CorporateDispatch PRO - Edition 6 by The Dispatch Media

Corporate DispatchPro

Issue No.6 | July 2020

Corporate DispatchPro The Journal of CI Group

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Issue No.6 | July 2020

Corporate DispatchPro The Journal of CI Group

EDITORIAL TEAM Andrew Azzopardi Isabelle Micallef Bonello Jesmond Saliba CONTRIBUTORS Claire Bonello Claire Hollier Jennifer Saba John Foley Keith Zahra Robert Cyran Tonio Galea PRODUCTION ASSISTANT Laura Grima Shirley Zammit

CONTENTS Editorial 5 People, Planet and Profit

Economic recovery compatibility

The EU green renaissance

The climate after the pandemic

Malta Insights

CommuniqEU 37 Corporate boycotts expose an inconvenient truth

E-commerce boost is about more than Amazon

Gilead gives glimpse into feverish drug market

Local Perspective | Global Outlook

DESIGN TEAM Matthew Borg Nicholas Azzopardi

SOURCES

Published By

ADDITIONAL SOURCES

Design Produced

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Corporate DispatchPro

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Corporate DispatchPro Editorial

Sustainability in practice Every event now is a global event, as 2020 has made amply clear: from the Wirecard bust to the Libyan conflict, from the Black Lives Matter movement to, most obviously, the coronavirus pandemic. Actions that take place in the remotest of locations, inevitably tug at a network of strings that stretches the world over.

No matter how high isolationist governments try to build their figurative – and non-figurative – boundary walls, issues are becoming increasingly global. At the very top of that pile, sits the climate challenge as temperatures continue to rise at an uncontrollable rate destabilising the delicate worldwide ecosystem that sustains life on earth. It is of little surprise that ‘sustainability’ has become a keyword in practically every field of human activity in recent years, whether policymaking, business, or activism. The private sector, in particular, has been instrumental in promoting the standard term which, although advocated for by every industry, it remains for the most part an elusive concept. If they lack the philosophical stamina to neatly describe the tenor of sustainability, companies have a more important role in defining what it means in practice. Together with the scientific community and political leaders, entrepreneurs are the determinant factors in achieving a sustainable transformation in societies. The EU Green Deal launched late last year is perhaps the best confirmation of the role of business in the rebalancing of shared priorities to reach the complex targets of social and ecological justice. The daring strategy by the European Commission is the most comprehensive and concrete commitment to sustainability anywhere in the world right now. At the heart of it, is enterprise. 5

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Corporate DispatchPro The executive branch of the EU lays out a vision for a better, fairer, healthier Union built on innovation and economic growth. Certainly, businesses cannot drive the change on their own. Governments and institutions are needed to smoothen the bureaucratic rough edges; academia and researchers are irreplaceable in revealing new possibilities; civic society has a crucial function in setting social standards. But the EU Green Deal is revolutionary in turning the ingenuity, foresight, and self-confidence of the commercial sector, long berated as a cause for ecological degradation, into the linchpin of Europeâ&#x20AC;&#x2122;s environmental revival project. The business community has been given a rare invitation to join the public arena usually reserved for politicians, NGOs, and other not-for-profit bodies. For the sake of this generation and the ones following, it must not be turned down. JESMOND SALIBA

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Corporate DispatchPro CLAIRE BONELLO

People, planet and profit sustainability today The original definition of sustainable development was coined at the first Rio Earth Summit in 1992. In essence it was a focus on “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Although, many tend to think that it is a concept exclusively related to the environmental field, it actually goes far beyond. Sustainability is a holistic concept that encompasses a wide range of environmental, social, and economic issues. In the more poetic – but also the more precise – words of the entrepreneur and environmentalist Paul Hawken “Sustainability, ensuring the future of life on Earth, is an infinite game, the endless expression of generosity on behalf of all.” In other words, sustainability is essentially linked to survival and depends on the combined effort of all acting together today for there to be a future for all. In the case of businesses, sustainability would include sensitive and ethical concern for “people” and “planet” besides the essential “profit”. Businesses should aim for sustainable practices to permeate through every level of their internal and external dealings, ranging from responsible and ethical sourcing and procurement to environmentally-friendly investments. Reducing the carbon commute of personnel, embracing a zero-waste policy, and aiming for a paper deficit are other sustainable practices which businesses could opt for. Within the local scenario, there is the dawning realization that businesses have to be sustainable, not only to be perceived to be addressing the latest eco-fad or trend, but also because the sustainable ethical practices of businesses impact society as a 9

