Business Agenda - Issue 38

BUSINESSAgenda THE OFFICIAL PUBLICATION OF THE MALTA BUSINESS BUREAU ISSUE 38 | SUMMER 2020

P O S T-COV I D-19: I S I T T I M E TO E M B R AC E A DIFFERENT KIND OF WORKPLACE? As Malta lifts its pandemic restrictions, how can the island reopen borders so people can travel safely?

NEWSPAPER POST

Greening the bloc: examining the EU’s Green Deal

OFFICIAL SPONSORS OF BUSINESS AGENDA

Traditional businesses in Valletta show there’s still a place for the past in the modern world.

BUSINESSAgenda

CONTENTS ISSUE 38 | SUMMER 2020

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30 22 COVER STORY

POST-COVID-19: IS IT TIME TO EMBRACE A DIFFERENT KIND OF WORKPLACE?

The pandemic has forced businesses to adopt different working practices, but will this lead to change in the long term?

Martina Said reaches out to business leaders and organisations to find out.

30 TOURISM

A SAFE PASSAGE FOR TOURISTS IN EUROPE’S COVID-19 EXIT PLAN

As Malta lifts its restrictions, three prominent tourism stakeholders outline their views on how best to deal with the tricky situation of opening borders so people can travel safely.

42 SOCIETY

94 MEET THE MEPs

Founder of social enterprise, Merill, and advocate for youth in agriculture, Jeanette Borg is spearheading change in the way Malta looks at its farmers.

As the newest and youngest Maltese Members of the European Parliament (MEPs), Alex Agius Saliba and Josianne Cutajar speak to Martina Said about their achievements, priorities and aspirations.

THE CHANGING FACE OF AGRICULTURE

50 EU POLICY

GREENING THE BLOC: THE EU’S GREEN DEAL

With a view to transform the European Union to a low-carbon economy without reducing prosperity, the European Green Deal aims to improve people’s quality of life. Sarah Micallef outlines how this can be achieved.

COVER ILLUSTRATION

By Nadine Noko, created exclusively for Business Agenda

AN EVENTFUL FIRST YEAR IN THE EUROPEAN PARLIAMENT

98 CULTURE

DOING THINGS THE TRADITIONAL WAY

Sarah Micallef meets with the owners of three of Valletta’s traditional businesses and discovers that there’s still a place for the past in the modern world.

110 BUSINESS PROFILE

LAYING SOLID FOUNDATIONS FOR INTERNATIONAL GROWTH

Sean Aquilina, Managing Director at MAKA Visuals, a young motion picture production house, and Joe Tanti, CEO at the Malta Business Bureau, chat to Martina Said about tapping international markets.

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BUSINESSAgenda EDITORIAL

E M B R A C I N G S U S TA I N A B I L I T Y A N D D I G I T I L I S AT I O N f o r A P O S T COVID-19 RECOVERY

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BUSINESSAgenda EDITORIAL

The year 2020 will be remembered for the COVID-19 pandemic. It is still too soon to predict when the crisis will be behind us. Unknown factors such as how the virus will evolve and the current fears over a second wave mean that we must remain vigilant and brace ourselves for any eventuality. What we know for certain is that the situation has triggered a sea-change in what we define as ‘normal’.

It has changed the way we work, the way we interact with each other, and our routines. In these challenging times, we nonetheless see an opportunity to learn and adapt our vision going forward.

The almost instant shift from traditional office-based work to teleconferencing and working from home has given us an opportunity to jump-start a modern and sustainable Europe. Businesses need now, more than ever, to raise their ambition, embrace new technologies and deeply integrate sustainability goals into their business strategy, operations, and stakeholder engagement. On page 22, we ask business leaders about their new workplace practices and whether the crisis has been a driving force for innovation.

On page 50, we delve deeper on the topic of sustainability by discussing the European Green Deal – the EU’s flagship initiative introducing a roadmap of measures needed to be implemented to keep up with the EU’s international climate commitment. The Green Deal strategy was drafted and published in December 2019 on the back of a European economy considered to have recovered from the 2008 financial crisis, with a moderate to average EU growth, and a steadily falling unemployment rate. And then came COVID-19. In view of the economic reality, we also ask

experts to share their views on the potential impacts of the COVID-19 crisis on achieving the climate change targets.

As the newest and youngest Maltese Members of the European Parliament (MEPs), Alex Agius Saliba and Josianne Cutajar mark their first year in Brussels, in this Business Agenda issue, on page 94 we ask them about their achievements, priorities and their aspirations for the rest of this term.

In our Business Profile feature on page 110, we explain how the local business community can benefit from our virtual business mentoring sessions which we are offering as part of the Enterprise Europe Network. In this section, we look at the experiences of one small-business owner who made use of our network’s services to grow and develop his company.

We understand that keeping a business running during and following the crisis is challenging.

However, we are here to continue guiding and supporting the Maltese business community on how to align their operations and help them embrace new practices such as sustainability and digitalisation.

Added to this, we have also kept businesses updated about EU policy initiatives by organising several virtual events relating to different topics, as explained in our news section starting on page 69. I invite you to continue reading the news section as it sums up our major achievements in the past few months.

I do hope you enjoy reading these articles and many others, and wish you a fun and healthy summer!

Joe Tanti MBB CEO

PUBLISHER

Mallia Building, 3, Level 2, Triq in-Negozju, Zone 3, Central Business District, Birkirkara CBD 3010 Tel: +356 2132 0713 info@contenthouse.com.mt www.contenthouse.com.mt

Malta Business Bureau, 64, The Exchange Buildings, Republic Street, Valletta VLT 1117 Tel: (+356) 2125 1719 info@mbb.org.mt infobrussels@mbb.org.mt www.mbb.org.mt The Malta Business Bureau is a non-profit making organisation acting as the European-Business Advisory and Support Office of the Malta Chamber of Commerce, Enterprise and Industry, and the Malta Hotels and Restaurants Association. The MBB has two offices, the Head Office in Malta and the Representation Office in Brussels.

EDITOR Joe Tanti EDITORIAL COORDINATORS Sarah Abdilla and Rebecca Anastasi DESIGN Nicholas Cutajar EDITORIAL TEAM Rebecca Anastasi, Ray Bugeja, Sarah Micallef and Martina Said CORPORATE SALES & BUSINESS DEVELOPMENT MANAGER Bernard Schranz ADVERTISING SALES COORDINATOR Sue Pisani Business Agenda is the bi-annual magazine of the Malta Business Bureau. Business Agenda is distributed to all members of the Malta Chamber of Commerce, Enterprise and Industry, all the members of the Malta Hotels and Restaurants Association, and to all other leading businesses. Business Agenda is also distributed by the Malta Business Bureau to leading European and business institutions in Brussels.

Articles appearing in this publication do not necessarily reflect the views of Content House Ltd or those of the Malta Business Bureau. All rights reserved.

Reproduction in whole or in part without written permission of the publishers is strictly prohibited.

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POST-COVID-19: IS IT TIME TO EMBRACE A DIFFERENT KIND OF WORKPLACE?

For businesses that were on the cusp of embracing new work practices before the pandemic, the past few months could be viewed as an opportunity to test them out. For others, it meant navigating tough and tricky territory. But could forced change be a driving force for innovation at the workplace? Martina Said reaches out to business leaders and organisations to find out.

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“The general feedback from the workforce has been positive – in the first few weeks, the struggle to adapt was real, but, soon enough, many started noticing the benefits.”

MARIJA ELENA BORG, MBB SENIOR EXECUTIVE

The conversations surrounding remote working, innovative work practices, and seizing the opportunity to ‘do things differently’ have never been louder than in recent weeks – all at a time when the majority of businesses are grappling with the aftershocks caused by months of uncertainty in the wake of the COVID-19 pandemic.

While the full scale of the economic uncertainties that lie ahead have yet to be seen, grasped, and understood, both locally and globally, could this really be a time for business leaders to embrace workplace innovation? Broadly speaking, the concept of workplace innovation, which has been on the EU’s agenda for some time, encourages companies to stay at the competitive edge by investing both in technological innovation as well as non-technological practices, namely human resources management, changes to the work environment, and, even, to a company’s business structure.

Marija Elena Borg, Senior Executive at the Malta Business Bureau, explains that workplace innovation is a social process encompassing all actions that, in some way, improve the motivation and working conditions of employees, resulting in enhanced productivity, innovation capacity and market competitiveness.

“Over the last 10 years or so, ‘innovation’ has been widely regarded as the key to transforming the EU into a ‘smart, sustainable

and inclusive economy’. Workplace innovation takes a central spot in this approach, and the European Commission has been promoting the concept not simply on a policy level, but also through the issuing of calls for proposals that seek to improve the entrepreneurial culture of SMEs.” Commenting on the emergency measures adopted by businesses on a national level at the start of the pandemic, Ms Borg says the most common measures were linked to the digitisation of services and remote working as, with the closure of major businesses in March 2020, entrepreneurs were forced to think of new ways to keep their businesses running.

in which it operates, but they all face similar concerns. “Whether or not some form of remote working is maintained, businesses need to increasingly promote a culture that puts people first. The benefit of having a solid change management and communication plan lies in ensuring that the right messages are delivered to the relevant employees, shareholders, clients and stakeholders.”

“Many chose to invest in developing online platforms and boosting sales through efficient delivery services.

Others believed it was opportune to develop a remote working policy for their company and pilot it whilst the rest of the country was adopting similar measures,” she explains. “The general feedback from the workforce has been positive – in the first few weeks, the struggle to adapt was real, but, soon enough, many started noticing the benefits and became accustomed to their new work routines.”

Ms Borg asserts that there is definite potential for the crisis to alter the way businesses operate in the long term. She concedes that each entity may be faced with unique challenges, also depending on the economic sector SUMMER ISSUE | 23

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disruption and prepare for the new normal,” she asserts.

However, she adds that the team adapted quickly, “thanks to the core soul of the business, which is the hunger to grow and drive success. Resilience was valuable in such a crisis.” Ms Zammit adds that after shifting operations online and putting business plans for the year aside to focus on the short term, the changes had her considering two main fronts.

“Firstly, the team. Communication was first on the list to stay productive remotely. Processes and norms were set, stating the expected general behaviour of working from home. We

Additionally, maintaining a safe and/or healthy work environment is key. “At the workplace, this primarily translates into ensuring conformity to sanitisation and screening protocols. When it comes to working remotely, this means that employees are to be encouraged to maintain constant communication with their teams and colleagues. The benefits are obvious: limiting further virus spread and ensuring that deliverables and targets are still reached as efficiently as possible.”

On its part, the MBB is helping to drive workplace innovation among Maltese businesses and exploiting opportunities by collaborating on European projects that promote cases of best practice in the field.

“The search for organisations that have either successfully implemented innovation measures at work or else are willing to learn more and pilot initiatives in-house is continuous. The value of working with best practices lies in the fact that there is truly no one right way of implementing workplace innovation – each entity should strive to assess what will ultimately work best for its ecosystem,” says Ms Borg.

One local company that has publicly embraced a new business model, in part encouraged by the 24 | SUMMER ISSUE

“I realised that the notion of putting people in an office may be a thing of the past. We had proof and first-hand experience that productivity did not suffer, and, in turn, we saw an increase in focus levels.”

MARTINA ZAMMIT, V SQUARED MEDIA & ENTERTAINMENT CEO

pandemic, is V Squared Media & Entertainment, who produce the TV tech programme, Gadgets, and who announced in May that it is officially implementing a work from home policy for two days each week. But the road getting there wasn’t entirely smooth.

Martina Zammit, CEO at V Squared, says the drastic impact that the pandemic had on the island and worldwide was immediate. “We didn’t have enough time to actually fathom the shift and the changes we were about to go through, from being in an office to working from home. As business leaders, we had to react fast to the challenges, reassess all our processes and systems, and, in a sense, reinvent our activities to adapt to the

tweaked the team structure highlighting everyone’s roles and responsibilities, and made sure to regularly engage with each other and share what we were working on,” she explains. “Secondly, clients and suppliers. It suddenly became apparent that most meetings could have easily been emails or quick phone-calls. We made sure to stay in touch with our clients through Zoom.”

Addressing her decision to permanently include remote working in the team’s weekly operations, Ms Zammit says that throughout the pandemic, “I realised that the notion of putting people in an office may be a thing of the past. We had proof and firsthand experience that productivity

BUSINESSAgenda COVER STORY

did not suffer, and, in turn, we saw an increase in focus levels. We understood that the team may not need to return to the office to be productive and accomplish work tasks. This led me to make major operational changes. Gadgets will remain working from home twice a week and use the centralised office base for the rest.”

She adds that, for the team, working from home is now their new normal, and one of the biggest pros of this model is that employees are given more opportunity to balance work and life. “Most importantly, it alleviates the hassle of traffic. The traffic issues we have been facing as a country are unbearable, not to mention the pollution. The environment is top on our agenda and we immediately understood that this is the way forward. We are a team of 10, working twice a week from home – that means 20 fewer cars on the road per week.

We encourage other companies to follow suit.”

For print and digital publishing company Content House, the immediate reaction to the local outbreak of COVID-19 led to the setting up of an ad hoc team focused on tackling the operational changes needed to shift to a remote work set-up.

Jesmond Bonello, Managing Director at Content House, explains “we have never worked remotely before as a team, so we knew we were moving into uncharted waters. The logistical and operational changes were carried out seamlessly and our team of over 30 employees shifted into working from their own home from mid-March.” Mr Bonello adds this also meant getting in touch frequently through regular Zoom meetings and introducing significant changes to the company’s modus operandi to enable everyone to work effectively.

“As far as the bottom line is concerned, it is very difficult to measure the success or otherwise of having switched the operations of the company remotely, as the

market conditions during the COVID-19 crisis, in our particular industry as a print and online media publisher, have been extremely tough,” he asserts. “The way I am looking at things is that we will not consider actively looking at change until the situation returns to normal.”

The forced shutdown of practically all vital sectors in Malta for over two months has weighed heavily on the industry Content House operates in, therefore, Mr Bonello states that, “for now, my energy is focused on getting back on our feet and returning to a situation where we are performing well and in growth mode. Once we achieve this, I feel it will be time to have a proper re-think on work practices and whether we could use our COVID-19 experience to introduce or change some of our working practices.”

Discussing the European Commission’s efforts to encourage changes to workplace practices through grants and incentives, Mr Bonello says he would welcome assistance that can reach the business community at member state level. However, “I feel that one of the structural problems in the way the European Commission operates is that it works on various initiatives at a high level, but can hardly ever say that such initiatives

“The life of a company is like that of a human being – if it finds itself in distress, its priority will be organic recovery; anything else is secondary.

That is our priority as businesspeople.”

JESMOND BONELLO, CONTENT HOUSE MANAGING DIRECTOR

reach the business community on the ground and it is not easy to experience such innovative programmes directly. We will seriously consider any opportunity that could be presented to us by the European Commission to assist and incentivise companies like ours to evolve our working practices.”

Looking ahead, Mr Bonello says planning the way his company will operate in the short- or longterm is difficult without knowing how the situation will unfold in the months ahead. What’s certain, however, is that the priority of any business organisation right now is recovery.

“The life of a company is like that of a human being – if it finds itself in distress, its priority will be organic recovery; anything else is secondary. That is our priority as businesspeople,” Mr Bonello maintains. “If you crash your car and end up in hospital, before you start considering whether to change your driving habits, or whether you should resume driving at all, you first concentrate on your health and recovery. We are at that stage right now. We were going at 200mph and suddenly, a major crash occurred. My focus is on our recovery. Once that is secured, everything is possible.”

Dean Micallef, Director at professional services provider, Firstbridge, says that as far as working practices are concerned, for companies that have been developing a more flexible, digitised workplace, such as Firstbridge, “COVID-19 was the test environment that provided that final push towards our ultimate destination. With that said, we were well prepared to move to remote working since we had already implemented several tools, processes and protocols that ensured continuity in various scenarios, such as adopting a paperless environment that limited our physical prints and the requirement for tangible files to adopting sophisticated cloudbased systems that managed our internal accounting, team time allocations, records and operational tasks.”

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Referencing the EU’s efforts to encourage businesses to adopt workplace innovation, Mr Micallef believes it is a great way to promote practices that will create more sustainable businesses. “It is hard to express the enormous impact of smart business practices, coupled with technological solutions, on the overall efficiencies of organisations. Here we are not just talking about financial savings in time and resources, but also on the enhancement in quality management and innovation.”

He adds that, particularly for those businesses that were able to focus on process assessment, there will come a time in the future that operators look back at COVID-19 as a turning point in the development of their organisation, “reflecting on the time that encouraged them to make changes that allowed them to scale up without placing too much pressure on the operational structure. I definitely welcome

“COVID-19 was the test environment that provided that final push towards our ultimate destination. With that said, we were well prepared to move to remote working.”

DEAN MICALLEF, FIRSTBRIDGE DIRECTOR

the initiative and, as a firm, we will continue to promote such initiatives both internally, as well as with our clients and the wider public.”

Asked whether he believes businesses can go back to operating as they did before the outbreak of COVID-19 in Malta, Mr Micallef asserts that any business that used the down-time to assess their operational systems

should focus on retaining the new practices that have proven positive. However, he adds it is also important to consider the various scenarios, opportunities and challenges that COVID-19 presented, and whether those scenarios will outlive the pandemic or not.

“During the pandemic, we have seen new businesses coming to the market addressing a new ‘need’ or ‘opportunity’. Those organisations would need to be careful to manage the shift in demand they may experience post-pandemic, which may remain, grow, shrink or cease to exist,” says Mr Micallef.

“Secondly, organisations that pivoted their operational business plan and offered a different product or service (whether complementary or completely different to their traditional offering) would also need to assess whether that alternate offering could continue to exist side by side their traditional product or service, or potentially outright replace them.”

For a firm like Firstbridge, the changes targeted a different type of service delivery and overall approach, he asserts, “and such practices have improved our overall cost and time efficiencies as well as our quality and consistency of delivery. Therefore, I’d say we would revert to some traditional methods that worked, but naturally, the improved processes will be retained and will supersede systems that are now apparently inferior or irrelevant.”

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BUSINESSAgenda TOURISM

A S A F E PA S S AG E for TOURISTS IN EUROPE’S COVID-19 EXIT PLAN

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BUSINESSAgenda TOURISM

As Malta lifts its COVID-19 restrictions, three prominent tourism stakeholders – working both locally and internationally – outline their views on how best to deal with the tricky situation of opening borders so people can travel safely. Here, Ray Bugeja traces the details.

