Global Business Magazine - December 2012

LUXURY BRAND SERIES BEST OF 2012

TRIPADVISOR

EUROPEAN DESTINATIONS ON THE RISE

gbm December 2012

global business magazine

Four more years: the outlook for Obama

Carbon Credit Funds

sPotlight on india

shiPPing & maritime

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The world’s capital market

The London Stock Exchange Group is Europe’s leading diversified exchange business, incorporating Borsa Italiana and the London Stock Exchange. With over 400 member firms trading and more than 2,600 companies quoted across its markets, the Group operates the largest and most liquid equity marketplace in Europe.

The London Stock Exchange’s Primary Markets team put UK and international companies in touch with one of the world’s deepest pools of global capital. Our markets are home to companies from all over the world, ranging from start-ups to some of the world’s largest corporations.

For further information, visit www.londonstockexchangegroup.com

INSIDE This Month:

sPotlight on india

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Business Talk With a long campaign and convincing victory behind him, the US President now faces a difficult four years ahead – without the same level of optimism that marked the beginning of his first term. This month’s cover story is on the newly elected Barack Obama.

From one topical issue to another, our Carbon Credit Funds focus finds out about the challenge to provide fund vehicles and make ensure they are effectively administered; the climate change conference that is having an impact on the carbon credit markets; and Luxembourg’s financial incentives of attaching a price to carbon emissions and creating markets to trade them.

Class Actions looks at consumer protection for cosmetic surgery products in Europe; the factors involved in defending class actions; the rules permitting representative and class actions in Nigeria; and why class action remains a key legal tool for both sides.

As an increasing number of people want to work around the world, our Immigration focus examines the impact of the financial crisis in Spain; the issues surrounding employer sponsored migration to Australia; the overhaul of immigration law in the People’s Republic of China; and how the current pointsbased system is affecting business immigration in the UK. Shipping & Maritime highlights the importance of research and innovation in Europe; shipping related litigation in Qatar; the need for US maritime activity regulations to move with the times; the challenges faced by the Bangladeshi shipbreaking industry; and why the risks faced by seafarers worldwide really aren’t oceans apart.

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Back on dry land, this month we’re taking a closer look at one of the world’s fastest growing economies – India. We find out about the different types of visas available to Foreign Nationals; get a unique perspective on the apparent shift in power from nations and corporations to individuals; and – just to demonstrate the latter – we also give you India’s 10 richest people.

Carbon Credit Funds luxembourg outlook sPotlight on india

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luxury brand series - best oF 2012

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Finally, as the party season gets underway, Luxury Brand Series fully embraces the theme of celebration, by looking back at some of the memorable places showcased in 2012. Here’s to more of the same in the New Year.

Contact Us:

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The opinions expressed in GBM do not necessarily reflect those of the editors, publishers or their agents. The information provided in GBM is general and may not be applied to a specific situation. GBM does not purport to provide legal or other professional advice and takes no responsibility for actions taken on the basis of information provided herein. Legal advice should always be sought before taking any such action. Laws and government policies are constantly changing and accordingly GBM takes no responsibility for the accuracy or currency of the information provided herein. If you require particular information you are advised to consult with the article’s author or seek legal advice.

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December 2012 • Global Business Magazine • 3

Four more years: the outlook for Obama

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More years:

The outlook for

OBAMA

While both the polls and the policies of the two major candidates for the 2012 United States Presidential Election seemed too close to call, psephologist extraordinaire, Nate Silver, predicted it best: it was Barack Obama who best motivated his base to come out and vote on November 6th.

While the numbers for President Obama weren’t overwhelming he took 50.7% of the popular vote to Mr Romney’s 47.65% - enough of those votes came from key states to ensure that he won 332 of the Electoral College votes to the Republican candidate’s 206.

As the incumbent president takes the help for four more years, what does this mean for the face of U.S. and international politics?

“Four More Years” – How the Incumbent Won Twelve months ago, a second term for President Obama seemed at unlikely even to his most optimistic supporters.

The economic recovery that Americans were longing for had not begun to materialise – in fact several key indicators were still falling – and no U.S. president since Franklin Roosevelt has won a second term with unemployment rates this high.

As soon as the primaries were complete, the Romney camp decided that the economy would be the central plank of their campaign. In Virginia, Iowa and Ohio, Mr Romney managed to gather some support from voters who believed that he would do a better job than the current president on the economy. The Republican candidate and his team worked hard for that support throughout his campaign: in one of his Midwestern campaigns in the

key state of Ohio, Mr Romney held a rally at a closed drywall factory – the same one that President Obama visited in 2008 after it had closed during the economic downturn under the previous president, George W. Bush.

"Had the president’s economic plans worked, President Obama’s plans worked, it would have been open by now," Mr Romney said. "But it is still empty, and it underscores the failure of this president’s policies with regards to getting the economy going again." Mitt Romney bet his entire stake on economic messages like these.

But that single-minded focus on his economic credentials may have cost the campaign dearly, according to Bill Galston, a former domestic policy adviser to Democratic President Bill Clinton. "The president's handling of the economy had to be the centrepiece of Romney's campaign,” he said. “He had no choice. But all sorts of economic signs perked up in the past six months - and just in time for the president." National exit polls also indicated that 50% of voters still blame former Republican President George W. Bush for the country's economic problems rather than President Obama.

Unemployment had slowly but steadily been falling, the housing market began to stabilise

and consumer confidence was returning in the months leading up to the election. This was reflected in voters’ views, according to polls by Reuters/ Ipsos.

“In October 2011, several months into Romney's candidacy, only one quarter of the country believed America was heading in the "right direction" - a key metric looked at by pollsters and a grave worry then for Obama's strategists,” according to Reuters analysts. “By [the week before the election], that number had risen to 45%.”

President Obama managed to improve his reputation on the economy in the Midwest.

CNN exit polls in Ohio showed that 37% of voters believed the economy was improving, compared with 33% who believed that things are getting worse, while in Virginia 43% saw things improving, compared with 36% who believed life was going to get worse.

Political analyst and former adviser to two Democratic and two Republican presidents, David Gergen, said: "There is no doubt the president benefited from his economic policies. His auto bailout may have won Ohio and helped win key votes in the upper Midwest." One in eight jobs in Ohio is tied to the auto industry and Mr Romney may never have recovered support

December 2012 • Global Business Magazine • 5

Four more years: the outlook for Obama

among the 59% of Ohioans who approved of the bailout that he opposed.

But while the economic indicators flickered into enough life to earn the incumbent a second term there is no guarantee that the economic recovery will hold. "Consumer confidence is also on the rise, inspired in part by cheery White House whisperings that success is just around the corner,” warned Gergen. “Voters may have a rude disappointment, [even though] they bought in during this election season."

Where Next for the Economy?

The Nasdaq opened down 40

points on the morning of the 7th November. Stock index futures also opened lower and treasuries rallied as the markets reacted to the news that the next four years are likely to be characterised by bond-friendly monetary policy and moderate economic growth.

While the outcome of the election has reduced some of the uncertainty faced by the markets there still remains a volatile time ahead in the coming months. The "fiscal cliff" - $600 billion in spending cuts and tax increases that are due to kick in on January 1st and 2nd next year unless a political consensus can be reached – could derail the recovery.

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"The market is tasked with appropriately pricing in the fiscal cliff," said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford, Connecticut. "Unfortunately, the honeymoon doesn't last very long in real time and we knew that regardless of the outcome of the election, our focus would immediately be shifted to the fiscal cliff, which is going to be difficult in and of itself," added Art Hogan, managing director of Lazard Capital Markets in New York.

The energy sector had the most dramatic reaction. Companies in this sector are facing more regulation in President Obama's

second term. They will have less access to federal lands and water despite the fact that volatility in the Middle East and dwindling oil supplies from Europe heighten the drive for energy independence. In the first day’s trading after the election, Alpha Natural Resources Inc dropped 7.5% to $8.90, Arch Coal Inc lost 9.4% to $7.85 and James River Coal Co tumbled 17% to $3.90 in premarket trading.

However the re-election of the president will likely mean an extension of the U.S. government's policy that promotes electric and hybrid vehicles according to Elon Musk, the chief executive of electric car maker Tesla Motors Inc. "I think that we can expect at least that things will continue as they have," Musk told reporters at an event in New York. "I wouldn't expect it to get any worse for electric vehicles; hopefully it

the Republican-controlled U.S. House of Representatives is home to the tax-writing Ways and Means Committee and this committee is unlikely to embrace higher taxes on higher earners.

will get a little better."

President Obama said he wants to see one million plug-in hybrids, extendedrange electric cars and pure electric vehicles on U.S. roads by 2015. This target will mean extensive investment in fastcharging stations on major routes throughout the United States – something that Tesla Motors has committed to undertaking after receiving a $465 million loan from the U.S. Department of Energy in early 2010.

Reforming Taxes "I've got a mandate to help middle-class families and families that are working hard to try to get into the middle class," Obama said on his re-election. "That's my mandate. That's what the American people said.” This is the clearest indication yet that the second-term president is likely to pursue a top-to-bottom reform of the U.S. tax code.

The last major tax reform in the U.S took place under President Regan. He, too, waited for his second term to push through the plans. Simplification and reform is something that members of both the main parties consider necessary. Furthermore, the U.S. deficit currently exceeds $1 trillion and a tax-code rewrite must play a role in reducing that amount. However, any attempt

by President Obama to shelve the Bush-era tax cuts currently enjoyed by the top 2% of earners is likely to lead to fiscal deadlock:

"You need presidential leadership," said Michael Mundaca, who was Obama's assistant treasury secretary for tax before returning to Ernst & Young. "You need the power of the Treasury tax policy and White House economic team and the IRS (tax-collecting Internal Revenue Service) to do something this massive."

In his first term, the president circulated reform blueprints and set up congressional hearings. "He actually has a fairly extensive paper trail on tax reform," said Jared Bernstein, a former Obama economic adviser.

The months leading up to the president's reinauguration will be fraught with negotiations to prevent the fiscal cliff and to shape a lasting response to the deficit. He will have to work hard to rebuild bipartisan cooperation after one of the most bitterly divisive presidential campaigns ever faught.

The New Internationalist The home front may have pressing issues but perhaps the most radical change in the president’s second term is the change in focus in foreign policy.

President Obama has spent his first two weeks concentrating on Southeast Asia in what the Whitehouse is calling the “Asian Pivot”. Along with Secretary of State Hilary Clinton and Secretary of Defense Leon Panetta, President Obama spent four days in a tour of the region, culminating in attendance at the Association of Southeast Asian Nations (Asean) summit.

With China’s new regime looking likely to continue their predecessors’ push for dominance in the region, President Obama’s visit has been described by some as coming “straight out of the Cold War playbook.”

"Using China's rise and the 'China threat' theory, the U.S. wants to convince China's neighbours that the Asia-Pacific needs Washington's presence and protection in order to

'unite' them to strike a 'strategic rebalance' against China in the region," according to security scholar Wang Yusheng who writes for China Daily.

Deepening tensions in the region have coalesced around the ownership of disputed – and fossil-fuel rich – territories in the South China Sea. China has confronted the governments of Japan, Brunei, Malaysia, the Philippines, Vietnam and Taiwan in the last year, claiming sovereignty over several islands and control over important shipping routes.

Thus far, President Obama has taken a conciliatory stance, advising the United States’ close military ally, Japan, to attempt to settle this issue diplomatically.

"It's strange," said Kazuhiko Togo, chief of the Institute for World Affairs at Kyoto Sangyo University. "I trust the U.S. as our ally, but we need to address this issue of U.S. 'neutrality.'" The position that the United States is taking may strengthen now the Obama administration has its second term.

Disappointingly for several of the United States’ potential allies, the U.S. delegates did not manage to get the territorial dispute on to the agenda at the Asean summit. China insists on dealing with the contenders on a bilateral basis – something that infuriated Philippine Foreign Minister Albert del Rosario, who said his delegation had been shocked when a Cambodian official announced that there had been a consensus not to discuss the matter at the summit.

"Consensus means everybody. I was there, the president (Aquino) was there and we're saying we're not with it because there's no consensus," del Rosario said. "How can they say there's consensus when we're saying there's no consensus?"

South. Predisent Obama will be hoping that the high-profile visit to the region will strengthen Lockheed Martin’s bid to provide 60 F-35 joint strike fighter planes: a deal which could result in a $7.6 billion for the air industry sector.

The visit has also set the seal on the rapprochement between the U.S. and Burma. “One of the things that we can do as an international community is make sure that the people of Burma know we’re paying attention to them, we’re listening to them, we care about them,” said President Obama. “And this visit allows me to do that in a fairly dramatic fashion.” It is believed that he encouraged the newly-formed government to strengthen democracy and respect for human rights in this transition period.

But tensions in the Middle East refuse to abate and President Obama may find himself just as tethered to the region as in his first term.

“There is now war between Israel and Hamas in addition to a proxy war with Iran in Syria; there are huge demonstrations against the king in Jordan; and the I.A.E.A. last week said Iran had doubled its capacity to enrich uranium,” Elliott Abrams of Council on Foreign Relations told the New York Times. “The only way to pivot away from all that is to move to Mars — Myanmar isn’t far enough.”

Whatever the next four years hold for the economy of the United States and the rest of the world, the newly re-elected president faces a demographic and political restructuring in the Middle East and in Asia. How he guides the American response to that will be the lasting legacy of his second term.

This is the second time in six months that a Cambodian-hosted Asean summit has ended amid accusations that Cambodia is bowing to Chinese pressure and allowing the superpower to hold sway.

The tension between the US and China continues to play out in Korea, with China supporting the North and America the December 2012 • Global Business Magazine • 7

Carbon Credit Funds - Luxembourg outlook

Carbon Credit Funds Luxembourg Outlook Luxembourg as a Centre of Excellence for Carbon Finance Funds Most industrialised countries have committed themselves, through international negotiations and treaties, to reduce their greenhouse gas emissions. Individual national targets have been set to meet this collective commitment, with the European Union and other states putting legally binding obligations on their largest industries to reduce their emissions. Those firms with high emissions need to pay a price for each tonne of CO2 emitted – called the ‘carbon price’.

What Does Carbon Finance Mean?

Attaching a price to carbon emissions and creating markets to trade them, is thought to provide financial incentives that encourage emitters to undertake emission reduction efforts.

However, if a company wants to emit more than it is allowed to, it can buy credits from those who have reduced their emissions below the target level, or from a project in a developing country that has certified emission reduction credits to sell. This trading forms the basis of the carbon market. Emission reductions certificates, or colloquially ‘carbon credits’, are the currency of these markets.

Regarding carbon financing within the EU, it has been decided that from 2013 to 2020, the EU is to enter into the third phase of the EU Emission Trading Scheme

8 • Global Business Magazine • December 2012

(EU ETS). As the first large emissions trading scheme in the world, it has not only been a cornerstone of the European Union's policy to combat climate change, but also a key tool for reducing industrial greenhouse gas emissions cost effectively.

Therefore, with respect to the third phase of the EU ETS, the Commission has announced it will be continuing to toughen its greenhouse gas (GHG) reduction targets, constraining European companies from different industrial sectors (electricity, aviation sector, steel and cement producers), in order to seek new carbon credits

sourcing solutions. Without a doubt, Luxembourg schemes will continue to be shortlisted by carbon finance managers as a possible domicile for their new generation of carbon funds.

Carbon Investment Vehicles (‘CIVs’) in Luxembourg Following the introduction of the SICAR (Société d’Investissement à Capital à Risque) and SIF (Specialised Investment Fund) laws in 2004 and 2007 respectively, Luxembourg has become the place of choice to launch sophisticated investment funds which meet the specific needs of carbon finance. There is a wide range of corporate vehicles in Luxembourg suitable for structuring compliant or voluntary carbon investments, including regulated structures such as SIFs and SICARs. There are obvious advantages to using a regulated fund such as: permitting cash in-outflow in a flexible manner; the possibility of using ring-fenced compartments; tax efficiency; and being easier to market with the stamp ‘regulated fund’ and safeguards provided by the fund auditors, the depositary bank and the Luxembourg regulator.

Moreover, Luxembourggoverned trust schemes and securitisation vehicles are also often used for their flexible structures.

Furthermore, a major competitive advantage of Luxembourg as a country of domicile, is the ability of the CIV to distribute carbon credits ‘in kind’, directly in the form of remuneration to investors.

As a result, CIV investors may be carbon credit buyers, who, in return for their investment, receive carbon credits traded directly through the CIV.

They are therefore able to benefit from the reduction in number of intermediaries, the risk mitigation offered by an investment vehicle, and the collective use of skills that a specialist carbon investment manager possesses.

In addition, the interposition of an investment fund between the end-investors and the creation of the carbon credits can be beneficial, as the value of this asset class remains uncorrelated to traditional equity or bond markets.

Finally, the existence of appropriate investment vehicles and flexible regulatory structures is further reinforced by the presence of a highly skilled and educated workforce, with experience in the carbon credit fund industry. The vast majority of the world’s financial institutions and law and tax advisory firms are present in Luxembourg, offering worldclass services to a global client base. This means that the country has the distinctive technical, financial and regulatory capabilities required for successful investments in the carbon credit market.

instruments and transactions, make Luxembourg a centre of excellence for CIVs.

By Isabel Hog-Jensen, Senior Legal Advisor at ALFI The Association of the Luxembourg Fund Industry (ALFI) is the representative body of the Luxembourg investment fund community. Created in 1988, the Association today represents over one thousand Luxembourg domiciled investment funds, asset management companies, and a wide range of service providers such as depositary banks, fund administrators, transfer agents, distributors, legal firms, consultants, tax experts, auditors and accountants, specialist IT providers and communication companies.

For further information, please contact ALFI at info@alfi.lu

The Luxembourg Fund industry is the largest fund domicile in Europe and a worldwide leader in cross-border distribution of funds. Luxembourg-domiciled investment structures are distributed on a global basis in more than 60 countries with a particular focus on Europe, Asia, Latin America and the Middle East.

Luxembourgish advisors and service providers can combine the ability to structure and manage discretionary carbon investment schemes, tailored to the investors’ distinct risk profile, as well as to their investment aim – be it the fulfilment of EU ETS compliance obligations, or the pursuit of investment returns on alternative investments. In short, both the comprehensive trading access to markets, and experience in setting up and managing all types of carbon credit

December 2012 • Global Business Magazine • 9

Carbon Credit Funds - luxembourg outlook

Fund Administration and Asset Valuation – The Luxembourg Carbon Credit Funds Report 2012

Philip Godley Director Head of debt structures SANNE GROUP International fiduciary services Tel +352 27 61 62 11 www.sannegroup.com

Carbon credits as an asset class attract a wide variety of investors, often with significantly different investment objectives and therefore different fund structures. These may include compliance buyers and aggregators seeking to acquire carbon credits at a competitive price, either directly or through investment in a fund; or investors, while seeking a monetary return, wishing to fulfil an objective of investing in ‘green’ assets through carbon as a financial instrument, similar to other commodities such as oil and gas.

Asset managers may launch carbon funds based on either of the two main types of carbon credits , namely compliance credits such as Certified Emission Reductions (CERs) issued by the UN on certified projects, or Voluntary Emission Reductions (VERs) which are credits often purchased by institutions or individuals to offset their carbon footprint on a voluntary basis.

Accordingly, carbon asset managers have been launching a wide variety of regulated and unregulated funds to meet investor demands. The challenge for the funds industry is to provide fund vehicles (commonly known as Carbon Investment Vehicles) to meet the requirements of investors, and for service providers to effectively administer such vehicles.

The understanding and experience of the administrator of the fund is crucial to ensuring the success of the fund product.

This is because the functions that a fund administrator performs on a carbon fund will likely be significantly different from a normal private equity or hedge fund.

While performing the registrar and transfer agent function, the administrator may well be required to review and accept subscriptions for an interest in the future delivery of carbon credits such as CERs generated by the fund and then deliver these CERs to investors, rather than just handling

10 • Global Business Magazine • December 2012

cash subscriptions, distributions and redemptions. In this case, the administrator will evaluate the amount of CERs available for distribution to each investor, and arrange the transfer through a carbon registry system, typically established and operated by a member country of the EU under the European Union Emissions Trading Scheme.

Following the recommendation by the advisor and approval of the manager, GP or fund board, investment transactions will also be facilitated by the administrator. These will either be on a primary basis by the fund entering into contractual Emissions Reduction Purchase Agreements (ERPAs) with projects such as landfill gas capture or renewable energy installations, or on a secondary basis through the purchase of carbon credits – whether CERs, VERs or EU traded credits such as EU Allowances (EUAs).

The administrator will have to ensure that the transaction is effected properly and on a timely basis, all the while ensuring all documentation is maintained and delivered to the depository where necessary. As some carbon credit transactions may also be completed over an exchange such as BlueNext, the administrator will need experience in handling such transactions.

Where the fund invests in CERs on a primary basis, the administrator will often be required to provide ancillary services such as a Request for Distribution (RfD) service, whereby the administrator directs the delivery of CERs from the UN Executive Board, as well as other so-called focal point activities.

The administrator will also be required to properly account for the transactions that the fund has entered into, as well as produce NAVs based on various pricing and valuation methods and techniques. Given that the funds will enter into ERPAs with projects at various stages of certification, verification or delivery, the pricing and valuation

of such transactions can sometimes be subjective, taking into account the likelihood of delivery, the time until delivery, as well as the counterparty risk associated with such transactions. A discounted cash flow method is normally utilised, based upon the price of the carbon credits that can be achieved in the market at the accounting date.

Where the fund actually holds or trades compliance carbon credits, various third party pricing sources can be used for reference, including prices frequently published for CERs and EUAs. However, where VERs are held or traded, pricing can be more difficult to determine, as there are different quality standards – some may be labelled and certified at a basic standard and others at a premium standard. VERs associated with the generation of renewable energy may be more valuable, for example, than those generated through forestry management. The value depends on the perceived quality or ‘additionality’ that the credit represents. An independent valuer is normally engaged by the fund manager for such portfolios.

Since 2007, Sanne Group has acted as administrator on some of Europe’s ground breaking carbon financing transactions, providing a range of administration services to climate funds investing in companies and projects involved in the mitigation of greenhouse gas emissions based in developed and developing countries worldwide.

The team has significant administration experience in the carbon compliance markets, with expertise in the Clean Development Mechanism (CDM) and the European Union Greenhouse Gas Emission Trading System (EU ETS). As well as fund administration, the team also provides operational support to carbon financing transactions, including acting as project focal point, carbon registry management, cash management and invoicing.

Leaders in alternative assets Fund administration and corporate services to alternative asset classes delivered by leading asset specialists.