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whole, which in turn creates an environment which is conducive for businesses to operate within and within which to attract investment. Corporate Social Responsibility (CSR) is evolving to include sustainability. Unfortunately, some Maltese businesses show a growing tendency to confuse CSSR with philanthropy. The norm in Malta is to have highly-publicised events where the CEO hands over a sizeable cheque in the glare of attendant cameras, and to think that this would be enough to have the CSR box ticked. This is a very superficial way of adopting a CSR policy. A meaningful CSR programme goes beyond singular monetary transactions. A genuine and sustainable CSR programme would have a broader focus on more long-term systemic issues, such as climate change and the inclusive economy. Another pitfall on the road to sustainability is the tendency to “greenwash” or “green sheen” using green marketing to appear more environmentally responsible than they really are. For example, a transport company may spout the specifications of its vessels to show how eco-friendly the said vessels are, neglecting to say that the vessel routes will oust communities from their long-term swimming recreational swimming haunts and disturb marine life. Or a company may sponsor tree-planting initiatives but downplay the fact that it will be excavating and building upon good quality agricultural land, displacing farmers, and generating more traffic congestion. Similarly, a business entity may fund a one-off sports activity but ignore the fact that its activities pollute the air or sea, making it dangerous and unhealthy for members of the public to practice a sport in that locality all the year round. 10

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Corporate DispatchPro In order for these attempts to stop becoming the norm and for genuine and effective CSR to be practised, there should be the introduction of mandatory social and sustainability key performance indicators as evidence of proven empirical evidence of sustainable reform. These would measure specific indicators of ecologically sound practices such as the percentage of materials used in manufacturing which are recycled input materials, energy saved sue to conservation and efficiency improvements, the percentage of water recycled and reused, total amount of greenhouse gas emissions by weight. These indicators should not be considered merely as mathematical concepts but ways of achieving the human-centric restorative economy. Indicators should help us understand whether we are reaching necessary goals for sustainability, namely to stop accelerating the rate that we draw down capacity, to refrain from buying or degrading other peopleâ&#x20AC;&#x2122;s environment, and to avoid displacing other species by taking over their habitats. Businesses are called to lead in this drive towards sustainability. If their practices are genuine and effective, they will resonate with clients and investors, besides being intrinsically desirable. On the other hand, if sustainability is just another buzzword there will be no long lasting impact from it being bandied about. As Paul Hawken coolly told a room full of civic and business leaders at the Commonwealth Club way back in 1992, â&#x20AC;&#x153;Either we see business as a restorative undertaking, or we businesspeople will march the entire human race to the undertaker.â&#x20AC;?

In order for these attempts to stop becoming the norm and for genuine and effective CSR to be practised, there should be the introduction of mandatory social and sustainability key performance indicators as evidence of proven empirical evidence of sustainable reform.

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Corporate DispatchPro CLAIRE HOLLIER

Economic recovery compatibility with the re-launch of the European Green Deal The COVID-19 pandemic has revived our reliance on single-use plastics notably polystyrene. The way people and industries have faced the pandemic was to prioritize hygiene over environmental concerns - at least under panic mode. According to Bloomberg, two major companies that make polystyrene products, Ineos Styrolution and Trinseo, have seen ‘double-digit percentage sales increases in the food packaging and health-care industries’ through February, March and April 2020. As some industry leaders told Bloomberg, they suspect the trend will abate once the pandemic ends. Similarly, amidst the pandemic, in terms of policy prioritization, climate change policy took the back bench and became secondary to health and economic policies. However, despite the COVID-19 crisis, the urgency of climate change mitigation has not dissolved. Far from it – though there is an increased perception that economic recovery post-COVID would come at the expense of positive climate neutral actions and risk a heavy blow to efforts to ‘bend the curve’ of greenhouse gas emissions in line with the goals of the Paris Agreement. Notoriously, the Czech Republic and Romania called for scrapping the Green Deal to divert the funds towards supporting national economies and health systems. On the same lines, Poland suggested to discontinue the EU Emissions Trading System (ETS) from next year onwards. Such calls and suggestions to scrap existing climate policies and strategies, fall short of farsightedness. It is not like climate change has vanished or been resolved with coronavirus. 13

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So how will the economic recovery, post-COVID pan out for the survival or otherwise of the European Green Deal? Essentially, the Green Deal, presented by the Commission in December 2019, is a roadmap for making the EU’s economy sustainable by turning climate and environmental challenges into opportunities across all policy areas and making the transition just and inclusive for all. It is a set of actions to boost the efficient use of resources by moving to a clean, circular economy and stop climate change, revert biodiversity loss and cut pollution. This Deal covers all sectors of the economy, notably transport, energy, agriculture, buildings, and industries such as steel, cement, ICT, textiles, and chemicals. It seems that the EU Commission has reignited attention and put back on track its efforts on the Deal. The aim is for the EU’s Green Deal to support the general post-corona economic recovery and put the EU’s decarbonization progress back on the Member States’ priority list. It is important to align economic recovery measures with global climate change, so that stimulus funds will be directed to flow into economic activities that have a place in a climate-neutral world. In simpler terms, post-corona economic recovery should be compatible with climate neutrality objectives and the economy should be directed towards more environmental efficient measures. The re-launch of the European Green Deal may offer a unique opportunity for the EU to live up to the Green Deal’s promise of economic modernisation along the Paris decarbonisation objectives. And it does make sense. Climate policy may no longer be the first priority of the EU, but to re-embark on a high-carbon future development pathway should not be seen as a viable economic strategy for exiting the crisis.

