and protecting customers’ personal data. The question remains – what is the best approach to achieving this goal?

The Organisation for Economic Co-operation and Development (OECD) has proposed that instead of talking about cybersecurity – companies, organisations and nations should be viewing the problem from a digital security risk management perspective.

Cybersecurity often overlooks risks to data that have nothing to do with a “cyber” element, even if people could agree on a definition of that term. In the case of Edward Snowden for example, he used a colleague’s credentials to access the system and copied files to a USB drive.

Digital security risk management involves getting everyone in an organisation to see digital risk as part of the overall risks that the organisation faces. The extent of risk any organisation is willing to take in any particular activity depends on the activities value. The aim is to manage the risk to a level that is acceptable to all parties.

What do you do about the weak link: humans?

It is worth remembering that in the case of the Equifax breach in which the personal details of up to 143 million customers in the US were leaked, it was largely human errors that were to blame.

Put simply, the person who was responsible for applying the patch (a piece of software designed to update a computer program or its supporting data, to fix or improve it) simply didn’t do their job. The software that was supposed to check whether the patch had been applied also failed to pick this up.

Until humans can be taken out of the equation entirely, it is almost impossible to remain entirely secure, or to avoid the inadvertent disclosure of personal and private information. Insider threat (as this type of risk is known) is difficult to combat and companies have tried various approaches to managing this risk including predictions based on psychological profiling of staff.

Automation and artificial intelligence may be a way of achieving this in the future. This works by minimising the amount of sensitive information staff have direct access to and surfacing only the analysis or interpretation of that data.

A litany of recent breaches

If you needed convincing about the vulnerability of personal data on the Internet, you only need look at Gemalto’s data breach website or DataBreaches.net.

The breaches of private and personal information don’t recognise national boundaries with hacks of companies like Yahoo having affected 3 billion users, including millions of Australians.

Of course, Australian companies and organisations have also been involved with spectacular data breaches. Last year saw the Australian Red Cross expose 555,000 customer records online.

Of more concern was the Australian Department of Health had published online what they believed were de-identified records of Medicare and pharmaceutical claims of more than 3 million patients. Researchers at the University of Melbourne discovered that the “encrypted” doctor provider numbers could be decrypted.

Are we looking at it in the wrong way?

Whilst there are practical steps companies can take to protect digital systems and data, there are more fundamental questions companies should be asking from a risk perspective. In order to navigate these questions, companies need to understand the data they collect and perhaps surprisingly, this is something most companies struggle to do.

The 13 Australian Privacy Principles from the Office of the Australian Information Commissioner outline the basics of how organisations and agencies should handle personal information. The practical application of these principles involves an approach called Privacy By Design for all applications and services companies offer.

Enter confidential computing

For CSIRO’s Data61, the answer to breaches of this sort is “confidential computing”. Data61 is tasked with data innovation and commercialisation of its research ideas. Confidential computing is the remit of Data61’s latest spin-off, N1 Analytics.

The main aspect of confidential computing involves keeping data encrypted at all times and using special techniques to be able to query data that is still encrypted and only decrypting the answer.

This can even allow others outside an organisation to query internal data directly or link to it with their own data without revealing the actual underlying data to either party.

Aside from the case of allowing the use of sensitive data in research, this approach would allow a company with financial information say, to share this data with an insurance company without handing over sensitive information but theoretically letting the insurance company carry out extensive data analytics.

What companies should do now to protect your data

As a starting point, Australian companies should only collect the minimum of personal information that the business actually needs. This means not collecting extra information simply for marketing purposes at some later date for example.

Companies then need to explain in simple, clear, terms why information is being collected, what it is being used for and get users to consent to giving that information.

Companies then need to secure the data that is collected. Security involves dedicated staff understanding the data that is kept by a company and taking responsibility for its physical security and for controlling who has access, when they have access and what form they can access the data.

The ConversationLastly, they need to understand and enact a risk management approach to all digital data. This means that this is part of the overall culture of the company for every employee.