After almost four months at a standstill, Malta International Airport, the island’s only gateway to the rest of the world for air travellers, is slowly coming back to life. Still, luring holidaymakers and keeping businesses in the industry afloat is not just a matter of ‘chocks away’ and clearing airliners for take-off.

Simon De Cesare, President of the Malta Business Bureau (MBB) and CEO of the Eden Leisure Group, underscores the need for the reopening of borders and airports as

well as having ‘safe corridors’. He underlines that recommendations by the European Commission to support the gradual reestablishment of transport, while ensuring the safety of passengers and personnel, can breathe life into the tourism industry again.

The MBB has been in touch with the Commission to raise issues resulting from the COVID-19 pandemic and is voicing the concerns highlighted by businesses on the ground to BusinessEurope (a lobby group

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BUSINESSAgenda TOURISM

“Opening borders, airports and the economy will not mean much if people cannot travel and, therefore, agreements and ‘safe corridors’ with countries having similar risk profiles may help to soften the blow in this regard.”

SIMON DE CESARE, MBB PRESIDENT

representing enterprises of all sizes in the European Union and seven non-EU European countries), EUROCHAMBRES (the Association of European Chambers of Commerce and Industry) and HOTREC (the umbrella association of hotels, restaurants, cafés and similar establishments in Europe).

Any action taken, Mr De Cesare advises, must be done in a safe and coordinated way for a number of reasons. Firstly, the virus must be contained and not allowed to spread. Secondly, it has to be tangibly demonstrated that tourists can come over and enjoy their holidays without fear of contracting the virus. Stressing that confidence is crucial, Mr De Cesare insists that Malta must get people to trust that its product is not only good but also safe.

“Opening borders, airports and the economy will not mean much if people cannot travel and, therefore, agreements and ‘safe corridors’ with countries having similar risk profiles may help to soften the blow in this regard,” Mr De Cesare asserts.

The MBB President acknowledges that recovery will take months, if not years, and notes that revenues disappeared overnight, with businesses in the tourism industry no longer being self-sufficient. Even when revenue starts to trickle in, he continues, it will be a while before

Mr De Cesare notes that the European Commission has just proposed a stimulus package, an estimated €1 billion of which is touted to be allocated to Malta.

Brussels has also proposed a new Solvency Support Instrument that will mobilise private resources to provide urgent support to otherwise healthy companies suffering from capital shortfalls. This will be in the form of a €31 billion budget aiming to unlock more than €300 billion in recapitalising potentially solvent companies through an EU guarantee provided by the European Investment Bank Group via financial intermediaries.

such businesses can operate to their full capacity because, even if countries allow tourists in, it will be unreasonable to expect demand to return to pre-COVID levels. “The Government and the EU must take this into account and continue to provide adequate financial support and assistance which will see us through this recovery period,” he argues.

The MBB President says that, with people unable to travel, the aviation industry hit all-time low levels of demand, and hotels are essentially empty, and restaurants were forced to shut their doors for the duration of the confinement period. Airlines, hotels, and travel agents have been inundated with requests for refunds, and, despite the European Commission saying it is possible to offer consumers a choice between vouchers and refunds, consumers tend to prefer refunds due to the uncertainty.

“All these businesses are doing their best to retain their workforce, which needs to be paid, in addition to paying for rent, utilities, and maintenance, among other things.

This presents a massive financial SUMMER ISSUE | 33

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react to conditions as they develop.

All stakeholders must realise that,” he maintains.

Mr Zahra considers it crucial to allay safety concerns if consumer confidence is to be boosted. The main message, he insists, has to be that Malta is safe and this must be done by highlighting the “excellent results” in containing the pandemic, and by harping on the undeniable fact that the health service is second to none.

The MHRA, he says, forcefully raised these points both in Malta and within the EU, ensuring there is continuous dialogue. Indeed, the entity enjoys excellent relations with the European Parliament’s Committee on Transport and Tourism, and has “excellent strong and direct” contacts within the EU, Mr Zahra notes.

outlay at the best of times, let alone at times like these,” Mr De Cesare remarks.

As President of the Malta Hotels and Restaurants Association (MHRA), and long involved in the hospitality business, Tony Zahra also insists that connectivity, and the opening of as many borders as possible – while, also, promoting Malta as a safe place to visit – are a must.

The road to recovery is evidently long and winding, and, as restrictions are lifted or eased, the focus will increasingly be on opening up, Mr Zahra says, while adding that talks are ongoing with both the Tourism Ministry and the Malta Tourism Authority to have as much connectivity as possible.

Connectivity, he is quick to point out, does not just involve Malta but other countries as well and, in our case, the European Union has its say too.

It does not seem difficult to secure such connectivity within the continent, he continues.

However, the UK is a problem since mandatory quarantine is in force there. Mr Zahra highlights the 34 | SUMMER ISSUE

importance of the British market to the Maltese tourism industry, noting that UK nationals make up 32 per cent of incoming tourists.

The next big hurdle once connectivity is assured is to fill as many available seats on aircraft and sea-going vessels as possible, and the MHRA President warns this is not a matter one can deal with overnight. “There is no manual we can follow to get there. We have to write it as we go along.” He stresses the need for all-round flexibility.

“We just have to be flexible and

“We just have to be flexible and react to conditions as they develop. All stakeholders must realise that.”

TONY ZAHRA, MHRA PRESIDENT

A lot of work, he explains, is also being done by the Mediterranean Tourism Foundation, which the MHRA had set up in late 2013 with the aim of increasing the potential for sustainable tourism growth across the Mediterranean region.

Mr Zahra is confident the MHRA can influence the decision-making process even at an EU level and acknowledges that the European Commission is working to open as many Schengen borders as possible. “Of course, I lobby strongly in that direction,” he remarks.

The fact that the MHRA is a member of HOTREC must help.

Indeed, the President of HOTREC, Jens Zimmer Christensen, speaks of a coordinated approach to open internal EU borders. Indeed, HOTREC has been in direct contact with the Cabinet of European Commissioner, Thierry Breton, responsible for the Internal Market portfolio, since March, its President says. It has also been having weekly calls with the Commission’s Tourism Unit.

He notes that his organisation’s messages are incorporated in the European Commission’s guidelines for transport and tourism, namely addressing companies’ liquidity problems; adopting a coordinated

BUSINESSAgenda TOURISM

approach to open the internal EU borders to ensure this is done safely; developing a website with information on the state of the borders and the available services in every country; and encouraging the patronage voucher schemes, as long as consumers are protected.

In the long run, he insists, digitalisation and sustainability should be part of the solution.

To this end, the organisations EFFAT, FoodDrinkEurope, and FoodServiceEurope, together with HOTREC, submitted a number of proposals that included an EU recovery plan, which largely supports the hospitality-tourism sector as a major source of employment and one that generates growth for other industries, Mr Zimmer Christensen says. They also called on the European Commission to apply reduced VAT rates on certain food and drink products to support consumer demand and help rebuild the sector.

They believe that the SURE (Support to Mitigate Unemployment Risks in an Emergency) mechanism will be a very useful tool to help fund compensation schemes launched in many member states.

“If all parties in the tourism ecosystem fulfil their role in a positive way, I am convinced visitors’ confidence will be restored.”

JENS ZIMMER CHRISTENSEN, HOTREC PRESIDENT

strictly followed by all airlines, acknowledging that air carriers have developed strict protocols aimed at customer safety.

Companies too must comply with national protocols and safety measures.

“If all parties in the tourism ecosystem fulfil their role in a positive way, I am convinced visitors’ confidence will be restored,” Mr Zimmer Christensen maintains. Fully aware of the precarious financial difficulties many tourism SMEs are facing, HOTREC is emphasising the need for liquidity to be made available to companies, insisting that fast track procedures are implemented to secure the survival

of the hospitality sector, and that administrative procedures are kept to a minimum.

In the long run, Mr Zimmer Christensen explains, HOTREC wants to see structural funds and a specific budget line for tourism to assist companies to secure an attractive product, a skilled workforce, a smaller carbon footprint and environmentallyfriendly offices.

“Structural funds are easier to access by companies at a national level. Therefore, we hope the EU institutions will dedicate a large portion of the recovery plan to this purpose,” he suggests.

If the exit plan is followed by all member states, the basic conditions would be in place for the hospitality sector to start delivering an individual quality experience to customers, he continues. “This will be the way forward to get out of the current crisis.”

The HOTREC President is confident that if member states adopt the coordinated approach, suggested by the European Commission to lift the internal containment measures, unilateral measures by member states, such as quarantines, could be avoided, thus bringing some confidence to travellers, and a willingness to spend holidays in another country.

He insists that all international and national health and safety regulations need to be SUMMER ISSUE | 37

BUSINESSAgenda FINANCE

by offering financing – guaranteed by the state and managed through local commercial banks, operating as intermediaries – to enterprises which struggled to fill their financial gaps.

BRIDGING the GAP

When the Malta Development Bank (MDB) was established in 2017, the Maltese business community gained a financial partner which aimed to support enterprises in their drive towards sustainable growth by offering financing facilities aiding fertile undertakings. Here, MDB Chairman Josef Bonnici speaks to Rebecca Anastasi about the bank’s role as “a counter-cyclical promotional instrument”, particularly in the times of COVID-19.

Prior to the onset of the coronavirus crisis, leading economists and business innovators had stressed the need to promote a sustainable economic model, which would allow Malta to thrive in the longterm. The COVID-19 pandemic has thrown this necessity in high relief, pushing governments across the globe to reconsider ways in which the capitalist system can accommodate the delicate balance 38 | SUMMER ISSUE

between promoting self-sufficient entrepreneurship and aiding viable enterprises which may need state support.

From the start, the Malta Development Bank (MDB), established three years ago by means of an Act of Parliament, aimed to do just that. Presciently, it looked to contribute towards tangible economic development

“Malta is a small open economy.

Inevitably, in a small economy, the market is imperfect, and this is reflected in occasional market failures,” says MDB Chairman Josef Bonnici. He attributes this to “the unavailability of sufficient collateral and start-up risks in the case of small-and-medium enterprises (SMEs)” as well as “the large size and long gestation period in the case of infrastructural projects,” which, he says create “financing gaps which restrain the pace of new investment.”

An awareness of these hurdles prompted the setting up of the MDB, the Chairman says, going on to explain that, over the first two years, the MDB proceeded to identify the gaps in the local credit market, in order to set up and establish the financial solutions which were needed. This was in line with the MDB’s vision to promote growth and development, in a non-discriminatory fashion, and in a way “that enhances positive outcomes in social inclusivity” he underlines.

Thus, particular attention was given to individuals and social groups who might have, traditionally, been left out in the cold – those with projects possessing “a strong social dimension such as education, health and affordable housing”.

Moreover, the credit needs of SMEs – which “often lack sufficient borrowing history and are also unable to offer the necessary collateral” – were also prioritised.

“The MDB enables commercial banks to be more forthcoming in the provision of loans to SMEs by offering a partial guarantee on such loans, thereby sharing the credit risk with the banks. Through such facilities, SMEs are benefitting from reduced collateral requirements, lower interest rates and access to finance which would have otherwise been difficult to obtain,” Prof. Bonnici says.

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In the same way, particular attention was given to family businesses – enterprises which usually depend on the critical completion of succession planning to ensure their longevity. Here, the MDB decided to offer a “dedicated guarantee scheme that greatly enhances access to financing for family business transfers from one generation to the next, thereby ensuring more long-term continuity of such enterprises.”

And today, with the onset of the coronavirus crisis, help has never been needed more. To this end, in order to help businesses survive in an increasingly hostile environment, and in response to the challenges confronting small, medium and larger enterprises in the wake of the pandemic, the MDB has recently set up the COVID-19 Guarantee Scheme (CGS) and the Interest Rate Subsidy Scheme.

Yet the bank has, since its inception, also geared its processes to foster the development of young talent – what Prof. Bonnici calls “Malta’s sole natural resource”, saying that the MDB “sees a long-term benefit in investing to enhance Malta’s human capital.” To this end, the Further Studies Made Affordable Scheme provides those at the beginning of their careers with the flexibility to continue studying, through guaranteeing study loans and providing subsidies on interest charges.

“With the current outbreak of COVID-19, the MDB is stepping in to help shield the Maltese economy, fulfilling its public policy role as a counter-cyclical promotional instrument. And we believe that we have evolved a support programme that adequately meets the financing requirements of the economy in the current difficult circumstances,” the Chairman explains.

“Our vision spans across generations and we believe that inclusive investment in education is a measure to achieve an inter-generational societal and economic benefit. We believe that it will be essential for the Maltese economy to move deeper into sectors that demand a supply of more skilled and talented labour force that can boost productivity, competitiveness and efficiency,” he attests.

Eligibility for all the bank’s schemes is “very broad-based,” the Chairman underlines, reiterating the commitment to support those enterprises and individuals who hold great promise, and who would otherwise have difficulty accessing finance.

“MDB’s facilities are provided to viable, bankable and self-financing operations. As borrowers service their debts, the stream of income ensures the self-financing nature of the approved projects and programmes along with the assurance of commercial viability and bankability,” Prof. Bonnici continues.

The aim here is to provide “a lifeline to businesses to ensure their survival and continuity” – desperately needed by many businesses which have seen their revenues decimated as the economy shuts down and people retreat to their homes in lockdown. The CGS, “a temporary extraordinary aid measure” which is backed by a Government guarantee of €350 million, has the potential, Prof. Bonnici explains, of generating €777 million in new liquidity, addressing “access to, and the affordability of cash flow” to businesses affected by COVID-19.

“We seek to dampen cyclical fluctuations by moving in the direction contrary to the overall state of the economy. Hence, we have launched an extensive guarantee programme that mobilises the banking system’s liquidity into new affordable credit which is more easily available,” he says.

The structure of the scheme, Prof.

Bonnici explains, is in line with its goals of supporting “the survival of businesses, to protect the existence of jobs, and to sustain the circular flow of money in the economy despite the challenging environment.”

As a result, preferential conditions for such working capital loans have also been implemented, with a moratorium of at least six months on interest and capital repayments.

Moreover, the interest rate is less than the standard bank rates as a result of Government’s guarantee and an interest rate subsidy, which slashes the percentage borrowers would have to pay, to as low as 0.1 per cent.

And, in recognition of the commitment to helping businesses for as long as the pandemic remains a reality, the CGS is open until the end of the year.

“This should have a considerable stabilising effect on the Maltese economy at such a critical time,” Prof. Bonnici says. “I believe that the CGS is a reaction to a crisis – as we emerge from the crisis, the market will show a reduced need for this intervention and actual conditions in the economy will guide decisions to sustain or to taper off the scheme.”

Looking ahead, to the MDB’s role even after COVID-19, Prof.

Bonnici says the bank will remain committed to sustainability in its economic, environmental, social and human dimensions.

“We expect that all our programmes in the future will continue to seek to optimise the use of resources, minimising the ecological impact, ensuring inclusivity and cohesion in our community. They will also prioritise health, education, skills, knowledge, leadership and access to services that we collectively consider to represent human capital,” he underlines.

Indeed, this is what the entity will continue to strive for. And to fulfil these objectives, the bank will remain “a counter-cyclical instrument, deeply analytical and constantly innovative,” promoting new programmes and initiatives which will aid local business, entrepreneurs and the entire economic landscape.

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BUSINESSAgenda INTERVIEW

THE FUTURE OF WORK AND SOCIAL CONSULTATION The Minister at the Office of the Prime Minister, Carmelo Abela, experienced a baptism of fire in his role overseeing the employment conditions portfolio through the COVID crisis. Here, he explains the whys and hows of his work to update employment laws and practices, touching on his vision for the Malta Council for Economic and Social Development (MCESD) reform and on how he intends to develop sustainable development within Government.

You have a vast portfolio within your remit. From public consultation and workers’ rights, to MEUSAC, public broadcasting, sustainability and the implementation of the Party’s Manifesto. What are your main targets?

The main task is that of fulfilling all the electoral pledges. We are faring very well, notwithstanding being hampered and held back as a result of the COVID-19 pandemic.

In relation to Public Broadcasting Services Ltd (PBS), we need to see a leap forward in the quality of productions on all stations. There are also internal issues that we 40 | SUMMER ISSUE

need to tackle, including the health of the company from a commercial point of view. In terms of sustainable development, we need to give this element more visibility in the process of governing, not just for the sake of visibility, but in order to integrate it into our daily processes and mindset as an executive as well as within all our policies. On a national level, we should also think of the concept of Malta as a sustainable island.

We have recently established the relevant boards and, alongside our Department, they shall help guide our endeavours in this field and achieve change.

COVID-19 meant that we have seen the role of the Department for Industrial and Employment Relations take centre stage. It appears that you are satisfied with their output.

I would say that I am satisfied that a small team of officials rendered a professional service to thousands of callers, notwithstanding the fact that they were working from home and addressing a voluminous workload. The unit was also malleable enough to deal with the different needs of both employers and employees.

There was also no precedent to fall back to. In fact, Employment Law does not give hints on such circumstances, and that is one of the reasons why we have instigated a process for changes in the law.

This does not mean that there isn’t room for improvement and, in fact, we are in the process of recruiting more talent to join our team.

However, DIER is now well placed to formulate proposed changes in a process that, I believe, also needs external expertise and robust consultation with stakeholders.

How did you approach the interaction with Malta’s social partners in this peculiar phase when you had just acquired this portfolio?

Indeed, this Government did not have a honeymoon period! We need to improve the way our social dialogue takes place in Malta.

Rest assured that I will promote a brand of dialogue which is honest and direct, even when we do not agree, and dialogue which is in the national interest. This needs to be achieved. Such spirit needs to be felt both in individual communication with social partners but also in our collective discussions within the Malta Council for Economic and Social Development (MCESD). Finally, however, it is the Government’s responsibility to take decisions.

What is your vision for the MCESD? We will not let MCESD, once again, be branded as a talking shop. We need it to be supported by a solid group of experts that can help drive its agenda via positions, which

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“Sustainability needs to be thought of within the parameters of the environment, the economy, but also social policy.” are then debated and negotiated around the table. This mould of internal professional capacity at MCESD needs to be fostered as soon as possible. An idea would be that of also helping our members to have access to expert advice themselves.