Private equity Debt Real estate Venture capital Clean technology and renewable energy

For more information please contact: Peter Dickinson Director peter.dickinson@sannegroup.com +352 27 61 62 12 Phil Godley Director philip.godley@sannegroup.com +352 27 61 62 11 www.sannegroup.com

Members of

Luxembourg | Jersey | London | Dubai | Dublin | Hong Kong | Shanghai Sanne Trust Company Limited is a member of the Sanne Group and is regulated by the Jersey Financial Services Commission (JFSC).

Sanne Group (Luxembourg) S.A. is a member of the Sanne Group and is regulated by the Commission de Surveillance du Secteur Financier.

Sanne Securitisation Limited is an Appointed Representative of Curzon Capital Limited, a company authorised and regulated by the FSA. Sanne Corporate Services Limited is a member of the Sanne Group and is regulated by the Financial Supervision Commission.

Sanne Capital Markets Ireland Limited is a member of the Sanne Group and is authorised by the Department of Justice and Law Reform.

Sanne Group (MENA) Limited is a member of the Sanne Group, is licenced to conduct business activities by the Dubai International Finance Centre and is regulated by the JFSC. Sanne Group Asia Limited is a member of the Sanne Group, is licenced to conduct business in Hong Kong and is regulated by the JFSC. Sanne Group Shanghai Financial Management & Consulting Co Limited is a member of the Sanne Group and is licenced by the State Administration of Industry and Commerce.

Carbon Credit Funds - luxembourg outlook

Carbon credit funds

Deloitte Audit Nick Tabone Audit Partner – Private Equity Tel: +352 451 45 2264 ntabone@deloitte.lu www.deloitte.lu

Carbon credits is the latest investment offered in the market, that not only promises the investor huge returns, but helps in the fight against global warming. On 26 November to 7 December 2012, the 18th Conference of Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCC) will be held in Doha, Qatar. With the aim of assessing the progress in dealing with climate change, the conference will subsequently have an impact on the carbon credit markets, as commitments that have been set by the participating countries will be revisited.

The carbon credit market was brought about by the Kyoto Protocol, which was adopted by the UNFCC in 1997 and entered into force in 2005. The Kyoto Protocol is a treaty between the participating countries, in which they agreed to reduce greenhouse emission by a pre-determined ratio relative to emissions in 1990. In order for those countries with excess emissions to comply with the limits set, they can either invest in new technology, or improve existing technology to reduce greenhouse gasses. They can also purchase emission allowances from developing countries – hence bringing the need for a carbon credit market.

According to the 2012 report ‘State and Trends of the Carbon Market’ by the World Bank, the carbon markets have been affected by the economic volatility experienced over the last decade. However, while carbon prices have been declining due to oversupply in the EU, despite the decline, the value of the global carbon market climbed in 2011. In fact, the total value of the market has grown by 11% year on year to US$176 billion (€126 billion), and transaction volumes have reached a new high of 10.3 billion tons of carbon dioxide equivalent,

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making the carbon market still very relevant.

Investors can access the carbon market by purchasing into different carbon credit funds, in which its brokers purchase carbon credits from green projects and sell them to polluting companies for a profit.

However, it is necessary for the investor to perform its due diligence, as more and more credit fund scams are being exposed, meaning a reliable platform for funds is needed.

Why Luxembourg Luxembourg is the largest investment fund centre in Europe. The country is also a successful global distribution centre due to its political and social stability. Having the Government, the legislator and the private sector working closely together, has led to the creation of a flexible and innovative regulatory framework. In addition, there is the presence of global players, flexible IT structures and a skilled multicultural and multilingual workforce.

Luxembourg is proactively developing a dedicated expertise in carbon finance and Carbon Investment Vehicles (CIVs), through a core group of professionals within the leading financial institutions, law and audit firms. Furthermore, the country has a very strong antimoney laundering and fraud legislation in place – imperative for any market as large as that of carbon credit trading, which frequently attracts white-collar criminals.

The carbon credit environment Climate change and carbon markets are global issues that demand a global response.

Carbon markets are developing throughout the world and it is increasingly likely that these markets will be linked and will require an international approach to carbon management.

Many of our clients operate

on a global basis and are looking for a service provider who can interpret regulations, opportunities and constraints with a global presence.

Furthermore, as climate change and carbon markets create needs that cut across conventional service offerings, member firm clients can benefit from receiving integrated services across audit, risk management, tax, consulting and financial advisory.

Although climate change and carbon markets are relatively new topics, services in emissions verification such as clean development mechanism (CDM) validation, emission allowance valuation, emissions trading internal controls, accounting and tax advice for CDM project developers and emissions traders, carbon valuation for M&A advice to insurers with respect to climate change impact and advice to governments on carbon policy development have already been provided.

Some of the main risks that need to be addressed in CIVs can be tested during the audit of financial statements of such entities investing in carbon markets. These include the existence of investments, the valuation of those investments, as well as the existence of transactions i.e., whether transactions that occurred during the period under review are valid.

Therefore, particular attention has to be paid to the method of valuation adopted, and whether an investment vehicle uses the quoted market prices of the compliant markets, or if investments are valued using the prices available on the voluntary market. It is the latter that raises the largest uncertainties around valuation of investments in the accounts of the investment vehicles.

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sPotlight on india

SPOTLIGHT ON

India

opportunities in india india may be a complex and challenging market but it is one that cannot be ignored by uk companies that are seeking to expand and go international.

India is the second fastest growing economy, after China.

The business opportunities, which a few years ago, existed only in the traditional economic heartlands of Mumbai, Delhi and Bangalore have now stretched to the emerging cities of Nagpur, Ahmedabad, Chandigarh, Pune and Jaipur, to name but a few.

The recently published report

by UK India Business Council (UKIBC) identifies and outlines the opportunities in the next generation cities in India where UK companies can build long term relationships in the coming times.

The World Bank predicted that India will be the fastest growing economy in 2010 at 8%. India is full of opportunities, some very visible and some still to be unearthed. As long as we are able to find innovative solutions and creative collaborations, the trade and investment relation between India and the UK will keep growing.

Huge investment potential exists in various sectors such as life sciences, manufacturing, energy, and infrastructure among others.

Ernst and Young recognises India as one of the emerging biotech leaders, ranked third in the Asia-Pacific region based on the number of biotech companies in the country. The Biotech Industry in India has a growth

rate of 37% per annum - one of the highest in the world. The market size of Indian Pharma Industry is estimated to reach ÂŁ14.39 billion by 2011.

The Indian Infrastructure sector has the potential to absorb US $500 billion in FDI by 2012.

The Indian telecom industry is growing at the fastest pace in the world and India is expected to become the second largest telecom market by 2010. India has emerged as the 2nd largest market after China for mobilephone handsets.

Automobile industry in India is one of the fastest growing automobile industries and is predicted to be among the top five vehicle producers by 2014.

From the unveiling of the world's lowest-cost car, the Nano, in January 2009 to the acquisition of the Jaguar and Land Rover brands in March 2009 - India's presence on the global automotive market cannot be questioned. The industry has witnessed an influx of both global equipment manufacturers as well as Tier 1 component manufacturers, who are setting up their manufacturing bases in the country. The Indian auto components industry has also grown by more than five-fold over the last decade.

14 • Global Business Magazine • December 2012

Economic Overview General Economy India opened up the economy in the early nineties following a major crisis that led to a foreign exchange crunch that dragged the economy close to defaulting on loans. The response was a slew of domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations.

The Indian economy responded well to these measures as annual GDP growth started averaging over 6% in the 1990s, well above the 'Hindu growth rate' of 3% in the previous four decades. This moved upwards to an 8.5%+ growth trajectory in the 200203 to the 2007-08 period with the GDP shares of agriculture,

manufacturing and services constituting 18%, 29% and 53% respectively.

The high growth rates also saw India's per capita incomes growing by over 4% per annum, making India the world's twelfth largest economy by market exchange rates and the fourth largest in PPP terms (2003) after US, China & Japan.

Liberalisation also triggered the growth of a rapidly expanding consumer class. The increased use of consumer durables portrays this feature aptly.

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india’s population is 1.2 billion approximately.

81 new projects from India generating 5,454 jobs. India is the 5th largest investor in the UK. In 2011 UK exports to India increased by 29% making India, the UK's largest non EU market.

While managing high rates of overall growth there is a growing perception that growth continues to be unevenly distributed. Some states like Karnataka, Andhra Pradesh, Tamil Nadu, Gujarat and Maharashtra continue to grow at a faster rate than their populous counterparts such as Bihar, Madhya Pradesh and Uttar Pradesh. Unemployment and income disparities continue to trap around 25% of the population below the poverty line.

Economic Policy changes The new policy regime since 1991 radically pushed forward in favour of a more open and market oriented economy. India has removed most of its trade barriers. The peak tariff rate is down to 10% in 2009-10 from 72% in 1991, while quantitative restrictions on imports ended in 2001, opening up the economy to foreign businesses, especially in consumer goods. This also meant more foreign capital flowing into India. The cumulative FDI flows into India from April 2000 to December 2009 stands at about US $110 billion.

Indeed India's slow paced yet

consistent reform programme has increased external and internal competition. The public sector role both as producer and consumer of goods and services although still significant is declining. It still accounts for a quarter of GDP, one-third of investments and one-sixth of final consumption expenditure.

This is expected to fall gradually as privatisation/disinvestment programmes gain momentum in the coming years. India's privatisation initiatives have enhanced the attractiveness of state-owned assets in sectors with a promising future such as telecoms, oil and gas, pharmaceuticals, real estate development and travel and tourism.

Population India's population is 1.2 billion approximately.

Political Overview The Indian Constitution provides a system of parliamentary and cabinet government both at the centre and in the states. The Indian Parliament consists of the President, currently President Smt Pratibha Devisingh Patil, (elected for a 5-year term as the constitutional head of the executive) and 2 Houses: The Lower House - Lok Sabha ('House of the People') - directly elected on the basis of universal adult suffrage; and the Upper House - Rajya Sabha ('Council of States') - indirectly elected by the members of state legislative assemblies.

The Bharatiya Janata Party (BJP) and the Congress Party are the 2 main forces in the current Indian political scene. Congress heads the ruling coalition at the centre,

“

In 2011, UK India bilateral trade grew by 26% bringing the total to £16.4 bn (£13 bn in 2010). In 2011, the UK attracted

the United Progressive Alliance (UPA) while the BJP leads the Opposition alliance the National Democratic Alliance (NDA).

Whilst neither can command a clear Parliamentary majority, following the UPA's good performance at the recent election, UPA gathered the extra seats to form the current government and enjoy a comfortable majority.

Getting here and advice about your stay UK Trade & Investment (UKTI) assists companies with tailored training, planning and support to help them prepare to succeed in India and elsewhere.

UKTI can provide: • An export health check to assess a company's readiness for exporting and help develop a plan of action; • Training in the requirements for trading overseas; • Access to an experienced local International Trade Adviser; • Specialist help with tackling cultural and language issues when communicating with Indian customers and partners; • Advice on how to go about market research and the possibility of a grant towards approved market-research projects; • Ongoing support to help business continue to develop overseas trade and look at dealing with more sophisticated activities or markets;

available from UKTI and others.

UKTI assists new and experienced exporters with information, help and advice on entering overseas markets such as India.

This service includes: • Information, contacts, advice, mentoring and support from UKTI staff at home and in our network of High Commissions and other offices throughout India; • Support to participate in trade fairs overseas; • Opportunities to participate in sector-based trade missions and seminars; • Access to major buyers, governments and supply chains in overseas markets; • Advice on forming international joint ventures and partnerships; • Exploratory visits to India; • Alerts to the latest and best business opportunities.

UKTI's team in India can provide a range of services to Britishbased companies wishing to grow their business in the Indian market. Our services include the provision of market information, validated lists of agents/potential partners, key market players or potential customers; establishing the interest of such contacts in working with the company; and arranging appointments. In addition, they can also organise events for you to meet contacts or promote a company and its products/services.

• Advice on a range of international trade assistance Source: UKTI December 2012 • Global Business Magazine • 15

sPotlight on india

india – the new emerging destination for Foreign investments With 1.2 billion people, India is among the fastest growing economies worldwide, boasting a robust financial system and deep capital markets. According to a recent BDO Ambition Survey, chief financial officers from Europe and the United States saw India ranked fourth globally as an attractive investment destination, with its appeal lying in market size, higher growth rates and access to new customers.

of 35, which means that by 2020, the average age of an Indian will be 29 years compared to 37 for China and 48 for Japan. In addition, 54 per cent of Indians are under the age of 25, and the number of consumers driving growth is set to rise from 46 million households in 2003 to 124 million households by the end of 2012. This makes India a production, services, agriculture and consumption driven economy.

Not surprisingly, with a large manpower base, diversified natural resources and strong macroeconomic fundamentals, in 2011 India attracted 46.8 billion dollars of foreign direct investments. An open democratic set-up backed with a strong and reliable judiciary system adds further advantage to the economy. This article looks at why the world's largest democracy and second most populous country ranks among the most preferred nations for foreign direct investments in various sectors.

Thriving Cities

Young Population Economically soundand militarily strong, India has made a mark for itself on the global canvas due to vast young population, increasing acceptance of international culture, and rapid urbanisation.

Nearly 65 per cent of the population is below the age

India is also projected to overtake China as the world's most populous nation by 2030 – in fact, the country’s urban sprawl is poised to become second largest in the world, with a larger population than many other countries. With cities being predicted to account for 69 per cent of the country’s GDP by 2030, India continues to urbanise at a strong pace, driven by a combination of uptrending consumption, robust job creation and growing financial penetration. Besides New Delhi and Mumbai, the top most vibrant cities are Bengaluru, Hyderabad, Pune, Chennai and Chandigarh.

16 • Global Business Magazine • December 2012

Growing Infrastructure As the number of cities with more than a million people is set to increase from 48 now to 68 in the next two decades, the country plans to spend nearly one trillion dollars to develop social and physical infrastructure over the next five years, with over half of funding coming from private sector.

Buoyed by the success public private partnerships in airport development, India plans to invest 30 billion dollars over the next ten years with more existing airports being opened up for expansion and modernisation. By 2020, the number of passengers is likely to go up to 260 million and cargo by five million tonnes.

India’s railways network is spread over some 64,000 km with 12,000 passenger trains and 7,000 freight trains each day from over 7,000 stations, plying 23 million travellers and 2.65 million tonnes of goods daily. At the same time, India's road network of 4.1 million km is the second largest in the world. With the number of vehicles growing at an average annual pace of 10.16 per cent, country roads carry about 65 per cent of freight and 80 per cent of passenger traffic. Meanwhile, the expenditure in road sector

is projected to double from 27 billion dollars to 58 billion dollars by 2017.

Independent Population One of the biggest draws for investors is India’s favourable demographics. By 2025, the proportion of dependent population in India will be 8.3 per cent compared to 13.2 per cent in China, 21.5 per cent in Europe, and 18.7 per cent in Latin America. A high proportion of working population and a dynamic private sector largely offset the concerns related to an inefficient government sector. It is true that India has several challenges to overcome in order to tread a sustainable growth path, with a twin deficits (fiscal and current account) problem coupled with the issue of widespread corruption in government sector.

However, these problems are somewhat short-term in nature.

The contribution of vibrant micro, small and medium enterprises (MSME) sector with huge employment opportunities is expected to be 22 per cent to the GDP. Successful Entrepreneurs Having broken free from a largely socialist pattern of governance and adopted pathbreaking economic reforms two decades ago, millions of young qualified, motivated and brilliant people now aspire to become entrepreneurs. With such a young, hard working and ambitious population, the concept of self-empowerment must be now fed into the bright young minds at school. Rather than focusing on recruitment and placement, passing out classes need to be introduced to

venture capitalists for funding new ideas. Furthermore, the new recruiters of India should be people with capital who will support ideas. We have seen competitive advantage now shifting from a national level to an individualistic level. As people are mastering the use of information technology, groups of individuals across the world are now leveraging on this powerful tool by committing to a common endeavour. This power shift from nations and corporations to individuals is unmistakable. We must celebrate this shift and not be lost in gloom and doom.

Growing Trade India is enjoying its position as a strategic international trade partner. While the country is anticipated to become the third largest auto industry by volumes after China and the United States by 2015, it is predicted that by 2025 the Indian banking sector will be the world's third largest in asset size. Similarly, India's consumer market is expected to grow two-and-a-half times by 2025 – from current 800 billion dollars to over two trillion dollars. The Indian economy has been recording GDP growth at an average rate of 8.5 per cent for the past five years, making it the third largest in the world on basis of purchasing power parity.

Industry Sector Initiatives India's domestic IT spending is valued at 30.4 billion dollars, of which banking, financial services and insurance (BFSI) contribute to 11.1 per cent. The IT spend in BFSI vertical is expected to reach 3.5 billion dollars in the next two years, growing at a compound annual growth rate of 13 per

HARIBHAKTI ECOSYSTEM

cent.

In addition to this, India's fifth petroleum, chemicals and petrochemical investment region has recently been approved in southern Tamil Nadu state by the federal cabinet headed by Prime Minister Manmohan Singh. The 16.58 billion dollar initiative has been earmarked for petroleum, chemicals and petrochemical production facilities. The federal government has also unveiled a national manufacturing policy so that the manufacturing sector can contribute at least 25 per cent to the GDP (from 16 per cent at present) and add 100 million new jobs in the next ten years. It has recognised that large integrated areas called national investment and manufacturing, are going to be key growth drivers for the sector. The country is also emerging as one of the world's key markets for hybrid and electric medium to heavy-duty trucks and buses. Component revenues from India are expected to reach 212 million dollars by 2020, accounting for 11 per cent of the global component market.

Evolving Infrastructure A recent massive power breakdown in India that impacted 600 million people, underscores the challenges in the country’s power infrastructure.

In fact, India's per capita electric power consumption is miserably low at 571 KW hour per capita, compared to a world average of 2,807 KW hour. While the country has an installed power capacity of 170,000 MW, this is not sufficient by any means for 1.2 billion people. The government’s 12th Five Year Plan (2012-17) projects addition of 90,000 MW of power, but the only way to achieve this

target will be through private sector participation. However, the increasing private sector participation in the power sector means that the future looks more promising.

Changing Governmental Practices India implemented its Constitution in 1950 that provided for a bicameral parliamentary system of government with three independent branches – the executive, the legislature and the judiciary. The country has a federal structure with elected governments in states (provinces). The government sector will gradually move towards being more efficient, as the population piles on pressure on the government to eradicate corruption and boost growth.

E-governance should come to the centre stage for both federal and state (provincial) governments to reduce physical contacts and enhance the quality of delivered public services. However, systems of e-governance need to be set up so that government services are available to entrepreneurs without contact with potentially corrupt government employees. This will then lead to an enormous reduction in corruption levels as systems and processes fall in place. When all these possibilities are near and transparency becomes the order of the day, the room for gloom will be limited.

Retail Investment India should also encourage creation of retail investors. It is a shame that with over 30 per cent national savings rate in a 1.8 trillion dollar economy growing by at least six per cent

annually, we cannot find 100 billion dollars every year for retail investment to be attracted into equity. After all, the means to achieve this are ready at hand, with 500 extremely attractive government-owned companies listed on stock exchanges. If stakes in them are divested to the retail investing Indian public, all recent challenges in divestment will become history and the high fiscal deficit a forgotten circumstance. This also means that individual Indians, whose only hedge against inflation is investment into equity, will be able to share the true value of India’s progress. As the cult of equity spreads, retail investments will flourish and flower in the private sector as well. Encouraged by investor guidance associations or forums, by a process of natural selection,investments will be then channelled into best-in-class, well-governed and sustainable enterprises.

Imagine the power that this polarisation will have on transforming India into the most attractive investor destination in the world. Foreign direct investments equal to at least double the retail investments will flow into India's investmenthungry landscape. Imagine what 300 billion dollars of fresh investments growing at least six per cent per annum could do.

It means that in ten years time, India could become the largest, most flourishing economy in the world.

Mr. Shailesh Haribhakti, Founder & Chief Mentor, Haribhakti Ecosystem

Martina Pinto Haribhakti Ecosystem corporatecommunications@bdoindia.co.in DID: +91 22 6672 9868

December 2012 • Global Business Magazine • 17

sPotlight on india

how Foreign nationals are being engaged lawfully to render services in india

India is expected to witness a growth of about 7% in the coming fiscal year (2012 to 2013), due to key factors that are making the country an attractive investment destination. These include second generation reforms to attract foreign investment and encourage entrepreneurship being underway; infrastructural advancements; exchange controls being relaxed; and the Indian Government committed to moving towards more transparency and simplification of the regulatory and tax regime. Though India provides for different types of visas, this article focuses primarily on the relevant categories of employment, business and dependent visas.

India welcomes migrants who not only wish to invest their money in India, but also seek jobs requiring highly skilled and qualified professionals. Since 1991, with the Government of India’s concerted initiatives to attract foreign investment into the country, the resultant flow of foreign nationals visiting India

for both business and pleasure has increased exponentially.

However, almost all foreign nationals who wish to come to India for employment or otherwise, require a valid passport of their country and an appropriate Indian visa. Foreign nationals are required to apply for a visa at an Indian Embassy, or at one of the Indian High Commissions abroad that has jurisdiction over their place of residence.

Temporary Visas Business Visa Business visas are generally issued with a validity of six months, although individuals of certain nationalities may be issued visas with a validity of up to ten years with multiple entries. A first-time applicant is generally granted a business visa with a validity period of six months, and may subsequently apply for a longer-duration visa. The period of continuous stay in India for each visit is limited to 180

days. The applicant’s financial background and expertise in the field of intended business is checked prior to granting a business visa. The Consular Post considering the application also checks the business invitation and support letters.

Employment Visa Foreign nationals with a high level of professional skills and qualifications may be granted visas to take up employment in India. They will not be granted visas for jobs for which qualified Indians are available, or for routine, ordinary, secretarial or clerical jobs. All employment visa applications must be sponsored by an entity in India. Foreign nationals who are employed and working in non-IT positions may be issued an employment visa for an initial period of up to two years. Employment visas may also be granted with a validity of up to three years, to take up employment in the Information Technology Sector. Employment visas may be extended for up to five years from the date of issue of the

initial visa. Employment visas are processed on a case-by-case basis, with the extension process and processing time differing in every Indian jurisdiction.

Employment visas are generally job and employer specific, which prevents foreign nationals from seeking new jobs on the same visa. Furthermore, the visa is dependant on the employment contract. It follows that if the contract is terminated the visa is no longer valid and the foreign national is required to leave the country.

Project Visa The Indian Government issues Project visas to foreign nationals seeking to work in the power or steel sectors. The number of foreign nationals who can work on Project visas in any unit in these industries is restricted to numeric caps – each cap varying, depending on the unit’s activities and production capacity. Project visas are valid for one year or for the duration of the project – whichever is less. A person who has been granted a Project visa will not be allowed to take up employment in the same Indian company for a period of two years from the date of commissioning the project.