David Glance, Director of UWA Centre for Software Practice, University of Western Australia

This article was originally published on The Conversation. Read the original article.

Regulator failing to resolve complaints on alleged human rights abuses by Australian companies


Shelley Marshall, RMIT University

The Australian National Contact Point (ANCP) was set up as part of Australia’s membership of the OECD to hear complaints on the way Australian corporations operate overseas, but research shows it’s poorly resourced and rejects most claims at the initial assessment stage, raising concerns about its effectiveness.

There are National Contact Points already operating in OECD countries, that are achieving more with their mandate to promote Australian businesses respecting human rights while operating or based in other countries.

Australia does not have a legal framework that specifically regulates the human rights obligations of Australian corporations overseas. The Australian government is missing a vital opportunity to promote sound and ethical business practice and mediate disputes before they blow up, by inadequately resourcing this important human rights body.

Why is the ANCP needed?

Australian companies now operate all around the world in mining, manufacturing, finance and other industries. Sometimes this is through wholly owned subsidiaries, sometimes they invest in joint ventures or part shares, and at other times Australian businesses procure parts through supply chains.

When their activities negatively impact communities overseas, those affected should be able to go to the ANCP to hear their complaints. Though, in principle, communities can take their claims to local police and courts, in many countries corruption, bias and long waits often make remedy through legal avenues impossible.

Company structures also sometimes render it difficult to hold the parent company or a lead company in a supply chain responsible, even though that business may be calling the shots.

As the Australian government adheres to the OECD’s guidelines for multinational enterprises, it’s required to have a National Contact Point to assist corporations in observing these guidelines. Part of this includes providing a platform for mediation and conciliation.

Though its findings may not be legally enforceable, the ANCP is particularly important because it’s the only avenue for redress for many communities and individuals affected by Australian business, outside our national borders.

Properly resourcing the National Contact Point would allow the government to better fulfil its obligations under the United Nations Guiding Principles on Business and Human Rights (UNGPs).

Findings by other National Contact Points, when it comes to breaches of the OECD Guidelines for Multinational Enterprises, have been highly influential in other countries. For example, the UK NCP determined that mining company Vedanta Resources had breached human rights guidelines regarding its planned mine in India.

It found the mine would displace thousands of tribal people. This finding resulted in high profile divestments from the company by a number of shareholders and the adoption of a new corporate social responsibility approach by the company. Interviews with shareholders that divested revealed that although the determination was not legal in nature, it was seen to have heightened authority because it came from the UK government.

How the ANCP is failing

The research on Australia’s NCP is part of a larger project that conducted 587 interviews with 1,100 individuals mainly in Australia, the UK, India and Indonesia. It assessed the performance of the ANCP based on an analysis of every claim that has been lodged with the body.

It found that the ANCP has all but abdicated its workload; it rejected or transferred (to another NCP) two thirds of all complaints made. With only one exception, the remainder of accepted complaints were closed without resolution, as the ANCP was unable to bring the parties to mediation and unwilling to issue a determination against the company the subject of complaint.

In the more than ten years since its establishment, the ANCP is yet to make a single determination against a company the subject of complaint.

In my meetings with Treasury, the department confirmed that until recently, one public servant was tasked with running the ANCP, who already had a full-time load of other work. Treasury also disclosed this single staff member, with no expertise in the area, was expected to deal with complex human rights complaints involving some of Australia’s biggest companies, around their primary role, with no dedicated budget.

To provide a point of comparison, the Dutch NCPhas two full-time staff, as well as other staff who have responsibilities to the NCP as part of their other duties, and receives an additional €900,000 over three years to promote corporate ethics. It is advised by four independent members and four advisory members from the government departments most relevant to business and human rights. Australia’s NCP receives no such independent advice.

The cases brought to the ANCP include a complaint regarding ANZ’s alleged financing of logging in Papua New Guinea and alleged forced evictions at a coal mine in Colombia jointly owned by BHP Billiton.