We also need to change the methods by which we present reports; we need to revisit topics in successive meetings, after giving our members sufficient time to prepare themselves individually; and then take final decisions together.

During COVID-19 everyone seems to have become enamoured with the idea of remote working.

However, the return to a ‘new normal’ is looking much more like a return to normality full stop, when it comes to remote working.

What are your views?

Throughout COVID-19, we started an internal discussion within the MCESD focusing on the changing face of work, employer-employee relations, and the current employment law. We have engaged in rounds of brainstorming sessions with our social partners and we have collated a report that we have already presented back to them during an MCESD meeting. I must say that it was well-received and that there was an agreement on what elements we need to discuss further. One of the main points of discussion that surfaced is obviously remote and teleworking.

As a Government, there were changes that we observed through

COVID-19 that we liked and others that need to be further analysed. I must also admit that COVID-19 was a wake-up call for some of the strongest opponents to teleworking, who have somewhat turned into fans of such arrangements as they felt that this has increased their productivity.

Flexibility is positive but, obviously, it brings with it questions that need to be addressed relating to health and safety, privacy, and practical issues, such as who should pay for electricity and internet bills.

We had a situation in this country where the acceptance of such flexible measures was circumstantial, tied to either parents who both work or adults who have to mind to an elderly relative. However, I do not believe that this should be the case. There are options of hybrid systems by which there could be a split of days and hours spent at the office, where you interact with your colleagues, and days and times outside of the office. These discussions will not only pertain to the private sector but will also include the civil service, even if the civil service does not fall under this particular law.

You have said that tech jobs are part of the solution for further diversification and an improved work/life balance. However, such arrangements bring about other issues like the right to digitally disconnect. While Government advocates new tech sectors it seems like our employment laws are still stuck in the past.

Would the right to digitally disconnect apply for politicians as well? Joking aside, in our recent brainstorming sessions with our social partners we referred to the gig economy which is intrinsically related to contracts which are not regulated via the normal parameters, in which employees complete short term tasks with a particular employer, before moving onto the next but which, on the other hand, do not allow for the access to vacation and sick leave.

This is why we need to have a clearer way forward. We need to

strive for a decent balance between our professional and personal lives.

We need to be cautious about not ending up expecting way more from employees because they are working from home. However, we also need to be careful not to affect our competitiveness negatively.

That is where an EU-wide directive would have its advantages.

Sustainability seems to have become a buzzword. What will you do in order to turn it into policy?

I agree with you that some over abuse the term sustainability.

We need to let actions speak louder than words. Sustainability needs to be thought of within the parameters of the environment, the economy, but also social policy.

As from 2021, Malta will have its Budget analysed on this merit. The national Budget will be analysed by the European Commission in order to assess each measure from a sustainability point of view.

That is why we are currently in the process of guiding all line Ministries in order to weave sustainability in the preparation of their Budget measures.

Closing off with a view on the immediate future. What will you be focusing on in this postCOVID-19 phase? What does summer look like for Minister Carmelo Abela?

Busy! We will surely try to have some rest. However, I know we will be back to business in no time. As the next electoral appointment draws closer, we must retain and escalate our pace in enacting more pledges from the Programme of Government although, I must say, that we are very satisfied with our 76 per cent record of completion in three years. I am an optimist.

We have to admit that our resilient economy has fared strongly before, during and after COVID-19, especially when compared to other countries. So has our social dialogue, which has given results that we should all be proud of. Our individual sacrifices meant that we could surmount this together.

Now we need to continue working together to maintain this hardearned success.

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THE CHANGING FACE of AGRICULTURE

With increasing concern being raised over the depletion of the Earth’s natural resources, many of the younger generation are turning towards sustainable agricultural practice in an attempt to make a difference. And, locally, Malta Youth in Agriculture (MaYA) founder, Jeanette Borg, has been at the forefront of revisioning the agri-business sector for young practitioners. Here, she tells Rebecca Anastasi about her work, and her hope for the future.

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“I’ve always been interested in working in nature,” says Jeanette Borg, the brainchild behind the Malta Youth in Agriculture (MaYA) foundation, the island’s only voluntary organisation specifically dedicated to fostering a passion for horticulture and husbandry in young professionals. And, indeed, Jeanette’s dedication to sustainable agriculture – evidenced through her 20-year career in the field – echoes current concerns on how humanity uses the land, and how it can best harness its potential.

“When I first started, things were very different to what they are today. Now, we have more awareness of what happens in the agricultural sector, but, at the time, there was a very narrow view of what this would entail and of the relevant issues,” she explains, underlining that working in the area is not just about ploughing the fields or rearing livestock.

“There are many diverse facets to agriculture – and for those who are passionate about food production, and cultivation, for instance, there

“At the time, I was told I was crazy to study agriculture, but now, fortunately, things have changed.”

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“There are always difficulties faced by women in different sectors, but this is changing as well – and, despite the stereotype of the typical Maltese farmer – there are many women in agriculture who work really hard and they are passionate about what they do.”

are ways of contributing which don’t necessarily involve handson work,” she says. Despite this, she places much importance on knowing how things operate on the ground, and on balancing theoretical knowledge with practical know-how, since “unless you work with soil, animals and plants, you cannot really appreciate how hard the job is,” she asserts.

And, Jeanette has sought to put this philosophy at the centre of her practice. Leaving school at the age of 15, she was intent on forging a career in a science-related discipline but didn’t want to enter the traditional professions and

become a doctor or vet. Instead, her love of nature propelled her into learning more about farming and she entered the University of Malta to embark on a Diploma in Agricultural Sciences.

“That was full-on”, she laughs. “But it taught me that agriculture is an umbrella term to represent many different streams, and I learnt there were a dozen areas I could focus my career on.” That educational background opened the door to a public sector job handling prospective funds from the European Union. This experience, she says, “was very stressful, yet exciting,” particularly since Malta,

at this juncture, was still vying for EU membership. Yet, it taught her the necessity of learning how the agri-sector works since without this knowledge, “I couldn’t have been able to understand why the funds needed to be allocated.”

Following her stint working within an institutional setting, Jeanette shifted into vocational education, heading to MCAST as part of the teaching staff, while, in the evenings working towards her Bachelor of Sciences in AgroSystems Management. “At the time, I was told I was crazy to study agriculture, but now, fortunately, things have changed,” she attests.

Being a woman, in what is predominantly seen as a maledominated world, also did not put her off, but seems to have given her strength to absorb different perspectives, allowing her to see challenges as opportunities. “There are always difficulties faced by women in different sectors, but this is changing as well – and, despite the stereotype of the typical Maltese farmer – there are many women in agriculture who work really hard and they are passionate about what they do,” she affirms.

In 2010, building upon her expertise in the sector, Jeanette cofounded the Merill Rural Network, an attempt to bridge the farming and artisanal communities within a tourism product, offering rural excursions, team-building activities, and workshops showcasing Malta’s agricultural heritage.

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This collaborative effort also saw the social enterprise supply an alternative source of income to these communities, through a diversification of their product.

“We formed this network of farmers and artisans, to help them as business entrepreneurs, but also to present something new on the market. And, 10 years down the line, it is still active. But, then something like COVID-19 appears, and your business takes a hit, so it’s a continuously changing situation,” she says.

Indeed, on the subject of the current global pandemic, I ask her how this will affect an enterprise such as Merill – and its collaborators – in the long-term. “I think we won’t be seeing any real business for another year, at least. We have to be realistic. We are not a hotel or a restaurant which might see some custom trickle in once the airport opens, so things won’t be the same for a long time. If we expect it to be, we’d be deluding ourselves.

Saying that, however, we also serve 46 | SUMMER ISSUE

the local market, which is still looking for such experiences,” she maintains.

Some of the other challenges in the sector are also well publicised – such as the lack of land availability on our small island – while other issues, are, perhaps, not so well known, she says, pointing to the uneven playing field presented with the flooding of imported produce into the island. “The free market has good qualities, but it has bad aspects too and I think the flooding of foreign agricultural products onto the market, and the fact that they are usually sold for one third of the local price, negatively affects local farmers,” she states.

Elaborating, she attributes some of the difficulties to confusion over what is local and what has been imported, adding that, while packaging in its current form needs to be phased out, there still needs to be some way of communicating the product’s origins. “For instance, during the pandemic people

were trying to buy local, but some Maltese sellers also deal with foreign imports so the customer needs to be made specifically aware of what originates from where. The reality is, today, you can only guarantee local produce if you purchase from a farmer’s market,” she asserts.

However, she does see cause for optimism even in the immediate future. Her work with young people, through the MaYA Foundation and MCAST, has proven that “there is scope for growth” in the sector. Indeed, MaYA was formed together with some of her ex-students, she explains. “In 2013, we saw that, abroad, there were many organisations championing local agriculture, and we asked ourselves why this did not exist here in Malta. So, together with Karl Scerri – who is still a full-time poultry breeder – and John Gauci, who works in horticulture, we set up this organisation which advocates youth in agriculture,” she states.

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The foundation does not have members, but accrues supporters – all farming practitioners, professionals or, even, hobbyists under the age of 40 – in order to motivate productive change.

“There’s such a good vibe in the air at the moment, and more people are becoming interested in the sector. So, we’ve been working with Government authorities and the press to constantly try and make things better,” she says. “And recent public opinion has helped since there is more awareness about where our food is coming from and the state of our land.”

In the meantime, for young people entering the sector, there are a gamut of career possibilities, she explains. “There’s a lot of untapped potential here in Malta, and one just has to be a bit creative. For instance, while we import many flowers, since different species require other climates, we have local practitioners who are cultivating crops, and these work together with florists to supply hotel chains, therefore building bridges between two separate industries,”

agriculture, and the trends which can be found in their practice.

“It’s with the little achievements that we rejoice, and we hope for a better future.”

she explains, underlining that there is substantial room for entrepreneurship even in food manufacturing and processing.

Yet, she doesn’t pull any punches in admitting there are still many struggles and “it can feel like an uphill battle” in trying to create more opportunities. Indeed, as part of her drive towards understanding the sector more – and encouraging more participation – Jeanette is currently reading for a Masters by Research in Rural Sciences, with a focus on young people under 40 in

While the MaYA founder is still at the beginning of her research project, her work experience and the bonds she’s created over a 20-year career, have helped her understand that young people – in every endeavour – need to feel supported. “Land availability and low wages are barriers towards entry in the industry, but, if these two factors can be improved, many more younger people can be doing something valid and sustainable.”

Looking ahead, Jeanette is intent on expanding her range of knowledge, learning what will drive the flourishing of the agricultural sector. “We, sometimes, waste most of our time trying to solve unsolvable problems, instead of being proactive and changing things. I like that I’m always learning and always trying to find a solution to problems. And, when some cases are resolved there’s great satisfaction. It’s with the little achievements that we rejoice, and we hope for a better future,” she smiles.

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PHOTO: EC - AUDIOVISUAL SERVICE

GREENING THE BLOC: THE EU’S GREEN DEAL With a view to transform the European Union from a high- to a low-carbon economy without reducing prosperity, the European Green Deal aims to improve people’s quality of life through cleaner air and water, better health and a thriving natural world.

Sarah Micallef talks to the experts about how this can be achieved, and the potential impacts of the COVID-19 crisis on achieving its targets.

“The European Green Deal is at the core of the European Commission’s political priorities,” says Dr Joanna Drake, Deputy Director-General for Mobility and Environment within the European Commission.

With an objective to tackle climate change and other environmental challenges in a systemic manner, 50 | SUMMER ISSUE

the Green Deal is also a growth strategy, “aiming to transform the EU into a fair and prosperous society, with a modern, resourceefficient, climate neutral and competitive economy where economic growth is decoupled from resource use.” It is also intended to protect, conserve and enhance the EU’s natural

capital, and protect the health and well-being of citizens from environment-related risks and impacts.

“Since the 1970s, the EU has developed comprehensive and ambitious environmental legislation covering all domains: air quality, water, waste, protected areas (Natura 2000), climate change and renewable energy,” Dr Drake expounds, but the pressures on the environment are increasing in such a way so as to render these efforts insufficient. “It is therefore urgent to act even more strongly, urgently and in a more coordinated way, especially between policies,” she says.

Speaking on behalf of European business, Alexandre Affre, Deputy Director-General of BusinessEurope, affirms that European business is fully on board with the ambition of reaching netzero greenhouse gas emissions to reach the objectives of the Paris Agreement and shift Europe to a fully functioning circular economy, and is fully engaged in making the European Green Deal a success.

However, he insists that “making Europe the first climate-neutral continent calls for a massive transformation of the economy,”

BUSINESSAgenda EU POLICY

“Europe has a big financial gap (€260-270 billion/year) to reach its existing 2030 climate and energy targets, and most of it will have to be covered by businesses.”

ALEXANDRE AFFRE, BUSINESSEUROPE DEPUTY DIRECTOR-GENERAL

system. But these alone are not enough. “More mechanisms to which a refundable deposit is attached are warranted in order to divert selected waste streams to appropriate methods of treatment which valorise the material and extend its lifetime within the economy,” he says.

and laments that there are still many questions. “For instance, Europe has a big financial gap (€260-270 billion/year) to reach its existing 2030 climate and energy targets, and most of it will have to be covered by businesses.

Competitors clearly do not have these same costs. As long as they do not, we need to think about additional safeguards,” he quips, adding that apart from this, a climate-neutral Europe will be a more electrified Europe. “Energyintensive industries will use at least three to four times more electricity between now and 2050.

However, the EU’s electricity prices are significantly higher on average than in other G20 countries,” he warns, stating that “we stand ready to work with EU policy-makers to address these and other issues to drive Europe to a climate-neutral economy.”

Asked whether Malta is prepared to make the necessary reforms to meet the EU Green Deal measures, Minister Farrugia highlights that the most imminent targets are related to climate change. “Malta is already the lowest emitter per capita in the EU, as most of its gross value added is generated through the services industry.

Indeed, we experienced a huge drop in emissions in 2015 when we switched our electricity generation from heavy fuel oil to gas,” he says.

When it comes to Malta, Minister for the Environment, Climate Change and Planning, Aaron Farrugia, speaks of the change in mindset required for the country to do things in a more sustainable way, calling for a paradigm shift towards policy-making which centres around intelligent development principles.

in order to foster this change within its own territory. “At a development level, it is important to factor green and blue infrastructure in our planning system with a view to move towards offsetting the environmental impact of physical development, thereby contributing to enhanced well-being and a more resilient environment,” he continues.

“One way to achieve this is through more sustainable production and consumption patterns. We need to change our habits and be more conscious in the choices we make,” he says, maintaining that while Malta does not have economies of scale within its domestic market to influence the demand and supply of green products and services, it should subscribe to instruments such as green public procurement

“Meanwhile, Government is committed to continue supporting our industries and society in general in this transition,” Minister Farrugia says, pinpointing one key challenge as being the consumption of single-use plastic products. To combat this, he highlights Government’s ban on certain single-use plastic items starting from next year, as well as the beverage container refund

However, this is not enough to meet our climate targets. “Our potential to curb emissions in a cost-effective manner is very low and hence our options are limited,” the Minister laments, explaining that Malta’s main emitting sectors are transport and energy consumed in buildings, and the island’s ability to reduce emissions from these is hindered by its size and external factors. In so far as transport is concerned, he says that while Government is assessing the necessary conditions to enable a transition towards sustainable mobility, “the known option available to curb emissions from land transport in the short to medium term is a shift towards net zero-emissions vehicles.

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“Sustainable development can only be achieved if the three pillars – economy, social and environment – are maximised.”

AARON FARRUGIA, ENVIRONMENT MINISTER

environment – are maximised,” he says, asserting that while economic growth remains a priority, it should not come at the expense of the socio-environmental aspect. “It is important that the European Green Deal is not seen as an environmental model of sorts but is marketed as a sustainable and resilient solution to the development of Europe – a development which greens business models not only in terms of the products and services which are offered but also how these are delivered,” he says, adding that it must also look at well-being as a key ingredient of economic success.

issue for our citizens.” Minister Farrugia goes on to highlight solar farms and tightening of building regulations to make buildings more energy-efficient as other possible solutions.

Moving on to the topic on everyone’s lips in recent months – what about COVID-19? Will the current crisis brought about by the pandemic impact the Green Deal’s timeline or ambition?

Certainly, the EU Green Deal is not an environmental strategy in isolation, but also an economic one. And while Malta’s impact on the climate as a result of these reforms will be negligible, they may have a huge impact on its economic competitiveness.

Speaking of the benefits Malta stands to reap, Minister Farrugia outlines one key benefit: attaining sustainable development for a better quality of life.

“Sustainable development can only be achieved if the three pillars – economy, social and

Dr Drake contests that the European Commission’s attention may currently be focused on addressing the COVID-19 crisis in its health, economic and social dimensions, but the environment and climate crisis cannot be neglected. “The pandemic’s impact on our health, societies and economies is profound and long-lasting. However, this difficult moment offers us an opportunity to lay the groundwork for a new normal with resilience, fairness and sustainability at its core,” she maintains. “The coronavirus is

giving us a sobering taste of how future climate and environmental crises will look like,” Dr Drake adds.

Mr Affre seconds this, maintaining that COVID-19 does not change BusinessEurope’s commitment to making the Green Deal a success, but, more than ever, these ambitions need to be accompanied by a strong business plan. “There needs to be significant public support to help deploy key low-carbon technologies such as batteries, hydrogen, low-carbon liquid fuels, off-shore wind or carbon capture and storage, in order to reach the scale where they become increasingly competitive. That is why the Green Deal ambition has to be deeply anchored into the European recovery plan, making sure that it secures investments in financing energy, environment and climate programmes,” he says.

“The COVID-19 crisis is significantly reducing member states’ economic

“The pandemic’s impact on our health, societies and economies is profound and long-lasting. However, this difficult moment offers us an opportunity to lay the groundwork for a new normal with resilience, fairness and sustainability at its core.”

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“Climate change challenges affect society and ultimately also businesses. Businesses fail if society fails, as it is difficult to separate community well-being from company viability and economic growth.”

ADRIAN MALLIA, CHAIRMAN OF THE MALTA CHAMBER’S SUSTAINABILITY COMMITTEE

growth and is forcing companies to reduce capital expenditure by the billions. A robust analysis of the impacts of a serious socioeconomic downturn on the ability for Europe to reach the Green Deal ambitions, and what the possible remedies are, is therefore essential,” Mr Affre continues.