It is important to align economic recovery measures with global climate change, so that stimulus funds will be directed to flow into economic activities that have a place in a climate-neutral world. In simpler terms, postcorona economic recovery should be compatible with climate neutrality objectives and the economy should be directed towards more environmental efficient measures. 14

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Corporate DispatchPro

Earlier this year, the Brussels-based think-tank Centre for European Policy Studies, published a paper backing the EU Commission’s refusal to scrap the proposed EU Climate Law to address the public health crisis. The Climate Law if adopted would embed the EU’s climateneutrality target for 2050 into EU legislation. It is precisely aimed to shield the ‘generational challenge of climate change’ from more pressing and immediate priorities. The Climate Law itself, has the potential to strengthen EU climate policy governance, which is likely to be indispensable for reaching EU climate objectives. However, in the context of the current economic crisis, there is a risk that Member States would lack appetite to give the European Commission its desired powers to amend climate trajectories by delegated acts as envisaged in the Climate Law. The suggestions by Poland, Czech Republic and Romania to slow down climate ambitions may point towards the potential challenges the Commission could face in managing energy and climate policy through National Energy and Climate Plans in the absence of binding national targets. In its position paper of June 2020, ‘What trade can do for climate’, BuisnessEurope contemplates how trade policy can uphold climate 15

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Corporate DispatchPro neutrality objectives. In April 2019, BusinessEurope had published its energy and climate strategy and explained five key framework conditions and related actions on how climate neutrality could possibly be achieved by around 2050, the last condition of which concerns the climate actions taken by other major economies. The organisation calls for the EU to define ‘the right balance’ so as not to undermine the Union’s competitiveness at global level. It regards that it is vital for the European Green Deal to take a systematic and holistic approach to the trade and climate agenda. BusinessEurope argues that ‘the sustainability triangle of climate action, competitiveness, and security of supply of energy and critical resources remains central’. With this triangulation in mind, BusinessEurope highlights that it is crucial to maintain well-functioning instruments such as the EU ETS, in order to protect competitiveness and minimise the risk of carbon/ investment leakage. Whilst recognizing that trade agreements can help incentivise a level playing field in the environmental area, BusinessEurope warns against an overburdening of the EU’s trade agenda which could come at the expense of the EU’s negotiation leverage on its core economic interests. In this sense a delicate balance needs to be found on how to use trade as leverage for climate goals while not scaling back on the economic purpose of the trade agenda. The organisation deems that more weight should be laid onto solutions at multilateral and plurilateral levels, such as unblocking the Environmental Goods Agreement (EGA) or stimulating the functioning of global value chains, or harmonising standards and regulatory frameworks in collaboration with non-EU Member States. Furthermore, trade agreements could promote green foreign investment in the EU or develop green public procurement, among other avenues, in line with the Green Deal. As regards any unilateral action, such as the Carbon Border Adjustment Mechanism (CBAM), any instrument needs to be devised in a way to avoid trade distortions or reduce the EU’s competitiveness. It is thus imperative that the impact assessment studying a first version of the CBAM considers sustainability and EU competitiveness and explores potential alternatives. Specifically, for island states heavily dependent on importation, the impact assessment should address the heterogeneity of peripheral economies.

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Corporate DispatchPro CI CONSULTA

The EU’s green renaissance At the end of June, the European Commission took a bold step towards its ambitious climate neutrality objectives by launching the Just Transition Mechanism. The platform will put €150 billion of fresh money at the disposal of local authorities around the EU to help regions get up to speed on climate and environmental policy. The plan attempts to bridge the gaps between communities that have clear and advanced pro-climate strategies in place and those that are lagging behind. One crucial area is coal use across the Union. Two-fifths of the regions around the EU, from Spain to Poland, still have active coal-fired infrastructure – an industry that provides jobs to around 240,000 people, more than one in every 200 European citizens. But emissions, to which coal is a major contributor, does not only affect workers in the industry or regions that host coal plants. Every year, no less than 400,000 people in the EU suffer premature deaths with complications linked to air pollution. The Just Transition Mechanism will seek to level the scales between all regions in Europe by investing in a new generation of capabilities, jobs, and technology that facilitate a concerted effort towards the EU green reconstruction plan. Local authorities will be able to access funds and favourable loans to support economic diversification, reskilling, stimulate innovation, and steadily shift towards non-polluting activities. The platform, though, has not come without criticism. Some local governments, such as that in the Belgian region of Flanders, have raised questions about the distribution of funds. Flemish 19