What needs to change

There are several ways the ANCP can improve its functioning and provide access to remedy. Top amongst these are: improving the independence of the ANCP and properly resourcing it, improving the process for handling complaints and increasing transparency.

If there was ever a time that the much neglected ANCP has a chance of being reformed, it is now. Australia is making a bid for a seat on the United Nations Human Rights Council this year.

The ConversationModern slavery – especially the extent to which it taints the supply chains of Australian businesses and businesses operating in Australia – is the subject of a parliamentary inquiry and national attention. Hopefully this important human rights mechanism gets the attention it deserves.

Shelley Marshall, Vice Chancellor’s Senior Research Fellow, expert in corporate accountability, RMIT University

This article was originally published on The Conversation. Read the original article.

Four ways social media companies and security agencies can tackle terrorism


Robyn Torok, Edith Cowan University

Prime Minister Malcolm Turnbull has joined Britain’s Prime Minister Theresa May in calling on social media companies to crack down on extremist material being published by users.

It comes in the wake of the recent terror attacks in Australia and Britain.

Facebook is considered a hotbed for terrorist recruitment, incitement, propaganda and the spreading of radical thinking. Twitter, YouTube and encrypted services such WhatsApp and Telegram are also implicated.

Addressing the extent of such content on social media requires international cooperation from large social media platforms themselves and encrypted services.

Some of that work is already underway by many social media operators, with Facebook’s rules on this leaked only last month. Twitter says that in one six-month period it has suspended 376,890 accounts related to the promotion of terrorism.

While these measures are a good start, more can be done. A focus on disruption, encryption, recruitment and creating counter-narratives is recommended.

Disruption: remove content, break flow-on

Disruption of terrorists on social media involves reporting and taking down of radical elements and acts of violence, whether that be radical accounts or posted content that breaches community safety and standards.

This is critical both in timing and eradication.

Disruption is vital for removing extreme content and breaking the flow-on effect while someone is in the process of being recruited by extremists.

Taking down accounts and content is difficult as there is often a large volume of content to remove. Sometimes it is not removed as quickly as needed. In addition, extremists typically have multiple accounts and can operate under various aliases at the same time.

Encryption: security authorities need access

When Islamic extremists use encrypted channels, it makes the fight against terrorism much harder. Extremists readily shift from public forums to encrypted areas, and often work in both simultaneously.

Encrypted networks are fast becoming a problem because of the “burn time” (destruction of messages) and the fact that extremists can communicate mostly undetected.

Operations to attack and kill members of the public in the West have been propagated on these encrypted networks.

The extremists set up a unique way of communicating within encrypted channels to offer advice. That way a terrorist can directly communicate with the Islamic State group and receive directives to undertake an attack in a specific country, including operational methods and procedures.

This is extremely concerning, and authorities – including intelligence agencies and federal police – require access to encrypted networks to do their work more effectively. They need the ability to access servers to obtain vital information to help thwart possible attacks on home soil.

This access will need to be granted in consultation with the companies that offer these services. But such access could be challenging and there could also be a backlash from privacy groups.

Recruitment: find and follow key words

It was once thought that the process of recruitment occurred over extended periods of time. This is true in some instances, and it depends on a multitude of individual experiences, personality types, one’s perception of identity, and the types of strategies and techniques used in the recruitment process.

There is no one path toward violent extremism, but what makes the process of recruitment quicker is the neurolinguistic programming (NLP) method used by terrorists.

Extremists use NLP across multiple platforms and are quick to usher their recruits into encrypted chats.

Key terms are always used alongside NLP, such as “in the heart of green birds” (which is used in reference to martyrdom), “Istishhad” (operational heroism of loving death more than the West love life), “martyrdom” and “Shaheed” (becoming a martyr).

If social media companies know and understand these key terms, they can help by removing any reference to them on their platforms. This is being done by some platforms to a degree, but in many cases social media operaters still rely heavily on users reporting inappropriate material.