Minister Farrugia firmly believes that returning to the way things were pre-COVID-19 is not an option. “The new normal being contemplated should be one which prioritises green and blue economic niches in a manner that they may become attractive to industry and businesses for a logical migration thereto,” he adds. “A migration to greener technologies cannot come at the expense of a regressive economic policy but neither can economic recovery come at the expense of socio-ecological considerations.

Thus, it is important to achieve that delicate balance that will nudge our economy to one which is decoupled from environmental and societal degradation, and which intrinsically increases our resilience to future shocks.”

Meanwhile, the Chairman of the Malta Chamber’s Sustainability Committee, Adrian Mallia, believes that the work of the Chamber is directly in synch with the ambitions of the European Green Deal, referencing its recent Economic Vision for Malta, which proposes an economic blueprint to

Government to sustain and assure a sustainable and competitivenessbased economy for the future.

Speaking of how COVID-19 will impact matters, Mr Mallia maintains that the crisis has obviously had a significant impact on the economy of all European countries and on the viability of business in general, especially in the short-term. “As a result, there will likely need to be a rethink in the ambition or timeline for the delivery of the European Green Deal, but we do not expect the Green Deal to be shelved,” he says, adding that this would be “a huge mistake”, and that the

environmental benefits resulting from the COVID-19 pandemic should be built upon and enhanced to create a new and more sustainable normal.

Turning his attention to how businesses can contribute to the transition of a green economy, Mr Mallia affirms that, within a green economy, growth in income and employment can be generated through strategic investments that reduce GHG emissions, improve resource efficiency, and reduce the loss of biodiversity. “Climate change challenges affect society and ultimately also businesses.

Businesses fail if society fails, as it is difficult to separate community well-being from company viability and economic growth.

The business response to climate change forms part of the transition to a green economy. This transition can be accelerated by businesses by aligning their investments with opportunities provided by climate change adaptation, thereby greening the economy,” he attests, arguing that the private sector has much to contribute to the development and implementation of climate change strategies, including sector-specific expertise, technological innovation, financing, resource efficiency and promotion of the circular economy, improved design to increase durability and recycling, and entrepreneurial spirit.

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THE POWER of TECHNOLOGY CEO of HandsOn Systems, Geoffrey Farrugia, believes many good things could emerge from one major challenge, such as the current pandemic – but for this to happen, adopting a new way of thinking is paramount. He chats to Martina Said about his company, surviving a crisis, and how technology could play a greater part in day-to-day life.

Among the many things we’ve come to see and learn over the past few months, as the COVID-19 pandemic spread through our communities, is that innovative thinking and technology are central to our survival, not only from a health perspective, but also from a social and economic standpoint too.

On the almost 10-year anniversary of HandsOn Systems, a company specialised in telematics, GPS technologies and tracking, Chief Executive Officer, Geoffrey Farrugia, hopes that this thinkingoutside-the-box state-of-mind is here to stay. “I’m aware that I’m biased because we operate in this sector, but I think this crisis has really shown the importance and necessity of technology in our lives,” he asserts.

“If we didn’t have the necessary infrastructure in place to keep us going the past few months, would we have been able to continue our social lives online? Would 56 | SUMMER ISSUE

companies have taken the plunge with remote working? School lessons, extracurricular classes, video calls, conferences, you name it. I think this pandemic has shown us, among many things, that we could all work smarter and use technology to our advantage.”

With their primary product being GPS tracking for commercial vehicle fleets, HandsOn Systems, like most other businesses and sectors, took a hit initially when the pandemic broke out in Malta.

“It was difficult to keep up at first, particularly when you start seeing clients not renewing, not paying, or not paying on time. That was the immediate negative impact,” says Mr Farrugia. “However, that triggered off a ‘thinking-outsidethe-box’ process – how can we be more innovative and offer services which are needed now?”

To this end, the company upgraded its systems to keep up with urgent demands spurred by the crisis, such as fever detection systems,

camera technology and tracking people in quarantine. It also took the opportunity to upgrade and maintain its own systems, at a time when less people were dependent on their service.

“It was and, still is, very challenging because the ripple effects of such a crisis will not go away overnight,” says Mr Farrugia. “However, we are always looking to cross-engineer solutions, while applying our skills and knowledge innovatively to the current needs. This time is a test for all of us to cut down on costs, optimise procedures and become more efficient, productive, and lean.”

For HandsOn Systems, business has been a mixed bag of ups and

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downs – requests for their tracking service increased in the areas of health, logistics and deliveries, including take-away food delivery services which were in high demand over the past weeks. “Of course, there were other sectors that make use of our products that did not operate at all, such as taxi companies, tour buses, and many in the tourism sector, who either

didn’t renew or suspended our service.”

Throughout this time, the platform that HandsOn Systems is based on, which collects and analyses data on a daily basis, continued to operate, and over the past months, some interesting findings were recorded that reflected the state of play.

“I think this pandemic has shown us, among many things, that we could all work smarter and use technology to our advantage.”

“The average trip time for vehicles went down by 60 per cent, and the number of vehicles per road decreased by up to 80 per cent,” says Mr Farrugia. “Of the 15,000 vehicles that use our tracking service locally, we observed that the number of kilometres covered by the whole fleet fell drastically – we usually record around three to four million kilometres monthly.

Throughout the past three months, it fell by around 90 per cent, to 300,000 kilometres.”

People moved and travelled less, and those who did travel locally displayed behavioural changes.

“Data showed that people travelled more to sub-urban and rural areas, rather than urban areas – so rather than heading to Sliema or Valletta, SUMMER ISSUE | 57

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many headed to the north in search of countryside and open spaces,” says Mr Farrugia.

In line with their approach to innovative thinking, the team at HandsOn has been working on a project related to alternative mobility, namely autonomous vehicles and drones. “We are trying to make science-fiction from 10 years ago a reality. Through drone transport, we could transport urgent medical supplies from Malta to Gozo in no time,” he asserts. “These methods are already being used in developing African countries, so why are we still depending on a slow ferry and road network when we have all it takes to use alternative means of transport?”

Mr Farrugia goes on to argue that, although Malta prides itself on being a tech-oriented island, he expected technology to play a more central role as the pandemic unfolded. “Take quarantine management – people under quarantine were being monitored physically by the police, sometimes

with hundreds needing to be monitored at a go. Why put the police at risk? Also, as we know, not everyone was following the regulations and instructions of the authorities – in this case, I believe we could have made better use of technology.”

This argument extends beyond the ill and affected – Mr Farrugia questions why it took a crisis of this magnitude for the general public to start shopping for their food online; why children who have been sick before weren’t able to follow lessons online from home, preventing other children from getting sick while ensuring no child misses out on their education; why it’s only recently that contactless payments really took off out of the fear of touching contaminated surfaces; and why meetings couldn’t have taken place online before, preventing traffic congestion, fuel costs and parking issues.

“Technology needs to become a more crucial part of our day-today lives. Unfortunately, it often

“Usage-based insurance really proved its usefulness over the past months because whoever didn’t use their car, saved money.”

“We are trying to make sciencefiction from 10 years ago a reality.

Through drone transport, we could transport urgent medical supplies from Malta to Gozo in no time.”

takes something bad to happen for people to react. Many good things could spin off from a crisis like this, and I hope we take this rare opportunity to do and think differently, and to adopt technology quicker and earlier.”

Focusing on the company’s product offering, HandsOn Systems has been evolving its GPS tracking solutions since its inception – collecting data, analysing it, and presenting it in interesting ways to the customer. It currently offers four main products, with the flagship one being HandsOn Fleet.

“This is the GPS tracking product which gives various tools and functionalities to the fleet manager to track, monitor, and take full control of their fleet. We then diversified on RFID technology, leading to the launch of our second product – HandsOn RFID,” says Mr Farrugia. “This service allows clients to physically track assets within buildings, which could include items, medical equipment, documents and even patients.”

Seeking to offer telematics technology to other niche markets, the company produced Aktuaris, a platform for insurance companies to offer usage-based insurance – where clients pay for their motor insurance based on how often they use their car, and how safe their driving is. “It is a ‘pay as you

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“Although we are big locally, we are small internationally, and we’re competing with companies that have bigger market shares, bigger revenues, bigger teams, even in developing markets like West Africa.”

go’ service, and it has disrupted and changed the way insurance is done,” he asserts. “Usagebased insurance really proved its usefulness over the past months because whoever didn’t use their car, saved money. This is where technology makes sense – why should you pay for insurance if you are not using your car? Our aim is to apply this extensively and make insurance smarter.”

The fourth product, which is still in the works and will be launched later this year, is a task management software that complements HandsOn’s fleet management system and vehicle tracking. “Many clients ask us whether we offer a service that could replace the traditional job sheet, so that staff will be able to follow which clients they need to go to, at what time, to which location, and collect information from clients, such as signatures, with ease. This product, Task Master, will enable clients to manage their tasks more efficiently,” says Mr Farrugia.

Over the years, the company’s target markets have also extended well beyond Malta’s shores, and today, HandsOn operates in several countries. Additionally, of the 20,000 total number of vehicles that use its GPS tracking service, 15,000 are based locally and 5,000 are based overseas.

“We have always sought to evolve our products based on customer needs, feedback, trends and competition, and at a point, we realised that we were saturating our own market with our main product, which led us to diversify our products, as well as our markets,” says Mr Farrugia.

The company has established an office in Italy, HandsOn Italia SRL; it also has a small business development operation set-up in South America; and has, in addition, opened an office in Ghana, West Africa – the company’s first attempt at penetrating a developing market, with the aim of being present from the beginning.

“In North Africa, we initially

operated in Libya but unfortunately pulled out due to the instability there. We are now present in Oman and we’re gradually making inroads there,” he asserts.

“It isn’t easy for a small company like ours. Although we are big locally, we are small internationally, and we’re competing with companies that have bigger market shares, bigger revenues, bigger teams, even in developing markets like West Africa. However, we have a product we can compete with, and are continually using our unique selling points to position ourselves within these markets,” says Mr Farrugia.

Reflecting on the challenges of the past months, Mr Farrugia asserts that the biggest challenge turned out to also be the greatest reward.

“Although I was advised multiple times to downsize our team and resources, I found it extremely hard to go up to someone and let them go – it was demotivating for me, and also, it is extremely difficult to find people in our field,” he explains. “Until now, we have managed to survive without letting anyone go, which is rewarding.

The question lies in whether there will be a second storm. Although we are trying to prepare for that eventuality, if it does come to that, I think it will be devastating for everyone.”

Looking towards the coming months, Mr Farrugia states that HandsOn has just secured an investment, which will be a crucial source for strengthening the local and international efforts of the company.

“Through this investment, we hope to consolidate and improve our existing investments, products, support structures and teams, with the aim of growing in the markets we operate in outside Malta, and making them stronger and more profitable,” he concludes.

“Currently, our overseas companies are considered start-ups on the international stage, but the intention is to get them on their feet quickly, and we hope to succeed at doing so this year.”

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HELPING BUSINESSES BUILD RESILIENCE IN TIMES OF U N C E R TA I N T Y

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Natalie Blyth, HSBC Group’s Global Head of Trade and Receivables Finance, explains that, in a volatile and uncertain external environment, businesses need to be flexible in their response, and that companies can set themselves apart by viewing external disruptions as opportunities to create efficiency and resilience.

A bee sting nearly killed me. My passion for beekeeping therefore comes as a surprise to many.

Through tending their hives, I observe nature’s complex system of interdependency, adaptability and efficiency.

It is fascinating to apply these observations to the business world. Managing my potentially fatal allergy around 200,000 bees is about mitigating risk. Yet, as I recently learned from the loss of my last hive to environmental change, ecosystems are particularly vulnerable to those risks outside your sphere of influence and control.

The impact of the novel coronavirus (COVID-19) on global trade is a case in point. The supply chain ecosystem extends across and between companies spanning the globe. Firms source goods and services from suppliers around the world, who in turn source from others. Like bees, trade provides an essential service. Yet, when one part of this network is impacted by an event like COVID-19, the whole ecosystem is vulnerable to disruption. This means that no company is immune.

As with my bees, interdependency makes the overall system more efficient, but can introduce unseen risks and vulnerabilities. With global growth being propelled by Asian consumers, an incident on the other side of the world can quickly spread. Just as a chain is

only as strong as its weakest link, companies can rapidly discover unexpected disruption across their supply chain.

The Fukushima nuclear disaster in 2011 triggered an unforeseen shock to global car manufacturers. Supply chains were dependent on only a single electronics manufacturer so close to the Fukushima nuclear plant that it had to shut down. This abruptly cut supply of the world’s microcontrollers, a type of custom

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“Like bees, trade provides an essential service.

Yet when one part of this network is impacted by an event like COVID-19, the whole ecosystem is vulnerable to disruption.”

chip used in cars, by around 40 per cent – interrupting car production around the world.i

to production to distribution, will enable corporates to prepare contingency options in advance.

Examples like this reinforce the fact that a company’s supply chain is a strategic consideration. So how can firms effectively manage the risk of unforeseen disruption?

Once immediate impacts subside, companies must then prepare for pent-up demand. This upturn can bring a spike in orders, requiring agility. Having financing in place enables resources to be allocated rapidly and flexibly to add capacity and avoid bottlenecks.

The immediate priority is to care for employees and their families.

A process for timely two-way information sharing is necessary so official advice is widely disseminated. In an effort to limit COVID-19 contagion, employees in affected countries have been unable to work from their regular workplace. So, enabling remote working can maintain productivity.

Considerations range from the practical to the personal during prolonged periods working in a home environment – from broadband speed to employee well-being.

The next step is to unearth hidden dependencies through an endto-end review of a supply chain.

Through mapping suppliers and buyers, companies can plan for interruptions down to the component level. Then, as roads, ports and loading facilities face impacts, alternative logistics and distribution options may be required. In the month following the first COVID-19 travel restrictions, around half of scheduled departures on a major Asia to Europe shipping route were cancelled.ii Having visibility across operations, from sourcing 62 | SUMMER ISSUE

Then in anticipation of future disruption, firms should consider supply chain diversification. A broader range of suppliers across different geographies mitigates the risk of one country being cutoff. Stanley Black and Decker, the world’s largest tools manufacturer, has recently expanded US production to avoid reliance on any one geography.iii These steps combine to build resilience. This becomes more important as potential disruptions multiply: whether infectious diseases, such as SARS, Ebola or COVID-19; environmental, as with Fukushima; financial, such as the global financial crisis; or political instability. The World Economic Forum’s Global Risks Report paints an unsettled landscape, highlighting intensifying environmental risks.iv Failure of climate change mitigation and adaption is the top risk by impact, followed by biodiversity loss, as I’ve recently experienced first-hand.

Over time, the distances across which companies maintain

supplier relationships may reduce, both to be closer to the consumer and to mitigate risk. It would, however, be short-sighted to sever the connections which wire global growth. Indeed, the suggestion of reverting to only domestic suppliers would reduce resilience.

A range of options is critical, as goods, services and skills may be unavailable, uncompetitive, or uncertain close to home. And as nature disrupts global trade, policymakers must be mindful of easing the burden, rather than adding to the barriers which have restricted trade in recent years.v Businesses cannot control a volatile and uncertain external environment, but they can be flexible in response. As threats multiply, resilience becomes critical. Companies set themselves apart by anticipating external disruptions, to inoculate against the sting in their tail. i New York Times, A Japanese Plant Struggles to Produce a Critical Auto Part, 27/05/2011.

Source ii “46 per cent of scheduled departures on a major Asia to Europe route had been cancelled in the past four weeks as of Feb 20.”

McKinsey, COVID-19: Facts and insights, slide 14. Source iii CNBC Television interview, CEO James Loree: “Diversification of our manufacturing base is very important… because we don’t want to be reliant on any one geography for production,” 21/5/2019. Source & media release iv World Economic Forum, The Global Risks Report 2020. Source v World Trade Organization, Trade restrictions among G20 economies remain at historic highs, 21/11/2019. Source

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Joyce Grech, Head of Commercial Banking at HSBC Bank Malta, discusses how the bank continues to support the business community in building resilience for a sustainable future against the backdrop of the COVID-19 pandemic.

by COVID-19 include capital and interest repayment holidays; fee-free temporary short-term working capital funding; faster turnaround on the issuance of shipping guarantees; waiver of related urgency fees; waiver of amendment fees on letters of credit impacted by delays; extensions of trade loans and extensions to receivables finance funding periods. These support measures are assessed on a caseby-case basis.

GTRF is also leveraging the new digital capabilities of HSBC Group, making international trade and trade finance simpler, safer and faster for all customers. This has a significant positive environmental impact by reducing the use of paper and avoiding unnecessary journeys. Additionally, our customers benefit from webinars concerning the ‘new norms’ and emerging trade trends.

Amid the uncertainty caused by the COVID-19 situation, many of HSBC Malta’s business customers have been facing supply chain disruption, including delays in receiving both goods and payments, as well as experiencing other challenges, such as having to confirm orders overnight.

Our Global Trade and Receivables Finance (GTRF) team is actively supporting our customers during these challenging times, including tailoring solutions that extend trade finance to our clients in a more structured manner. We are remaining close to our customers in sectors that are experiencing increased working capital challenges, ensuring that they

can benefit from our extensive international network.

We are proactively contacting customers doing business in countries and sectors that are significantly impacted by COVID-19 to help them navigate trade with new or existing counterparties. As a bank, we deliver international connectivity and solutions to our local customers in Malta, by leveraging the wider HSBC Group network. As the situation continues to evolve, HSBC Malta will continue to adapt to support the business community in these uncertain times.

“We are remaining close to our customers in sectors that are experiencing increased working capital challenges, ensuring that they can benefit from our extensive international network.”

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ERA – whose stated mission is “to safeguard the environment for a sustainable quality of life” – has its work cut out for it.

Over the past few years, there has been widespread citizen concern over the ways in which the island’s green spaces, land and environmental health have, ostensibly, been sacrificed upon the altar of business, and progress.

CHA R T IN G A BR I G H T VI S I ON f o r t h e E NVI R O N M EN T For decades, international scientists have sounded the alarm on irreversible damage to the planet’s ecosystems, while, locally, there is increasing concern over uncompromising growth. But, according to Claire Cordina Borg, Unit Manager for National Affairs at the Environment and Resources Authority, there is hope.