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Corporate DispatchPro Environment Minister Zuhal Demir argued that regions that have taken the initiative to transition from polluting energy sources years ago will stand to lose. The European Commission, on the other hand, has defended the approach as the ultimate exercise in EU solidarity and insists that, unless all communities can arrive at an even starting line, the Union as a whole cannot move towards the establishment of a European Climate Law with the required speed and determination. The law proposes to make the commitments drawn out in the EU Green Deal into a legal obligation, effectively forcing the bloc to trigger the earmarked investment to achieve emissions neutrality by 2050. The €1 trillion package promises to overhaul almost every aspect of the economy from agriculture to construction, and from transportation to energy. German Chancellor Angela Merkel has recently said that the EU’s post-coronavirus plan should be combined with climate protection efforts, using the recovery period as a springboard for firmer action towards the EU Green Deal. Now that the Germany has assumed the rotating presidency of the Council of the EU on July 1, the last one for Merkel before she retires in October next year, the four-term Chancellor will be steadfast in her intention to lay the foundations of the so-called ‘new green growth strategy’ that may yet be her most significant legacy in European project yet. After decades of campaigning and rhetoric, warning and pledges, the stars seem to be aligning for a European green renaissance.

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Corporate DispatchPro TONIO GALEA

The climate after the pandemic Kofi Annan, the former U.N. Secretary General, once referred to certain global issues like climate change, terrorism and disease as ‘problems without passports’ that ignore man-made borders to effect all in one way or another. With a few exceptions, many countries are striving to put the coronavirus pandemic behind them and get along with the ‘new normal ‘ even if the virus is not yet eliminated. Although the full human impact and economic cost of the pandemic has not been quantified, it is is difficult to underestimate the effects of the virus on health care systems around the globe. The crisis has brought to light the limitations and shortcomings of domestic and global medical supply production and distribution systems while piling strain on the physician workforce, hospitals, and health care systems in many countries. More importantly, it made clear human vulnerabilities, showcasing the importance of good leadership and wellfunctioning, universal social and health care systems. At the same time, bigger and more complex issues for which no straightforward solutions are found emerge more prominently. Choices must be made that turn out positively for one group of people and negatively for another. Various medical experts warned that, even if this coronavirus can be controlled, it is not going be the last pandemic the world will see. Scientists have long warned about infectious diseases, particularly following the recent outbreaks of Ebola, SARS and the bird flu. 25

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Corporate DispatchPro More than ever before, these crises are showing that human health and the health of the planet go together.

The more populations encroach on nature the greater the possibility of other pandemics is becoming. Pandemics aside, the next global crisis â&#x20AC;&#x201C; the climate crisis â&#x20AC;&#x201C; is already well under way, building up its destructive potential around the globe. More than ever before, these crises are showing that human health and the health of the planet go together. Healthy societies and markets depend on the health of the natural environment. In principle what needs to be done is known and the means to do it are there. There are hopeful authors who predict that this crisis will bring about positive structural change to our society. But, as time passes, the shared interest and enthusiasm that was apparent at the beginning of the pandemic, will start to fizzle out, as human nature is wont to do. It becomes more difficult to sustain all the initiatives that have been developed and, in some countries, this was even difficult during the peak of the pandemic. A structural change takes a lot of time and often costs a lot of money. The effects and remedies need to be entrenched in the defined processes, legislation, and spread throughout culture to be better prepared in the long run. If this outbreak showed one thing, it was the thirst for reliable and credible information. It reversed the decade-old trend of eroding trust in established institutions. It restored trust in mainstream science by policymakers and the public. Most challenges today cannot be stopped at borders or contained by national sovereignty. More than before, we must imagine a global public good with a renewed focus of what national security entails.