Accompanying Dependents A spouse and dependent children, who accompany and wish to reside with individuals on an employment or business visa in India, are issued Entry visas that are co-terminus to the visa of the principal applicant.

However, if an accompanying spouse wishes to be employed in India or conduct any other activities he or she would require an independent Employment

18 • Global Business Magazine • December 2012

visa.

Registration of Foreign Nationals Most foreign nationals who take up employment in India need to complete a post arrival registration process at the appropriate Foreigners Regional Registration Office (FRRO) in the seven major cities of Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Amritsar and Hyderabad. Apart from the FRROs, the concerned District Superintendents of Police function as Foreigners Registration Officers (FRO) in all the other locations. Foreign nationals are governed by an FRRO or FRO, depending on the place of residence in India.

Business visas are generally issued with a maximum validity of five years with the right of multiple entries. If a business visa is issued with a clear stipulation stating ‘each stay not to exceed six months (or the duration of stay stipulation) and registration is not required’, then the foreign national on such a business visa need not register.

However, if a business visa is issued with a stipulation that ‘registration required within 14 days’, then the individual also needs to register with the respective FRO or FRRO. To complete the registration formalities, the Indian company, through its authorized signatory (an Indian national), has to assume responsibility for the foreign national during his or her stay in India, and assume responsibility for the repatriation of the foreign national employee if anything adverse occurs during the stay in India on the employment visa. Once the registration is

complete, the foreign national is issued a residence permit that is co-terminus with the visa, and facilitates multiple entries into India.

Extensions and Modifications: Although certain employment and business visas may be extended within India, modifications to visas are generally not allowed. However, in extraordinary circumstances the Ministry of Home Affairs (MHA) may consider a request for modification. Applications for extensions should be submitted to the appropriate FRRO or FRO, who in-turn usually forwards most of the applications to the Ministry of Home Affairs (MHA).

Permanent Visas The Persons of Indian Origin (PIO) Card A foreign national who can prove his or her Indian origin up to three prior generations (or the spouse of a citizen of India or person of Indian origin), may be eligible for a PIO Card.

Citizens of Pakistan, Bangladesh and other countries – as may be specified by the central government – are not eligible to receive these Cards. The PIO Card gives the holder visa-free entry into India for 15 years; the right to take up employment without a visa; and exemption from registration with an FRO or FRRO, if the period of stay in India does not exceed 180 days.

In addition, PIO Card holders enjoy parity with Non-Resident Indians (NRIs) in economic, financial and educational fields.

PIO Card holders may acquire, hold, transfer, or dispose of, immovable property in India (except agricultural or plantation properties); open Indian Rupee

(INR) bank accounts; lend INR to Indian residents; and make investments in India. PIO Card holder’s children may also obtain admission in educational institutions in India on parity with NRIs. However, they cannot exercise any political rights, visit restricted or protected areas without permission, or undertake mountaineering, research or missionary work without additional permission.

Those staying in India on a long-term visa may apply for the Card from the appropriate FRO or FRRO. The Overseas Citizen of India (OCI) Card The Indian Government has implemented a law regarding registration of an eligible foreign national as an OCI. Eligible foreign nationals include – among a few other categories – certain persons of Indian origin, and individuals whose parents or grandparents migrated from India after 26 January 1950, and their minor children. This is subject to the applicant being a citizen of a country that allows dual citizenship in some form.

This provision is extended to citizens of all countries, other than those who have been citizens of Pakistan and Bangladesh.

Registration as an OCI is a one-time process that grants all the benefits that are available to PIO Card holders, with some additional benefits. These include a lifelong multi-entry, multi-purpose visa to visit, live or work in India. OCIs are not subject to travel restrictions within the country, and are not required to register with an FRO or FRRO for any length of stay in India.

LawQuest – The Firm LawQuest is a general business and immigration law firm, headquartered in Mumbai, India. Offering client centric legal and business solutions, the firm’s areas of practice include: Immigration and Work Permits; Corporate and Commercial Law; Real Estate Law; Personal Law; Employment Law; Intellectual Property Law; and Entertainment and Media Law. LawQuest’s local and international immigration solutions include: strategic advice; the registration and provision of legal opinions on corporate immigration; private individual migration; compliance and advisory; local registration; consular services; and document Apostille procurement and legalisation.

LawQuest has a strong legal practice that draws on local expertise and intercontinental capabilities, to represent clients across India and abroad.

Clients range from start-ups to multinationals and Fortune 500 Companies who are world leaders in their industry segments.

Founder and Managing Partner, Poorvi Chothani, Esq. heads the business and immigration practices, and is licensed to practice in the U.S., U.K. and India.

Author: Poorvi Chothani, Founder and Managing Partner, LawQuest

Rita Batra, Office Manager, LawQuest Office No. 103, 10th Floor, Maker Tower ‘F’,Cuffe Parade, Mumbai 400 005, MH, India rita@lawquestinternational.com Contact Number # +91 22-4002 0955

December 2012 • Global Business Magazine • 19

sPotlight on india

indias richest

In the 1990s India barely registered on the world’s finance radar, but by 2012 its population of billionaires had rose from two to a staggering 46. The majority of these wealthy citizens have made their fortune in various business undertakings, from telecommunications to manufacturing, pharmaceuticals to the steel industry. Some have inherited companies while others are self-made, but the majority of Indian billionaires are involved in philanthropic work—mostly notably the creation of schools and revitalization of India’s educational system. The Top 10 Billionaires are listed below, in descending order of net worth.

1. Mukesh Ambani, £14 Billion Born in 1957, Mukesh Ambani is the CEO and chairman of Reliance Industries Limited (RIL), an energy conglomerate considered to be the number-one company in India. Besides being India’s richest man, he is the second-richest person in Asia, and ranked nineteenth in overall wealth worldwide. After joining Reliance Industries in 1981, Ambani proceeded to switch the company from producing textiles and synthetic fibres to petrochemicals and petroleum refinement, then finally to the production of oil and gas. He is a member of Bank of America’s board of directors. His private 27-storey building in Mumbai is considered the most expensive home in the world.

2. Lakshmi Mittal, £13 Billion CEO and chairman of, ArcelorMittal, the world’s largest steel manufacturer, Lakshmi Mittal remains the richest man living in Europe despite having lost £6.5 Billion in 2011. He has a 34-percent holding in the Queens Park Rangers football team, sits on the board of directors of the European Aeronautic Defence and Space Company, is a member of the Indian Prime Minister’s Global Advisory Council, and sits on the Kellogg School of Management’s advisory board. A noted philanthropist, Mittal is known for his generous donations to Indian Olympian athletics through the Mittal Champions Trust, establishing the LNM Institute of Information Technology in Jaipur, and founding New Delhi’s Usha Lakshmi Mittal Institute of Management.

3. Azim Premji, £10 Billion After ushering Wipro Limited, the company for which he is the chairman, through over forty years of continued development to become one of the strongest Indian software conglomerates in the industry, Azim Premji has singled himself out as one of India’s most successful business tycoons. Since the mid-1980s he has been a generous philanthropist, with his most charitable gesture being his establishment of the Wipro Equity Reward Trust, which gives Wipro employees the opportunity to receive shares and other benefits from the company—perks usually only enjoyed by upper management. An advocate for quality, universal education, Premji founded the Azim Premji Foundation in 2001 and continues to regularly contribute to education research and system reform in India’s government-run schools.

4. Savitri Jindal, £6.9 Billion One of the few wealthy women in India (and ostensibly the world), Savitri Jindal inherited the wealth after her husband, O.P. Jindal, was killed in a 2005 helicopter crash. Jindal and her immediate family thus assumed control of her husband’s steel conglomerate, the O.P. Jindal Group, of which she is now the non-executive chairperson. Until 2010 she was also the Minister of Power for the Government of Haryana. Despite being listed by Forbes as the world’s 80th most-wealthy person, amongst billionaire mothers she is noted to have the most children—she has nine.

22 • Global Business Magazine • December 2012

5. Sunil Mittal, £5.1 Billion Unlike India’s wealthiest billionaires, Sunil Mittal did not inherit his wealth or company; he is a self-made billionaire and first-generation entrepreneur. One of the first Indian business owners to identify the mobile telecom sector as a major growth area, he founded Bharti Enterprises, which now runs the largest GSM-based mobile phone service in India (and fifth-largest worldwide, with 190 million customers in both Asia and Africa). In 2007 he was honoured with the Padma Bhushan, India’s highest civilian award. Considered one of the world’s top 25 philanthropists, Mittal is committed to country’s education and works with the Bharti Foundation to establish schools throughout India.

6. Kumar Birla, £8 Billion After his father’s death in 1995, a then-28-year-old Kumar Birla assumed control of the Aditya Birla Group despite strong speculation and doubt regarding his ability to run the company successfully. He quickly proved the skeptics wrong by becoming one of India’s most respected industrialists by increasing his company’s turnover from £1.26 Billion to £20.8 Billion and expanding the borders of its operation to include more than forty countries, including all of North America and China. The AB Group has become India’s third-largest house of business, and Birla has since become Chancellor of the Birla Institute of Technology & Science.

7. Anil Ambani, £5 Billion Anil Ambani is the elder brother of India’s wealthiest man, Mukesh Ambani, and chairman of Anil Dhirubhai Ambani Group, one of India’s largest private conglomerates. After joining his late father’s company, Reliance Industries, as CO-Chief Executive Officer in 1983, Ambani went on to pioneer multiple innovations in the Indian capital market, and, along with his brother, helped the Reliance Group become the leader in Indian textiles, power, telecom, and petrochemicals. In 1997 he was designated by India’s leading business magazine, Business India, as Businessman of the Year, but during the financial crash of 2008, he lost a staggering £20.4 Billion.

8. Dilip Shanghvi, £4.9 Billion Another of India’s rare self-made billionaires, Dilip Shanghvi is the managing director of Sun Pharmaceutical Industries Limited, a company he founded in 1983 that has now become the third-largest and most-profitable Indian drugmaker. After starting with five psychiatry-related products at its inception, Sun Pharma went on to introduce products for cardiology and gastroenterology in 1987 and 1987, respectively. Today it is the leading producer of chronic prescriptions in India, with 57-percent of its sales in non-Indian markets—most notably the US. The majority of Shanghvi’s success is attributed to mergers with and acquisitions of other key pharmaceutical companies.

9. Shashi and Ravi Ruia, £4.4 Billion Chairman and Vice-Chairman, respectively, brothers Shashi and Ravi Ruia are integral parts of the Indian multinational conglomerate, Essar Group, which they inherited in 1969 after the death of their father. Though initially a small construction company, Essar Group is now present in multiple sectors including communications, energy, logistics, and steel. In 2011, after suspected corruption of the sale of India’s 2G Spectrum, Ravi Ruia (along with two other executives, excluding his brother) was charged by India’s Central Bureau of Investigation. The name of their corporation (Essar), is derived from the initials of the brothers’ combined first names.

10. Kushal Pal Singh, £4 Billion After the merger of the company he’d joined in 1960, American Universal Electric Company, with DLF Universal, Kushal Pal Singh became DLF’s managing director. The company is now the largest real estate company in the world, building residential, business, and retail properties. Singh is considered the richest property director in the world. In 2011 Jack Welch published Singh’s autobiography, titled Whatever the Odds: The Incredible Story Behind DLF. Considered an important contributor to society, he has received multiple awards for his work, including the Delhi Ratna Award and the Padma Bhusan Award.

December 2012 • Global Business Magazine • 23

Class actions

Class Action Litigation 2012 – Where Do We Go From Here?

Adam J. Levitt*

Class action litigation is one of the most widely discussed, yet patently misunderstood, tools of our legal system. At their core, class actions are simply representative litigation. A basic principle of jurisprudence is that a non-party to litigation cannot be bound by a judgment in that case. Representative litigation, however, provides an exception whereby “the judgment in a ‘class’ or ‘representative’ suit, to which some members of the class are parties, may bind members of the class or those represented who were not made parties to it.”

(Hansberry v. Lee, 311 U.S. 32, 41 (1940)). Essentially, the class action device permits one or more parties (usually plaintiffs) to represent and legally bind a larger group of individuals or entities through a single lawsuit.

Class action litigation arises from the English legal system, which devised class actions as ‘an exception to the usual rule

24 • Global Business Magazine • December 2012

that litigation is conducted by and on behalf of the individual named parties only’. (Califano v. Yamasaki, 442 U.S. 682, 700-01 (1979)). The general rule, called the ‘necessary parties rule,’ had required that ‘all persons materially interested, either as plaintiffs or defendants in the subject matter of the bill ought to be made parties to the suit, however numerous they may be’. (West v. Randall, 29 F. Cas. 718, 721 (No. 17,424) (C.C.D.R.I. 1820) (Story, J.)). When strictly enforced, however, the necessary parties rule becomes impracticable, particularly if the parties are numerous or if some parties are unavailable, effectively denying recovery to the parties whose rights were at stake. (See Howard M. Downs, Federal Class Actions: Due Process by Adequacy of Representation (Identity of Claims) and the Impact of General Telephone v. Falcon, 54

Ohio St. L.J. 607, 616 (1993).)

For plaintiffs, the advantages of class action litigation are clear. A class action benefits from economies of scale and provides litigants with the ability to prosecute significant claims that would otherwise be cost-prohibitive to bring on an individual basis. Indeed, the costs of litigating a class action lawsuit, or arbitrating against a large corporate defendant, will often outweigh any small claims an individual plaintiff may have against the company.

Writing for the United States Court of Appeals for the Seventh Circuit, Judge Richard Posner noted, “the realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.” (Carnegie v. Household Int’l, Inc., 376 F.3d 656, 661 (7th Cir. 2004)). And even where individual damages are

pursue individual or class action litigation in state court. On the other hand, defendants are not left without remedy against the risks of relitigation. In fact, the United States Congress specifically set out to address relitigation concerns with the enactment of the Class Action Fairness Act of 2005 (‘CAFA’), 28 U.S.C. §§ 1332(d), 1453, which permits a defendant to remove to federal court sizeable class actions with minimal diversity requirements (requiring only diversity between any member of the class and any defendant).

And in practice, state courts can be expected to rely on principles of comity (as they always have) in deciding how to manage separately filed class cases that were originated (and still pending) elsewhere. Therefore, many of the concerns raised by Bayer are largely ameliorated by CAFA’s removal provisions and traditional jurisprudential tools.

In short, the class action device remains an advantageous and economical device for both sides.

considerable, the class action device is attractive because it allows for convenient and economical group resolution of similar, if not identical, lawsuits.

The same issue need not be retried on behalf of each class member.

While class actions are often demonised by the large corporations that are frequently named as defendants, that demonisation is somewhat misplaced because class actions can also benefit defendants.

Indeed, a class action can ensure that a corporate defendant is not subject to inconsistent obligations, resulting from inconsistent outcomes in a multitude of separate trials of materially identical issues.

After all, reasonable minds (i.e. judges and juries), often disagree on similar issues. In addition, defendants can achieve global peace by resolving litigation on a class-wide basis, whether

through victory at trial or through a global settlement.

In light of the United States Supreme Court’s recent decision in Smith v. Bayer Corp., 131 S. Ct. 2368 (2011), however, it pays for defendants to be cautious in expecting complete global peace. In Bayer, the Court found that a member of a proposed class that the trial court had not yet certified was legally permitted to pursue separate class action litigation in a different U.S. court, arising out of the same facts. This was on the grounds that that ‘absent’ class member was neither a party to an earlier federal action based on those facts that had been dismissed, nor the type of nonparty that could be bound by that judgment. In theory, therefore, Bayer may be an obstacle to complete peace for a defendant, to the extent that an individual can opt out of the federal court action and then

In the United States, federal class action practice is governed by Rule 23 of the Federal Rules of Civil Procedure. Although the original form of Rule 23 was first promulgated in 1938, the current form of the class action only came to life fairly recently with the 1966 amendments to Rule 23. (See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997).) A class action commences when one or more named plaintiffs file a lawsuit individually and on behalf of a proposed class of similarlysituated plaintiffs. To protect the rights of the other members of the proposed class (often referred to as ‘absent class members’), Rule 23 establishes strict procedural steps requiring judicial involvement every step of the way.

As soon as practicable in a class action lawsuit, the plaintiff must ask the court to ‘certify’ or approve the proposed class, and to permit the case to proceed as a ‘class action’. By this process, the court must determine whether the proposed class satisfies a basic set of prerequisites: first, the class must be so large that joinder of all of the parties

would be impracticable; second, there are one or more questions of law and fact common to all class members; third, the representative plaintiff’s claims or defenses are typical of those of the entire class; and last, the representative plaintiff will fairly and adequately represent the interests of the entire class. (See Fed. R. Civ. P. 23(a).) Rule 23(b) contains additional requirements depending on how the class action is structured and the type of relief being sought (i.e. whether the relief sought is injunctive in nature, or whether damages are being sought, as well as whether the requested class certification is limited to ‘issue certification’ pursuant to Fed. R. Civ. P. 23(c)(4)(A)).

In recent years, however, obtaining class certification has become increasingly challenging and, as discussed below, has developed into a far more significant legal hurdle than it was in years past. The evidentiary burden on the moving plaintiffs has become greater and the extent to which courts are willing to delve into the underlying merits of the plaintiffs’ claims in order to resolve certification issues has similarly increased.

Recent court decisions in the United States have placed class action litigation in a state of flux and redefinition. Indeed, the past few years have seen numerous substantive developments relating to arbitration clauses, commonality issues, causation, and class certification standards.

In particular, two recent United States Supreme Court decisions have had significant effects on the ever-shifting landscape of class action litigation. In the first case, brought by a group of female employees against Walmart under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-1, et seq., alleging sex discrimination in pay and promotions, the Court held that district courts must engage in a ‘rigorous analysis’ to determine whether the ‘party seeking class certification can affirmatively demonstrate his compliance’ with Rule 23. (WalMart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011): Quoting

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Class aCtions

Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982).) To the extent there is any overlap between the class certification issues and the merits, the Court held that the district court must preliminarily resolve the merits issues bearing on class certification, even if the plaintiffs ‘will surely have to prove [the merits issues] again at trial in order to make out their case on the merits’. (Id. at 2552 n.6.) The Court rejected the suggestion that its prior rulings stood for complete separation between class certification and analysis of the underlying merits. (See, e.g., Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974): ‘We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit, in order to determine whether it may be maintained as a class action.’)

The Court also addressed the Rule 23(a)(2) ‘commonality’ component of the class certification analysis, holding that any common question ‘must be of such a nature that it is capable of classwide resolution’.

(Dukes, 131 S. Ct. at 2551.)

A second pivotal decision concerns arbitration and class action waivers in consumer and employment contracts. Under prior law in California (and some other states) as framed in the California Supreme Court’s seminal decision in Discover Bank v. Superior Court, 36 Cal. 4th 148, 30 Cal. Rptr 3d 76, 113 P.3d 1100 (2005), a class action waiver provision in an arbitration agreement was deemed to be unconscionable,

whether it be a class action or classwide arbitration at stake.

Accordingly, in Laster v. AT&T Mobility LLC, 584 F.3d 849 (9th Cir. 2009), the Ninth Circuit had relied on the Discover Bank rule, to hold that an arbitration provision in AT&T’s cell phone contracts was unconscionable, and that California law was not subject to preemption under the Federal Arbitration Act (‘FAA’), 9 U.S.C. § 2. The United States Supreme Court reversed that decision, holding that state law rules are preempted when they pose an obstacle to the accomplishment of the FAA’s objectives. (See AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1748 (2011).)

Presently on the United States Supreme Court’s docket are several cases with potentially significant ramifications for class action practice, with effects that will be felt both in the United States and internationally.

For example, Comcast Corp. v. Behrend, Case No. 11-864, which is set to be argued during the Court’s present term, is posed to clarify some of the class certification questions remaining in the wake of Dukes.

In Comcast – an antitrust case concerning Comcast’s business practices – the narrow issue for the Court to consider is the extent to which a district court should examine whether plaintiffs have introduced admissible evidence to show that damages may be awarded on a class-wide basis, which is relevant to the Rule 23(b)(3) requirement that common issues predominate over individual ones. The Third Circuit, in

Adam J. Levitt President, Class Action Trial Lawyers Partner, Wolf Haldenstein Adler Freeman & Herz LLC Chicago, Illinois, USA Tel: 312-984-0000

26 • Global Business Magazine • December 2012

Fax: 312-984-0001 levitt@whafh.com levitt@thecatl.org www.whafh.com www.thecatl.org

Behrend v. Comcast Corp., 655 F.3d 182, 207 (3d Cir. 2011), held that class certification was proper and rejected Comcast’s argument that the court should fully inquire into the reliability and admissibility of plaintiffs’ expert testimony on damages at the class certification stage. The Third Circuit found it sufficient that plaintiffs had provided a common methodology to measure and quantify damages on a class-wide basis.

In Genesis HealthCare Corp. v. Symczyk, Case No. 11-1059, the question before the Court is whether a case becomes moot when there is a full value offer of compromise to a sole class representative that would satisfy all of the plaintiff’s claims. In Symczyk v. Genesis HealthCare Corp., 656 F.3d 189, 198-200 (3d Cir. 2011), the Third Circuit held that a collective action under section 216(b) of the federal Fair Labour Standards Act, 29 U.S.C.S. § 201, et seq., is not mooted when the defendant makes a Rule 68 offer of compromise to a putative representative. If the Court were to reverse this ruling, the prosecution of collective actions under the FLSA may very well become more difficult, as it would prevent defendants from trying to “pick off” the class representative plaintiff at the inception of a case by mooting that plaintiff’s claims.

Finally, in Amgen Inc. v.

Connecticut Retirement Plans and Trust Funds, No. 11-1085, the Court will attempt to resolve a split among the federal appellate circuits regarding class

certification in securities fraud cases. In Amgen, the Court will be presented with the issue of whether a plaintiff has the affirmative burden to prove that that the alleged misstatements or omissions in a securities fraud action were ‘material’ at the class certification stage, in order to receive the benefit of the rebuttable class-wide presumption of reliance on the ‘fraud on the market’ theory set out in Basic Inc. v. Levinson, 485 U.S. 224 (1988). The Court will also have to determine whether a defendant may rebut that presumption of reliance at the class certification stage by introducing evidence that the statements or omissions were not material. The Court’s decision on this issue will clearly have an effect on pleading standards on all sides of securities litigation on a going forward basis.

In sum, the class action landscape continues to evolve, and those who dwell in this landscape would do well to monitor this evolution carefully. * President, Class Action Trial Lawyers; Partner, Wolf Haldenstein Adler Freeman & Herz LLC (Chicago, Illinois, USA). Mr. Levitt thanks Maja Lukic, an associate in his firm’s New York City office, for her assistance with this article.