Create counter-narratives: banning alone won’t work

Since there are so many social media applications, each with a high volume of material that is both very dynamic and fluid, any attempts to deal with extremism must accept the limitations and challenges involved.

Attempts to shut down sites, channels, and web pages are just one approach. It is imperative that efforts are not limited to such strategies.

Counter-narratives are essential, as these deconstruct radical ideologies and expose their flaws in reasoning.

But these counter-narratives need to be more sophisticated given the ability of extremists to manipulate arguments and appeal to emotions, especially by using horrific images.

This is particularly important for those on the social fringe, who may feel a sense of alienation.

It is important for these individuals to realise that such feelings can be addressed within the context of mainstream Islam without resorting to radical ideologies that leave them open to exploitation by experienced recruiters. Such recruiters are well practised and know how to identify individuals who are struggling, and how to usher them along radical pathways.

Ultimately, there are ways around all procedures that attempt to tackle the problem of terrorist extremism on social media. But steps are slowly being taken to reduce the risk and spread of radical ideologies.

The ConversationThis must include counter-narratives as well as the timely eradication of extremist material based on keywords as well as any material from key radical preachers.

Robyn Torok, PhD, PhD – researcher and analyst, Edith Cowan University

This article was originally published on The Conversation. Read the original article.

Tech companies fight Trump’s travel ban and may take their business elsewhere


David Glance, University of Western Australia

127, mostly tech, companies have signed a brief of support opposing US President Trump’s “Muslim travel ban”. The companies, that include Apple, Google, Microsoft, Facebook and Tesla have filed an “amicus brief” with the 9th US Circuit Court of Appeals in support of US District Judge James L. Robart who ordered a stay on Trump’s executive order to ban anyone from 7 countries from entering the US for between 90 and 120 days.

The tech companies have argued that immigration is a central factor in the history and makeup of the US and has helped fuel American innovation and economic growth. Immigrants, or their children, founded more than 200 companies that are amongst the top 500 companies in the US. Between 2006 and 2010, immigrants were responsible for opening 28% of call new businesses in the US. Thirty percent of US Nobel laureates in Chemistry, Medicine and Physics have been immigrants.

Mostly however, the brief focuses on the harm that its chaotic implementation will have on US companies. They allege:

“The Order makes it more difficult and expensive for U.S. companies to recruit, hire, and retain some of the world’s best employees. It disrupts ongoing business operations. And it threatens companies’ ability to attract talent, business, and investment to the United States.

The consequences of this action will be that US companies will lose business and ultimately

“Multinational companies will have strong incentives, including from their own employees, to base operations outside the United States or to move or hire employees and make investments abroad.”

This last is no idle threat. In 2015, it was estimated that US companies have US $2.1 trillion overseas that haven’t been repatriated because of the tax implications. Apple alone has over US $230 billion held outside the US.

The idea of using this money to set up development and further manufacturing capabilities outside the US makes a great deal of sense, even without the imperative of Trump’s actions. However, there is another move that Trump is threatening that may make the decision to move operations outside the US more attractive still.

Trump’s administration is planning to target the high-skilled worker’s H-1B visa. This offers mostly tech companies the ability to recruit up to 85,000 skill developers and other staff from around the world. According to the Republicans and Trump however, tech companies should be recruiting locally.

Companies like Microsoft, where I have first hand experience of recruitment experience, did actively try and recruit within the US. Recruiting from outside is generally more expensive and time consuming and so there is no real reason why tech companies would actively ignore domestic applicants or favour foreign ones. Tech companies seek to employ the best people for the job and if the pool is global, that is how they achieve that goal.

Having offices remotely distributed can be made to work although it makes communications across teams and different product areas more challenging than if they are all in a single location. However, it already happens in most tech companies with Google and Microsoft already having research and product development occurring out of countries like Australia, India and China.

As outlined in the amicus brief, Trump is sowing uncertainty and chaos with his desire to treat policy like tweets on Twitter. That is going to provide enough incentive for companies to brave the potential disapproval from Trump and use the significant investments held outside the US to expand their capabilities.