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Corporate DispatchPro CI CONSULTA

UNEMPLOYMENT RISES BY A TENTH IN MAY The number of registered unemployed rose by 430 from April to May, an increase of 10.8 percent to reach 4,409. Figures published by the National Statistics Office show a rise of 2,740 on the unemployment register compared to May last year. Increases were observed across all age groups, but the biggest month-on-month change was recorded among people aged between 25 and 29 years, where unemployment grew by 20 percent to over 570 people. The lowest increase was registered among those 45 and over (7.4%), however, at 1,583 unemployed the group has the biggest number in absolute terms. Just over a quarter of unemployed persons are registered as clerical support workers, and a fifth classify as technicians and associate professionals. The smallest increase in registered unemployment was seen in elementary occupations, up 3.5 percent from April; jobs in the managerial category, on the other hand, recorded the biggest rise (26%), going from 341 in April to 431 in May. Managers made up 5.5 percent of the job seeking market in May last year, growing to 9.8 percent this year. This was the highest gain of share in terms of job categories. By contrast, unemployed skilled workers in the agricultural and fisheries sectors increased by 27 percent compared with last year, but at 60 people, the share of this category shrunk from 2.8 percent to 1.4 percent of the registered unemployed over the same period.

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THREE-FOURTHS OF WORKING AGE POPULATION IN EMPLOYMENT Total employment stood at 260,827 between January and March this year, an increase of more than 13,500 compared to the first quarter last year. The Labour Force Survey published by the National Statistics office estimates at 75 percent of people aged between 16 and 64 were employed. Just over 220.300 were registered as employees, accounting to 85 percent of the population in employment. Self-employed without employees numbered slightly below 28,200 while 12,178 were selfemployed with employees. The share of unemployed in the workforce decreased to 2.1 percent from 2.2 percent during the same period the previous year, and the number stood at 9,006 in 2020. Persons who are neither active in the labour market nor unemployed, increased by 11,050 from last year and numbered 432,489. The share of inactive people, however, decreased from 39.1 to 37.6 over the same period.

Men registered a higher rate of employment than women across all age groups, but the greatest contrast was observed between the 55-64 group and the 15-24 group. While women make a third of the oldest age bracket, the lowest share, they constitute 47 percent of the younger bracket, the highest share.

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Corporate DispatchPro Retail trade, transportation, accommodation, and food service is the largest economic activity in terms of employment, engaging more than 72,000 people or 27.6 percent of the entire workforce. Another 62,800 are employed in public administration, defence, education, health, and social work. At the other end, the sectors employing the least people are agriculture and fishing activities (2,572) and real estate activities (2,311). Over a third of women are employed in public administration, defence, education, health, and social work, outnumbering men by more than 11,600. There are also more women than men in financial and insurance activities as well as in uncategorised services. There are 13,051 women working in professional, scientific technical administration and support services, only 36 fewer than men. Three in ten men are engaged in retail trade, transportation, accommodation, and food service while financial and insurance activities attract them the least, with around four percent of men working in this category. A QUARTER OF DEBT HELD BY NON-FINANCIAL SECTORS Malta is one of four EU countries where non-financial sectors hold more than a tenth of government debt. Figures by Eurostat show that 26 percent of debt in Malta is held by non-financial corporations, households and non-profit institutions serving households â&#x20AC;&#x201C; the second-highest among the EU27. Hungary has the highest rate of debt in non-financial sectors, accounting to 28 percent of the general total. Just under 60 percent of government debt in Malta is held by resident financial corporations, the fifth-highest share in the EU after Denmark (74%), Sweden (73%, Croatia (67%), and Italy (63%).

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Corporate DispatchPro At the other end, with less than 20 percent of total government debt, Cyprus recorded the lowest share held by resident financial corporations. In fact, four-fifths of it is held by non-resident institutions. By contrast, Malta has the lowest rate of debt held by non-resident institutions, at around 15 percent. Sweden is the only other country to hold less than a fifth of its debt with non-resident sectors. Debt securities are the main financial instrument used by EU members, notably so in the Czech Republic where they comprise 92 percent of total general government debt. In Malta, the share is of 86 percent, exactly like France but lower than Hungary, Slovenia, and Spain (all 87%). Loans are prevalent in Estonia (88%) and Greece (81%), while Cyprus, Sweden, Croatia, Luxembourg, and Portugal all use the instrument for more than a quarter of their debt. CONSUMER PRICES AVERAGE LOWEST IN 15 MONTHS The Retail Price Index fell by 0.5 percent from April to May, closing at a rate of 103.43. Figures by the National Statistics Office show an annual rate increase of 0.66 percent compared with the same month last year, a decline from the 0.83 annual increase registered in April 2020. In fact, this was the smallest increase in the annual rate in the two years under review. The twelve-month moving average rate stood at 1.30 percent in May, the lowest since February 2019 and continuing a gradual narrowing since reaching 1.73 percent in August last year. Clothing and Footwear registered the highest rise month-onmonth, climbing by 2.98 percent in May. Compared with the same month in 2019, though, the category fell by 1.42 percent, the secondhighest decrease after Recreation and Culture (-2.38%). On the other hand, the biggest increase from last year was observed in Housing, which grew by 2.09 percent, and Food, rising by 1.98 percent. The latter category includes restaurant services and takeaways. Compared with the previous months, however, the rise in Housing was 0.08 percent while Food decreased by 0.95 percent.