Work in Progress: Introducing Class Actions into French Law A class action may be defined as one by which a representative brings a lawsuit in the name and on behalf of a group of identified or non-identified persons, in order to recover damages for the harm suffered by them. At present, no such action exists in France, and the closest forms of collective redress currently available, namely the action en representation conjointe (joint representation action) and action d’intérêt collectif (collective interest action), are considered unsatisfactory.

Joint Representation Action ‘When several individual, identified consumers have suffered personal harm having a common origin through the actions of the same professional person’, an approved association may, ‘if given authority to do so by at least two of the consumers concerned’, sue for damages on their behalf (Consumer Code art.

L422-1, para. 1). However, such authority ‘may be not solicited by means of a public appeal on television or radio, or by means of posters, tracts, or personalised letters. It must been given in writing by each consumer’. The effectiveness of such an action is considered to be paralysed by the impossibility to solicit potential victims for authority to institute and prosecute legal proceedings on their behalf, since the French Supreme Court has prohibited the use of any mass communication means (including, notably, the Internet), thereby going beyond the letter

of the law, which identifies the prohibited means of solicitation (Cass. Civ. 1, 26 May 2011, appeal on a point of law No. 10-15.676).

Collective Interest Action Properly declared associations established expressly for the protection of consumer interests may, if they are approved for this purpose, ‘join proceedings in civil courts…when the original complaint aims to repair a wrong suffered by one or more consumers due to acts or omissions that do not constitute a criminal offence’. (Consumer Code art. L421-7). However, the concept of collective interest is difficult to circumscribe, and the harm to the collective interest of consumers is so hard to assess that the trial courts relatively often award nominal damages of €1.

The government formed after François Hollande’s election as President of France on 6 May 2012, has said that it wants to introduce class actions into French law. Consequently, it is expected that draft legislation on the subject will be submitted to the French Parliament in the spring of 2013.

In a resolution dated 6 – 7 July 2012, the National Council of French Bar Associations recommended, among other things, that class actions not be restricted to a particular area of the law, but be available to ‘all aggrieved parties (whether individuals

France or legal entities, and whether professionals or not) and all types of damage (bodily injury, emotional distress, economic loss, property damage)’. It is also recommended that preference be given to the opt-in mechanism; that the representation of collective claimants ‘not be vested solely in consumer associations’; and that the court hold an adversarial preliminary hearing to determine whether a potential class action is admissible and meritorious. This is in order to screen out dilatory and baseless actions, and subsequently order the advertising required to implement the opt-in mechanism.

In an interview given to the consumer magazine 60 Millions de Consommateurs on 12 September 2012, the French deputy minister for social and solidarity economy and consumer affairs (Benoit Hamon) stated that the scope of application of the projected new form of collective redress would be limited to economic loss and property damage and would not include bodily injury, which he said was ‘a matter more for a criminal proceeding than for a class action’.

The forms of procedure for the proposed French class action have yet to be specified, and debate on the subject is far from over. The forms adopted by the French government will probably be close to those contemplated at the level of

the European Union. A report by the European Parliament’s Committee for Legal Affairs on 12 January 2012 has called for an opt-in mechanism to: enable a judge or similar body to conduct a preliminary admissibility check of any potential collective action; Member States to designate organisations qualified to bring representative actions; damages awarded to be distributed to individual victims in proportion to the harm they sustained individually; and collective claimants not to be in a better position than individual claimants, with regard to access to evidence from the defendant.

BOPS is specialised in commercial litigation and domestic and international arbitration, where the firm acts and enjoys a strong reputation in cases relating to insurance and reinsurance, aviation, banking, D&O and product liability, as well as environmental and construction law. BOPS primarily advises and represents insurance and reinsurance companies, airlines, banks, pharmaceutical firms, and oil and construction companies. While some of the firm’s clients are French, most are from other countries – the majority English-speaking. The firm’s practice areas and its clients’ business activities enable BOPS to perceive and anticipate the issues associated with the proposed introduction of class actions into French law.

Alexis Valençon, Avocat à la Cour Partner, Bouckaert, Ormen, Passemard & Sportes (BOPS) 47 Rue Dumont d’Urville, 75116 Paris Tel: +0033 (0)1 70 37 39 00 Fax: +0033 (0)1 70 37 39 01 alexis.valencon@bopslaw.com

December 2012 • Global Business Magazine • 27

Class actions

Issues Surrounding Consumer Protection for Cosmetic Surgery Products in Europe The recent furore over the rupture of breast implants containing regulatorily unapproved clinically untested industrial grade silicone, has understandably raised serious questions about the adequacy of the European regulatory legislation of products for cosmetic surgery. This article reviews the relevant European legislation on medical devices, but does not review the current status of the clinical and toxicological issues with these implants. Suffice it to say that women implanted with these prostheses manufactured by the French company PIP are now very concerned that rupture and release into breast tissue of potentially toxic silicone may cause cancer. Although there is no evidence as yet of any longterm harm from such rupture and tissue deposition, there is insufficient knowledge of the long-term safety of this industrial grade product. It therefore remains to be seen whether litigation under consumer protection and/or the general consumer safety legislation will be successful.

Medical Devices Regulatory Legislation Medical devices are defined as: any instrument, apparatus, appliance or other article, whether used alone or in combination, including the software necessary for its proper application by the manufacturer to be used for human beings for the purpose of diagnosis, prevention, monitoring, treatment or alleviation of disease; and the investigation, replacement or modification of the anatomy or of a physiological process.

The onus of satisfying conformity to the essential legal requirements of safety and fitness for purpose of a medical device lies with the producer – subject in most cases to the approval an ‘independent notified body’.

The manufacturer must apply appropriate conformity assessment procedure requirements and complete a declaration of conformity. The choice of conformity assessment procedure depends on a riskbased classification ether on

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a total quality management system audited to ISO 9000 series, as customised for medical devices with EN4600 series standard or individual product assessment. The essential requirements relate to the safety of the device, including those labelling requirements expressed in terms of scientific and technical performance characteristics. This should include evaluation of clinical data but not necessarily in terms of efficacy. In addition to this, manufacturers have posted marketing safety surveillance and vigilance requirements. In parallel, Member States have market surveillance obligations and, if a medical device is unsafe, to its competent authority. The national regulatory authority has the power to effect the withdrawal of the product in its jurisdiction, and the matter is then referred to the Commission for coordination with other Member states.

Principal Marketing Directives The marketing of medical devices in the EU is governed by three principal Directives –

Directive 90/385/EEC on active implantable medical devices; Directive 93/42/EEC on medical devices; and Directive 98/79/ EEC on in vitro diagnostics.

All of these Directives were implemented into UK law, as from June 13, 2002 by the Medical Devices Regulations 2002 (SI 2002/618). Part 1 deals with introductory measures common to all devices; Part II – general medical devices; Part III – active implantable devices; Part IV– in vitro diagnostics; Part V – notified bodies, conformity assessment bodies and marking of products; Part VI – fees; and Part VII – general and enforcement measures. The basic structure, concepts and terminology are identical across all three. Ultimate authority for their interpretation rests with Court of Justice of the European Community in Luxembourg, to which the national courts may refer questions about the interpretation of Community law. There is also a sequence of guidance notes issued by the Commission (MEDDEV series), arising out of meetings with notified bodies etc.

that affect the function of vital organs. Breast implants – in common with devices such as contact lenses, urinary catheters, dental bridges and crowns – would be classified as Class II. For all products in Class II, a full quality assurance system, audited periodically by a notified body, including examination and certification of the design dossier of each product, must be carried out.

UK Member State competent authorities, whilst not involved in the assessment or authorisation for placing on the market, do have the responsibility to oversee the competence and performance of notified bodies within their jurisdiction. However, the legal responsibility for safety, fitness for purpose, and general product liability and duties under the general product safety legislation, rests with the manufacturer.

Classification of Medical Devices Medical devices are categorised on the basis of their potential degree of risk they represent.

Class IIa and IIb are invasive or implantable devices, or those that do interact with the body, whereas Class III is for devices

As regards legal liability, a manufacturer is defined as a natural or legal person with the responsibility for the design, manufacture, packaging and labelling of a device before it is placed on the market under his own name, regardless of whether these operations were carried out by himself or on his behalf by a third party (Directive (EEC) 93/42, Art 1.2 (f); the Regulations, reg 2 (1)). The Regulations require a manufacturer to observe the manufacturers obligations set out in the relevant conformity procedure, and to take account of the results of any assessment or verification operations carried out at an intermediate stage of manufacture (The Regulations, reg 17 (2)).

The Consumer Protection Act 1987 The main legislation dealing with liability of producers for defective products is the Consumer Protection Act 1987.

Part 1 of the CPA implements EC Directive 85/374 on Liability for Defective Products. The introductory wording of the CPA and European Court of Justice jurisprudence (Case C-300/95 Commission v UK) makes it clear that where there are textual differences between the CPA and the Directive, the Directive should prevail and the CPA should be interpreted in light

of the purpose of the Directive.

Furthermore, the ECJ has held that a producer's liability for defective products must be identical throughout EC member states.

The CPA confers strict liability on the ‘producer’ of a defective product for damage caused by the defect (section 2(1) CPA). Any claim brought under this Act is to be brought by the consumer of the product, who must demonstrate that the product is defective, and that the defect caused the damage. The burden of proof is on the claimant. The legal test that the Court will apply is the ‘but for’ or ‘balance of probabilities’ test, i.e. but for the use of the product, the claimant's actual damage would not have occurred on the balance of probabilities.

Damages awards in the UK are not intended to be punitive. The claimant must prove the loss he has suffered and will be awarded damages to compensate him for this loss. In addition, the CPA excludes claims not exceeding £275 (section 5(4) CPA). The CPA defines damage as ‘death or personal injuries or any loss of or damage to any property (including land)’ (section 5(1) CPA). Whilst the CPA appears to exclude pure economic loss, e.g. loss of earnings, the Directive does not. Given that the CPA needs to be interpreted in light of the Directive, the scope for damages is, therefore, exceedingly broad.

The Limitation Period for Claims The limitation period for bringing a claim under the CPA is three years from the later of (a) the cause of the personal injury by the defective product, or (b) the date of knowledge of the defect by the claimant. The Court has discretion to exclude this limitation period with respect to

personal injury cases only (s33 Limitation Act 1980). There is also a long-stop limitation period under the CPA and Directive (Art 11 Directive), stating that the rights conferred upon the injured person will be extinguished if an action is not brought within 10 years of the date on which the producer put the product into circulation.

Liability will not attach if the defect came into existence after the product left the defendant.

However, products with latent defects are defective as at the date of supply. A producer has a defence if it proves that the state of the scientific and technical knowledge at the time when it put the product into circulation, was not such as to enable the defect to be discovered. The scope of this defence has been circumscribed in the UK by the decision of A v National Blood Authority ([2001] EWHC QB 446 (26th March 2001)) and, under the principles laid out in that judgment, it would be difficult to prove one fell within this defence. Certainly, once the existence of a defect is known and there is a risk that it will materialise in any product, it is immaterial that the known risk was unavoidable in the defective product.

Therefore, it appears that the current status of liability for defective breast implants would lie primarily with the manufacturer who put the product(s) into circulation; the notified body responsible for issuing the CE mark and the national competent authority would not engage liability under the consumer protection legislation. However, both organisations could be held liable in negligence.

Four New Square, Lincolns’ Inn WC2A 3RJ Dr Peter Feldschreiber Tel: 0207 822 2000 p.feldschreiber@4newsquare.com www.4newsquare.com

December 2012 • Global Business Magazine • 29

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Representative/Class Proceedings in Nigeria Nigerian business law is much the same as English business law.

Nigeria is a federation with both states and federal trial courts.

Appeals lie from both the states and the federal trial courts to the Federal Court of Appeal, and ultimately end at the Supreme Court of Nigeria. The system in all of the courts is adversarial and there are no juries. There are three regimes of rules permitting representative and class actions – none of which allows USA-style mass torts class claims.

All of the federal and state high courts have a basic regime of rules (the ‘Basic Rules’) for representative actions. The rules provide that ‘where there are numerous persons having the same interest in one suit, one or more of such persons may sue or be sued on behalf of, or for the benefit of, all the persons so interested. The courts have read these rules to insist that both the representative(s) and the person(s) represented must have a common interest in a common subject-matter, a common grievance, and reliefs that are in their nature beneficial to all members of the class. Judgments in actions brought under these rules are binding on both the named parties and the persons represented.

Some states have a further regime of representative action rules (the ‘Further Rules’), empowering judges to appoint a person or persons to represent any person or class of persons who may be interested in or affected by proceedings concerning: (a) the administration of an estate; (b) property subject to a trust; (c) land held under customary law as family or communal properties; or (d)

NIGERIA the construction of a written instrument. The courts can make such appointments where firstly, it is expedient to do so; and secondly, the person or members of the class either could not be readily ascertained, or although ascertained, could not be found. The court can also make such appointments where it is expedient to do so for the purpose of efficient procedure, even though the person or the class or some members of the class could be ascertained and found. The judgment of the court in such proceedings is binding on the persons represented.

The 2009 Federal Rules have attempted to introduce American-style class action procedure only for intellectual property (the ‘IP Rules’). The conditions for recognising class representative(s) are similar to the ones under the Basic Rules.

However, the Federal Rules take it a step further by empowering the judge to order a party to ‘opt in’ or ‘opt out’ of the class on ‘good and justifiable cause’.

All three regimes of rules are narrow. the Basic regime is narrow because it insists on the members all having ‘the same interest’. This element shuts out virtually all claims for damages where each member of the class has a different quantum of recovery. The Further and IP regimes apply only in specific areas of law, namely concurrent property ownership and intellectual property rights disputes respectively.

The law on the subject is not entirely clear and the judicial decisions on it are not always consistent. Thus, in UTB v Koleosho (2006) 18 NWLR (Pt. 1010) 1, some shareholders of

G. Elias & Co. (Solicitors & Advocates) 6 Broad Street, Lagos, Nigeria Tel: (2341) 2806970 (2341) 2806971

30 • Global Business Magazine • December 2012

a company were successfully sued as representatives of the entire body of shareholders, as the issue at stake was the share capital of the company, which affected all of its shareholders.

Successful representative actions have also been maintained in communal land disputes (in Re: Otuedon (1995) 4 NWLR (Pt. 392) 655); chieftaincy title matters (Bamisile v. Osasuyi (2007) 10 NWLR (Pt. 1042) 225); environmental claims arising from oil spillage (NNPC v.

Sele (2004) 5 NWLR (Pt. 866) 379); and an employees’ appeal against reassessment of taxes deducted at source by taxing authorities (Ukpong v Comm. for Finance (2006) 19 NWLR (Pt. 1013) 187).

On the other hand, the Supreme Court of Nigeria has ruled in Adediran v. Interland Transport Limited (1991) 9 NWLR (Pt. 214) 155 that a representative

gelias@gelias.com www.gelias.com Primary Contact Person: Prof. Gbolahan Elias SAN

action founded on mass torts is incompetent. The Federal High Court earlier this year refused an attempt by some consumers to sue either in a class or representative capacity in a financial services product liability suits. The appeal against this decision is currently pending before the Court of Appeal of Nigeria. Similarly, the National Industrial Court earlier this year struck out an employees’ class action, for being incompetent.

The court rules need to be broadened and made clearer to allow USA-style mass tort claims. However, the law in the USA has taught us that the fears of complexity, uncertainty and injustice that typically discourage the development of rules allowing large-scale class actions, are largely exaggerated.

Authors: Prof. Gbolahan Elias SAN and Stephen Chima Arubike

Defending Class Actions The fundamental feature of a class action is that the claims are such that resolving those claims for one plaintiff effectively would resolve those claims for others who have the same claims against the defendant.

Rule 23 of the Federal Rules of Civil Procedure and its state equivalents, require proof of several elements designed to help determine whether this feature is present in a given case. One should take discovery and otherwise defend the case with those factors in mind. However, a defendant should not focus solely upon a formulaic recitation of each Rule 23 factor as if following a checklist. While each case is different, the ultimate goal in determining whether to certify a class typically is to answer

USA one key question – can proving one plaintiff’s claim prove the same claim for a sufficiently large number of other potential plaintiffs?

Addressing the elements of the substantive claims as applied to the facts at hand can be vital to answering this key question, and to developing a proper theme to oppose class certification. The commonality and typicality requirements of Rule 23(a), in particular, provide a ready means of developing the proper theme.

As the United States Supreme Court recently explained, for there to be commonality, members of the class must have suffered the same injury (Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011)).

The claims must depend upon a common contention, the resolution of which will resolve an issue central to the validity of the claims. Id. Simply stated, there must be ‘glue’ to hold a class together (see id. at 2552). Similarly, in describing typicality, one court has described the requirement in simple terms: ‘[A]s goes the claim of the named plaintiff, so go the claims of the class.’

(Sprague v. Gen. Motors Corp., 133 F.3d 388, 399 (6th Cir. 1998)). Analysing the elements of the claims and the facts of the specific case – focusing the court on how the claims can be litigated – can establish whether these necessary requirements exist, and therefore whether a class should be certified. By emphasising these requirements,

one can develop an effective theme to show the court that the hallmark features of a class action are missing.

At the end of the day, the court must determine whether one plaintiff can stand in the place of all whom he seeks to represent.

Although the plaintiff bears the burden of proof – and the court should be reminded of this fact – a good defence should also focus the court on the elements of the substantive claims and the facts at hand, to show that they simply do not lend themselves to representative proof. If they do not, there can be no class.

Stites & Harbison PLLC Chadwick A. McTighe Member Tel: (502) 681-0392 cmctighe@stites.com www.stites.com

December 2012 • Global Business Magazine • 31

triP adVisor

European Destinations on the Rise With the year drawing to a close we take a look at the European destinations that have sparked an increased interest for travellers. With breath-taking architecture, ancient monuments, gastronomic delights, and lively nightlife, the European destinations on this list offer something to suit every traveller’s preference. It’s no surprise that these destinations have seen a remarkable increase in traveller feedback and interest from TripAdvisor’s 60 million plus users, who have visited and explored destinations throughout the continent.

“These European destinations have seen the greatest increase in positive traveller feedback and traveller interest, year-overyear,” commented Emma Shaw, TripAdvisor spokesperson. “For travellers who are unsure about where to travel next year, this list may offer welcome inspiration.”

european destinations on the rise 1. Kiev, Ukraine The capital and the largest city of Ukraine, Kiev was propelled in to the spotlight when it played host to the Euro 2012 Football Championship this summer. Featuring a mix of old and modern architecture, UNESCO World Heritage sites, theatres and museums, travellers are spoilt for choice for things to do and see here.

As one TripAdvisor traveller said, “I love Kiev and would recommend a visit to the museums. It is a very beautiful place.”

2. Moscow, Russia Moscow boasts many historical sites, including St. Basil’s Cathedral, the Red Square and the Kremlin, and a multitude of museums to explore.

As one TripAdvisor traveller said, “Moscow is truly great, largely because it is so different to anywhere globally. Fabulous places to see, fabulous metro and incredible history.”

3. Turin, Italy Located in Northern Italy, Turin has a rich culture and history, and is known for its art galleries and baroque, neo-classical, and Art Nouveau architecture.

As one TripAdvisor traveller said, “Turin is a very romantic city with plenty of interesting things to do.”

4. St. Petersburg, Russia Home to more than two hundred museums, including The Hermitage Museum, one of the largest art museums in the world, St. Petersburg is a cultural hub also boasting theatres, galleries, libraries and festivals.

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This city is also scattered with 18th and 19th century architecture across the cityscape, travellers can also marvel at the breath-taking sights.

As one TripAdvisor traveller said, “I love St Petersburg and it still remains high on my list of favourite places to visit.”

5. Naples, Italy World renowned as the city that originally invented the pizza, Naples is also famous for its art, architecture and historical churches – 448 of them in total.

As one TripAdvisor traveller said, “I’ve just returned from Naples and I fell in love with it. The monuments, historical buildings, churches and the pizza - I didn't want to leave.”

6. Glasgow, United Kingdom Host to the 2014 Commonwealth Games, Glasgow is a vibrant city featuring a diverse range of attractions, including opera houses, galleries, nightlife and the football stadiums of the famous Scottish football clubs, Celtic F.C. and Rangers F.C. As one TripAdvisor traveller said, “The city is so lively and dynamic, yet still manages to keep its old charm and character.”

7. Manchester, United Kingdom Home to the world-famous football stadium, Old Trafford, Manchester is a bustling metropolitan city also recognised for its nightlife, shopping districts and the numerous bands that have emerged from its music scene.

As one TripAdvisor traveller said, “I love

Manchester for its restaurants, little pubs, fab nightlife and shopping.”

8. Belfast, United Kingdom Famous for being the city that the wellknown RMS Titanic was built in, Belfast is a city filled with history, culture, diverse restaurants and great shopping.

As one TripAdvisor traveller said, “If you are looking for sightseeing, shopping, and an eating and drinking getaway, I highly recommend Belfast.”

9. Valencia, Spain Internationally recognised as the setting of La Tomatina, the annual tomato fight festival, Valencia is a picturesque city filled with history and culture.

As one TripAdvisor traveller said, “I love Valencia because of the beach, the bars and restaurants, and the port area which is lovely to watch.”

10. Liverpool, United Kingdom Internationally known as being the birthplace of a wealth of musical talent, including The Beatles, Liverpool is an exciting city featuring rich architectural heritage, thriving nightlife, several UNESCO World Heritage sites, and two English Premier League football clubs.

As one TripAdvisor traveller said, “Liverpool is a great city, with great people and loads more to see and do.”

For more information on the destinations on the rise, visit www.tripadvisor.co.uk/ TravelersChoice-DestinationsontheRisecTop10-g4

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Four Seasons Paris Opened in 1928 in a typical art deco style, the George V became Four Seasons Hotel George V after a two year renovation from 1997 until 1999. The elegant hotel offers 245 rooms including 59 suites decorated to resemble small French apartments.

The guestrooms are resplendent with Parisian flair, some with furniture in the style of Louis XVI, all with modern bathrooms of polished marble, and with separate showers and tubs.

Each room also features the most cuttingedge telecommunications and entertainment technology.

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Classic French style is also ever-present in the decoration of the spa reminiscent of Marie Antoinette’s boudoir. The Spa offers beauty and relaxation treatments carried out with expert care and was voted best hotel Spa in Europe by Travel and Leisure.

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Four Seasons Hotel George V, Paris is also renowned for its fine dining. Its centrepiece restaurant, Le Cinq, is rewarded two Michelin stars. Executive Chef Eric Briffard creates an authentic French menu delivered to tables in a sophisticated and intimate dining room. Another fascinating feature of the restaurant is the wine cellar nested 14 meters below ground and hosting over 45,000 bottles.