Here, she tells Rebecca Anastasi about ERA’s vision for a healthier and greener environment in Malta.

If there’s one thing COVID-19 has, hopefully, taught us is that humanity cannot hide from the devastation it has wrought on the environment. Indeed, according to transnational entities such as the United Nations and the World Health Organisation, pandemics are the direct result of our destruction of the natural world, in which wildlife, and its ecosystems, have been decimated, resulting in increasing number of diseases making the leap to human beings.

In light of this, international experts have also recently called on the world’s economies to mend this broken relationship with nature and have urged governments to seriously heed the call for a green – 64 | SUMMER ISSUE

one in which progress is not pitted against the environment – before it’s too late.

“We need to redefine progress, and not only focus on growth but on quality of life. Environmental stability is an essential part of this,” says Claire Cordina Borg, Unit Manager for National Affairs at the Environment and Resources Authority (ERA), Malta’s environmental regulator. But, this, she says, requires a fundamental shift in attitudes – and, that takes time. “Change evolves slowly. After all, giraffes did not get their long neck overnight,” she smiles.

In its role as the regulator of Malta’s environmental heritage,

But, as Ms Cordina Borg stresses, economic development can only be effective if it’s accompanied by social and environmental considerations. And, to ensure the environment gets the support and protection it needs, a systematic approach is essential.

“ERA determines environmental priorities, according to evidence, which means that we’re constantly gathering data and information on the state of Malta’s environment and its different media – air, water, land,” she explains. “And, hats off to the Authority, but only two years after its inception, it published the State of the Environment Report in 2018, which allowed us to see what was doing well, and where we could do better.”

Knowledge is key, she continues, and, indeed, ERA has not only undertaken scientific studies on the state of Malta’s environment but has also conducted statisticallyvalid citizen surveys to collect views from the public. “The Authority has been set up to safeguard the environment and that includes safeguarding it for the people living here. And, when you start to look at the data, you see common trends emerging. And, awareness of these perspectives allows us to develop our vision, and strategy,” she remarks.

Indeed, via these different data collection techniques – and with the information acquired through the Eurobarometer – ERA is formulating its vision of Malta’s environmental future, which is also going to “address quality of life”, with Ms Cordina Borg stressing that this will not be simply a paper exercise. “We are looking closely at what is needed and charting a vision far ahead in the future, for it

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takes a generation of planned work to register sustained change. We know where we want to go and where we want to be, and we’ll be able to see and plan incremental changes year after year,” she underlines.

This long-sighted perspective – which maps out an outlook until 2050 – is fundamental since it will require everyone to contribute to this plan. “The vision aims to empower individuals to contribute to change, and the challenge is to help people understand that we can all be part of a greener future for our country. The biggest hurdle is to change habits, since this is always demanding. But, a major driver to protecting our environment is citizen choices, so the Authority’s vision is to equip stakeholders with the tools needed to make better choices. Then, we’ll see a change in the environment, and this should have a ripple effect on everyone’s quality of life and wellbeing,” she asserts.

In formulating its vision, ERA has already consulted over 200 people across private and public entities.

It is also taking global megatrends into consideration – “how life is going to change by 2050; we estimate higher population numbers and more digitisation”, Ms Cordina Borg says – while also ensuring that it reflects what the island needs in the long-term for results to be achieved. “In this regard, we also have to look at the little puzzle pieces to make that change happen, and, once the vision is finalised, we will develop it into a strategy, and then formulate the precise action points,” the Unit Manager says, asserting that the Authority is investing in how sustainability can be “catalysed, implemented and maintained.”

between four to six weeks. “We have to, and want to seek feedback from different stakeholders, since, in reality, for a policy to work, everyone needs to be ready and comfortable to work with it,” she explains, stating that a ballpark plan sees a strategy in place by 2021, followed by the development of the action points.

I ask if the new vision accounts for increasing the availability of green, open spaces in Malta, and she underlines that it will not distinguish between environmental media – like wind, air, and land – or compartmentalise them, but it will be a systems-based approach.

This is since changes will have a domino-effect which will result in a holistic betterment of Malta’s natural world, and, this perspective is vital if the Authority is to realise its goals, Ms Cordina Borg notes.

“The tools at the Authority’s disposal to protect these open spaces are already being used very wisely and we need to keep in mind factors which lay people might not be completely aware of. For instance, many of the sites earmarked for protection are home to endemic species or possess elements essential for Maltese biodiversity. When you put that into a system context, we can then start to talk about ecosystem services: what is the value that nature is

giving to life, in general? For, the value of open spaces is not only based on their square meterage,” she explains.

Informing the public, and teaching younger generations these connections is also a task ERA takes seriously, Ms Cordina Borg asserts, since “we need to equip people” to contribute to the changes. To this end, ERA has, in the past, also collaborated with the Valletta Green Festival, and ŻiguŻajg Festival, among other events, to create interactive educational activities showing young and old how their behaviour can have a ripple effect on Malta’s environment.

“We want to communicate how everyone can contribute to change, and this applies to every generation,” Ms Cordina Borg asserts. For, by the end of 2050, she says she would like to see “a healthier environment, cleaner air and seas”, as well as a shift in perspective on behalf of all key stakeholders, be it Government, businesses and individuals.

Is 2050 too late, I ask? “No, I don’t think it is,” she smiles. “I am not a give-upper. And, I firmly believe everyone here at ERA is just as determined as I am.

Moreover, and in this regard, Ms Cordina Borg is at pains to emphasise that the process towards action points cannot be a rush job. Indeed, once the vision is officially published – which should happen “shortly”, she says – a public consultation process will be launched, and this will last SUMMER ISSUE | 65

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OVERCOMING COVID-19: NECESSITY AS THE MOTHER OF INVENTION Speaking of the ways in which the global pandemic has brought about unprecedented changes in how a vast majority of companies operate, CEO and Managing Director of STM Malta Deborah Schembri discusses how COVID-19 has tested companies’ resilience with Sarah Micallef, and how ultimately, in every challenge lies an opportunity.

“Today’s CEOs are faced with uncharted waters as they continue to navigate the impacts of the COVID-19 pandemic,” begins Deborah Schembri, Chief Executive Officer and Managing Director of STM Malta.

“Out of necessity, CEOs have prioritised the ‘now’, focusing on supporting their people, customers and suppliers, and orchestrating responses to supply chain disruption. In parallel, leaders have sought to stabilise revenues and take care of customers, to reshape their businesses to align with evolving demand and find new growth pathways,” she says. And, now, those same leaders are rapidly turning their attention to the ‘next’: “a period of unpredictable and possibly muted economic recovery which will raise new competitive threats and opportunities at great speed.”

What follows, Ms Schembri maintains, will not be a return to pre-COVID business practices, but rather “a new era defined by fastchanging shifts in cultural norms, societal values and behaviours, such as increased demand for 66 | SUMMER ISSUE

responsible business practices and renewed brand purpose.”

Indeed, with over 20 years’ experience across several industries, in which she formulated new strategic directions and implemented changes within both local and international companies, Ms Schembri believes that there are important lessons to be taken away, post-COVID. Referencing the urgency and complexity tied to the reopening of businesses, Ms Schembri maintains that a programme of reinvention can outmanoeuvre the uncertainty.

“This presents an opportunity and a need for many companies to build the competences they wish they’d invested in before: to be more digital, data-driven, and in the cloud; to have more variable cost structures, agile operations and automation; to create stronger capabilities in e-commerce and security. This agility will be core to the long-term capabilities they build. Leaders should consider the steps they take to reopen as the first in a long journey of wider transformation,” she asserts.

Noting that a typical crisis will play out over three timeframes – “respond, in which a company deals with the present situation and manages continuity; recover, during which a company learns and emerges stronger; and thrive, where the company prepares for and shapes the ‘next normal’” – Ms Schembri maintains that CEOs have the substantial and added responsibility to nimbly consider all three timeframes concurrently and allocate resources accordingly.

“Within the framework of these broad imperatives, resilient leaders can take specific tactical steps to elevate these qualities during the current crisis, blunting its impact and helping their organisations emerge stronger,” she says, affirming that, with the right approach, the crisis brought about by the pandemic can become an opportunity to move forward and create more value and positive societal impact rather than just bouncing back to the status quo.

Asked about the strategic changes that companies should be making, Ms Schembri believes that the coronavirus outbreak has forced companies to move at an unprecedented speed to serve their customers with quality, while caring for their employees with compassion. “Companies are reevaluating how contact centres are leveraged, how employees deliver relevant customer experiences, where they work, and how digital channels can be used to support business continuity through the crisis and beyond,” she says.

“The pandemic has forever changed our experiences – as customers, employees, citizens, humans – and our attitudes and behaviours are changing as a result,” the CEO attests, adding that the result is a fundamental change in how and what consumers buy, and an acceleration of structural changes in the consumer goods industry, for example. “Once the immediate threat of the virus has passed, companies will need to consider the impact of these changes on the way we design, communicate, build and run the

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possible,” she continues, affirming that as the situation evolves, “we expect to see a shift in focus and a re-prioritisation of operational and conduct risks, as firms come to terms with managing dispersed workforces.”

experiences that people need and want.”

With these emerging behaviours, Ms Schembri continues, “organisations also have an opportunity to accelerate the pivot to digital commerce, by expanding existing offerings and creating new lines of service, like the retailers rallying to provide ‘contactless’ delivery and curb-side pick-up services for consumers. This acceleration will force organisations to revisit and even reimagine their digital strategies to capture new marketplace opportunities and digital customer segments.”

On a personal level, I ask what the experience of COVID-19 has been like for STM Malta – how has the company reacted to the pandemic and its effects?

“Though a challenging period as the CEO and Managing Director of STM Malta, I am very much pleased with how we adapted to the pandemic,” Ms Schembri notes, maintaining that remote working has been a success, and while some workflows might take longer to complete, for other processes the team took the opportunity to innovate and offer a better experience to its clients. “The employees are amazing, and I think this experience was a confirmation of the STM Malta values of team spirit, respect and learning,” she smiles.

As a pension provider, STM Malta operates within the financial

services industry – an industry which will perhaps not experience the effects of the pandemic as instantaneously as others. Given this advantage, Ms Schembri explains that the company is working hard to safeguard business moving forward. “Obviously ensuring we are always meeting customers’ expectations is important, but we are also taking the opportunity to formulate new products and offerings to launch at the opportune time, taking into consideration the COVID-19 crisis,” the CEO says.

Ultimately, does she feel that there are positives to be taken from the pandemic? “Necessity is the mother of invention. Never has that old phrase meant more than now, as the world battles to deal with the coronavirus. But it’s been inspiring to see businesses taking up the challenge, and it will be fascinating to see how that response alters through the different phases of the crisis, and into recovery,” she says.

“The COVID-19 pandemic has confronted business with its kryptonite: uncertainty. But it’s also made it tap one of its superpowers: ingenuity,” Ms Schembri affirms, and while she admits that the best businesses are always ingenious, and the ability to reinvent what they do and how they do it is vital to staying competitive, “sometimes it takes a crisis to jolt the most creative impulses into action, whether that crisis affects just the business, its industry or, in this case, the world.”

Shifting focus to the financial services industry as a whole, Ms Schembri describes the COVID-19 pandemic as a global stress event that is testing all businesses’ financial, operational and commercial resilience.

“Against this backdrop, the financial services sector is having to adapt rapidly and at scale to current constraints and market conditions,” she says, adding that “to date, firms have understandably prioritised immediate financial and operational measures such as protecting liquidity and cash flows, and ensuring that they are able to keep core business activities going.”

With many organisations facing considerable IT challenges even before the pandemic, STM Malta’s CEO believes that COVID-19 is pushing companies to rapidly operate in new ways, with IT being tested like never before. “As businesses juggle a range of new systems, priorities and challenges - business continuity risks, sudden changes in volume, real-time decision-making, workforce productivity, security risks – leaders must act quickly to address immediate systems’ resilience issues and lay a foundation for the future,” she says.

“Recognising the strain on resources faced by firms, financial regulators have taken steps to alleviate the pressure, postponing high impact activities such as stress tests, reducing capital buffers, pushing out implementation dates and delaying non-critical supervisory reviews where

“Once we reach the other side of this pandemic, it will be important to establish long-term strategies for greater resilience and to apply lessons learned from the experience to create a systems and talent roadmap that better prepares a company for future disruptions.”

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NEWS Looking back on MBB highlights APRIL – JULY 2020

MBB’S EU POLICY VIRTUAL EVENTS 4TH MAY

NEW EU RULES ON E-COMMERCE

30TH APRIL

EUROPEAN GREEN DEAL WEBINAR In collaboration with the European Commission Representation in Malta, the MBB organised a webinar on the European Green Deal to discuss the challenges and opportunities of transiting to a green economy and to reflect on the COVID-19 crisis’ impact on the long-term EU objective of becoming climate neutral by 2050. The need to support sustainability is as urgent as ever, as this will also help to generate economic growth as we come out of the pandemic.

The webinar – moderated by MBB EU Affairs Manager, Daniel Debono – saw the participation of over 100 people from all sectors of the Maltese economy. It was addressed by Joanna Drake, Deputy Director General at the European Commission’s DG Environment as well as the heads of the respective Maltese delegations in the European Parliament: MEPs Miriam Dalli and Roberta Metsola.

Different sectorial topics considered pillars of the European Green Deal were an integral part of the discussion, covering the circular economy, sustainable tourism, smart mobility and investing in the green economy. Local stakeholders with expertise in these areas contributed to the discussion. These included Adrian Mallia, Managing Director at Adi Associates and Chairman of the Malta Chamber’s Sustainability Committee; George Micallef, Tourism Consultant and MHRA Council member; Konrad Pule, General Manager of Malta Public Transport; and Joseph Darmanin, Chief Business Development Officer of the Malta Development Bank.

The European Commission will be proposing legislation to reform the way goods, services and content are made available online. This initiative is being called the ‘Digital Services Act’ and will become the legal framework for the EU in all digital developments, thus affecting all companies that offer goods or services online, as well as those that host online content or provide access to online content. In addition, there is the possibility that this new legislation will replace the current E-Commerce Directive.

In view of this, the MBB hosted an online consultation session with Maltese businesses on the ‘Digital Services Act – New EU rules for e-Commerce’, moderated by MBB Senior Policy Advisor, Mark Seychell. This consultation session was organised in collaboration with MEP Alex Agius Saliba, who is leading the negotiations on this crucial matter in the European Parliament.

During the session, local businesses gave their opinion on how they believe that access to goods and services online should be regulated. This allowed the MBB to create a strong position with which to lobby the EU institutions once negotiations on the new rules are underway.

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BUSINESSAgenda NEWS

24-26TH APRIL

MBB CEO PARTICIPATES IN EUROPEAN COMMISSION HACKATHON

5TH JUNE

PLACING TOURISM ON THE EU AGENDA

The tourism industry is one of the hardest-hit sectors by the coronavirus pandemic. In view of this, the MBB, with the support of the Malta Hotels and Restaurant Association (MHRA), organised an online consultation session with MEP Josianne Cutajar on ‘Placing Tourism on the EU Agenda’.

MBB President, Simon De Cesare, and MHRA VicePresident, Angela Attard Fenech contributed to the discussion.

The session – moderated by MBB Senior Advisor, Mark Seychell – covered three key topics: the Digital Services Act, which is likely to profoundly change the way bookings are made online; the SME Strategy which aims to improve the business environment for SMEs; and post COVID-19 measures that may be implemented by authorities and businesses in order to speed up the recovery process.

These events were all supported by Enterprise Europe Network.

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MBB CEO Joe Tanti participated as a mentor in the virtual EUvsVirus pan-European Hackathon aimed at providing solutions for various COVID-19 related challenges, such as health, business continuity, social cohesion and education, among others. Organised by the European Commission, this unique hackathon connected civil society, innovators, partners, and buyers to develop innovative solutions to overcome these challenges.

Over 20,900 participants from across the EU and beyond joined the hackathon and simultaneously worked together to hack the coronavirus – which is believed to be the worst tragedy of our generation.

Over 2,150 solutions were submitted, which range from a ‘modular micro factory’ to a ‘natural language processing system for medical reporting’. The winning solutions in each challenge area were then invited to join a European Innovation Council COVID Platform to facilitate connections with end-users and provide access to investors, foundations and other funding opportunities from across the EU.

BUSINESSAgenda NEWS

28-29TH APRIL

MBB & HSBC FOOD WASTE SEMINARS GO DIGITAL The Malta Business Bureau (MBB) and the HSBC Malta CSR Institute hosted their first set of online webinars on food waste reduction, expanding these sessions to an international audience. These were organised as part of the Business Against Food Waste Campaign led by the MBB, in partnership with HSBC Malta and ITS, and with the support of Wasteserv, the Malta Tourism Authority and the Ministry for Tourism and Consumer Protection.

Another set of webinars were held on 28th and 29th May, featuring an expert line-up of speakers, each bringing a different perspective to the food waste challenge.

The partners have now hosted more than 300 participants over six seminars and four webinars, showing a strong appetite to reduce food waste at work and home. Participants have come from several sectors, namely manufacturing, hospitality, services, retail, the public sector, post-secondary schools, and the general public.

15TH MAY

MBB CEO ADDRESSES EUROPEAN ENTREPRENEURS CEA-PME MEETING

having a ‘COVID-19 Tourism Season’. This is needed to avoid too many failed companies and too high a loss of GDP in Europe.

Referring to the Maltese situation, Mr Tanti stated that, like many other countries, hospitality and tourism have seen the most significant impact from COVID-19. As one of Malta’s main economic pillars and following several years of large increases in arrivals, the industry is now facing an unprecedented challenge, which requires constant monitoring to ensure proper understanding and sound decision-making.

27TH MAY

MBB EXECUTIVE SARAH ABDILLA SPEAKS AT EUROPEAN YOUTH EVENT As part of her Communication Champion role for Enterprise Europe Network (EEN) Malta, MBB Executive Sarah Abdilla was invited to speak during one of the European Youth Event online sessions on ‘Entrepreneurs During the COVID-19 crisis: How Can the EU help?’, organised by the European Parliament.

Sarah presented the EEN’s services for businesses and shared some practical examples of how EEN can help SMEs, even amid the pandemic.