Trump may succeed, contrary to his intentions, in catalysing a new phase in globalisation in which companies shift their centres from the US to a more distributed model. Of course, companies may still run into problems if Trump’s brand of nationalism succeeds in taking hold in other countries like Australia or Europe.

The other side-effect of the US uncertainty is the fact that increasingly businesses based outside the US will have a competitive advantage and customers may decide that it is easier to avoid doing business with the US for at least the next four years. China is rapidly becoming the technological equal of the US in many ways and so its ascendancy may also benefit.

The amicus curiae brief is the start of a long legal campaign which will aim to keep the worst of Trump’s plans in check. Depending on the outcomes, the world outside the US may actually benefit from Trump if companies are forced to look outside the walls, real and virtual, he is seeking to create.

The Conversation

David Glance, Director of UWA Centre for Software Practice, University of Western Australia

This article was originally published on The Conversation. Read the original article.

Plinky Prompt: My Greatest Achievement


Magic Garden

My greatest achievement from a purely human perspective would be gaining the top jobs in my chosen field of work – not that they are necessarily the greatest tasks a person has ever had. In the areas in which I have chosen to work and in the two different companies I have now had the top jobs in both. I have been content with that.

Powered by Plinky

Vietnam stepping up religious rights abuses, experts say


Government-perpetrated violence against a Catholic village in Vietnam has highlighted a series of human rights abuses in the communist nation, and three U.S. congressmen are calling on the United Nations to intervene, reports Baptist Press.

"A few months ago during a religious funeral procession, Vietnamese authorities and riot police disrupted that sad and solemn occasion, shooting tear gas and rubber bullets into the crowd, beating mourners with batons and electric rods," Rep. Chris Smith, R.-N.J., said at a hearing of the Tom Lantos Human Rights Commission in August.

"More than 100 were injured, dozens were arrested and several remain in custody and have reportedly been severely beaten and tortured. At least two innocent people have been murdered by the Vietnamese police," Smith said.

The Con Dau tragedy, Smith said, "is unfortunately not an isolated incident." Property disputes between the government and the Catholic church continue to lead to harassment, property destruction and violence, Smith said, referring to a report by the U.S. Commission on International Religious Freedom.

"In recent years, the Vietnamese government has stepped up its persecution of Catholic believers, bulldozing churches, dismantling crucifixes and wreaking havoc on peaceful prayer vigils," Smith said.

Persecution is not limited to Catholics, though, as Smith had a list of nearly 300 Montagnard political and religious prisoners. In January, the Vietnamese government sentenced two Montagnard Christians to 9 and 12 years imprisonment for organizing a house church, and others have been arrested in connection with house churches, Smith said.

"The arrests were accompanied by beatings and torture by electroshock devices," the congressman said. "We must not forget the sufferings of Khmer Krom Buddhists, Cao Dai, Hoa Hao, the Unified Buddhist Church of Vietnam and others. The said reality is that the Vietnamese government persecutes any religious group that does not submit to government control."

The violence in the 80-year-old Catholic village of Con Dau in central Vietnam reportedly stemmed from a government directive for residents to abandon the village to make way for the construction of a resort.

International Christian Concern, a Washington-based watchdog group, reported that when Con Dau residents refused to leave, water irrigation was shut off to their rice fields, stopping the main source of income and food.

In May, police attacked the funeral procession, beating more than 60 people, including a pregnant woman who was struck in the stomach until she had a miscarriage, ICC said.

One of the funeral procession leaders later was confronted by police in his home, where they beat him for about four hours and then released him. He died the next day, ICC said. Eight people remain in police custody and are awaiting trial.

"The people of Con Dau are living in desperate fear and confusion," Thang Nguyen, executive director of an organization representing Con Dau victims, told ICC. "Hundreds of residents have been fined, and many have escaped to Thailand."