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Four Seasons Hotel George V 31, avenue George V, Paris 75008, France Tel: +33.1.4952 7000 • Fax: +33.1.4952 7010 www.fourseasons.com/paris reservation.paris@fourseasons.com

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Raffles Hotel Singapore Established in 1887, Raffles Hotel has over the years gained international recognition as a traveller’s paradise and is heralded as one of the world’s top hotels. Cherished as the legendary symbol for “all the fables of the Exotic East”, few hotels can look back on more than a century of legendary service to so many distinguished guests and fewer still have preserved their past with a more loving attention to detail.

In l989, Raffles Hotel closed for two and a half years for complete restoration. The essence of the restored Raffles Hotel lies in the 103 suites, each tastefully appointed with classical furnishings and modern convenience to cater to every discerning traveller. Residents are pampered in an atmosphere of privacy and intimacy, a harmonious synthesis of 21st century luxury with the style and grace of a bygone world.

The exclusive swimming pool and Raffles Spa set amidst Raffles Hotel’s historic walls and famed gardens provide a sanctuary for renewal and well-being.

The hotel is a complete world in itself, where patrons can enjoy a wide choice of cuisines in 15 distinctive restaurants and bars including the Raffles Grill with its ardent French cuisine, the Tiffin Room with its famed curry buffet, the Bar & Billiard Room with its Champagne Sunday Brunch and the famous Long Bar where the world-famous Singapore Sling was born.

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The Bar & Billiard Room, once a sanctuary to a spirited tiger, is today a retreat for Champagne brunch on an idyllic Sunday.

The colourful parade of gastronomic pleasures is skilfully paired with vintages from Champagne Billecart-Salmon – an exclusive and privileged boutique champagne house.

itself on its celebrated wine cellar. To the traditional sources of France, Italy and Germany have been added outstanding vintages from newer wine regions such as California, Australia, New Zealand and South Africa.

Tiffin Room’s décor and ambience reflects the Hotel’s glory days from the turn of the century to the 1930s. The designs of the tables, chairs, and uniforms are all based on early photographs. Square teak tables – including many Raffles Hotel’s originals – are combined with “palm back” bentwood chairs. For most of this century, a mild chicken curry was one of the few Asian mainstays on the hotel’s daily menu as the partaking of Sunday tiffin curry was an essential aspect of colonial life. Today, Raffles’ tiffin curry can be enjoyed from a delectable buffet spread for lunch and dinner.

Some signature dishes include the succulent Raan Lamb, Tandoori Mushroom and colonial classics such as Mulligatawny Soup and Butter Chicken.

Since the restoration in 1991, the historic Long Bar has found a new home at Level 2, Raffles Hotel Arcade, where visitors continue to undergo one of the true rites of passage of world travel – savouring a Singapore Sling, the legendary hot pink cocktail with a reputation of iconic proportions, having travelled the world since its creation in 1915 at the Long Bar by Hainanese-Chinese barman, Ngiam Tong Boon. Some 2000 Slings are served each day. The earthy decor of the two-storey Long Bar is inspired by Malayan plantation life in the 1920s. The deep, rich colours and greenery bring patrons back to the edge of the tropical plantation. In keeping with the relaxed atmosphere, guests are invited to brush peanut shells off the table and bar-top to the floors; quite possibly the only place in Singapore where ‘littering is encouraged’.

Dining at Raffles Grill is truly a delightful experience that is long remembered. The skilfully orchestrated menu at Raffles Grill is a shining chapter to an already illustrious setting. Every plate is dominated by light and lightness. Dishes are imaginative yet original, perfectly ensconced in the flavours of classic French. Raffles Grill also prides

The adjoining land parcel, built in architectural harmony with the Hotel, is known as "Raffles Hotel Arcade". Raffles Hotel Arcade is an integral part of Raffles Hotel, offering a broad range of facilities for visitors to enjoy. It houses 35 regional and specialty shops, indoor and outdoor function areas including The Ballroom and

The Lawn and a variety of restaurants and bars including Long Bar where the famous Singapore Sling was created.

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Tropical gardens have always been synonymous with Raffles Hotel. These occupy more than a quarter of the entire estate, providing a tranquil contrast to the bustling city beyond.

The delightful sound of singing birds beyond the verandahs and the rustle of palm branches in the breeze recalls the atmosphere of a bygone era and enhances the simpler pleasures of nature usually denied the modern traveller.

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Also at Raffles Hotel Arcade is the Jubilee Hall, a recreation of a nineteenth century playhouse which features audio visual presentations, plays, recitals and cultural events. And the Raffles Hotel Museum showcases memorabilia, period photographs and other mementos, providing a fascinating historical glimpse of the Hotel, colonial Singapore and travel in the East.

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Saint James Paris The Saint James Paris is a new on-the-rocks formula, a cocktail of elegance, humour and fantasy, to be enjoyed without moderation!

Just off the boutiques and restaurants of Victor Hugo avenue, in the exclusive 16th district, the latest addition to Relais & Châteaux is hidden in a private garden at a few minutes’ walk from the ChampsElysées, Trocadéro and Congress Centre.

Part château, part family townhouse, it has just been redecorated by the designer Bambi Sloan who created a blend of grandeur and intimacy, of classicism and extravagance.

Highly Parisian yet decidedly beyond fashion… Simply unique.

care cabins, hammams and fitness centre…

As for the rest, there are the 48 rooms and suites filled with beautiful dreams and jealously guarding their special secrets!

Each of the 48 spacious rooms and suites unveils its own story inspired by famous guests, from My Fair Lady to Elizabeth of Austria, the Last Queen of Scots, René Magritte…

The dining room and its stunning summer terrace offer a cozy setting to taste the creative and refined French cuisine after a drink in the famous library-bar. Brunch on Sundays. 24-hour room service.

The Saint James Paris combines all of the services of a château-hotel, the privileges of a private club and the charm of a preeminent family home.

Let us pamper you in our Gemology spa with treatments made out of gems and hotgemstone massages, or keep in shape in the very chic fitness room.

It is a fabulous venue and a true feast for the senses. For the mind and for conversation, follow the mythical library and the bar, lounges and meeting rooms… For gastronomic pleasures, visit the gourmet restaurant... For a breath of nature, the large terrace in the centre of the park… For fitness and beauty care, the spa with its precious

Our convertible Smart car is at your disposal for a shopping session in Paris or to drive out of the city. Our concierges Clefs d’Or are at your disposal to arrange any requests. WiFi and valet parking are free.

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For your meetings and events, our private rooms welcome up to 25 persons in a U-shape and 50 personsfor a cocktail.

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Viceroy Bali The Viceroy Bali resort is situated in a lush highland setting just five leisurely minutes’ drive to Ubud centre. The refined 25 all villa resort is luxurious in the finest of details, each with private pools and spectacular vistas over Petanu River gorge and tropical forests.

All villas are well appointed with European fittings and amenities contrasted by traditional Balinese architectural features. At the Viceroy Bali award winning French cuisine is offered at Cascades which houses an extensive wine cellar and cocktail bar with breathtaking views of the valley and tropical countryside.

The resort’s Lembah Spa is one of the island’s most talked about health retreats which also features a full equipped gym with the latest cardiovascular equipment. The Viceroy can be reached by road, a one hour drive from Ngurah Rai International Airport or 12 minutes by helicopter to the property’s own private heliport.

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Sofitel Fiji Resort & Spa Fiji UPGRADE TO LUXURY AT THE SOFITEL FIJI RESORT & SPA Luxurious French sensibilities and Sofitel style is what truly sets this resort apart in a destination spoilt for choice. Down to earth Fijian friendliness is what keeps guests returning time and time again.

Famous for its long, lazy beachfront location, swaying palm trees and romantic sunsets, the Sofitel Fiji Resort & Spa is Denarau Island’s most alluring resort enjoying a beach frontage, the island’s largest lagoon pool, and 26-acres of lush gardens with views extending across Nadi bay.

With a prime address on Denarau Island just 20 minutes drive from the Nadi International airport, the resort is a modern, integrated destination unfolding across 26-acres of lush garden paradise with views extending across Nadi bay.

Sofitel’s signature style emanates throughout, with classic furnishings and Fijian customs infused in every aspect of resort life, including its award winning restaurants and spa.

Best of all this month, the resort celebrates romance to introduce an elegant new Luxury Room category, including ten inspiring suites.

The resorts features a full service Mandara day spa with a menu of unique wellbeing experiences including the Fijian ‘bobo’ massage, and body treatments infused with local ingredients. Boasting nine exclusive 42 • Global Business Magazine • December 2012

beachside bures, including specially created couples rooms, beautiful bures with outdoor garden showers, plus a private sauna, whirlpool and juice bar retreat, Mandara is a spa sanctuary for Sofitel guests.

watersport and recreation options in association with onsite operator, Adrenalin Fiji and a Rosie Holidays touring desk to book day trips such as cruises and village visits conveniently at the hotel.

Sofitel also features the world’s first ever Pure Fiji concept store onsite, in addition to French inspired sidewalk cafe, La Parisienne for casual dining. Of course, the most talked about and loved part of the resort is no doubt its stunning lagoon style pool complete with a separate ‘adults only’ deep end and secluded spa.

When it comes to cuisine Sofitel’s V Restaurant is unrivalled. Proudly Fijian with local artwork and motifs adorning white walls and influencing its decor and design, V restaurant is also unapologetically chic.

The restaurant is completely air conditioned for the comfort of its guests, ensuring a contemporary and comfortably cool dining encounter. V’s stunning presentation is complemented by the culinary craftsmanship of renowned executive chef, Brendon Coffey

For those who like adventure, Sofitel Fiji offers Fiji’s most extensive range of tailored

making it the perfect venue for those with an appreciation for fine food, wine and service.

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Couples visiting Fiji for a romantic interlude can enjoy a peaceful and leisurely breakfast – sans children – at Sofitel Fiji Resort & Spa’s beachside restaurant, Salt. Situated between the ocean and the resort’s long lagoon pool, Sofitel’s ‘adults Y BRA UR only’ breakfast is available each day from 08.00am to 10.00am.

2012 Sofitel’s à la carte couple’s BE ST OF breakfast at Salt complements the resort’s buffet breakfast with sparkling wine option which is available each day at Lagoon restaurant.

Visit www.sofitel.com

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luxury brand series – best oF 2012

Mandarin Oriental Barcelona Barcelona is an extraordinary city blessed with historic architecture, some of the finest food in Spain, streets of fashion and a sandy beach.

Barcelona’s unique attribute has to be its proximity to the sea. It has a lively marina and the beaches are exceptional, dotted with cafés where you can refresh yourself with the sand beneath your toes.

On these pages you’ll find our concierge recommendations on things to do and see, and where to shop and dine.

We offer some of the most exclusive accommodation in Barcelona, with just 98 rooms and suites at this premiere address.

Interiors are by one of Spain’s leading designers, Patricia Urquiola; the results are enduring modern designs which incorporate subtle reflections of our oriental heritage.

Finished to a level of luxury synonymous with Mandarin Oriental, we give every guest a supremely comfortable home in the city.

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Views are either over Barcelona’s most stylish boulevard, Passeig de Gràcia or our landscaped interior garden. A number of guestrooms have a balcony or terrace, from where you can admire the surrounding modernist façades.

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Matterhorn Focus, Zermatt Switzerland Zermatt is a very special resort, Europe’s highest lifts, one of the world’s biggest liftserved verticals and the iconic backdrop of the Matterhorn make it hard to beat.

The resort is full of top class accommodation too, so to stand-out is a challenge, and the answer from the Matterhorn Focus was to design the hotel like a work of art.

The 4-star Superior ‘Design and Lifestyle’ Hotel Garni Matterhorn Focus was created

by Heinz Julen, world famous for his eyecatching creations. With its distinct lines, the architectural style is elegant, without being obtrusive, blending perfectly into the mountain environment. The combination of modern architecture, genial comfort, attentive service and fascinating countryside create a very special ambience. The splendid location with an unbeatable view of the Matterhorn emphasizes the high standards that the hosts set for the hotel.

Most of the 30 spacious rooms and suites offer a view of the famous „Matterhorn“, some even from the free-standing bath tubs.

While from the other rooms there is a view of the buzz of activity in the charming Valais village of Zermatt.

The spacious and exclusive wellness area invites guests to relax in luxury, where all their needs will be catered for. It is very important to the hosts, that the guests are able to enjoy to the fullest their well-deserved and always too short holiday. To this end, a splendid indoor pool, an outdoor whirlpool, a saline bath, a caldarium and a Finnish sauna are waiting for the guests. A rest room with heated couches provide relaxation.

Massages and beauty treatments, well-fit courses and various leisure activities ensure complete well-being.

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Flexibility is one of the big advantages and ensures success oriented and focused activities.

But the key element of the success of the Matterhorn Focus, behind the great design and the excellent facilities, is the discreet but attentive service to the high standard required by the owners, Chris & Sonja Noti and their team.

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Zermatt is, amongst many other things, a perfect setting for seminars and conferences, away from “every-day-life”, promoting mental freedom. The light and spacious meeting room of the Hotel Garni Matterhorn Focus is fitted with all the technical features necessary for a successful event.

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Shipping &Maritime Keeping Afloat In the Maritime World – Innovate or Die! European business organisations used to be urged to export for survival, which is still an imperative, but unless we innovate in everything we do, we face extinction.

Helping enable the maritime world within Europe to keep afloat is its extensive bank of knowledge, experience and skills in doing just that. It has a long tradition, and its

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foundations are found in its earliest manufacturing, from the industrial revolution. One feature in this specialised world is the contribution made by maritime applied research in hydrodynamics.

The successful creation in 1873 of the world’s first purpose-built ship model towing facility in the UK, followed many amateur experiments in the 1860s by William Froude, father of the modern science of naval architecture. So significant was his early work that it stands as an example of worldleading innovation in the whole field of applied science. One hallowed tradition that still recognises Froude’s advanced thinking, is the ceremony of ‘mixing the waters’, where a small quantity of the water from the first-ever towing tank, is added to each and every towing tank that is commissioned, worldwide. Such was the impact of that practical, innovative, and of course, amateur work, that it has influenced all of ship hydrodynamic science since. What do you do before the science itself existed? Innovate and invent it of course!

Today, amongst Europe’s towing tank community, engineers and scientists continuously strive to push the practical limits ever further, for the benefit of maritime manufacturing and operational demands.

Once, the pressures were to find a feasible solution at all – now the research and innovation seeks to improve and refine the safety, economic, environmental or commercial parameters of ships and their systems. These facilities around Europe are applied to the development of ships, offshore structures, including renewable energy installations, and to the sea/land interface, where hydrodynamics meet coastal issues as the maritime and marine worlds seek to coexist.

In my role as Director of ECMAR,

the European Council for Maritime Applied R&D, I see everyday at first hand how a growing database of knowledge works for the good of Europe’s citizens, their economic and social needs, and increasingly, the positive contribution that ships make to the environment. Europe has a proud past, and an even more important future where its entrepreneurial and innovative nature makes progress.

Graham Clarke BSc CEng FRINA ECMAR Director Rue Marie de Bourgogne 52-54 B-1000, Brussels, Belgium Tel: +44 1590 67 11 77 Mob: +44 78 99 79 52 22 www.ecmar.eu

Much of what the maritime research community does is encouraged at EU level by its research programme – currently FP7 and, in the future, Horizon 2020. Here, the specialist knowledge adds strength to that contribution, not only because of the science and engineering involved, but also the state of the art and benchmarking capability that it brings to the strategic, decision-making table. A few examples of where the research mind has been given free-rein to flourish, can be seen in dealing with the severe climatic challenges that face the seagoing world – more than we see on land. Delivering cleaner emissions without demanding more fuel to achieve that; creating vast arrays for windenergy capture against the environmental odds; ensuring the safe transit of shipping in the opening passages of the Arctic; and always respecting and maintaining the vital balance between the different uses of the oceans, whether it be for transport, resources or food and recreation – these are amongst the solutions that Europe’s technical capabilities are constantly working to sustain.

At the next ceremony of the mixing of the waters, with the transfusion will also flow the accumulated wisdom and experience that maritime Europe has distilled over the past one-and-half centuries –sustaining the marine and maritime lifeblood for future generations. They will innovate and they will survive.

Graham Clarke is Director of ECMAR, the European Council of Applied R&D, which has 28 members from 14 European countries.

He is a naval architect and has worked in maritime industries for the last 45 years, the past 20 of which have focused on European projects, policies and programmes.

Top: Physical modelling - Seakeeping Test in Large Towing Tank (photo HSVA, Hamburg) Bottom: Stability and loading measurements of Offshore platform in simulated seaway. (photo MARIN, Wageningen)

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INDIA Salvaging the Wreck – Keeping the Shipbreaking Industry Alive Who would have ever imagined that the MD Alpine, a Greek ship that washed up on a beach in the southeastern city of Chittagong in the 1960s, would usher in the start of a monopoly for Bangladesh, a bite-size country in the South Asian subcontinent? What sparked locals scurrying to dismantle the vessel after realising that they could make a profit by selling its parts, has, according to a World Bank Report, come to manifest itself as one of the biggest industries in Bangladesh, employing over 200,000 people.

Today, shipbreaking in Bangladesh is a multi-billion dollar industry that creates jobs and meets a growing demand from European countries for shipbreaking services. Every year, an average of 250 ships of all shapes and sizes – from gas tankers, cruise liners to cargo ships – meet their demise at the hands of barefooted, mud-faced, scrawny yet sturdy young men on the beaches of Chittagong.

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According to the Economist, in 2008 Bangladesh accounted for half of the world’s shipbreaking activities.

A cheap and resilient labour force, coupled with flat beaches for intentional strandings, has given Bangladesh an edge over other coastal nations, making it one of the forerunners in the industry. Even though it may have lost number one position to India in 2011, the profit numbers that rung from the Bangladeshi shipbreaking yards at their peak in 2008 has kept the heart rates soaring for its fellow competitors – India, Pakistan and China. With a shipbreaking industry that accounted for half of all the ships scrapped in the world, Bangladesh had been being enjoying the spotlight for years. Today the country accounts for around a fifth of all the ships and ranks fourth, preceded by India, Pakistan and China.

The Indian industry – which managed to regain the title it lost to Bangladesh as the largest shipbreaking nation in the world by recycling 415 ships during 2011-12 – has once again been faced with a challenge to its supremacy, with shipbreaking activities fully resuming in Bangladesh from the beginning of this year. However, just as one begins to get hopeful about Bangladeshi shipbreaking activities picking up pace to match its earlier highs, the industry has been dealt with another harsh blow.

Just when the Bangladeshi shipbreaking industry was trying to recover the losses incurred during its prolonged shut down last year, following the ban imposed by the Bangladesh Supreme Court, on 12 November 2012, the Supreme Court cleared the way for the Bangladeshi government to close the operation of all shipbreaking yards running without environmental

clearance. What began as a repeated critique from non-governmental organisations and environmentalists alike has once again brought the Bangladeshi shipbreaking industry to its knees.

Make or Break The industry came under the microscope after it caused several gross violations of human rights, as well as posed serious environmental risks. Trouble in the Bangladeshi shipbreaking industry ensued when a group of environmental lawyers – Bangladesh Environmental Lawyers Association (BELA) – filed a writ petition before the High Court in 2009, and managed to persuade the High Court to ban shipbreaking businesses that failed to meet certain environmental standards.

The allegations included high health risks due to injuries, noxious fumes and the handling of asbestos, that were not only severely compromising the health of shipbreakers but also devastating the environment of the Chittagong beaches.

Reports of most workers prying off chunks of metal with the help of nothing more than scrapyard blowtorches and calloused hands, and sicknesses being caused from inhaling toxic fumes and overexposure to asbestos (a silicate mineral substance used in shipbuilding that is a known cause of cancer),

increased exponentially. Furthermore, the industry transformed what once were pristine beaches in Chittagong into metallic graveyards of grime and sludge. Some of the debris from dismantled ships dragged back into the ocean, threatening marine life.

Making matters worse for the shipbreaking industry was the fact that most workers were uneducated and unaware of their rights to file complaints if and when they suffered accidents or sickness. Without legal representation, they became vulnerable to being unilaterally exploited by employers greedy for sizeable profit margins. The industry had also been accused of resorting to child labour. In developing countries, children are always the most vulnerable demographic because they do not have to be paid a salary, and their voice is not heard.

Mulla & Mulla & Craigie Blunt & Caroe Advocates, Solicitors & Notaries Mulla House, 51, Mahatma Gandhi Road, Fort, Mumbai 400 001, India.

Tel: (+91-22) 22044960 / (+91 22) 22623191 Fax: (+91-22) 22040246 / (+91 22) 66345497 info@mullaandmulla.com

As a result, the High Court passed a verdict that no ship could enter Bangladesh territory for breaking without cleaning its hazardous materials at source or outside the territory; and further directed the Government to frame necessary rules on ship-breaking in three months in light of six existing laws – the Basel Convention Act, 1989; Bangladesh Environment Protection Act, 1995; Bangladesh Marine and Fisheries Ordinance, 1989; Bangladesh Labour Act, 2006; Bangladesh Territorial Water and Maritime Zone Act, 1974; and Environment Protection Rules, 1997.

The High Court’s verdict meant that by 2010 the shipbreaking industry had ground to a halt, with the knock-on effects of the ban hurting the wider economy. In a densely populated country like Bangladesh, with over 150 million squished into 130,000 square kilometers, keeping citizens employed is a must. However, the ban imposed by the Supreme Court caused thousands to lose their jobs. Not only this but domestic steel prices rose sharply. Zahirul Islam of PHP, a local manufacturer with a big shipbreaking division stated that; “for 14 months the company was unable to import a single vessel for breaking.”

In response to the verdict of the High Court that no ship could enter Bangladesh territory for breaking without cleaning its hazardous materials at source or outside the territory, the Bangladesh Ship Breakers Association (BSBA) filed a stay petition before the Supreme Court. On 23 March 2009, the Supreme Court stayed a part of the High Court verdict that restricted operation of shipbreaking yards without environmental

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clearance. In April 2009, the BSBA also filed an appeal with the Supreme Court against the High Court verdict.

Finally, in 2011, relenting under pressure from the ship breakers, and after realising that shipbreaking was a profitable industry

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for Bangladesh, Bangladesh’s Prime Minister Sheikh Hasina, relaxed the regulations.

Hefzatur Rahman, president of the BSBA, believes this action saved the industry, because according to him, the ban was merely stunting an industry that helped Bangladesh in numerous ways, as shipbuilding not only

created jobs but also supplied over half the country’s steel. Therefore, from just a score of vessels scrapped in the main part of Chittagong two years ago, in 2011 about 150 were broken up.