The EYE Online offers young people from all over the EU the opportunity to virtually meet and inspire each other, share their stories and exchange their views with experts, decision-makers, activists and influencers. The EYE Online also addresses young people’s concerns about the actions and role of the EU in the context of the COVID-19 crisis, echoing a strong civic responsibility message to young Europeans as part of the #EuropeansAgainstCovid19 campaign.

MBB CEO Joe Tanti addressed a web-meeting organised by European Entrepreneurs CEA-PME, a Brussels-based business confederation of small and medium-sized companies in Europe. Participants shared ideas on how to further support SMEs during the COVID-19 pandemic, not only financially but also by giving back opportunities by opening borders and SUMMER ISSUE | 73

BUSINESSAgenda NEWS

UPDATE ON DIFME PROJECT SME HUB DIFME, standing for ‘Digital Internationalisation and Financial Literacy for Micro Entrepreneurs’ is an Erasmus+ Knowledge Alliances Project that brings together universities and businesses from Malta, Bulgaria, Germany, Greece, Ireland, Italy, and the Netherlands. Led by the Malta Business Bureau, the project aims to identify the existing gaps in the financial and digital skills of micro entrepreneurs, and to subsequently develop training and online resources to address these gaps and enable entrepreneurs to expand their businesses locally and internationally.

Prior to the submission of the project proposal, validation of a proposed SME Hub was developed, with consultation sessions carried out with micro businesses. The main conclusions of this exercise revealed that there is a strong demand for access to practical information.

Consequently, it was decided that the SME Hub will serve as an open repository of solutions oriented to two different target groups, i.e. startup entrepreneurs and experienced entrepreneurs.

Through collaborations between the DIFME partners, information related to government agencies and industry partners will be collated and made accessible to entrepreneurs operating across different industries. The intention is not to

9TH JUNE

MBB VICE-PRESIDENT ELECTED TO EUROCHAMBRES BOARD OF DIRECTORS During the General Assembly held on 9th June, MBB Vice-President John A. Huber was elected to the Board of Directors of EUROCHAMBRES, of which The Malta Chamber is a member.

Established in 1958, EUROCHAMBRES represents over 20 million businesses in Europe employing over 120 million people, 93 per cent of which are SMEs. The organisation has 46 members, representing national 74 | SUMMER ISSUE

re-invent the wheel but to facilitate access to relevant information (knowledge, government and other relevant assistance programmes) on a national and European level.

Therefore, the DIFME SME Hub will: • Offer practical solutions to enable entrepreneurs to put together factual and useful data, with the objective of ensuring that micro/small enterprises do not get entangled in the data overload available through search engines • Enable entrepreneurs to keep themselves informed about the latest EU related information and assistance to their business needs • Offer online tools such as a Directory of selected information that will include participant and other country links (namely governmental and public bodies operating in the legal, tax and banking sphere) • Provide updated information related to cultural customs, taboos and trends in different countries. It will also highlight seasonal sales peaks and holidays that can have an impact on online selling • Offer access to the training platform Visit www.difme.eu for more information

associations of chambers of commerce and industry, and transnational chamber organisations. It also has a European network of 1,700 regional and local chambers.

“Being active at senior levels of pan-European business networks is of utmost importance for a small country like Malta. It provides a platform within which to network and convey our priorities to high-level EU officials and business leaders,” Mr Huber said after his election. “I look forward to continue promoting the entrepreneurial spirit of Maltese enterprise at European level and putting forward our position on those EU policy issues which are of priority to us,” he added.

The Malta Business Bureau congratulates Mr Huber on his election and wishes him a successful mandate.

BUSINESSAgenda NEWS

15TH JUNE

MBB LAUNCHES LEADER PROJECT WEBSITE MBB, which forms part of the LEADER project partnership comprising seven European organisations operating in the fields of vocational education and entrepreneurship, announced the launch of the LEADER project website. Leadertheproject.com is now serving as a one-stop-shop for students as well as academic and in-company trainers to learn more about the project and access the resources which are currently being set up to promote people skills development.

These include a soft skills curriculum for European students in Vocational Education and Training (VET), a train-the-trainer guidebook and, ultimately, a serious game which is expected to complement more traditional forms of teaching and training. At present, the game developers are interviewing a selected sample of students to assess their needs and demands, and ensure that they stand to benefit from the real-world, decision-making scenarios which will be featured in the digital game, demonstrating how specific skills work in different situations.

As the partner organisation responsible for the project’s dissemination actions, the Malta Business Bureau was tasked with the development of this

website and e-learning platform. The MBB’s Chief Executive Officer, Joe Tanti, stated that, “As an organisation that has the interests of the business community at heart, it is important for us to contribute to initiatives that support the education and training of our future industry leaders. Students, academic tutors and industry trainers have a lot to learn from one another and should always find time to consult each other and work collectively”. He thanked the LEADER partners for the time and energy which they are investing in the implementation of this project, and especially acknowledged the sterling work conducted by MBB Executives Sarah Abdilla and Marija Elena Borg in the setting up of this user-friendly platform.

The LEADER Project, co-funded by the Erasmus+ Programme of the European Union, is led by Friesland College (the Netherlands) in collaboration with Technical Education Copenhagen (Denmark), Malta Business Bureau (Malta), Spektrum Educational Centre Foundation (Romania), CEBANC College (Spain), Inqubator Leeuwarden and 8D Games (the Netherlands).

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BUSINESSAgenda NEWS

18TH JUNE

MBB CONGRATULATES THE MALTA CHAMBER ON ITS REBRANDING

will result in thousands of kilometers of empty runs, mostly to EU peripheral countries, causing thousands of tonnage of pointless emissions that go against the EU’s own European Green Deal. On a positive note, the European Commission will be investigating this specifically and is reserving the right to launch targeted legislation to address this problem.

6TH JULY

INCOME PROJECT PARTNERSHIP HOSTS INTERNATIONAL WEBINAR

The Malta Chamber of Commerce, Enterprise and Industry, has rebranded its identity to reflect its restless drive to be Malta’s foremost business representative body. The organisation has been the leading voice of Malta’s business community for over 170 years.

The Malta Chamber aspires to further the interest and the success of its stakeholders, in the face of future challenges and opportunities. Driven by a renewed sense of purpose, and under the banner of a new identity, The Malta Chamber shall continue to boldly influence policy, and foster a resilient enterprise culture, safeguarding Malta’s prosperity in respect of the values of our population while set within a global socio-economic landscape.

The Malta Business Bureau congratulates The Malta Chamber on its rebranding and wishes it success in the upcoming years.

MBB CEO Joe Tanti and MBB Senior Executive Marija Elena Borg participated in an International Webinar that was organised as part of the EU-funded INCOME Tourism Project.

During this webinar, participants – including project partner representatives, but also students, academic and in-company tutors, which are collectively referred to as learning trios in this project - were split in thematic working groups and reflected upon the following topics: Accommodation, Food and Beverage, Destination Management, MICE as well as Travel Agencies and Tours Operators. Given the current implementation of multiple recovery plans to relaunch economies across the European region, these discussions proved useful in determining what the Tourism Industry can keep improving on to boost its sustainability.

25TH JUNE

MBB EU AFFAIRS MANAGER ON NATIONAL NEWS MBB EU Affairs Manager Daniel Debono spoke to TVM Malta about the EU Mobility Package and the impact this is expected to have on local operators as well as the economy at large. Mr Debono commented that in view of the increase in costs that some provisions of this legislation will bring without increasing productivity or commerce, operators may seriously consider to pass on the increased costs over to consumers. Mr Debono also spoke about the contradictions between the outcomes of negotiations on this legislation and the EU’s overall political ambitions relating to the climate strategy. Provisions such as requiring the return of the truck to the country of their operator’s establishment 78 | SUMMER ISSUE

7TH JULY

MBB HOLDS INVEST+ ONLINE WORKSHOP Following a series of financial literacy mentoring sessions, MBB organised an online workshop on ‘The Economic Impact Caused by COVID-19‘. This served as an excellent opportunity for anyone wishing to understand better the economic repercussions and opportunities brought about by the COVID-19 pandemic, and how these are affecting personal and business finances.

This workshop was held as part of the INVEST+ project, led by the Malta Business Bureau in collaboration with the HSBC Malta Foundation. INVEST+ seeks to improve the level of financial literacy in Malta through a series of mentoring sessions and thematic workshops linked to finance, business planning, accounting, savings, and investment.

BUSINESSAgenda INSURANCE

thus providing another layer of security. These guidelines apply to all countries around the world in which MAPFRE has a presence, and are administered taking into consideration local circumstances and exigencies.”

THE FRUITS OF HARD WORK AND COMMUNICATING THROUGH A CRISIS Closing shop, protecting all members of staff and moving more of its processes online in the face of COVID-19 was no easy feat for insurance leaders MAPFRE Middlesea. Martina Said chats with the company’s CEO, Felipe Navarro, to find out how he and his dedicated team have navigated the storm – and made it through the other side.

Following weeks of instability, unease and remote working, during what feels like an unending time-lapse since the start of 2020, many businesses have re-opened their doors to a new reality, where work practices have changed, and the future is hard to plan.

For insurance leaders MAPFRE Middlesea, the transition towards a return to a new form of normality began around mid-May, following a few months of complete change for employees and clients alike.

Health Organisation (WHO) as well as all the measures taken by the local health authorities.

The Chief Executive Officer of MAPFRE Middlesea, Felipe Navarro, shares that, since the start of the COVID-19 crisis in Malta, the company has had to monitor the situation closely, reviewing information provided by the World

“Apart from the safety aspect, our priority was to ensure business continuity, and, primarily, to continue delivering an efficient and effective service to our clients.

We have also been following the guidelines set by MAPFRE,

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“The first thing we did, in the beginning of March, was set up a management committee to deal with the impact of this crisis. Since then, this committee has been meeting twice a week to discuss all those measures which needed to be put into action for the safety of all our employees and clients,” says Mr Navarro.

On a micro level, Mr Navarro asserts that the first measure the company undertook was to identify which staff members could work remotely from day one. “Members of staff who were considered to be more at risk or had someone vulnerable living with them were given priority to work from home. Subsequently, we started implementing the automation of processes and made them accessible remotely, so that more staff could work from home.”

Keeping staff informed of every decision along the way has been a priority, and, in order to keep employees motivated and engaged, the company has organised regular online activities, including mental health sessions, and continues to do so. This is to ensure that staff does “not feel alone and is empowered to cope with the crisis. I have personally written a note to all staff members every week to keep the line of communication open and to encourage them to reach out for help whenever needed.”

On the business front, Mr Navarro asserts that MAPFRE Middlesea has also upgraded some of its services to better meet clients’ insurance needs during these difficult times.

“We understand that many people today are facing the challenging situation of being unemployed as a result of the COVID-19 crisis,” he explains. “For this reason, we decided to support our clients who have found themselves unemployed by giving a 25 per cent discount on home, motor and health policies. This benefit is also available to those sole-traders and self-employed who qualify for COVID-19-related Government assistance schemes.”

The process of the lodging of claims for home and health policy clients has also been simplified, and clients can now file a claim through the online portal in a

BUSINESSAgenda INSURANCE

matter of minutes. “Moreover, customers who have had a car accident and are eagerly waiting for their vehicle parts to arrive, can now check the status of their vehicle parts via the MAPFRE Middlesea chatbot, Emma, by visiting the website,” Mr Navarro adds. “Apart from all the above measures, which are still in place, we have opened our offices to meet clients by appointment. We have decided to return to normal operations gradually to avoid unnecessary risks to staff and clients.”

Assessing the impact of the crisis on MAPFRE Middlesea’s business and sector, Mr Navarro states that, considering the magnitude of the crisis, the company has managed to protect most of its business.

“Naturally, COVID-19 had a strong negative impact on many sectors, such as the hotel industry, car hire, and many other companies that rely on tourism. As a result, the insurance industry will face some challenges,” the CEO explains. “The first phase, in its response, will depend on the exposure to the direct COVID-19 claims we have on our books that will be partially offset, for certain lines of business by a much lower claims frequency due to lower activity levels. What could be more of concern would be the long-term consequences of the impact of COVID-19 in general on the economy, and how this will impact sales activities for the market at the renewals stage.”

Beyond Malta’s shores, the impact of COVID-19 on the world economy is believed to be immense, albeit still hard to measure. Given the unprecedented characteristics of this crisis – closed borders and airports, grounded fleets, countries under lockdown – some reports have considered the aftermath may be worse than the 2008 financial crisis.

Sharing his thoughts, Mr Navarro says, “I believe it is too early to say what the final toll of COVID-19 on the world’s economy will be.

For sure we know that there will be a general contraction in all economies, to various degrees.

Tourism is an obvious victim due to the implementation of national lockdowns around the world, but global trade has also started registering strong contractions, as are manufacturing industries such as those of aircraft and automobiles, and all industries in their respective supply chains.”

The human and economic costs of the crisis witnessed over the past months have been overwhelming and sobering, but the global response from companies and organisations willing to help mitigate the devastation caused by the virus has been, at the very least, inspiring. Through Fundación MAPFRE – a non-profit organisation created by MAPFRE Group in 1975 – the company has extended a helping hand within and beyond Malta’s shores in the fight against COVID-19.

Mr Navarro explains that Fundación MAPFRE has been operating in Malta for the past eight years, creating awareness about road safety, instilling healthy living habits in young children, and helping the less fortunate by working with various NGOs. “In order to help mitigate the effects of the current crisis in Malta, Fundación MAPFRE has donated 100,000 professional masks to be used by front-line health care workers who are helping us fight the virus. Fundación MAPFRE has also donated €35 million worth of medical equipment worldwide and as a contribution towards research in finding a vaccine for COVID-19.”

Looking back over the last few months, the weeks were fraught with challenges that also brought about a unique set of opportunities. For Mr Navarro, the biggest challenge was undoubtedly trying to keep all

employees safe and healthy, both physically and mentally, while at the same time continuing to deliver the services their clients deserve. “I must say that I am very proud of our people and the results achieved. We all did our very best; the staff worked as hard as ever to keep the business going and to deliver the best possible service to our clients,” he asserts. On the positive side, “the crisis made us realise that we could improve further on our processes and on our ability to conduct more of our business online. All the new procedures implemented during these months have proved to be very effective and will remain in place.”

On a personal level, Mr Navarro says that having worked from home for several weeks meant he had more time to spend with family, “which has also been important for us, and we’ve been able to support each other during these times.

Having my extended family living in another country has meant that I have been more in touch with them to ensure that they are fine and coping well with the situation.

This experience has definitely brought me closer to my loved ones, both here and abroad. In the midst of all this, I have also found the time to indulge in hobbies such as cooking, reading and catching up on a couple of good movies.”

Beyond the limits of his household, Mr Navarro expresses similar sentiments for all his work colleagues. “During these months I have come to appreciate more the regular human contact I had with my colleagues. It was, as always, thanks to them that my role was greatly facilitated and that we could get through this together.”

“We all did our very best; the staff worked as hard as ever to keep the business going and to deliver the best possible service to our clients.”

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BUSINESSAgenda

D E T E R M I N I N G M A L TA ’ S E N V I R O N M E N TA L FUTURE With a staggering 300,000 tonnes of waste in Malta landfilled every year, the Government’s new strategy to tackle the island’s evergrowing mass of refuse hopes to revolutionise the process through the development of the ECOHIVE. Here, new Wasteserv Chief Executive Officer, Richard Bilocca, explains the vision to Rebecca Anastasi, outlining the way in which this system of state-of-the-art waste management plants will be a boon for the island as it moves towards a circular economy.

Malta’s scarcity of natural resources, congested urbanisation and small size, together with the large influx of tourists every year, pose an environmental challenge.

Indeed, according to the latest European Union Environmental Implementation Review on Malta, published in 2019, the island registered the highest rates of municipal waste generation in the bloc – which, in 2017, stood at 604kg per year per inhabitant, compared to the EU average of 487kg – while its recycling rate, at only 6 per cent, falls far short of this year’s target of 50 per cent.

Moreover, the report underlines that, despite the increasing focus on developing a circular economy – focusing on sustainable 82 | SUMMER ISSUE

consumption and the reuse and regeneration of waste – Malta’s secondary use of material was only 5.2 per cent in 2016, below the bloc’s average of 11.7 per cent.

Composting is also “practically non-existent”, the report continues, showing that the landfilling rate of 86 per cent is three times the EU average of 24 per cent. This high rate was also recently verified in Parliament by Environment Minister Aaron Farrugia, who asserted that Malta, every year, landfills 300,000 tonnes of waste.

These excessive numbers have been a cause for concern on the island for many years, with successive administrations pledging to turn the tide on waste management and create

a sustainable system with a long-term view. And, today, as Wasteserv’s Chief Executive Officer, Richard Bilocca, underlines, the hope is that a solution – in the form of an “ECOHIVE”, a system of waste management plants, managed by the entity – has been found.

“Wasteserv will be turned into an efficient, environmental machine, in which waste streams will be separated, creating new resources which can be used as part of our circular economy. This is a forwardlooking strategy and we’ve never had anything as ambitious, from an environmental point of view,” he says.

For, he continues, the ECOHIVE is not just a plan, but it’s a vision,

PHOTO: TYLER CALLEJA JACKSON

ENVIRONMENT

BUSINESSAgenda ENVIRONMENT

centred squarely on reducing the reliance on landfilling towards a focus on the creation of new resources. “At the moment, we are disposing of waste in the most primitive and least advantageous way,” he explains.

“Instead, the ECOHIVE will fulfil an environmental need, by getting rid of waste, while also giving us new material which we can use – just like the bee who contributes to the ecosystem by pollinating and producing honey.”

Four different operations – integrated within the same system – will ensure different waste streams are separated and dealt with appropriately. The first, known as the Material Recovery Facility (MRF), will take care of dry recyclables, such as paper, plastic, cardboard and tin, which, today, are all disposed of in grey bags.

“We’ll actually be separating paper and plastic so we don’t pollute the former, and, using advanced technology, we’ll be recycling them in such a way that their value won’t be diminished and they can be reused to their full potential,” the CEO asserts.

In the meantime, the organic processing plant will treat any biodegradable waste, which will be placed in “digesters”, Mr Bilocca continues. Here, bacteria will process the matter, producing gas, and electricity. The mixture will also be “cooked to a certain temperature and pasteurised,” he continues, before being sent to be re-used as compost in agriculture.