Smith, along with Rep. Joseph Cao, R.-La., and Frank Wolf, R.-Va., introduced a House resolution in July calling for the United Nations to appoint a special investigator to probe "ongoing and serious human rights violations in Vietnam." In August, the Lantos Commission met in emergency session to address the "brutal murders and systematic treatment of Catholics in Con Dau."

"The Vietnamese government justifies this violence, torture and murder because the villagers of Con Dau had previously been ordered, some through coercion, to leave their village, property, church, century-old cemetery, their religious heritage, and to forgo equitable compensation in order to make way for a new ‘green’ resort," Smith said at the hearing. "Nothing, however, not even governmental orders, grant license for government-sanctioned murder and other human rights abuses."

The U.S. Department of State declined to testify before the Lantos Commission, and the U.S. ambassador to Vietnam characterized the Con Dau incident as a land dispute and refused to get involved.

Logan Maurer, a spokesman for International Christian Concern, told Baptist Press he has publicized about 10 different incidents of persecution in Vietnam during the past few months.

"In some cases, especially in Southeast Asia, religious persecution becomes a gray area. We also work extensively in Burma, where often there are mixed motives for why a particular village is attacked," Maurer said. "Is it because they’re Christian? Well, partially. Is it because they’re an ethnic minority? Partially.

"So I think the same thing happens in Vietnam where you have a whole village that’s Catholic. One hundred percent of it was Catholic," he said of Con Dau.

Maurer explained that local government officials in Vietnam generally align Christianity with the western world and democracy, which is still seen as an enemy in Vietnam on a local level.

"As far as the official government Vietnamese position, that’s different, but local government officials do not take kindly to Christians and never have. We have documented many cases of government officials saying Christianity is the enemy. So here it’s mixed motives as best we can figure out," Maurer said.

"They wanted to build a resort there, and they could have picked a different village but they chose the one on purpose that was Catholic because it represents multiple minorities — minority religion, minority also in terms of people that can’t fight back. If they go seek government help, the government is not going to help them."

A Christian volunteer who has visited Vietnam five times in the past decade told Baptist Press the Con Dau incident illustrates the way the Vietnamese government responds to any kind of dissent.

"In our country, and in modern democracies, there are methods for resolving disputes with the government, taking them to court, trying to work through the mediation process," the volunteer, who did not want to be identified, said. "In Vietnam there is no such thing. It is the government’s will or there will be violence."

Vietnam’s constitution includes a provision for religious liberty, but the volunteer said that only goes as far as the communal will of the people, which is monopolized by the Communist Party.

"So when the Communist Party says you can’t build a church there or you can’t worship this way, those who say, ‘Well, I have religious freedom,’ are essentially trumped by the constitution that says it’s the will of the people, not individual liberty that’s important," the volunteer said.

The government in Vietnam has made efforts during the past 15 years to open up the country to economic development, and with that has come an influx of some western values and a lot of Christians doing work there, the volunteer said.

"I would first caution Christians to still be careful when they’re there working," he said, adding that government officials closely watch Christians who visit from other countries, and books about Jesus cause trouble.

Secondly, the volunteer warned that all news emerging from Vietnam must be tested for accuracy on both sides because both those who are persecuting and those who are sounding the alarm on persecution have their own political goals.

"That being said, I don’t doubt that this happened," the volunteer said regarding Con Dau.

International Christian Concern urges Americans to contact the Vietnamese Embassy in Washington at 202-861-0737, and the Christian volunteer said people can contact the U.S. Commission on International Religious Freedom to encourage changes in Vietnam.

"They can also directly e-mail the ambassador and the consular general in Ho Chi Minh City and encourage them to push for more reform," he said. "And they can contact companies that are having products made in Vietnam and encourage the business leaders to speak out for change in those countries. You go to JC Penney today in the men’s department and pick up almost anything, it’s made in Vietnam. That’s the kind of pressure they could put on them."