However, for ship breakers any door to

recovery appears to have once again been slammed shut. In November 2012, the Apex court's stay on the High Court order to shut all shipbreaking yards without environmental clearance lost effect, with the BSBA withdrawing its appeal against the High Court verdict. This now means the 2009 High Court verdict – asking the Government to strictly regulate the shipbreaking industry, as well as to restrict entry of ships that had not been cleared of hazardous materials at source or outside the country – has now come into effect.

with its yards in Alang (and elsewhere) demolishing 415 ships. Alang, which opened in 1982, has the capacity to break ships of about 4 million metric tons a year and, according to Gujarat Maritime Board website, employs about 25,000 workers. According to industry sources, another 150 plus vessels are waiting for their turn at the dismantling units. The volume and number of ships dismantled has been on an increasing trend, and industry sources state that in India more than 400 ships were dismantled between 2011 to 2012.

India’s Tryst with the Bazel Convention

The International Maritime Organisation (IMO) applauded as the Indian Supreme Court in July 2012 adopted a realistic interpretation of a key element of the Bazel Convention, in allowing the ship that spilt millions of gallons of oil in waters off Alaska in 1989 to be recycled in the nation’s biggest scrap yard at Alang.

This decision of the Apex Court of Bangladesh may be said to follow close on the heels of the recent decision of the Indian Supreme Court, in respect of the entry of the much-debated Exxon Valdez into Indian waters for recycling at Alang, the hub of India’s shipbreaking industry. However, even as the ongoing war of words between environmentalists, authorities and trade over the entry of the Exxno Valdez into Indian waters and its subsequent dismantling continued unabated, the country's shipbreaking industry was busy sealing its current position as world's top shipbreaking nation.

In 2011-12, India reclaimed its lost position as the world's largest shipbreaking nation

Following a petition filed by Delhi-based activist, Gopal Krishna, the division bench of the Supreme Court held that the Oriental Nicety – formerly known as the Exxon Valdez – may enter the yard in Alang, on India’s western coast, and that if any toxic wastes embedded in the ship structure are discovered during its dismantling, the ship owner must pay for their disposal.

The notoriety of the pollution caused by the Exxon Valdez when it spilled 11 million gallons of oil into Alaska’s Prince William Sound, devastating wildlife and local businesses, is still remembered by people 23 years later. Victims of the spill sued Exxon Mobil Corp. (XOM) and won a $5 billion punitive damage award in 1994, which was then cut to $507.5 million in 2008 by a divided U.S. Supreme Court.

Nikos Mikelis, IMO’s head of marinepollution prevention and ship recycling, commented that the Indian Supreme Court has arrived at a realistic and practical simplification of the meaning of ‘compliance with the Bazel Convention’. However, the simple truth of the matter is that the decision was driven more out of a choice between either shutting down India’s shipbreaking industry, or formulating realistic and practical requirements.

Steer Clear?

controversy surrounding the implementation and correct interpretation of the Bazel Convention, the European Union seems to no longer want to affiliate itself with the hazards of shipbreaking. As a result, they have proposed legislation stipulating that European ships can only be sold and delivered to those yards in Bangladesh and India that meet environmental guidelines.

These regulations also mandate that all ships coming from Europe be emptied of any toxic chemicals. However, in spite of reassurances, the EU does not seem to be convinced, and is still pushing for proposals that, if not met, might cast the shipbreaking industry into another period of dormancy.

Will China Sail Ahead of India and Bangladesh?

While India and Bangladesh battle environmentalists and NGOs on the one hand and the ghosts of the Bazel Convention on the other, China seems to be working hard on its Plan Green! As the IMO takes its role more seriously by developing the Hong Kong Convention and setting out regulations for shipbreaking and recycling yards, China has already indicated its plans of implementing the convention. Expressing pride about their country’s capacities for ship recycling – which have been developing over the past 30 years – the representatives from the China National Ship Recycling Association stated that out of China's 61 salvage yards, 22 are now equipped for ‘green’ ship recycling with more to follow. Furthermore, China’s go-green efforts have been further supported by the Chinese Government who recycles yards to end the practice of beaching ships for scrapping, in favour of recycling them in docks or harbours.

Conclusion So long as the Hong Kong Convention is not in force, it is easier for ship owners to sell their old vessels to ship scrapyards in India, Pakistan or Bangladesh, where standards are lower. However, from the perspective of securing an industry that locks within itself the potential of being a gold mine of profits and creates job opportunities, investing in improved equipment and better working conditions is a small price to pay to keep the industry up and running.

Environmental pressure group NGO Shipbreaking Platform sees the Exxon Valdez decision in a different light. According to the NGO, ‘the ruling implies that India can no longer accept ships from Europe (EU) or the US’. Wishing to steer clear from all the

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shiPPing and maritime

QATAR Ship Arrest in Qatar – Can We or Can’t We? Whilst other countries have been weathering the economic storm, Qatar has seen an unprecedented amount of growth over the last five years, and is expanding at a record pace. Mass scale developments such as the New Doha Port Project and Qatar’s main LNG Terminal – Ras Laffan Industrial City – are rapidly putting Qatar on the map as a key maritime hub in the Middle East.

In parallel with this growth, the shipping industry has seen an increased amount of goods being transported to and from Qatar, which in turn has led to an increased amount of shipping related litigation. A common query that we receive these days is ‘can we or can’t arrest a ship as security for a claim?’. In short the answer is ‘yes’, although this may not be without its difficulties.

The law covering ship arrests is contained in Law Number 15 of 1980, which is commonly referred to as the Maritime Code. Whilst not ratified by Qatar, the Maritime Code is based on the 1952 International Convention relating to the Arrest of Seagoing Ships.

The Maritime Code addresses ship arrest under two headings: Firstly, ‘pre-trial arrest’ which is described in the Maritime Code as ‘conservatory arrest’ (the most common form of arrest); and secondly, ‘post judgment arrest’ and ‘judicial sale’, described as ‘executory arrest’.

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In order to arrest a ship in Qatar, the arresting party must have a ‘maritime debt’.

The Maritime Code defines a ‘maritime debt’ as a debt arising out of one or more of the following: damage caused by a ship in a collision; death or injury caused by a ship; assistance in salvage; contracts relating to the operational hire of a ship under a charterparty; contracts relating to the carriage of goods under a charterparty or bill of lading; loss or damage to goods or luggage on board a ship; General Average; towage or pilotage; supply of goods or equipment necessary for the use or maintenance of a ship, wherever such supply is made; construction repair or equipping of a ship and dry docking costs; sums incurred by the master, shippers, charterers or agents of the ship or her owners; wages of the master, officers and crew; dispute over the ownership of a ship; dispute over co-ownership of a

ship, her possession and use by the coowners of their right or associated profits; and lastly, ship mortgages.

Provided that the arresting party has a ‘maritime debt’, then it may, depending on the circumstances, be able to request the court to order the arrest of that ship (or in certain circumstances, an associated or sister ship). Please note however, that the Maritime Code prohibits the arrest of a ship if the master has already obtained outward clearance to sail (unless the claim relates to the voyage on which the ship is about to sail).

It is important to recognise that just because there is a ‘maritime debt’, this does not meant that the court will allow arrest. Qatar is a civil law jurisdiction, and does not have the system of binding precedent as found in common law jurisdiction. Therefore, each case will be decided on its own merits, and it is possible for the court to issue a judgment that differs from a previous judgment,

Shalagh Saleh despite there being similar circumstances.

In addition, Qatar does not have a specialised maritime court so any arrest application will heard by the general commercial courts. As all proceedings are in Arabic, ample time needs to be allowed for the Qatari Advocate to prepare submissions and translations of supporting documents.

Prior to commencing proceedings, the arresting party also needs to give careful consideration as to whether arrest is costeffective. Unless it is a matter of principle, then it is sensible not to spend more money than the dispute is actually worth! When considering this, it should also be noted that the Qatari courts do not generally award legal costs where a party is successful in its claim.

If the court is satisfied that grounds for arrest exist, it will issue a Notice of Arrest preventing the ship from leaving Qatari waters. This Notice of Arrest will then be served on the Ship, the Port Authority, and possibly the ship’s agent in Qatar.

The Notice of Arrest will contain a summons, requiring the parties to attend before the court to hear the merits of the claim. This hearing will usually take place within 15 days from the date of the Notice of Arrest in order that the court can enquire into the merits of the claim.

In practice, while the first hearing is often fixed within the 15-day time limit, it would be usual for the court tohear the merits of the claim at that second hearing. It is more common for the parties to be required to exchange written submissions and supporting documents over a

number of months following which the Court will issue its judgment on the merits.

Our experience suggests that the courts will generally not allow an arrest to be made for security only. Itwill usually insist that the claim on the merits is also filed (within 15 days), failing which – depending on the approach taken by the court – the arrest may lapse.

Senior Associate, Eversheds LLP Tel: +974 4496 73997 shalaghsaleh@eversheds.com www.eversheds.com

As is common after a ship is arrested, the parties (often the insurers of that ship) will engage in a dialogue almost immediately after arrest, following which security (usually a P&I Club letter of undertaking or bank guarantee) will normally be provided to allow the ship to be released from arrest.

Finally, whilst the Maritime Code does not contain express provisions addressing wrongful arrest and/or counter security, the courts may be prepared to consider these points – depending on the facts of the matter and the actions of the arresting party. It is therefore important to give full consideration to the value of any dispute and the surrounding dynamics, before commencing any court action.

Shalagh Saleh Shalagh is a Senior Associate in the Litigation and Dispute Management Team in Qatar.

She qualified as a solicitor under the Law Society of England and Wales in 2005, before joining the Shipping and International Trade Team in Newcastle Upon Tyne. In May 2008, Shalagh relocated to Qatar in order to assist the Chairman of the Middle East offices, Christopher Jobson with contentious litigation in the Middle East.

Shalagh has dealt with a wide range of shipping disputes in Qatar and elsewhere.

Cases which she has worked on include: assisting in complex charter party disputes; providing ad hoc advice on ship arrests in the Middle East; taking witness statements in a cargo contamination case in the UAE; and providing general advice to international insurers on the law and procedure in Qatar and the Middle East.

Shalagh takes an active interest in the shipping community in Qatar and has given lectures to the Nautical Institute in Qataras well as written articles/ provided in house training on matters relevant to the shipping community.

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shiPPing and maritime

USA DEVELOPING EFFICIENCIES IN MARITIME REGULATION Maritime commerce will always be the focus of regulatory systems that ensure commercial transport infrastructure is capable of responding to the need for energy, fisheries, national security, and protection from natural disaster. With an eye on the future of global trade and the strength of maritime industry, regulations addressing maritime activity must respond proactively to changes. This article looks at how maritime regulation is meeting the demands of expanded waterway uses, and how better efficiencies can be developed for future growth.

As one of the U.S. federal agencies charged with regulating maritime activity in tough fiscal times, the Coast Guard is looking at its eleven statutory missions, with a

focus driven by a single noun-protection –‘protecting Americans on the sea, protecting America from threats delivered by sea and protecting the sea itself’. (Admiral Robert J. Papp, Commandant of the United States Coast Guard: United States Coast Guard 2012 Posture Statement). Most U.S. government agencies have developed a similar focus on mission prerogatives. This concentration on core priorities will ensure agencies maintain competencies through funding cuts, and will also help with meeting the demands of expanded waterway uses in the long-term.

Nevertheless, as maritime activity expands, how can the government guarantee there are no regulatory gaps or capacity voids in how our waterways are overseen?

The Backdrop for Maritime Regulation One of the first pieces of legislation to affect maritime commerce resulted in the near-destruction of the U.S. merchant fleet.

Under the Embargo Act of 1807, U.S. vessels were prohibited from trading with foreign countries, putting an estimated 30,000 American sailors out of work (Encyclopedia Britannica Blog Facts matter #7).

Above: A cartoon depicting a merchant stopped by then President Jefferson’s embargo cursing the ‘Ograbme’ (Embargo spelled backwards).

While this action devastated American trade, it ultimately resulted in benefits that

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were formative to growth of the nation, for example, the establishment of the U.S. Coast Survey as a corollary to foreign trade restrictions. This agency initially helped domestic shipping by producing charts and recording knowledge of coastal waterways, but its long-term benefits have proven to be critical to the U.S. maritime industry.

The Coast Survey also provided data that helped establish deep-water ports, utilisation of the Gulf Stream, and other information that assisted in expansive uses of America’s waterways (History of Coast Survey).

Regulation of maritime activity has evolved, but reluctantly so. Little oversight has been accomplished without the driving force of disaster. In 1912, the year the Titanic sank on her maiden voyage, passenger vessels were not required to carry lifeboats sufficient to carry all passengers on board, emergency drills were not required, ships crews didn’t have to be trained in emergency evacuation, and sound procedures for ice reporting were not in place (Surviving disaster – The Titanic and SOLAS). Each of those issues were addressed two years later when the international community adopted the International Convention for the Safety of Life at Sea (SOLAS), but the framework for those standards was around long before the Titanic sank. Unfortunately, the death of over 1,500 people drove the implementation of these standards. There are also other salient examples of U.S. legislation such as the Ports and Waterways Safety Act (PWSA), which show how regulation reacted to maritime disaster instead of meeting the needs of waterway uses as they developed.

A Forward Leaning Approach to Waterway Uses The National Ocean Policy Implementation Plan is the U.S. government’s first attempt to comprehensively review maritime activity.

It establishes a framework for permitting procedures, environmental reviews, and other government actions that are streamlined and better informed. Not only does it recognise the importance of a holistic approach to resolving conflicts in waterway uses; it also recognises the importance of leadership through collaboration and recognition of internationally recognised principles, such as those reflected in the Law of the Sea Convention.

One example of the successes that can be gained from such collaboration, is the planning effort that went into developing a vessel traffic separation scheme (TSS) that passed through Stellwagen Bank

Marine Sanctuary in Massachusetts.

Through interagency coordination with stakeholders, the Coast Guard was able to route commercial vessel traffic so that vessels are far less likely to collide with whales, and shipping traffic is less likely to interfere with proposed deepwater liquefied natural gas locations.

Authored by Lieutenant Brendan Sullivan. A Coast Guard Judge Advocate and a licensed mariner, he is currently serving at Coast Guard Headquarters in the Office of Maritime and International Law. Lieutenant Sullivan earned a Bachelor of Science degree in marine transportation from Massachusetts Maritime Academy in 2000, a Doctor of Jurisprudence degree from Roger Williams University School of Law in 2008, and a Masters of Business Administration from the University of Massachusetts Charlton School of Business in 2008. For four years he worked aboard general cargo ships as a Third and Second officer. Lieutenant Sullivan also served in the U.S. Navy from 2000-2009, completing deployments to the Middle East and South Korea.

Above: The Final Recommendations of the Interagency Ocean Policy Task Force: Example of the Potential Benefits of CMSP: Stellwagen Bank National Marine Sanctuary.

Coordinated regulatory planning has proven effective, but government must also develop efficiencies if it is to keep pace with waterway uses. The Coast Guard’s mission to protect, the military’s mission to defend, and other agency’s missions to manage coastal marine resources, does not inevitably result in overlapping priorities. However, identifying common prerogatives requires more than just a periodic meeting between agencies.

A singular vision needs to be established for all agencies with a maritime nexus. That is the next step in reducing bureaucratic inefficiencies and developing comprehensive waterway oversight.

Conclusion As government, stakeholders and the public look at future development of maritime regulation, much can be learned from the past. If nothing else, it is clear that stagnation ultimately leads to disaster.

Therefore, our approach should not only be forward looking, but as flexible and dynamic as maritime activity itself. Maritime regulation can foresee and collaborate the many waterway uses, but without additional efficiencies and mergers it is unlikely that regulation will keep speed with development.

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shiPPing and maritime

USA LIFE ON THE OCEAN WAVE: TREATING SEAFARERS FAIRLY Each year over 100,000 ships move 90 percent of global commerce with the help of 1.2 million seafarers. The United States Coast Guard is charged with protecting people on the sea, protecting people from threats delivered by the sea, and protecting the sea itself. We work closely with our sister agencies in government, the International Maritime Organisation (IMO) and the maritime industry, to ensure passengers and goods move safely and securely on the world's oceans, while respecting the marine environment. As sailors ourselves, we also expect fair treatment of seafarers.

The Law of the Sea Convention, IMO conventions and International Labour Organisation instruments all make the flag states responsible for upholding maritime standards and responding to marine casualties. Incidents resulting in major loss of life or significant pollution have strengthened these processes, along with flag state accountability. However, for seafarers involved in these incidents, the threat of abandonment remains a very real concern.

Between 2001 and 2010, over 130 ships and 1600 seafarers were abandoned. In 2009, at the height of the global economic crisis, over 50 vessels were abandoned, leaving over 600 seafarers to fend for themselves. While the circumstances vary, an abandoned seafarer is often stranded far from home, and without the means for support or transportation to his or her country.

Abandonment can be the result of a ship owner facing bankruptcy or the arrest of the vessel by creditors. Sometimes, vessels are abandoned as unseaworthy after port state control inspectors detain them. The threat of abandonment is also present in marine casualties and environmental crimes cases, when crewmembers are needed to

provide testimony for investigations. These seafarers support the flag states at great personal peril, because once they provide information injurious to an employer, they risk any future employment in the maritime industry. Even with the potential for whistle blower compensation in a small segment of these cases, seafarers must weigh the benefit of providing important information that will enhance maritime safety, and protect the world’s oceans, against the possibility of being left destitute and without work.

AUTHORED BY CAPTAIN MELISSA BERT THE CHIEF OF THE OFFICE OF MARITIME AND INTERNATIONAL LAW FOR THE U.S. COAST GUARD. HER COAST GUARD CAREER HAS INCLUDED TOURS AFLOAT AND ASHORE – LEGAL AND OPERATIONAL. JUST PRIOR TO THIS ASSIGNMENT, SHE SPENT A YEAR AS A FELLOW AT THE COUNCIL ON FOREIGN RELATIONS FOLLOWING SERVICE AS THE SECTOR COMMANDER AND CAPTAIN OF THE PORT FOR SOUTHEAST ALASKA. SHE HOLDS A JURIS DOCTORATE FROM GEORGE WASHINGTON UNIVERSITY, AND IS A 1987 GRADUATE OF THE COAST GUARD ACADEMY.

Moreover, a seafarer risks alienation and physical retaliation when they come forward to assist with the investigations. Unlike individuals that assist with investigations of land-based incidents, seafarers are in the difficult position of providing information about their ship and their shipmates. For them, it’s not just a matter of providing information about their place of employment, it’s an issue of addressing problems with the processes and people they live with, work with, and spend nearly every waking hour with to accomplish the work of the ship.

Many countries have their stories of seafarers being abandoned, and America is not immune from this problem. An environmental criminal prosecution in 1998 in Los Angeles, California, resulted in crewmembers spending weeks in homeless shelters and sleeping in the offices of the Seaman's Church Institute. These crewmembers had done nothing illegal, and yet they were effectively punished for supporting the United States in a pollution investigation.

However, not all vessel owners put seafarers in this position, as the overwhelming majority of companies take responsibility for their people. This should be the standard.

For the past several years, the Coast Guard

has encouraged policy makers to enact laws to prevent the Los Angeles script from unfolding again while not punishing the responsible leaders in the shipping industry.

Domestically, legislation has been introduced in the Senate annually for the past five years.

The bills propose the creation of a fund, the corpus derived from the community service moneys awarded in environmental criminal prosecutions. The fund would not be fed by taxpayers or responsible companies and owners: Instead, the bad actors would bear the costs for housing law abiding seafarers, while they await testifying in American courts.

Internationally, the United States joins Canada, Spain, the Netherlands and France at the IMO, in the introduction of guidelines for seafarer treatment in maritime accidents.

I look forward to supporting these efforts when I lead the United States delegation at the IMO Legal Committee meetings in London this coming spring.

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immigration & CorPorate migration

Alison Harvey General Secretary Immigration Law Practitioners’ Association (ILPA) 40/42 Charterhouse Street London EC1M 6JN

info@ilpa.org.uk 0207 2518383 www.ilpa.org.uk

Immigration into the UK for Work – Is the Current System Scoring Points?

The Immigration Law Practitioners’ Association (ILPA) is a professional membership association based in London in the UK, the majority of whose members are barristers, solicitors and advocates practising in all aspects of immigration, asylum and nationality law. Academics, nongovernmental organisations and individuals with an interest in the law are also members.

Established over 25 years ago, ILPA exists to promote and improve advice and representation in immigration, asylum and nationality law through an extensive programme of training and disseminating information, and by providing evidencebased research and opinion. ILPA is represented on numerous government

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(including UK Border Agency) and other consultative and advisory groups, and works closely with parliamentarians of all parties.

It was in September 2000 that the then immigration minister, Barbara Roche MP, made a speech challenging the prevailing orthodoxy that all immigration (henceforth to be known as ‘migration’ with its connotations of persons coming to the UK and then leaving again) was bad. In arguing that some migrants, the ‘highly skilled’ are good, a new debate had started, although it would be a mistake to regard it simply as positive. The new orthodoxy was a taxonomy whereby any migrant could be classified as ‘good’ or ‘bad,’ albeit that there was debate as to who belonged in which category.

From 2006, the previous (Labour) Government overhauled business immigration, starting with the publication of the Command paper A Points-Based System, making migration work for Britain (Cm 6741). This proposed an ‘Australian style’ points-based system – the words Australian-style being used because the then Government held them to connote a tough system. However, the system was not Australian style, not least because Australia was using points to identify persons for permanent settlement, whereas the UK was identifying temporary migrants. Nor was it particularly points-based. Points were ascribed to attributes, but there was little scope to trade attributes (with the exception

of a limited trade between qualifications and earnings). For the most part mandatory requirements were ascribed a fixed number of points. The Points-Based System was originally supposed to simplify the 70 or so routes by which a person could come to work in the UK into five tiers. In the event, sub-tiers and categories have led to their still being 70 or so different routes to come to work in the UK. The most pernicious part of the system is and remains the withdrawal of most appeal rights from those who apply to come to the UK to work. A refusal can be challenged only on the grounds that it breaches a person’s human rights, or their rights not to be discriminated against on the grounds of race. It cannot be challenged because it is wrong, contrary to the weight of the evidence etc. There is still scope to challenge decisions vitiated by unfairness, irrationality or bias before the High Court, but this is a costly procedure used by few.

The Government’s original intention was to withdraw appeal rights from those applying in-country. However, ILPA argued that this would simply recast applications as human rights applications and create complexity, and these arguments prevailed: The Government’s plans were then changed during the passage of the Immigration and Asylum Act 2006 and in-country appeal rights were preserved. The history of this can be traced on the page devoted to the Immigration and Asylum Bill on the website of the UK parliament and on the Briefings pages of ILPA’s website. Interestingly, it was students and universities who are also part of a Points-Based System alongside workers, who led the charge in parliament.