This will be stationed next to a waste-to-energy plant, which will help “produce tons of really hot water every day, in order to pasteurise the mixture”, Mr Bilocca explains. Yet, he underlines, even with the first two plants working at 100 per cent capacity, the island will still have to deal with 40 per cent of its national waste stream which cannot be reused or upcycled. Indeed, today, the only solution is to landfill it, but, under the ECOHIVE project, this will go to the waste-to-energy plant where its volume will be reduced by some 75 per cent.

“This is a power plant, which, instead of burning fossil fuels, burns waste – but, does so in a controlled manner, and not in a primitive way. This is state-of-theart technology, and the energy produced will be used to create electricity,” he says, going on to underline that this plant will help Malta process 192,000 tonnes of waste per year – an essential service on a small island struggling for space.

And, indeed, a substantial amount of investment is being plunged into this new waste-to-energy facility, which is expected to cost up to €190 million to build and a further €200 million to operate over two decades. Moreover, time has also gone into its planning, with Wasteserv engaging the services of Danish engineering and environmental science firm, Cowi, to conduct research on the best options and best practice.

“The waste-to-energy plant is the one we most urgently need, and the one which will be in operation first. This will free us from having to expropriate more land to dump waste, and it will allow us to fully realise our potential and meet our EU targets.”

“They are helping us throughout the process,” Mr Bilocca asserts, saying that, although the timelines are tight – with the waste-toenergy plant earmarked for a 2023 opening – Wasterserv “are committed to doing whatever it takes to deliver.” To this end, the procurement process has already been initiated: the pre-qualification questionnaire was launched a week ahead of schedule, as the firm seeks out experienced contractors that will be able to build and manage the site for a period of 20 years.

Following this process, there will only be a very small percentage of waste – approximately 10 per cent – which will need to be landfilled, the CEO says. And, to manage this, Wasteserv is also overseeing the construction of a newer, smaller, engineered landfill, until the ECOHIVE project is completed, which, Mr Bilocca says, will “maximise space without taking up too much land”, with consultants in the field overseeing its construction. Moreover, the aim is to increase the height on the Għallis Engineered Landfill in Magħtab, “according to permit”, which will be lower than the infamous 1970s landfill, which was decommissioned years ago.

But, land availability is still an issue, and the ECOHIVE project, itself, has not been immune to controversy in this respect. Indeed, farmers in the area have accused the authorities of siphoning their agricultural land for the project and, while the dispute is still raging, Mr Bilocca insists all other options have been looked at and the severity of the situation means that there is no perfect solution.

Indeed, the seriousness with which Wasteserv is approaching the project reflects their commitment to the development of a circular economy, Mr Bilocca says. “With this investment, we’ll have the tools to reach our target, although we’ll, then, need everyone to make an effort to support the new systems,” he insists.

However, he is convinced that the Maltese population understands the need for an overhaul in the country’s approach to waste management – and, looking ahead, expresses his conviction that the country’s environmental and sustainability goals will be reached. “We don’t want to be associated with the bottom of EU environmental tables, anymore. We want to reach the top. We want to set an example, even in Brussels,” he concludes.

“The waste situation in Malta is such that to resolve it means taking either a painful decision, or a more painful one, or a catastrophic one.

The do-nothing option is not viable.

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BUSINESSAgenda EDUCATION

MCAST DELIVERS THE FUTURE WORKFORCE

BY PROF. JOACHIM JAMES CALLEJA

The Malta College of Arts, Science and Technology (MCAST) provides learning experiences at practically all levels of the Malta Qualifications Framework.

The College has grown to offer over 190 full-time courses in six different vocational sectors and over 350 parttime courses.

MCAST prepares students for new jobs, with entrepreneurial skills for new ventures, for established professions across many sectors. We deliver the future workforce of our country because our relationship with industry is strong and mutually beneficial.

The attraction of learners and workers to MCAST is primarily because of the hands-on training. MCAST’s two-way knowledge transfer with industry allows learners to improve potential by acquiring specific skills, greater awareness of responsibility and full cognisance of the needs and methods of industry.

Challenges faced by industry affect the role of higher education institutions and how they prepare students for the workforce. It is not just about meeting the needs of the sector but also about developing future-proof student experiences. This is MCAST’s approach in preparing its course offer for the 21st century. MCAST’s Curriculum Office has worked on reviewing over 21 programmes in constant consultation with industry stakeholders to upgrade the quality of its courses.

The process of industry consultation and ongoing reflection on where new trends and technologies might lead has

led MCAST to launch seven new programmes. One of these courses is the Advanced Diploma in Robotics, Drone Technology, Automation and Artificial Intelligence.

This course is an example of how MCAST is taking full advantage of the opportunities created by advanced technology. The Diploma course will include practical work that will guide students to develop skills and to gain knowledge of machine learning techniques. Through this vocational programme, the College aims to promote greater inclusivity in rewarding tech-based careers.

MCAST prioritises design, collaboration and translating students’ expertise to reach the world of employment.

MCAST has a proven record of accomplishment of over 20 years of how it acts fast in response to industry’s present and future needs. In turn, employers are increasingly recognising MCAST students and hiring new talent with very good salaries from the College’s cohorts.

Over the past months, the current COVID-19 circumstances impacted students and raised concerns on securing jobs and gaining relevant experience. Now more than ever, students need to feel supported and understand the range of learning prospects that are currently available to them. As we move towards normality, we expect MCAST to strengthen its leadership position in Malta as the education and training institution with one of the highest rates of success in employability.

Prof Joachim James Calleja is Principal and CEO at MCAST. www.mcast.edu.mt

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BUSINESSAgenda CORPORATE

Q UA L I T Y I S A WAY O F L I F E AT E V O L V E L T D

Evolve Ltd, part of the Attard & Co Group of Companies, has partnered with The Malta Chamber to establish a new Quality Committee, headed by Christopher Busuttil Delbridge, Managing Director of Evolve Ltd, who will be the entity’s first Chairman.

The pursuit of quality is a virtuous mindset. It pervades nations, organisations, and the notion of the self. At Evolve Ltd, we have always placed this as the cornerstone in the personal development of our employees, thus forming the firm’s company culture.

Having been the first company in the Maltese healthcare and scientific market to obtain ISO9001 certification, as a result of our heavy investment in our personnel’s well-being and mental health, we have experienced first-hand what a shift in mindset can do for a relatively small group of people, let alone for a nation.

To reach that larger audience, and spread this positive message, we are collaborating with a like-minded organisation, The Malta Chamber, to serve Maltese firms across all business verticals.

Many business sectors are struggling today, as a result of the pandemic, which has brought fear to our communities and introduced restrictions. That is why now, more than ever, there is the need for an approach to business which prioritises quality over quantity.

The vision being proposed by the new committee will be put forward through ubiquitous Quality Ambassadors from all walks of life. These will be trained and approved by a working group. All major stakeholders, such as business owners, would be able to sign up for programmes of improvement and continuous monitoring.

It is also our firm belief that we must train and mentor the next generation, and that is why we plan to work with the all stakeholders to strengthen the building blocks of a quality mindset within our curriculum and encourage the introduction of debating skills as well as a change in culture and mindset which lends itself towards the giving

and receiving of constructive criticism. Indeed, the mantra being upheld is that ‘quality is a way of life’.

Furthermore, the committee’s main four focus areas will be: Malta Chamber as an institution – ensuring the Malta Chamber is held to the highest standards and implements what it promises on time, every time. This committee will seek to develop the Chamber’s policy in key areas related to the upholding of quality in all aspects of business and the economy.

Personal – by starting with the ‘man in the mirror’, one can work on adopting a growth and positive mindset.

The ‘extra-in-the-ordinary’, so to speak, can make a huge difference. These are traits that make individuals stand out, and more employable on the labour market as well as help them become better all-round people. The responsibility for our actions is ours and ours alone, and that is why fostering continuous improvement is an essential trait in any individual.

Professional – another objective of the committee will be to research and make the necessary representations about the importance of quality to business activities and ensure they appreciate the return on investment as well as the utmost importance of investing in their employees, their work practices, and their target market. Businesses that are members of the Chamber will be assisted in their drive towards solutions which are best suited to their target audience, in the most efficient way possible.

A system of mystery shoppers is also being envisioned for those operators who sign up for this service and this would include a report on the findings, followed by suggestions for improvement.

National – lobbying national authorities but also helping raise the bar all around (as part of the Chamber’s Corporate Social Responsibility), will also be part of the Quality Committee’s remit. By inculcating a different approach in the younger generation and helping to develop the next generation to be better than us, we will continuously strive to help Malta become better placed and more competitive than before in an ever-changing landscape.

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BUSINESSAgenda INVESTMENT

IS NOW A GOOD TIME TO INVEST IN A MERGER ARBITRAGE INVESTMENT STRATEGY? CIO of AUM Asset Management Limited and Portfolio Manager of Abrax Merger Arbitrage Fund, Xavier Robinson, explains the benefits of merger arbitrage investment strategies and why now is a good time to get involved.

Merger arbitrage is a sophisticated investment strategy that buys and sells stock of two merging companies at the same time. Before we look at why merger arbitrage is a sound investment strategy for those who understand the market, let’s define the concept. ‘Arbitrage’ can be defined as buying and selling a product or stock (or other asset) in different markets simultaneously. The idea is to capitalise on the spread between the asset’s buying price and selling price.

In very simple terms, an example of arbitrage can be seen when people buy a product from a shop and then sell it through Amazon for more money. If a seller buys a TV from a company for €100 and sells it through Amazon or another online retailer for €120, then there is arbitrage. In this case one would make a €20 (20 per cent) profit.

Within capital markets there are numerous types of arbitrage, including convertible bond arbitrage 88 | SUMMER ISSUE

and currency arbitrage. One of the most tested and trusted involves merger arbitrage – where profits are made from announced mergers and acquisitions. Let’s break down how this works.

How does a merger arbitrage investment strategy work?

When an acquiring company wants to buy a target company, it usually has to pay a premium. The premium has to be over the target company’s share price, so that it’s a worthwhile deal for its board of directors.

Merger arbitrage is an investment strategy that makes money from the difference between the target company’s current share price and the amount paid for its acquisition against the context of the announced merger.

Therefore, merger arbitrage can be described as an event-driven investment strategy, which makes profit from pricing inefficiencies that may happen after the announcement of the merger,

acquisition, bankruptcy or other major corporate event. If we take an example of a potential merger: when a company makes it public that they intend to acquire another, the stock of the target company will usually rise. The stock of the target will trade in function of the transaction terms announced, and will trade at a discount (a spread) to the transaction consideration to be ultimately received (whether in cash and/or stock of the acquirer), depending on the risks of completion of the transaction or on the upside optionality in the form of a potential counterbid or the need to see improvement in the transaction terms (where the price will be above the terms of the transaction consideration).

This is where a merger arbitrageur will step in. So, how is it profitable for the arbitrageur? Firstly, it’s important to realise that corporate mergers are usually split into two categories – stock-for-stock mergers and cash mergers: • Stock-for-stock merger – this is where the acquirer exchanges its own stock for stock of the company it wants to buy. During this kind of merger, a merger arbitrageur will buy the stock of the target company and short the stock of the acquiring company. When the merger is through and complete, the merger arbitrageur uses the converted stock (from target company into acquiring company) to cover the short position.

• Cash merger – where the acquiring company buys the target company’s shares for cash. Until the acquisition is complete, the target company’s stock will trade in function of the acquisition price. If you buy the target company’s stock below the offer terms before the acquisition closes, therefore, you can make a profit should the acquisition go through.

Merger arbitrage formed as an investment strategy during the boom years of the 1980s, when returns were very high. This was because it was a new strategy with no real competition. Some arbitrage firms made returns of more than 20 per cent per year. This made it more popular as a strategy and the field became much more competitive, lowering the available returns.

What are the risks of merger arbitrage investment?

The biggest risk is that the merger

BUSINESSAgenda INVESTMENT

doesn’t go ahead at all, resulting in a share price drop of the target company. A deal can fall apart for numerous reasons, including shareholders voting against it, a company performing badly, losing funding or regulators blocking the deal.

The compensation is the merger spread previously mentioned and is payment to the arbitrageur for the option they provided to long-term shareholders – that is, to exit their stake quickly without having to wait for the deal to close.

These risks are why merger arbitrageurs must have high levels of knowledge, skill and understanding of myriad factors. They must accurately analyse the potential of a merger and determine whether it is likely to actually happen and how it will play out. This is why large institutional investors such as hedge funds, investment banks and private equity firms are the primary user of merger arbitrage as an investment strategy.

Is merger arbitrage the right investment strategy for you?

A merger arbitrage investment strategy aims to collate a diversified portfolio of arbitrage trades. Each trade must offer the following: • An annual return above the cost of capital.

• Market implied probability of success.

• An expectation of a return with little correlation to other trades.

The market will set the spread of each opportunity and overall, merger arbitrage continues to outperform other hedge fund strategies on a risk-adjusted scale because of its recurring and compounding income stream nature. There are other advantages of merger arbitrage compared with bonds, including that usually returns therefrom are taxed more favourably.

Merger arbitrage as an investment strategy can provide consistent, relatively low-risk attractive returns which are compounding over time. But a broken deal can cost the arbitrageur. Losses can be higher than the profit expected from a successful investment, so diversification is very important to minimise risk.

Historically, 94 per cent of mergers have completed. Stats show that 87 per cent closed with the initial deal terms in place, a further 6 per cent with higher terms and 1 per cent with lower. Around 6 per cent of announced mergers have failed to close. So, while merger arbitrage is a good bet as part of a diversified portfolio due to its low-risk, lowcorrelation with other asset classes and absolute return, it also needs expertise and resources to run as a strategy.

Abrax’s CBI-regulated UCITS fund also offers daily liquidity to investors, backed by the MontLake brand.

This makes it an excellent cash management alternative to the more illiquid asset investment strategies out there, particularly in a system compounded with generally negative interest rates.

Individual investors should work with professional merger arbitrage funds

As to what sets the Abrax fund apart, much of its success lies in its long-standing market-leading performance. For just under 10 years, Abrax has been beating and consistently coming out ahead of all merger arbitrage indexes. Mr Robinson says: “we focus solely on late-stage M&A transactions with firm, legal merger contracts in place, rather than special situations or preevent deals that are more uncertain and geared towards higher market correlation.”

Abrax has been trading in announced mergers and acquisitions since 2011 with an annualised return since inception of ~ +8 per cent and consists of a traditional hedge fund and a UCITS structure.

All of this is why Abrax Merger Arbitrage has an extremely low deal break rate of 0.04 per cent rate versus the 6 per cent p.a. witnessed in merger arbitrage. Its extreme focus on capital preservation has shown predominantly positive monthly performances at a time when global indices fell by more than 5 per cent.

Despite the fact that since August 2011 there have been 10 months of significant market corrections, the Fund’s performance has held strong.

The most recent example of this is the global market correction of 1020 per cent between February and April 2020 following the first wave of COVID-19.

This is why individual investors are best off allocating funds to a professional merger arbitrage fund, such as the Abrax Merger Arbitrage strategy managed by AUM Asset Management Limited. Based in Malta, AUM has been founded in 2015 by Jean-François de ClermontTonnerre, is headed by Roberta Bonavia, and is one of the country’s biggest privately owned investment management companies.

Xavier Robinson, Portfolio Manager of Abrax Merger Arbitrage Fund, says: “by exploiting late-stage M&A opportunities across North America and Europe, Abrax aims to deliver absolute returns regardless of market conditions. Abrax Merger Arbitrage has a 99.6 per cent success rate for deal competition across its portfolios since it launched in May 2011 and the investment team think now is the best time to get on board.”

www.aum-am.com

Why right now is a good time to invest in Abrax Merger Arbitrage

Mr Robinson believes that COVID-19 has created unprecedented opportunities in price dislocations across live deals and that there is also evidence to show that there will be a surge in new M&A activity during Q3 and Q4 of 2020, making now an ideal time to invest. The Abrax investment team has more than four decades of investment experience and this, along with its track record of high returns and strong focus on capital preservation during challenging times make it a unique proposition.

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PROMOTING ENTREPRENEURSHIP helps revive the economy Human history has shown that crises have been pivotal in developing our societies.

We’ve had wars that fuelled technological innovations, pandemics that advanced healthcare systems and global financial crises brought forward hi-tech companies like Uber. History has also shown that businesses play a key role both in helping society get through an economic crisis and in creating innovations that shape society after a crisis.

In terse economic conditions, fundamental entrepreneurial factors drive the generation of new business. Data from a recent Global Entrepreneurship Monitor (GEM) survey shows that basic entrepreneurial characteristics (i.e. opportunity recognition and innovation) and drivers of entrepreneurship (like necessity vs. opportunity) actually increase the likelihood of success for new business leads. This survey continued to reveal that necessity-driven entrepreneurship is ineffective during recessions and that innovation and opportunity recognition are more relevant as success factors during periods of business decline.

It is now hence the opportune time to recognise opportunity and consider programmes that rekindle the entrepreneurial trait in your business!

The “Erasmus for Young Entrepreneurs” programme is one such opportunity for you. It is a mobility initiative, financed by the European Commission and operates in EU and non-EU countries. It is also horizontal to all business sectors.

Eligible entrepreneurs are those in the early stages of their business start-up (new entrepreneurs) and experienced owners or managers of a micro or small

enterprise (host entrepreneurs). The term “new entrepreneur” includes both nascent entrepreneurs, who plan to start their own company in the future, and those who have already set up their own business in the last three years. Exchanges aim to help the new entrepreneurs gain first-hand knowledge about start-up topics like marketing/sales, customer relations and business finance, and are supported by monthly financial grants for the duration of the exchange which can vary from 1 month to 6 months.

On the other hand, host entrepreneurs are experienced business persons, with more than three years of activity. By participating in the programme, host entrepreneurs suffer no financial burden but they should be willing to cooperate with the new entrepreneur towards developing his/her entrepreneurial skills and know-how. Host entrepreneurs will get to work with an energetic and motivated new entrepreneur who can contribute to your business with innovative views, new skills and knowledge and possibly benefit from a fresh perspective on your current operations, plus any specialised knowledge that the new entrepreneur may have and that you do not master.