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Corporate DispatchPro INCREASE IN ASYLUM APPLICATIONS DURING 2019 There were 4,090 people requesting international protection in Malta during 2019, almost double the number recorded in the previous year. The figure represents 0.6 percent of the share of asylum applicants across the EU: Germany has the highest share at 23 percent, followed by France and Spain with 18 percent and 16 percent, respectively. Data by the National Statistics office shows that the number of boat landings in Malta rose to 43 last year, the highest since 2008. The number of persons onboard amounted to 3,405, an increase from 1,445 during the previous year. The Refugee Commissioner processed slightly over 1,000 asylum applications, accepting two-fifths, and rejecting the rest. The majority of people whose request for protection was granted are of Syrian citizenship (70%) or Libyan citizenship (15%). Applicants originating from any of these two countries make 17 percent of the total arrivals, while people from Sudan make the largest group by citizenship, at 26 percent. Four in five asylum seekers were from African countries. Malta received the second-highest number of applications for processing relative to its population size in the EU, equivalent to 8,286 requests for every million inhabitants. Cyprus had the highest number, at 15,584 per million, while Greece ranks third with 7,205 applications per million. Greece received more than a tenth of the total applications in the EU, while Cyprus has slightly under two percent of the share. Nearly eight in every ten applicants in Malta were within the 18 to 34 age bracket and 2,900 are male. There have been 635 relocations of asylum seekers during 2019, with more than 80 percent of them heading to France or Germany.

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Corporate DispatchPro KEITH ZAHRA

CommuniqEU

Foreign affairs The European Council extended the mandates until 30 June 2021 of three of its Common Security and Defence Policy (CSDP) civilian missions: the European Border Assistance Mission in Libya (EUBAM Libya), the European Border Assistance Mission in the Rafah Crossing Point (EUBAM Rafah), and the European Police Mission for the Palestinian Territories (EUPOL COPPS).

The COVID-19 pandemic has put on hold the implementation of some activities foreseen as part of the mandate of the missions. EUBAM Libya is tasked with contributing to the Libyan authorities’ efforts to disrupt organised criminal networks involved in smuggling of migrants, human trafficking and terrorism. The mission coordinates and implements projects with international partners in the fields of border management, law enforcement and criminal justice. EUBAM Rafah is tasked with providing a third party presence at the Rafah Crossing Point between the Gaza Strip and Egypt and contributing to strengthening Palestinian Authority’s border capacities. EUPOL COPPS is tasked with contributing to the Palestinian Authority’s efforts to establish effective and sustainable policing and wider criminal justice arrangements, in cooperation with the other institution building programmes.

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Corporate DispatchPro KEITH ZAHRA

CommuniqEU

Agriculture The European Council and Parliament agreed to extend support European farmers under the current legal framework until the end of 2022 when the new Common Agricultural Policy will enter into force.

Extending the current rules for two more years and until the new CAP is agreed and enforced, gives much needed predictability and certainty to all farmers across Europe during the COVID-19 crisis. The EU will continue to fund rural development programmes and to grant support to European farmers through direct payments while ensuring a smooth transition to the next CAP period. Given the current state of play of the CAP reform discussions in the European Parliament and Council as well as of the ongoing MFF negotiations, it became clear that the legislative procedure would not be concluded in time to apply the new rules and the CAP Strategic Plans as of 1 January 2021. It was therefore necessary to plan for a transitional period. The extension will allow for uninterrupted payments to farmers and other beneficiaries. Moreover, within these two years, member states will have time to prepare their strategic plans under the new CAP legislation and to plan for their implementation after approval by the Commission.

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Corporate DispatchPro KEITH ZAHRA

CommuniqEU

Financial services The European Banking Authority has launched a discussion paper exploring ways on how to enhance the Bank Recovery and Resolution Directive (BRRD) framework on early intervention measures. The objective is to further enhance crisis management tools available for competent authorities in addition to well-established and widely used supervisory powers laid down in the Capital Requirements Directive (CRD) and in the Single Supervisory Mechanism Regulation (SSMR).

The BRRD introduced early intervention measures (EIMs) to expand the existing set of powers available to supervisors towards institutions in difficulties. While monitoring the application of EIMs in 2015-2018, the EBA observed a limited use of EIMs across the European Union (EU) during that period. Instead of EIMs, the competent authorities often preferred to apply other pre-BRRD supervisory powers available to them. The EBA investigated the reasons for these supervisory practices. While recognising that EIMs could be successfully implemented under the existing regulatory framework, the EBA identified some challenges in their application, and is now putting for discussion potential solutions aimed at enhancing the framework.