The Points-Based System introduced the notion of employer (or educational establishment) as sponsor, responsible for policing the adherence of its employee to the requirements imposed by immigration officers. This privatisation of immigration control sets up many tensions, not least between the exigencies of fair employment law practice and imperatives of immigration control. One difficulty for employers is that whereas under the UK’s old work permits’ system they would be told before they employed a person that they had not met the requirements imposed for the employment of a foreign national – now they find out as a result of an audit, subsequent to the person’s taking up post. When the Points-Based System was introduced, it was repeatedly stated that it was intended that applicants could make applications without benefit of legal advice. Instead, the fear of being hauled up years down the line for an expensive mistake has meant that companies are now spending many thousands of pounds

having lawyers audit their systems before applying for a sponsor licence. Another difficulty at the moment is that it is taking many months for the UK Border Agency to process sponsor licensing applications, with the Agency confirming to an ILPA member on 14 September that it was still processing applications from 29 March 2012.

The consequences can be dramatic: For example, this summer the UK Border Agency withdrew the licence to sponsor students from London Metropolitan University, which will mean that all foreign (non-EEA) students studying there have to find an alternative establishment, or leave the UK. There has been no scalp of comparable size among employers, although many small businesses have lost their sponsor licences, with concerns repeatedly expressed that those most often targeted for enforcement activities are those businesses with a preponderance of ethnic minority managers and employees.

From its inception, the Points-Based System has been encumbered with a plethora of mandatory guidance scattered across web pages, seemingly at random. Need to prove your qualifications? Produce an original degree certificate. If you cannot, be sure to produce evidence backing up your explanation of why not. Need to produce evidence of earnings? A bank statement?

Let us hope that you do not have an internet bank: Ad hoc bank statements printed on the bank’s letterhead are acceptable as evidence (This excludes mini-statements from Automatic Teller Machines (ATMs)).

Electronic bank statements from an online account are acceptable but must contain all of the details listed above. In addition, you must provide a supporting letter from your bank, on company headed paper, confirming the authenticity of the statements provided.

Alternatively an electronic bank statement bearing the official stamp of the bank on every page is acceptable. Tier 2 Policy Guidance (Version 08/2012).

Woe betide those who bank in countries that do things differently from the UK. It is tedious beyond words, and in ILPA’s experience officials are often unable in meetings to articulate the mischief that these evidential requirements are supposed to address.

Guidance changes frequently, but so do the immigration rules which set out the criteria for entry and stay. Statement of Changes in Immigration Rules HC 565 was laid before parliament on 5 September 2012, and appeared on the UK Border Agency website at about 10pm UK time on that day.

It came into force a couple hours later on 6

September 2012. Rules changed at short or no notice are often riddled with errors. ILPA pointed out to UK Home Office officials that Statement of Changes in Immigration rules HC 194, which came into force on 9 July 2012, had eliminated the category of ‘dependant of a Points-Based System migrant’. This was clearly an error because application forms still made provision for such dependants, and other parts of the rules imposed requirements on them. No one noticed – a mistake that has subsequently been corrected.

Two cases before the UK Courts challenged the tyranny of the guidance in the Court of Appeal Pankina v Secretary of State for the Home Department [2010] EWCA Civ 719, which the Home Secretary did not like but elected not to appeal further, only to argue the same point in Alvi v SSHD [2012] UKSC 33 in the Supreme Court. The upshot of these two successful cases can be simply summarised as being that no mandatory ground for a refusal of an application under the immigration rules can be set out in mere guidance; it must be contained in the rules themselves and laid before parliament. The Home Office response to Alvi was Statement of Changes in immigration rules Cm 8423, published on 19 July 2012 and coming into force 20 July 2012. It comprised 296 pages of changes, so immigration lawyers were kept busy that night. Might it not have been easier, rather than move mandatory requirements lock stock and barrel into the rules, to allow officials an element of discretion? It might indeed.

The coalition Government could have looked forward to an easier ride on immigration than its predecessor when it came to power in May 2012. However, the Home Secretary has put paid to this, setting a standard by which she was bound to fail, in promising to reduce net migration to the UK from the hundreds of thousands to the tens of thousands. She elected to be judged by a standard not within her control: a figure determined not only by how many people come to the UK to work but by how many emigrate from the UK each year; how many European nationals exercise rights of free movement; and how many persons are forced to flee their home countries because of war, famine, pestilence and death. In those circumstances the division set up in 2000 between good migrant and bad migrant breaks down, every refugee, migrant and immigrant, whatever their purpose in coming to the UK, takes the Government further from its target. The effects of this can be studied in the briefings on ILPA’s website, in the reports of the independent Chief Inspector of the UK Border Agency, and in the reports of parliamentary committees and debates in parliament.

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immigration & CorPorate migration

Baker & McKenzie Pamela Mafuz Special Counsel – Head of the Global Immigration and Mobility Practice in Madrid Tel: +34 91 230 4500 pamela.mafuz@bakermckenzie.com www.bakermckenzie.com

Spain – An Overview of Immigration and Corporate Migration Spain is clearly a popular destination.

Together with Germany and the UK, it is ranked among the EU countries with a larger population of foreign nationals. In January 2012, the percentage of foreign population in Spain was 14.9%, with immigration increasing three-fold in the last decade alone.

However, this tendency is changing as a clear result of the financial crisis in Spain, which has slowed down the pace of immigration to the country.

Despite Spain being one of the EU countries with more foreign nationals, and the modification of the Spanish Immigration Act in 2010 and of its rules of implementation in 2011, Spanish immigration legislation has not yet fully adapted to the significant increase of foreign nationals in the country.

However, on the occasions it proves difficult for companies, foreign visitors and investors to adapt to legislative requirements, Spanish immigration policies have been modified to encourage foreign investment in the country. The country now offers several alternatives to the different situations an employer of a foreign (non-EU) national may encounter – from temporary, non-immigrant visas, temporary work and residence authorisations, and long-term residence authorisations – to fast track processing at specific immigration offices for those that qualify as a ‘large company’. The latter is based on the company's foreign investment in the country or its activity being identified as strategic by the governmentor in terms of job creation or net turnover. Often more than one solution is worth consideration.

Requirements, processing times, employment eligibility and procedures for accompanying family members may vary, depending on the situation.

Business Travel Foreign nationals coming to Spain on shortterm business trips may use short-term or multiple short-term stay visas. In both cases, the purpose of the foreigner’s stay in Spain must be either business or tourism, but under no circumstance should it be work. Unfortunately, Spanish regulations

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do not clearly establish what activities are included in the term ‘business’ as opposed to ‘work’, although the line between one and another may be determined, for instance, based on the duration of the foreigner’s stay in the country. A business visitor may very well carry out commercial and professional activity in Spain such as business meetings, conferences, negotiations and general administration activities. However, employment in Spain or work related activity is prohibited. Furthermore, unless the foreigner qualifies as a student, for stays over 90 days within a six-month period, the foreigner must obtain a residence visa.

Visa Waiver The normal requirement of initially applying to a Spanish consular post for the short-term stay visa is waived for foreign nationals of certain countries. Not only is the permitted scope of activity the same as short-term stay or multiple short-term stay visas, the length of stay is also up to 90 days within a six-month period only, without the possibility of a stay extension or status change. A departure ticket is also required, together with proof of financial means during the stay in Spain, medical insurance and accommodation.

Work and Residence Permits for EU Citizens In general, EU citizens may work in Spain without applying for a work permit.

However, certain formalities must be observed, depending on the duration and the employment activity. The spouse of an EU citizen, his/her children under the age of twenty-one, or all ascendants, may also be hired to work in Spain, even if they do not qualify as EU citizens. Only in certain cases are other family members who do not qualify as EU citizens, entitled to reside and work in Spain.

Irrespective of the right to work and reside in Spain, EU citizens, their spouses, children under the age of 21 and ascendants, who intend to reside in Spain for more than

three months, are required to comply with certain registration formalities at Police Headquarters for identification purposes: Firstly, EU citizens should apply for registration with the Central Registry of Foreigners, within three months of the date they enter Spain: Secondly, spouses, children under the age of 21 and ascendants, should apply for a five-year duration residence card as a family member of an EU citizen.

Non-EU Citizens Working in Spain Article 1 of the Labour Act defines an employee as an individual who renders services for the benefit, and within the organisation, of another who pays for such services. Non-European Union nationals over the age of 16 wishing to work in Spain must have previously obtained either work authorisation, or a work and residence permit or residence authorisation. Work permits and requirements for employees differ from those that are applicable to self-employed persons.

Companies that wish to hire foreigners requiring a work and residence permit must initially apply in Spain for such permit.

Once the Spanish Government approves the permit, the employee will need to apply for his or her residence visa at the Spanish Consulate where he/she resides. After the residence visa is granted, the employee may then legally enter and work in Spain – notwithstanding the remaining formalities that will need to be complied with once in Spain.

Employee Work Permits.

The most common options regarding the type of work permit to be obtained are the following: Transnational Work and Residence Permits These intercompany transfer work permits are applicable to intra-company transfers, when a multinational decides to temporarily assign an employee from one of its work centres located outside of the European Union (EU) to Spain (excluding transfers for training purposes). This type of permit has

a maximum duration of one year and may be extended for an additional year. Specific conditions must be met to obtain this type of permit, in terms of seniority within the multinational group, amongst others.

Temporary Work and Residence Permit This local hire work permit initially has a one-year duration, and may be extended annually until the employee obtains permanent residency in Spain (after five years of legal residence). In light of the current economic scenario, the alternatives for obtaining this type of permit are quite restrictive, as the employee must comply with: firstly, personal requirements, which means the employee must be an ascendant or descendant of a Spanish national, the spouse of a foreigner who holds a renewed residence permit in Spain, a national of Peru or Chile, or must meet other specific personal requirements; or secondly, special requirements relating to the position within the Spanish company – for example, in the case of top management employees.

If none of these conditions are met, approval of the work permit would depend on the unemployment situation in Spain, in which case approval would only be given if firstly, the position offered in Spain is included in the ‘Difficult Positions to Cover Catalogue’ (‘Cátalogo de Ocupaciones de Difícil Cobertura’), or secondly, the Spanish company obtains a certificate from the relevant Employment Office, indicating that there are no unemployed people registered who meet the conditions required for the position. As previously stated, companies that qualify as ‘large companies’, have access to a special immigration office (the large companies’ unit within the Spanish Ministry

of Labour and Immigration –‘LCU’), for the processing of work permits for highly skilled employees, or employees in a management positions. In these cases the LCU offers expedited work permit processing, and the work permit approval will not be conditioned to the unemployment situation – as mentioned above.

Self-Employed Work Permits Individuals who wish to perform services in Spain as independent professionals or ‘selfemployed’ must obtain a self-employed work permit. Such permits may be granted in, for example, the following circumstances: Firstly, the activity in Spain should have positive effects on employment, capital investment, new technologies and/or production in Spain; secondly, the investment should be suitable to the business activity or project intended in Spain.

There are additional authorisations, which may be relevant to specific cases such as work permit exceptions and residence authorisations that apply to directors, or professors of foreign or local Universities.

In addition to this, Spanish immigration regulations establish a way to obtain a work and residence authorisation based on the years a foreigner has remained in Spain, and on his/her inclusion into Spanish society. In effect, work and residence authorisations based on exceptional circumstances – as in ‘arraigo social’– may be obtained if a foreigner has remained in Spain for more than three years, and has been offered employment for more than a year.

Immigrants to Spain are often interested in eventually becoming Spanish citizens.

Naturalisation to citizenship generally

requires ten years of continuous residence after immigrating, however, this general period is shorter for nationals of countries such as Morocco or Philippines (to five years); nationals of all South and Central American countries (to two years); and for the spouse of a Spanish national, or the son or grandchild of a Spanish national (to one year). The processing of a Spanish citizenship petition, via previous years of residence in the country, may take up to three years.

Baker & McKenzie – Global Immigration & Mobility Only a firm with extensive global experience can offer practical and comprehensive solutions to address all legal issues on immigration and global mobility. At Baker & McKenzie, we help both international and national companies to handle employee and top executive transfer projects. Chambers Global ranks our Immigration practice in the top tier, recognising the strength of our core immigration capabilities across five continents. PLC Cross-Border Global Employment also recommends our Labour and Employee Benefits practice in 18 jurisdictions – twice the number of our nearest competitor – while Legal 500 recommends us in North America, Europe and the Middle East, Asia Pacific, and Latin America.

Our practice handles a wide range of matters such as: general advice on labour and immigration law; expatriation agreements and contracts for expatriates; laws governing these areas; social security, compensation and benefits for expatriates, and their tax treatment.

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immigration & CorPorate migration

Bryan Wee Special Counsel Registered Migration Agent MARN - 1175440 T +61 3 9274 5000 F +61 3 9274 5111 bryan.wee@dlapiper.com

Prevalent Issues Surrounding Employer Sponsored Migration to Australia The last few years have seen a dramatic increase in employer sponsored migration to Australia, with the number of temporary employer sponsored business visas granted almost doubling from 67,980 in 2009-10 to 125,070 in 2011-12. Permanent employer sponsored business visas have also almost doubled from 23,762 in 2008-09, to a projected 46,000 for the year 2011-12 (DIAC Migration Programme Statistics and Annual Report). This article sets out the features of the most commonly granted Subclass 457 Business Long Stay visas (457 visas), as well as the key characteristics of Enterprise Migration Agreements, Labour Agreements and Regional Migration Agreements.

agreements give more flexibility to employ foreign workers to meet labour shortages in large projects, for semi-skilled work, and in remote areas.

foreign labour is being used to drive down Australian worker's wages, and conditions and projects should be used to up-skill the Australian workforce.

In May this year, the government announced that it approved an EMA on the $9.5 billion dollar Roy Hill iron ore project, to allow up to 1715 foreign workers to be employed – a decision that is now under review.

In November this year, the government approved a Labour Agreement with Chevron on the $43 billion dollar Gorgon gas project, to allow 150 semi-skilled foreign workers to be employed. The government also approved an RMA in Darwin in February 2012, where the Itchys gas project is located.

This increase in the numbers of business visas corresponds to an increase in demand for skilled and semi-skilled work in Australia.

Recently, the Australian government helped facilitate business migration through Enterprise Migration Agreements (EMAs), Labour Agreements and Regional Migration Agreement (RMA) initiatives. These

However, EMAs and Labour Agreements have received staunch opposition from Australian trade unions, including a heavily funded advertising campaign. The CFMEU building union argues that jobs can easily be filled by thousands of retrenched Australian workers, given that the resources boom is receding. Meanwhile, unions argue that

To the contrary, the government and industry still contend that there is a continuing skills shortage, with over 70,000 skilled workers required on major resource projects between 2010 and 2015 (National Resources Sector Employment Taskforce Report 2010). The Australian Mines and Metals Association recently told a Senate Inquiry that more than $500 billion of resource projects are either ready to or awaiting approval, and that scrapping these initiatives could jeopardise local jobs. There is also a lack of labour mobility in Australia, with Australian workers reluctant to relocate to secluded mining projects, or take up fly-in fly-out arrangements.

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Subclass 457 Visas Subclass 457 visas are the mainstay of the business migration programme and are

uncapped. They are valid for four years, and allow a foreign employee and their immediate family to live, study and work in Australia, as well as travel to and from Australia.

There are three steps to obtain a 457 visa.

Firstly, the employer must become a ‘Standard Business Sponsor’ or SBS – the key requirements being that the employer must be a genuine company and commit to meeting a training benchmark, which involves investing 1% of annual payroll to train employees, or giving 2% of annual payroll to an Australian industry training fund. Once granted, a SBS lasts for three years, during which the employer can nominate as many foreign employees as it wants.

Secondly, the SBS must nominate a job to be filled. In order for the job to be nominated, the job must be on the ‘Consolidated Skilled Occupation List’, and the salary for the position must exceed a minimum amount – currently $51,400. The employer must show that the foreign worker is being paid at ‘market salary’, and is employed on at least the same terms as an Australian employee (unless the salary exceeds $180,000 per year). In some cases, there is also an English language test.

Finally, the employee must apply for the visa to fill the nominated job. In order to be granted the visa, the employee must show that s/he has the skills to perform the nominated job. The employee must also meet health requirements and maintain Private Health Insurance. The employee is only allowed to work at the nominated job and for the sponsor (or associated entity), and while they can change employers they must be nominated by another SBS. The Department of Immigration and Citizenship (DIAC) have recently increased funding of the 457 visa programme, and processing times have been reduced. The median processing time at June 2012 was 16 days, and 90% of applications were processed in the 2-3 month service standard (DIAC Annual Report).

During the visa period, SBS employers have responsibilities. These include ensuring the employment terms and conditions match Australian workers, and that they cooperate with immigration authorities, and notify DIAC about certain events – particularly if the job changes or is terminated. In 201112, the most common source country for 457 visas was the United Kingdom (23%), followed by India (17.5%), Ireland (9.2%), the Philippines (7.3%) and the United States (7.1%).

Enterprise Migration Agreements Enterprise Migration Agreements are available to resources projects with capital

expenditure of more than $2 billion, and a peak workforce of more than 1,500. EMAs are negotiated directly with project owners, based on the needs and requirements of that project, including the number of foreign employees that are required.

for foreign semi-skilled workers, and show evidence of an effort made to recruit local workers. In addition, the employer must show a commitment to training Australians, as well as a willingness to continue training and recruiting Australians.

Legally, EMAs are a temporary, hybrid arrangement based on the Minister's statutory discretion to waive some requirements in the subclass 457 visa process.

These terms are specifically negotiated with project owners and include commitments to training, preferring Australian labour, and a range of other requirements such as English language skills, occupations and qualifications levels. Much of the information involved in negotiating an EMA is commercial in confidence, and because they are based on Ministerial discretion they have been criticised as secretive.

There are industry template agreements negotiated with stakeholders for common industries with semi-skilled labour shortages, such as the on-hire, meat, snowsports, tour guides, fishing, and fast food industries.

Employees have to be nominated to the semiskilled position, and have relevant skills and experience similar to the 457 visa process.

They must meet any mandatory licensing or registration requirements and be under 45 years of age. Ongoing employer obligations vary, but generally an employer will have to meet all Australian standards and workplace legislation for wages and working conditions.

When the Roy Hill EMA was announced, the government announced that the project could engage up to 1,715 foreign employees (out of the over 8,000 required for the project) and that $20 million would be allocated to training – including 2,000 training places.

The government also announced that it would establish a Resources Sector Job Board to offer jobs to Australians first, in order to ensure that there was a genuine need to employ foreign labour.

Labour Agreements are more complex, and generally take up to six months to negotiate and finalise. Despite its limited size and scope, the recent Gorgon gas Labour Agreement has elicited anger and protests from Australian trade unions, in part as a reaction to the Roy Hill EMA. Prior to that, between September 2011 and September 2012, DIAC approved 75 Labour Agreements – largely in other industries (DIAC Migration Blog: Labour Agreements – busier, but faster than ever).

While the CFMEU building union was originally supportive – particularly of the Resources Sector Job Board – EMAs have now polarised the mining industry, partly because of the personalities that are involved. It is pressed by large mining concerns including Gina Rinehart's Hancock Prospecting, which operates the Roy Hill mine, and is correspondingly opposed by the ACTU and unions. It remains to be seen if this, or another EMA, will be approved in the near future, given the political flavour they have taken on.

Labour Agreements Labour Agreements allow approved businesses to sponsor semi-skilled foreign workers, where there is a demonstrated skill shortage that cannot be met in Australia.

Standing outside the usual subclass 457 process, some conditions like the skill requirement are relaxed while other conditions are strengthened. Critically, Labour Agreements are available for semiskilled jobs. Low-skilled or unskilled jobs, where the employee can be trained in a reasonably short time and with no prior knowledge, are not considered.

Labour Agreements include temporary visas of up to four years, as well as permanent visas. Foreign employees can bring their immediate families to work, study, live, and travel to and from Australia. In order to qualify for a Labour Agreement, an employer must primarily demonstrate an ongoing need

Regional Migration Agreements Regional Migration Agreements are negotiated between the federal government and the regional government or council. It applies to regions with populations of less than 150,000 people, where there is a critical, short-term labour need. Regional Migration Agreements also allow employment of semiskilled foreign employees where a need can be demonstrated.

As with the 457 programme and other migration agreements, there is a focus on ensuring funding for training, and ensuring workplace rights as part of the programme.

In addition, specific issues such as the capacity of infrastructure to support an increased population are considered.

The first Regional Migration Agreement was granted in February 2012 for the top end of the Northern Territory, and has met with little controversy. DIAC continues to look at other areas, particularly with semi-skilled shortages in the tourist industry in places like Broome (DIAC Migration Blog: Regional consultation on Migration Agreements).

DLA Piper is a global law firm with 4,200 lawyers located in 31 countries and 77 offices throughout the Americas, Asia Pacific, Europe and the Middle East. In Australia, DLA Piper has offices in Melbourne, Sydney, Perth, Brisbane and Canberra.

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immigration & CorPorate migration

Clifford Chance LLP Amsterdam Sara Schermerhorn Counsel Tel: + 31 20 7119 332 sara.schermerhorn@cliffordchance.com www.cliffordchance.com

Immigration and Corporate Migration in the Netherlands ‘Our immigration policy is restrictive, fair and aimed at integration. For our immigration policy, we will take account of the Dutch society’s financial means. For those concerned and for the Dutch society, it is of importance that migrants are standing on their own feet, are self-supporting, are able to quickly integrate and support building the society. On that basis, also EU citizens and highly skilled migrants (kennismigranten) remain to be welcome [in the Netherlands].’

These are the opening lines of the paragraph on immigration and integration in the coalition agreement of the new Dutch government, concluded on 29 October of this year (the ‘Coalition Agreement’). On the same day, the Amsterdam branch of the Boston Consulting Group published a report entitled, ‘NL 2030, the outlines of a new Dutch income-generating model’, setting out the need for the Netherlands to (better) adapt to new developments, in order to be prepared for the future, and not be overtaken by competing economies.

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The coalition government is well aware: the Coalition Agreement refers to the need to keep the position of the Netherlands in the top five of most competing economies and further reinforce it. While a direct link to the role of foreign knowledge workers in this effort has not been made, that does not alter the fact that the Netherlands is well on its way to simplifying the access route to the Netherlands for highly skilled migrants. The efforts taken so far to attract highly skilled migrants will need to be continued to further develop the Dutch knowledge economy, and make sure the Netherlands remains known for its status as an innovative country.