Report from the Christian Telegraph

China Moves Uyghur Christian Prisoner, Allows Family Visit


Court rejects appeal of 15-year sentence for Alimjan Yimit.

DUBLIN, April 29 (CDN) — Authorities in Xinjiang Province recently moved Uyghur Christian Alimjan Yimit from a prison in Kashgar to a prison in the provincial capital Urumqi and allowed the first visit from family members since his arrest in January 2008, sources told Compass.

Alimjan (Alimujiang Yimiti in Chinese) was noticeably thinner but in good spirits, the family told friends after their brief visit to him in Xinjiang No. 3 prison on April 20, one source told Compass. They were allowed only 15 minutes to speak with Alimjan via telephone through a glass barrier, the source said.

But Alimjan’s lawyers, Li Baiguang and Liu Peifu, were prohibited from meeting with him, despite gaining permission from the Xinjiang Bureau of Prison Management, the China Aid Association (CAA) reported on Saturday (April 24).

Officials have now granted Alimjan’s wife Gulnur (Chinese spelling Gulinuer) and other close family members permission to visit him once a month.

Alimjan and Gulnur pastored a Uyghur ethnic house church in Xinjiang prior to his arrest in January 2008.

Attorney Li told Radio Free Asia earlier this month that while the initial charges against Alimjan were both “instigating separatism” and “leaking state secrets” to foreign organizations, his actual offense was talking to visiting Christians from the United States.

The Kashgar Intermediate Court found Alimjan guilty of “leaking state secrets” on Oct. 27, 2009 and gave him a 15-year sentence. His lawyers appealed the sentence, but the People’s High Court of Xinjiang upheld the original verdict on March 16.

“This decision is illegal and void because it never succeeded in showing how Alimjan supplied state secrets to people overseas,” Li said, according to Radio Free Asia.

“Religion lies at the heart of this case,” fellow legal advocate Li Dunyong, who was effectively disbarred at the end of May 2008 when Chinese authorities turned down an annual application to renew his law license, told Radio Free Asia.

Zhang Kai, another Beijing lawyer who had defended Alimjan, suffered the same fate. (See “China Refuses to Renew Licenses for Human Rights Lawyers,” June 11, 2009.)

Alimjan’s legal team now plans to appeal to the Beijing Supreme Court, according to CAA.

Court Irregularities

Officials initially interrogated Alimjan during his employment by two foreign-owned companies and forbade him to discuss the questioning with anyone. In September 2007 they closed the business he then worked for and accused him of using it as a cover for “preaching Christianity” among the Uyghurs.

Kashgar police then detained Alimjan on Jan. 11, 2008 on charges of endangering state security before formally re-arresting him on Feb. 20, 2008 for allegedly “inciting secession” and “leaking state secrets.”

He was then held for more than a year at the Kashgar Municipal Detention Center without facing trial.

After an initial closed hearing in the Kashgar Intermediate Court on May 27, 2008, court officials returned Alimjan’s case to state prosecutors citing lack of evidence. During a second secret hearing in July 2008 the charge of “inciting secession” was dropped. After further investigation the case was returned to court officials for consideration in mid-October 2008.

On Mar. 30, 2009, just one week after a rare prison visit from his lawyer, prison officials transferred Alimjan to a hospital in Kashgar. Alimjan called out to onlookers, “I’m sick. Tell my lawyer to come quickly to see me,” according to a CAA report. Compass sources confirmed that Alimjan had been beaten in prison. (See “Detained Uyghur Christian Taken to Hospital,” April 16, 2009.)

Last October, authorities finally sentenced Alimjan to 15 years in prison for “leaking state secrets” to foreign organizations.

“It is the maximum penalty for this charge … which requires Alimjan’s actions to be defined as having caused irreparable, grave national damage,” Li Dunyong said in a CAA press statement announcing the verdict.

The United Nations Working Group on Arbitrary Detention has ruled the arrest and detention of Alimjan to be arbitrary and in violation of international law, according to CAA.

Report from Compass Direct News