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Corporate DispatchPro KEITH ZAHRA

CommuniqEU

Competition The European Commission has launched a process to ensure that the EU competition rules do not stand in the way of collective bargaining for those who need it. The initiative seeks to ensure that working conditions can be improved through collective agreements not only for employees, but also for those self-employed who need protection.

Stakeholders from the public and private sector as well as legal and economic practitioners trade unions and employers organisations are invited to participate to the on-going public consultation on the Digital Services Act Package. The Court of Justice of the European Union has long recognised that collective bargaining with workers falls outside the scope of the application of EU competition rules. Concerns arise, however, when attempts are made to extend collective bargaining to groups of professionals who, at least formally, are not employees, such as the self-employed. According to EU competition law, such professionals are considered â&#x20AC;&#x153;undertakingsâ&#x20AC;? and agreements they enter into (such as collective bargaining) may therefore be captured by the EU competition rules. To define the scope of the self-employed who need to participate in collective bargaining is a challenge. Self-employed activities are very diverse, they can cover a wide range of activities and their situation varies during time. The European Commission is therefore now assessing whether it is necessary to adopt measures at EU level in order to address the issues raised by this situation and improve the conditions of these individuals. 43

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Corporate DispatchPro JOHN FOLEY VIA REUTERS BREAKINGVIEWS

Corporate boycotts expose an inconvenient truth Boycotts can really work. Think of what happened to the Montgomery city transit system in Alabama in 1955, when Black passengers stopped taking buses for over a year to protest racial segregation. Or its British counterpart in Bristol eight years later, triggered by the local transport company’s refusal to hire Black workers. Both shared a similar recipe: large numbers of customers willing to make short-term sacrifices, and businesses that couldn’t function without the cash they provided.

What about when companies boycott each other? Something like that is happening to Facebook. Advertisers are threatening to pull their spending for July from the $670 billion social network because they say it’s not doing enough to remove racist content. Unileverowned ice cream brand Ben & Jerry’s, and fashionable outfitters The North Face and Patagonia, are among those who have joined the “Stop Hate for Profit” movement, triggered by protests over racial injustice and police brutality. Verizon Communications, the $225 billion U.S. telecom group, “paused” its spending with Facebook on Thursday. It’s tempting to think the spirit of Montgomery has revived in Menlo Park, California, where Facebook resides, and that racial justice has rocketed to the top of corporate board agendas. But it hasn’t, much as chief executives might love to argue otherwise. Corporate assaults like this are at best an inconvenience for a company like Facebook – and at worst, they are a marketing opportunity for the companies who participate, that distract from efforts that can effectively drive change.

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Company-on-company boycotts face big problems. Not many brands can really abandon a social network that accounts for perhaps one-fifth of global digital advertising. Sure, they don’t want to appear next to hateful content – but there are other, less public ways around that. Advertisers can ask not to appear next to certain keywords, which have in the past included “protest”, “gay,” “fat” and – in one recent case reported by Vice Media this week – “Black people.” The idea that self-interest prevails shouldn’t be surprising. Most companies aren’t wired to be moral, or to create social change that hurts their profitability. Executives and boards have a responsibility – often legally enshrined – to shareholders first and foremost. Verizon, the biggest name to suspend advertising with Facebook, was one of several large companies that pulled ads from Alphabetowned video platform YouTube in 2017. It returned once it could better control where on the site its ads would run. Besides, capitalism has its own problems with race. Of the personal wealth tied up in company shares in 2016, only 3% was held by black households, according to Federal Reserve and U.S. Census Bureau data – and those households had only 2% of the wealth held in mutual funds that buy stocks and bonds. Since 2015, big American companies including Facebook, Citigroup, Apple and Starbucks have faced 60 shareholder votes challenging them to disclose more on diversity or toughen up their policies, based on data gatherer Proxy Monitor’s tally. All but two have failed. 46

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Corporate DispatchPro There are two exceptions to all of this. One is companies where the boss has an unusually free hand. That would include JPMorgan boss Jamie Dimon, who took the knee for a strategic photo opportunity outside a bank vault, or Patagonia’s billionaire owner Yvon Chouinard. It might also include Ben & Jerry’s, which is part of Unilever but has considerable autonomy. For some brands – especially those like The North Face that target the affluent – not advertising may even be a way to sell more, and at higher prices. The other counterexample is Facebook itself. The company’s $60 billion of cash and cash-like investments are easily enough to cover its operating expenses for a full year, so even losing some revenue is no disaster. It’s so dominant that there’s really nowhere else for users of its products to go. More importantly, Chief Executive Mark Zuckerberg’s prodigious wealth, and his majority voting stake, mean he need not worry about what other investors think if doing so interferes with his grand vision of creating a growing online community. That makes Facebook a terrible target for boycotts by companies. Then again, it also means that if Zuckerberg himself ever decides to turn activist, his company would be a force to be reckoned with.