The ongoing crisis has, on the other hand, led to proposals for even more restricted access for foreign nationals from outside the EU not qualifying as knowledge workers.

This is based on the principle that, given the current unemployment figures, maximum use should be made from the existing workforce in the Netherlands. However, it is important to understand that the emphasis

on the Netherlands’ restrictive immigration policy in the Coalition Agreement does not affect the possibilities for corporate migration where highly skilled migrants are concerned.

At present, it is relatively easy to obtain relevant permits to work and reside in the Netherlands for knowledge workers, although it requires a Dutch-based employer to start the process. The main criterion is the salary thresholds to be met, that are revised annually (2012: € 51,239 gross per annum, or € 37,575 gross if the knowledge worker is younger than 30 years). The Dutch-based employer must be admitted to the relevant procedure with the Dutch Immigration and Naturalisation Service (the ‘IND’).

For this purpose, it will need to submit a declaration of the Dutch Tax Authorities, confirming its compliance with tax (payment) obligations, and proof of its registration with the Dutch Chamber of Commerce. In addition, a statement for the attention of the IND should be signed, providing for certain specific obligations for the Dutch employer.

Foreign employees that are seconded to a Dutch-based part of their foreign employer’s group of companies can also benefit from the accessible and quick Highly Skilled Migrants Scheme. This grants the knowledge worker a residence permit that allows him to work in the Netherlands, with no separate work permit required.

PhD recipients from outside Europe, the opportunity to, for a period of one year, find a job in the Netherlands as a knowledge migrant, or to start an innovative business.

In case of a subsequent classification under the Highly Skilled Migrant Scheme (relevant 2012 salary threshold: € 26,931 gross per annum), no work permit is required.

Since the procedure was introduced in 2004, changes continue to be made that have resulted in an even more simplified and thus ‘welcoming’ immigration policy for knowledge workers. As of 1 January 2012, a pilot has started, allowing knowledge workers to use the Highly Skilled Migrants Scheme for situations where their activities in the Netherlands do not exceed three months.

So far, performing activities for such limited duration were subject to obtaining a separate work permit in addition to a possible (depending on nationality) visa for a stay in the Netherlands/ Europe of up to 90 days.

At the presentation of the 2011 annual results of the IND earlier this year, it was concluded that the process for entering the Netherlands as a knowledge migrant cannot be seen as a hurdle anymore. In principle, the processing of the application to be filed by a Dutch-based employer should not take longer than two weeks. Figures show that the Netherlands remains attractive for knowledge workers from outside Europe, with a total number of 5,800 knowledge migrants from outside Europe taking up their residence in the Netherlands in 2011, thereby equalling the level of 2009 when the number declined as a result of the economic downturn.

Furthermore, the Dutch government wants to give university graduates or recent

Therefore, despite the fact that the immigration paragraph in the Coalition Agreement may be perceived as stressing the restrictive nature thereof, the Netherlands remains keen to giving residence to foreign nationals that help the country reinforce its knowledge economy and innovative status.

Clifford Chance Amsterdam’s Employment and Pensions group provides business immigration advice to financial institutions, banks, multinationals and companies operating in the Netherlands. Where their work mainly involves the immigration aspects of executive relocations within the context of the Highly Skilled Migrants Scheme, the team also deals with immigration aspects of mergers and acquisitions and reorganisations. Assisted by their colleagues in other jurisdictions, the team can provide a comprehensive immigration service.

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Baker & McKenzie Grace Shie Special Counsel, Global Immigration & Mobility Tel: +852 2846 1966 grace.shie@bakermckenzie.com www.bakermckenzie.com

Facing Legislative Change – the Impact on Business Immigration and Expatriate Employees As the world’s second largest economy, the People’s Republic of China (‘PRC’) remains a top destination for foreign investors.

Multinational companies continue to seek investment opportunities to tap into the Chinese market, and to establish subsidiary operations and other business presence. Over the years, the PRC has received an influx of business visitors who source opportunities and expatriate employees who oversee new ventures. Given the growing presence of foreign nationals within its borders, the PRC recently overhauled its law governing immigration – whether for temporary or more permanent purposes.

The time is ripe to revamp the current law.

The road to legislative change has been paved by the shift in the pattern and volume of inbound migration since the current law was introduced over 25 years ago. In the 2010 national census (released by the PRC’s National Bureau of Statistics) foreign nationals were covered for the first time. The census covered 593,832 foreigners residing in the PRC, and captured data regarding their geographic distribution within the country, their nationality and the purpose of their stay. More recently, in April 2012, the Vice Minister of Public Security reported key statistics to the Standing Committee of the National People’s Congress, the top legislature. Among other figures, the Vice Minister reported that the number of foreigners living in the PRC for more than six months had increased from 20,000 in 1980 to almost 600,000 in 2011, while the number of foreigners working in the PRC had increased from 74,000 in 2000 to 220,000 in 2011. The Vice Minister also reported that the cases of foreigners illegally entering, working, or overstaying in 2011 was 20,000 – twice as many as in 1995.

Against this backdrop, in June 2012 the National People’s Congress passed the Law of the People’s Republic of China on Entry and Exit Control. The new law takes effect 1 July 2013, and supersedes the existing entry and exit control laws that will be repealed.

Employers will need to assess how the new

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law impacts their foreign staffing needs in the PRC. The new law is based on a two-pronged approach to immigration – boosting the PRC’s competitiveness in a global market with a revitalised visa policy designed to draw overseas professionals to its borders, while at the same time combating illegal immigration. For example, a new visa category is proposed, one that seeks to attract foreign talent with specialised expertise. At the same time, greater emphasis is placed on defining illegal employment, affirmative obligations for employers are created, and a duty to report is imposed on citizens.

The new law expressly addresses the employment of foreigners in the PRC. Specifically, the law requires foreign nationals to apply for work authorisation, and prohibits employers from engaging foreign nationals who lack work authorisation. Illegal employment is defined as: (1) working without having secured a work permit or related residence permit; (2) engaging in activities beyond the scope permitted by the work permit; or (3) in the case of a foreign student, engaging in activities beyond the scope permitted by the work-study position.

employee is liable for a fine of RMB 5,000 to 20,000 plus possible detention of 5 to 15 days.

Moreover, a foreigner may be removed from China for illegal residence or employment, and in such a case will not be permitted entry during the next 1-to 5-year period. Violation of the new law under ‘serious’ circumstances may lead to deportation, resulting in a 10year bar.

The new law also introduces a ‘talent’ visa category but fails to define eligibility criteria or permitted activities. However, the ‘talent’ visa is still greatly anticipated by employers looking for options beyond the limited work and business visas currently available when sending employees on international assignment to China. Under current law, the PRC provides visa options for the purpose of business, tourism, study, and work, and offers only two work permit options. In comparison with other countries in AsiaPacific, the PRC’s menu of work permit and visa options are general and limited.

For example, no specific category exists for training, and intracompany transfers do not enjoy a special work permit or relaxed eligibility consideration. Therefore, employers are looking to the new ‘talent’ visa to fill some gaps.

On a broader level, the law requires incountry activities to match the type of visa held. Foreigners are prohibited from engaging in activities inconsistent with the purpose of the visit, which can be a basis for being denied entry. A foreigner would run afoul of these provisions, for example, by applying for a tourist visa but actually entering the PRC to work.

Recognising another gap, the new law requires the education authority to issue regulations governing ‘work-study’ activities for foreign students. Such regulations are expected to provide long sought-after guidance to employers seeking to provide internships to student visa holders, particularly as violation of these same regulations would constitute illegal employment under the new law.

Harsher penalties for non-compliance have been created. For example, in the case of illegal employment, the current law imposes fines of RMB 5,000 to 50,000 on the employer, plus expenses for exiting the foreigner, and up to RMB 1,000 on the employee. Under the new law, the employer is liable for a fine of RMB 10,000 per person up to a maximum RMB 100,000, plus confiscation of income derived from the employment, while the

Another noteworthy provision is the mandate for the establishment of a unified platform for information sharing by the relevant government authorities, which may include a system for the collection of fingerprints and other biometrics. This would bring the PRC in line with other jurisdictions such as Hong Kong and Singapore that have biometrics requirements for the work permit process.

In the coming months, implementing regulations are expected on key provisions, ranging from the new ‘talent’ visa category to the employment of foreign students. The regulations are also expected to provide clarifying guidance on the validity of visas and residence permits, and to impact local practice and procedure. Existing regulations governing the administration of the employment of foreigners such as work permit procedures and requirements, may also be impacted.

The PRC work permit application process under current regulations is outlined in Baker & McKenzie’s Global Mobility Handbook (available on the Baker & McKenzie website), which covers visa categories in major jurisdictions around the world. We invite employers to watch for future updates on the PRC implementing regulations and their impact on your business, as we regularly report on any major legal developments concerning the management of an expatriate workforce.

Baker & McKenzie’s top-ranked Global Immigration & Mobility practice boasts over 150 immigration professionals in over 70 offices around the world. An industry leader, our Global Immigration & Mobility practice has been recognised by Chambers Global with a Band 1 ranking for four consecutive years (2009 to 2012). We are the only topranked global immigration practice that is part of an integrated, full-service global law firm. Our expertise spans all aspects of immigration – policy, compliance, expatriate transfer and relocation, and management of organisation-wide international assignment programmes. We also understand that employee transfers between global locations involve a multitude of cross-border issues, including tax planning, employment, compensation and benefits, export controls, and data privacy. Whether you need to transfer a single employee into the PRC, move project teams throughout Asia-Pacific, or manage an international workforce across the globe, Baker & McKenzie can help.

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deal directory C&C Group Plc to Acquire Gleeson Group On 22 November 2012, C&C Group plc (‘C&C’), a leading manufacturer, marketer and distributor of branded cider and beer, announced that it had agreed to acquire the Gleeson Group, a leading supplier and distributor of beverages in Ireland. Stephen Glancey, CEO of C&C, said: “We are pleased to announce our agreement to acquire the Gleeson Group, a deal that represents a significant investment in Ireland for C&C. The acquisition has the potential to transform our existing Irish business through the addition of an extensive distribution network and the creation of an attractive, multibeverage brand platform.”

Acquisition of Global Life Assurance Limited by LCLI On 12 November 2012, Charles Taylor plc announced that LCL International Life Assurance Company Limited (‘LCLI’) had entered into an agreement to acquire Global Life Assurance Limited (GLA).

David Marock, Group Chief Executive Officer, Charles Taylor said: “Global Life policyholders will continue to enjoy high levels of service and, by merging the Global Life business into LCLI, we will be able to streamline management, delivering cost savings without compromising service.

We expect the acquisition to be earnings enhancing and it has the potential for an early payback of our investment.”

Dewhurst plc – Potential Acquisition in Dual Engraving On 12 November 2012, Dewhurst plc, an independent supplier of quality components to the lift, keypad and transport industries, announced that it had signed an agreement to acquire 70% of the business and assets of the partnership trading as Dual Engraving (‘Dual’). Commenting on the acquisition,

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Richard Dewhurst, Chairman of the Company, said: “Assuming we proceed to completion, the deal will allow us to provide better geographical support to customers in our important Australian market. Dual has been a customer of our Lift Material subsidiary for several years and we have been impressed with the way the business has developed over that period.”

Proposed Acquisition of Fabergé On 21 November 2012, Gemfields plc, the leading gemstone mining and marketing company, announced that its proposed acquisition of a 100% interest in Fabergé Limited (‘Fabergé’) with a view to creating a globally recognised coloured gemstone champion. Fabergé will provide Gemfields with direct control over a high-end luxury goods platform and a global brand with an exceptional heritage. Ian Harebottle, CEO of Gemfields plc, commented: “Gemfields has firmly established itself as ‘the Coloured Gemstone Mining Company’ and the proposed acquisition of Fabergé further enhances our potential to be recognised as the leading coloured gemstone company.”

Greenko – Hydropower Acquisition On 19 November 2012, Greenko (‘the Company’), the Indian developer, owner and operator of clean energy projects, announced the acquisition of three run-ofriver hydropower projects in the Kangra District of Himachal Pradesh, totalling 15 MW. This brings Greenko’s total generating portfolio to over 275 MW and keeps the Company on track for its target of 1,000 MW in 2015. Commenting, Anil Chalamalasetty, CEO and MD of Greenko, said: “Greenko has generated strong returns from its hydro assets. Today’s portfolio addition is part of our strategy of adding attractively priced, high quality, tuck-in acquisitions in the hydropower sector and providing a balanced

portfolio of clean energy assets for India’s rapidly growing market.”

Acquisition of InFront Minority and Issue of Shares The Innovation Group plc, a global provider of business process services and software solutions to the insurance, fleet, automotive and property industries, on 19 November 2012, announced its acquisition of the 16% minority interest in the Group’s subsidiary, InFront Solutions Limited (‘InFront’), for £2.2m. Innovation Group has developed a compelling proposition in the UK for the handling of subsidence claims. This proposition, operated by InFront, provides the insurer with a fixed per-claim pricing structure, fully backed with reinsurance that removes variability from the insurer’s claims reserves and delivers certainty over indemnity spend.

NewRiver Retail Secures a 25-Year Lease Agreement with Primark On 12 November 2012, NewRiver Retail Limited, which specialises in value-creating retail property investment and active asset management, announced that it had completed the acquisition of two large retail units in the Golden Square Shopping Centre in Warrington, Cheshire, in a move that brings value retailer Primark into the Company’s portfolio. Property Director at NewRiver Retail, Allan Lockhart said: “We are delighted to welcome Primark to the NewRiver Retail portfolio. This acquisition delivers on our commitment to both valuecreation and to meeting consumer demand for value, range and convenience. Moreover, the transaction provides an attractive cash on cash return of 15% per annum secured against one of Europe’s leading and financially most successful retailers.”

Old Mutual Acquires Strategic Distribution Capability in Latin America On 19 November 2012, Old Mutual plc announced the acquisition of a majority stake in AIVA Business Platforms (AIVA). AIVA is a family-owned, high quality business platform and distribution business based in Uruguay and spanning the Latin American region, with assets under management of over $800 million. Paul Hanratty, CEO of Old Mutual’s Long-Term Savings business said: “The deepening of the relationship between Old Mutual and AIVA provides a firm base from which we can capitalise on opportunities in these fast-developing investment markets in an efficient and low capital manner.”

Redefine International Acquires Earls Court Holiday Inn Express Hotel On 22 November 2012, Redefine International, the diversified income focused property company, announced that it had, through its 71% held subsidiary Redefine Hotel Holdings Limited, completed the acquisition of 60% of the issued shares in BNRI Earls Court Limited (‘BNRI’) for a consideration of £8.7 million. BNRI owns the 150-bedroom Holiday Inn Express Hotel in Earls Court, London (the ‘Hotel’) valued at £27.0 million. The Hotel will complement the Group’s existing portfolio of six high quality hotels. Commenting, Mike Watters, said: “During our recent £127.5 million capital raise we stated that we had identified a strong pipeline of acquisition opportunities, and this transaction represents the first of these.”

Acquisition of Bus Operations in North West On 12 November 2012, Stagecoach Group plc (‘Stagecoach’) announced that Glenvale Transport Ltd, a wholly owned indirect subsidiary of Stagecoach, had agreed to acquire certain businesses and assets of subsidiaries of FirstGroup plc for a consideration of £4.5 million. The acquisition will allow Stagecoach to expand its successful

bus operations in the North West, which already operates more than 300 buses and employs more than 900 staff. Les Warneford, Managing Director of Stagecoach UK Bus, said: “This acquisition will extend our operations in the north west of England, particularly in Merseyside. We believe there is significant scope to develop these businesses and improve their financial performance by investing in the quality of the bus fleet, as well as offering customers our good value fares and attractive network tickets.”

Acquisition of the Business and Assets of Peter E. Greenberg and Associates Ltd On 12 November 2012, the Board of TLA Worldwide plc announced that it had completed the acquisition of the business and assets of Peter E. Greenberg and Associates Ltd (‘PEG’). PEG is the preeminent representation agency in the Latin American baseball market with an impressive client roster. Commenting, Mike Principe, CEO, said: “We are delighted to have made this strategic acquisition, which cements our position as a market leader in baseball representation. Peter E Greenberg and Associates provide us with a greater presence in Latin America, and secondarily, Asia, as well as a platform to grow wider in the sports marketing sector.”

Trinity Mirror Investment in Local World On 21 November 2012, Trinity Mirror announced that it had exchanged contracts to acquire a 20% equity interest in Local World Limited (‘Local World’) – a new company created to acquire and operate the regional publishing assets currently owned by Northcliffe Media Limited (‘Northcliffe’) and Iliffe News & Media Limited (‘Iliffe’). Local World is acquiring the regional publishing assets of the Northcliffe and Iliffe businesses, and will have an agreed enterprise valuation of circa £100 million at completion. Simon Fox, Chief Executive of Trinity Mirror, commented: “Alongside our continued focus on the creation of One Trinity Mirror, our investment in Local World reinforces our

commitment to local media and enables us to participate in a compelling business opportunity with the consolidation of two strong local media businesses. In addition, the investment builds on Trinity Mirror’s existing commercial services for the provision of contract printing and national advertising sales to Northcliffe.”

WANdisco Plc – Acquisition of AltoStor On 19 November 2012, WANdisco, a leading provider of global collaboration software to the software development industry, announced that it had completed the acquisition of Silicon Valley based software company, AltoStor. Commenting, David Richards, WANdisco Chairman and Chief Executive Officer, said: “The AltoStor acquisition will enable WANdisco to launch products quickly into the highly lucrative Big Data market. Combining our technology with the founders of the Hadoop project is a significant coup and an important aspect of this deal is that the founders of AltoStor believe in the WANdisco story – that’s why they are committing to this direction for the long term.”

Acquisition of AquaPerfect LLC Waterlogic plc, a leading designer, manufacturer and global distributor of pointof-use (‘POU’) drinking water purification and dispensing systems, announced on 15 November 2012, that it had agreed to acquire the trading assets of AquaPerfect LLC (‘AquaPerfect’), a highly-regarded vendor of Waterlogic water dispensers and Keurig coffee machines based in Northern California, USA. Peter Cohen, Chief Executive, Waterlogic Commercial, commented: “AquaPerfect is our third US west coast acquisition further enhancing our North American presence. We see big opportunities through the introduction of Waterlogic’s highly innovative Firewall UV water purification technology and associated products into the AquaPerfect customer base.

AquaPerfect represents a great fit, having sold the Company’s products for over 14 years and we look forward to welcoming it into the Waterlogic Group.”

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Aegis Media Acquires Netsociety Aegis Group plc (‘Aegis’), the world’s leading, focused media and digital communications group, announced on 19 November 2012, that it had acquired Netsociety, a performance and search agency whose focus is on search marketing and digital performance media. Julius Minnaar, CEO of Aegis Media Netherlands, said: “We are delighted to be acquiring Netsociety, which will enhance the prospects of our business in the Dutch and Belgian markets, ensuring we continue to produce outstanding work for our clients there. We look forward to working with our new colleagues to leverage the exciting opportunities this acquisition will bring to our business in the Netherlands.”

Acquisition of Aerospace Assets On 16 November 2012, Avingtrans plc, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, and medical sectors, announced that it had agreed to acquire the trade and certain business assets and liabilities relating to the manufacture of aerospace components from PFW UK Limited’s Farnborough site for a cash consideration of £1.85 million. Steve McQuillan, Chief Executive of Avingtrans commented: “This acquisition will further strengthen our position in the aerospace pipes market, making us a leading player in this niche in the UK”.

BAE Systems - Agreement to Acquire Marine Hydraulics International On 15 November 2012, BAE Systems entered into a definitive agreement with American Maritime Holdings, Inc. to acquire Marine Hydraulics International, Inc., a privately held company that operates a shipyard, pier

70 • Global Business Magazine • December 2012

and waterfront facilities in Norfolk, Va., for cash consideration of approximately $69 million. Marine Hydraulics International is a marine repair, overhaul and conversion company that had sales of $113 million in 2011. The company employs approximately 400 people supporting the US Navy and other maritime customers and would be integrated with the BAE Systems Ship Repair business.

Further Acquisitions for Better Capital PCC Limited Better Capital PCC Limited was pleased to report that on 19 November 2012, BECAP Fund LP acquired certain bank facilities and related rights of ATH Resources Plc and its subsidiary, Aardvark TMC Limited (together ‘ATH’). An operator of surface coal mines in Scotland and listed on the Alternative Investment Market of the London Stock Exchange, ATH’s recent trading update for the financial year ended 30 September 2012 announced revenues of over £90 million for the period. The 2009 Fund has committed £15 million to the SPV.

Acquisition of Systems Alternatives International LLC Brady (‘the Company’), the leading provider of trading, risk management and settlement solutions to the energy, metals and soft commodities sectors, announced on 12 November 2012, that it had agreed to acquire Systems Alternatives International LLC (‘SAI’), a leading provider of systems to the metal recycling markets based in Maumee, Ohio, US. Commenting on the acquisition, Gavin Lavelle, CEO of Brady, said: “SAI is a market leader in recycling software which is highly complementary to our existing market leading concentrates, refined and financial metals trading business and also provides both product and domain knowledge along with people skills as we expand our presence in the North American markets. This acquisition further strengthens our product offering by complementing our existing financial and risk management capabilities and provides new cross selling and other growth opportunities. In line with previous years, the Company is now in the busiest quarter of the year with a strong sales pipeline and a number of significant licence deals in the latter stages of finalisation. We look forward to updating the market.”

Acquisition of an Investment in the Barking & Havering LIFT Project for £5.8m

Brooks Macdonald Group Plc – Acquisition of Spearpoint

Bilfinger Berger Global Infrastructure SICAV S.A, the listed global infrastructure investment company, was pleased to announce on 19 November 2012, that the Company has acquired a 60% equity and loan note interest in the Barking & Havering Local Improvement Finance Trust project (‘the LIFT Project’) through the acquisition of Primaria (Barking & Havering) Limited.

The LIFT Project comprises 10 buildings for the provision of strategic accommodation for primary and community based health and social care in the London Boroughs of Barking & Dagenham and Havering. The total consideration paid by BBGI is £5.8m, which is in line with the current valuations of similar UK PFI projects in BBGI’s portfolio.

On 16 November 2012, Brooks Macdonald Group plc (‘the Group’), the AIM listed integrated wealth management group, announced the acquisition of Spearpoint, a Jersey and Guernsey based provider of discretionary fund management with stock broking and retirement planning capabilities. Spearpoint is one of the leading integrated wealth management businesses in the Channel Islands with funds and assets under management of approximately £1.1bn. Chris Macdonald, Chief Executive of Brooks Macdonald Group commented: “The acquisition of Spearpoint is a major step forward for the Group. It adds scale, offshore and international capability together with the acquisition of a strong investment management and pensions team.”

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