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Corporate DispatchPro JENNIFER SABA VIA REUTERS BREAKINGVIEWS

E-commerce boost is about more than Amazon Amazon.com still dominates the fast-growing e-commerce pie, but it’s getting some company. Lockdowns have trained people to shop online including in formerly laggard categories like groceries. That has helped Jeff Bezos but even more so digital sales at Walmart and other retailers. The future may be a lot to do with balancing clicks and bricks.

Overall retail sales have suffered mightily as shops shuttered their doors to keep coronavirus at bay. Evercore ISI estimates sector sales, excluding e-commerce, autos and gas, will shrink 6% this year after expanding nearly 2% in 2019. A recession, which the United States officially entered in February, is an additional headwind for consumer spending. But the pandemic has acted as an accelerant for e-commerce. Shoppers had little choice but to order online to get milk, eggs and the like delivered to their doorsteps. In April alone internet sales doubled or more year-over-year at Walmart, Target, Home Depot and Etsy, reckons Morgan Stanley, as consumers stocked up on food, cleaning products and stuff for home improvement. The convenience has staying power even as people emerge from sheltering in place. Morgan Stanley revised its forecast for online sales growth this year to 25%, nearly doubling its previous estimate. That’s an additional $71 billion directed at electronic purchases. And there’s plenty of headroom. E-commerce is expected to account for about a quarter of the estimated $3 trillion in total retail sales this year excluding food services, among other categories. 49

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Corporate DispatchPro Amazon is forecast to grab 38% of e-commerce sales this year according to eMarketer. But a rising tide will lift other boats as well. The research outfit expects Walmart to beat internet-only marketplace eBay to the No. 2 spot this year. Beleaguered traditional retailers have a potential advantage on the e-commerce front, too. Even before the pandemic, more consumers said they wanted both online and in-person options, while fewer wanted to be limited to either walk-in stores or onlineonly shopping, according to an Evercore ISI survey. Curbside pickup, a staple of post-lockdown reopening, could be here to stay. Thatâ&#x20AC;&#x2122;s a piece of the logistics puzzle Amazon mostly still lacks.

Amazon is forecast to grab 38% of e-commerce sales this year according to eMarketer.

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Corporate DispatchPro ROBERT CYRAN VIA REUTERS BREAKINGVIEWS

Gilead gives glimpse into feverish drug market Medicine may be a science, but drug pricing is definitely an art. That’s especially true of Gilead Sciences’ treatment for Covid-19, given the lack of alternative treatments for a pandemic. The $2,300 price of a course of remdesivir may sound high – and is compared with the basic cost of manufacturing the stuff – but is actually fairly restrained.

Start at the bottom. The marginal cost of producing remdesivir is probably less than $600, according to the Institute for Clinical and Economic Review, an independent non-profit. But companies must spend heavily to research and develop drugs. Factor in Gilead’s development expenses for 2020 and the cost rises to $1,600. Drugs come with many other costs too, including the need to subsidize products that failed in development. The Tufts Center for the Study of Drug Development estimated in 2014 the average new drug costs about $2.6 billion to develop, all in. If pharma companies keep 40% of their revenue as profit, Gilead would have to sell roughly 3 million courses of remdesivir to cover its costs at that $2,300 price. An alternative question is not what it costs, but what it’s worth. The drug has been shown to help severely ill patients recover four days faster. Gilead Chief Executive Daniel O’Day says four days in a U.S. hospital costs about $12,000. The real upper limit to what the market could bear for remdesivir might be even higher, since there are no proven alternatives, and Covid-19 has the potential to overwhelm intensive care units. 53

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Corporate DispatchPro If pharma companies keep 40% of their revenue as profit, Gilead would have to sell roughly 3 million courses of remdesivir to cover its costs at that $2,300 price.

Gilead is wise not to test that limit. U.S. healthcare costs are already inflated, and charging what people might pay would create a political minefield. A majority of American voters said healthcare costs were one of the most important issues during the 2018 midterm elections, according to pollster KFF. Ahead of Novemberâ&#x20AC;&#x2122;s presidential election, the $94 billion pharma groupâ&#x20AC;&#x2122;s restraint may help it accumulate political capital. Prevention is better than cure.

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CorporateDispatch PRO - Edition 6

Articles inside

Gilead gives glimpse into feverish drug market

E-commerce boost is about more than Amazon

CommuniqEU

Malta Insights

Economic recovery compatibility

Corporate boycotts expose an inconvenient truth

The EU green renaissance

The climate after the pandemic

Editorial

People, Planet and Profit