To date, the mobility initiative has facilitated nearly 2000 cross-border exchanges and currently has about 7,000 entrepreneurs registered in the programme’s database. Malta Enterprise has led this programme on a national level for the past five years and continues to encourage the Maltese business community to participate and benefit from tangible support that will impact the growth of the company.

So, if you have a brilliant business idea but you’re not sure how to bring it to life, or you are a newly established entrepreneur and need a helping hand, or perhaps you are already running your own company successfully but would like to expand and would benefit from some fresh ideas, then be proactive and grab this opportunity!

Reach out to Brigitte Tanti, Erasmus for Young Entrepreneurs National Project Coordinator, on brigitte.tanti@maltaenterprise.com or 2247 7623.

For more information, visit www.erasmus-entrepreneurs.eu

BUSINESSAgenda BUSINESS UPDATE

OVER 7,000 PEOPLE P E R DAY U S I N G WHOSWHO.MT BUSINESS SEARCH ENGINE The WhosWho brand comprises whoswho.mt, Malta’s first business networking and search engine platform, Malta Business Who’s Who Annual Publication and The Boardroom, an audio-visual show streamed live on whoswho.mt and its social pages.

Malta’s business portal and business search engine, whoswho.mt, is attracting an average of over 7,000 people per day since its launch in January. The WhosWho brand in Malta – both online and the annual publication – has been an instant hit as it filled an important void in the local business search engine and professional networking scene.

WhosWho.mt is proving to be a very useful tool for business people and professionals, facilitating business and networking opportunities between companies and people in business. The portal includes

thousands of WhosWho profiles and company profiles, and provides a large dose of daily business news articles, primarily focusing on business people and companies operating in Malta.

Whoswho.mt is an extensive and ambitious project by Content House Group, one of Malta’s largest media organisations, owning and managing over 20 successful media brands in different genres.

Whoswho.mt has a hybrid role – that of a local online business networking

engine as well as a business news portal specifically linked to people in business and to companies. In April of this year, The Boardroom was launched as an audio-visual subbrand – The Boardroom is an AV show presented live by well-known editor and businesswoman Jo Caruana.

Leading business people have already been featured exclusively on the show, which has contributed to the exponential growth and diversification of the WhosWho brand in Malta which now includes a strong presence on social media, an audio-visual show, a business portal, a search engine, as well as an annual prestigious publication.

Raisa Mazzola, Head of Digital and Marketing at Content House, explains the specific role of whoswho.mt: “Whereas other business portals, even ones managed by us, focus on news happening locally that can impact businesses, or is relevant to the business segment of society, whoswho.mt is specifically focusing on news or announcements related to local companies and local people in business and management. And that means we are very interested to report on anything that is intrinsically linked to people in business or to companies operating in Malta.”

Ms Mazzola notes that the business search engine is equally original and targeted: “This is not a search engine for everyone or for everything.

There are other portals that aim to fill that niche in the market. This is about searching about people in business or companies. So it is specific and can be a search about individuals operating in a market, for instance. Each entry is backed with an additional keyword facility that enhances the networking and search engine, as well as making the search more intuitive.”

A solid team of business journalists and writers, digital strategists and online marketers, as well as business development and sales executives, is behind whoswho.mt, ensuring a constant flow of daily stories and business updates as well as announcements. These updates are also posted on the social media outlets of whoswho.mt, particularly on Facebook and Linkedin.

For more information send an email on info@contenthouse.com.mt SUMMER ISSUE | 93

BUSINESSAgenda MEET THE MEPs

AN e v e n t f u l FIRST YEAR IN THE EUROPEAN PARLIAMENT As the newest and youngest Maltese Members of the European Parliament (MEPs), Alex Agius Saliba and Josianne Cutajar have spent their first year in Brussels in sixth gear. Focused on making every minute count, they chat with Martina Said about their achievements, priorities and their aspirations for the rest of this term.

ALEX AGIUS SALIBA

“Given that this is my first term as an MEP, I had to work very hard to build networks and gain the trust of my colleagues and my political family,” says Alex Agius Saliba, who was elected MEP under a Labour ticket for the first time in May 2019.

He describes the past 12 months as “an eventful and hectic year”, and the progress he managed to achieve in his first year in this new role is “reflected in the number of tasks and important roles I have been entrusted with, and the several amendments and key contributions I have made.”

Looking back on the most notable highlights from the 94 | SUMMER ISSUE

past year, Dr Agius Saliba says every little achievement gives great satisfaction, particularly knowing your contribution can make a difference in the lives of millions of citizens across the bloc.

“Among the several encouraging moments over the past year are the mention by authoritative journal POLITICO as one of the top 20 MEPs to be followed this year; the nomination for the best MEP award in the Internal Market and Consumer Protection Committee; and the submission of my draft report on the Digital Services Act, on which I received positive feedback from colleagues, the European Commission and several stakeholders.”

He adds, however, that there have been plenty of challenges too, including “unjust criticism and personal attacks”, adding that “from the beginning of this journey, I chose to never shy away from a debate and always sought to be clear and truthful to what I believe.

To me, accountability is of utmost importance – a politician should live up to his words and stick with stances and promises made before being elected.”

As the co-chair of the European Parliament’s Intergroup on mental health, Dr Agius Saliba has been active in discussions over the past year on how mental health should be at the centre of policy-

BUSINESSAgenda MEET THE MEPs

making. More recently, he’s been vocal about the elevated risks and mental health problems faced by LGBTQI+ youths.

“I asked the European Commission to clarify what actions it intends to take to address difficulties faced by this vulnerable cohort. Although societies have made major strides and are now more open, understanding and inclusive, when compared to their heterosexual counterparts, LGBTQI+ young people are still disadvantaged, discriminated against and victimised,” he asserts. “The hostility they face at home and in society at large puts them under constant pressure, and this exposes them to higher risks of mental health problems. This is what prompted me to raise such an important issue and why I believe that this minority in society should be prioritised. I intend to keep up the pressure in months to come to see that concrete actions are taken at a European level.”

Turning his attention to the ongoing battle against COVID-19, Dr Agius Saliba believes that, on a national level, Malta set an example to the rest of the world on its tackling of the pandemic and, all in all, the situation was handled professionally and successfully. On an EU level, however, he believes it has been a learning curve.

“Looking at the many important decisions made by the Union in such a short time, I believe this crisis also demonstrated the level of efficiency that can be achieved at EU level.”

ALEX AGIUS SALIBA

Looking towards the future, Dr Agius Saliba says his focus will be on issues relating to the internal market and consumer protection, as well as the employment and social affairs sector. “My top priorities are to successfully finish what I started, namely the work on my reports concerning the Digital Services Act and the Right to Disconnect, two areas which have generated a great deal of discussion and which will probably

steer a lot of controversy and heated debate in the future.”

Finally, he asserts that his sole aspiration as an MEP is to offer a voice to Maltese and Gozitan citizens within the European Parliament, “and to work towards a better Union, which guarantees fairness and equal opportunities, and which is, ultimately, more inclusive, sustainable, and socially just.”

“On one hand, there was definitely room for greater cooperation and a more coordinated response.

Although several high-level meetings were organised to address the situation, this health emergency exposed difficulties in rapid response and solidarity between member states. On a positive note, and looking at the many important decisions made by the Union in such a short time, I believe this crisis also demonstrated the level of efficiency that can be achieved at EU level,” he asserts. “Looking forward, I hope we do not forget what we’ve learnt over the past months, and, more importantly, I hope that, in our path to recovery, we seek to choose the most sustainable path possible.”

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BUSINESSAgenda MEET THE MEPs

JOSIANNE CUTAJAR

Summing up her first year as a Member of the European Parliament, Josianne Cutajar, who is also currently the youngest Maltese MEP, describes it simply as “effective and productive” – though the leap from a local council in Gozo to the European Parliament could have been overwhelming, she took the steep learning curve all in her stride.

Touching on the highlights from her first year in office, Dr Cutajar says her biggest achievement is the trust she gained in the European Parliament and among the Socialists and Democrats’ political family through her moderate and researched style of politics. “It was that trust which led to my direct involvement in building a new European digital and industrial 96 | SUMMER ISSUE

“I want to forge a new, more modern narrative – politically and economically – that puts human wellbeing at the core of our decisions and legislation.”

JOSIANNE CUTAJAR

policy, with dossiers on a new European SME strategy, artificial intelligence and the Digital Services Act.” Taking her place within the Parliament’s Tourism Task Force has been especially meaningful, proving to be a powerful platform to influence debate within the S&D and the rest of the Parliament on the issue of cancelled flights and packages, and the impact on travel in the wake of COVID-19.

“Such influence ultimately led to unprecedented recommendations by the European Commission that respect consumers’ and passengers’ rights and, at the same time, took into consideration the long-lasting effects of the pandemic and how these will impact small flagship airlines and

BUSINESSAgenda MEET THE MEPs

“Everyone expects a low demand [in tourism] in the first weeks and months as trust grows gradually, but I can already feel excitement brewing among the local population to return to a safer new normal.”

JOSIANNE CUTAJAR

other intermediaries in the travel and tourism markets.”

More recently, Dr Cutajar underlines a personally significant feat for her – “managing to get all the Maltese MEPs behind my amendments on the proposed Mobility Package, which will be detrimental to the Maltese economy. It was the first time in this mandate that all the Maltese MEPs came together and cosigned the same amendments.”

Turning back to the biggest crisis at hand for all countries as well as the EU, I ask Dr Cutajar how she thinks Malta and the Union will emerge in the coming months from the calamity that has gripped the world since the start of the year. Firstly, however, she praises the local management of the pandemic, saying it was handled “brilliantly”. “When seeing the social disaster unfolding in several of our neighbouring states, we have to be grateful for the character shown by our medical professionals and decision-makers,” she asserts.

At EU level, Dr Cutajar says that unprecedented decisions were taken, proving that the 2008 economic crisis taught great lessons. “First among which is that there can be no economic success if people are not living decently.

The temporary frameworks that were agreed upon, the suspension of the Stability and Growth Pact, and the suspension of State Aid Rules, upped emergency packages intended to protect employment.

Moreover, the flexibility permitted in the use of Cohesion and other European funds, and now the proposed Recovery Fund, sent a very strong message that the

European Union is not just a cold bureaucratic institution, but a political organisation with very strong social values.”

The bitter side of this experience, Dr Cutajar adds, was the lack of solidarity displayed by individual member states on several fronts, namely “the limitation on exports of essential medical supplies, including to other member states experiencing an exceptional crisis situation; the discussions on financial assistance to beat the crisis; and the disputes on the relocation of migrants entering Europe from the central Mediterranean route.”

Looking at the glass half full, the MEP says that a remarkable economic recovery can enable European member states and their SMEs to experience the least possible impact, while making their digital and ecological transitions even more possible.

Focusing on the tourism sector and her capacity as a member of the Tourism Task Force within the European Parliament, Dr Cutajar states that, as the virus worked its way across Europe and restrictive measures were imposed, including travel bans, the initial reaction was one of devastation among stakeholders in the tourism sector, both locally and at European level.

The MEP adds that the emergency measures enacted in March and April helped safeguard some employment and prevented a freefall situation for many enterprises. “I was in relentless consultation with local stakeholders throughout the past

months, and still am,” she asserts.

“I am positive that if we can make optimal use of the grants included under the Recovery Fund to help businesses – especially the micro and small ones – face the liquidity crunch, and of other instruments to further facilitate their access to capital and help them continue to grow sustainably, we can proceed relatively swiftly to a new normal.

Everyone expects a low demand in the first weeks and months as trust grows gradually, but I can already feel excitement brewing among the local population to return to a safer new normal.”

Looking towards the immediate future, Dr Cutajar is excited to be directly involved in the European digital policy, “at a time when the European Commission is intent on acquiring digital sovereignty and technological autonomy. My work, however, is testament to my belief that our digital transformation and technological progress shouldn’t happen for its own sake, but to enhance our general well-being, to improve working conditions for everyone, and to improve accessibility to services for people of different genders, living in different regions, and with different abilities.”

And her future aspirations for the long term? “I want to forge a new, more modern narrative – politically and economically – that puts human well-being at the core of our decisions and legislation, which understands that the growth in our enterprises’ productivity and our quality of life are not inversely proportional.”

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BUSINESSAgenda CULTURE

DOING THINGS THE TRADITIONAL WAY Valletta is a city with a rich history, peppered with myriad remnants of times gone by. Among these are a handful of traditional businesses that hark back across several generations. Sarah Micallef meets with three such business owners and discovers that there’s still a place for the past in the modern world.

GEORGE ZAMMIT TAL-HWAWAR PHOTOS: INIGO TAYLOR

Johann Farrugia has been running the fragrant little herb shop known as Tal-Hwawar in Valletta for over 40 years, but the shop itself has been around since 1888, when his father’s uncle started the business.

Today, you’ll find an assortment of aromatic herbs and spices for sale here, but, back in the old days, they would also stock a variety of items for people’s daily needs, including paraffin for paraffin lamps, string, candles and even bird seed! But while some of the stock has changed, the way in which Johann conducts his business hasn’t: “we like to do things in the traditional way, and that’s what keeps our customers coming. We sell herbs by weight and package them in wax paper to keep them fresh.”

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BUSINESSAgenda CULTURE

Yet much has changed over the years, and Johann recalls a much busier area, and a very different Valletta. “Just after World War II, the British would come from their ships to buy goods in bulk from shops like ours – it was a busy hub for wholesale and retail,” he says.

And while Johann himself has no plans to retire quite yet, the future for Tal-Hwawar remains uncertain. Without family members interested in taking over the business, he affirms, “if I were to lease it out, I would only hope that it would continue to be run in the traditional style” – the way his family have been doing for over a century.

“We sell herbs by weight and package them in wax paper to keep them fresh.”

GEORGE ZAMMIT TAL-HWAWAR

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BUSINESSAgenda CULTURE

PHOTOS: LISA BORAIN

DITTA DARMANIN

Words by Lisa Borain

Sixth generation craftsman Pierre Darmanin, of Ditta Darmanin, has been gilding for 40 years. “I’m in love with this craft. If I weren’t, I would close down. It wouldn’t be worth my while,” says Pierre of his craft of gilding and restoring, which has been in his family since 1798.

The craft is a rare one, with only a few craftsmen left practising it, having spent decades painstakingly learning its secrets.

“It’s a very delicate art. There are so many details that you learn with experience,” he says.

While Pierre and his family are originally from The Three Cities, they have always had their workshops in Valletta. His predecessors would travel to Valletta from the south each day by boat. “This is where everyone was. You have to imagine what St Christopher’s Street was like in the 18th century. It was lined with the sunken workshops of carpenters and gilders offering their services.

The street used to be referred to as it-triq tas-siggijiet, which means ‘chair street’. It was then blasted in World War II, and when it was rebuilt, its character changed completely,” he continues.

“It’s a very delicate art. There are so many details that you learn with experience.”

DITTA DARMANIN

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BUSINESSAgenda CULTURE

Pierre focuses mainly on building Maltese clocks from scratch, as well as painting, gilding, and restoring church articles, mirrors and frames.

It takes roughly 19 days to build a clock, the gilder reveals, and Malta is the only country in the world that produces clocks precisely like these.

“It came about from the Knights of St John. In the beginning, the clock was just an adorned box.

The specific Maltese clock began when a knight requested a special design with a more adorned shape.

Then, in the 19th century, noble and wealthy people began to give one to their daughters as part of a dowry. There are four main colours; the black was for the knights, the blue for nobility, red was for clergy, and green for wealthy businessmen,” he maintains.

What’s the best part of this vocation? “When you’re up high in a church restoring a piece of art.

You’re up there, touching art where others don’t go. That’s something really special,” Pierre smiles. But is there a future for Pierre’s craft? “My daughter is an archaeologist, but I have taught her everything about gilding. I’m also looking forward to having grandchildren to teach one day. We’ll see what happens!”

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BUSINESSAgenda CULTURE

“The shop actually started off selling furniture, moving on to gramophones and records at the turn of the century.”

ANTHONY D’AMATO

PHOTOS: INIGO TAYLOR

ANTHONY D’AMATO RECORD SHOP Anthony D’Amato Record Shop in Valletta was established in 1885, making it one of the oldest surviving record shops worldwide.

Today, the business is run by the fifth generation of the family.

“The shop actually started off selling furniture, moving on to gramophones and records at the turn of the century,” says Anthony D’Amato, a member of the fifth generation. “Back then, the vinyls were 78 RPMs, followed by 45s and 33s, which are still popular today,”

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Lucy Street and Strait Street were demolished. The façade, however, dates back to the 1950s, and bears the name of the second-generation owner.

he explains, adding that the shop also sold cassette tapes, CDs and DVDs over the years.

And as far as business goes, things are once again on the up, thanks to the continued popularity of vinyl, Anthony says, admitting that while the lockdown due to the COVID-19 pandemic has certainly

set them back, a newly set-up delivery service has proved popular among their customers. “It’s an undiscovered opportunity which we probably wouldn’t have looked into otherwise,” he says, revealing that while it will likely take a year or so to get back to where they were pre-COVID, he’s confident D’Amato Records will pull through as it always has, and all the better for it.

“In the 1930s, we recorded the first-ever Maltese songs on vinyl – these were recorded in Milan and mastered in the UK by HMV.” Among these songs, some of which are still popular today, is Malta’s traditional dance, Kontradanza Maltija.

The shop itself has impressively survived two world wars – a lucky feat indeed, considering that during World War II, a large proportion of the blocks on St John Street, Republic Street, St

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LAND ROVER PLUG-IN HYBRIDS: PHEV, OUR MOST INNOVATIVE POWERTRAIN YET How you want to drive is up to you. Simply select the default driving mode, combining petrol and electric drive, or opt for the full electric drive of EV mode.

How to charge Whether you’re out and about, or at home, an assortment of charging options allows you to plug in wherever you may be.

Home The necessary Mode 2 Home Charging Cable is supplied with your vehicle. Home charging is ideally done overnight and can be undertaken whatever the weather. For faster charging times a wall box is recommended.

What is PHEV? Plug-in hybrid electric vehicles are often shortened to hybrid or, to distinguish them from mild- hybrid vehicles, PHEV. By combining an internal combustion engine with an electric motor for optimal efficiency and performance, PHEV delivers the best of both technologies. PHEV delivers a virtually silent drive in full electric vehicle (EV) mode and, for optimal refinement, ensures a seamless transition between the petrol engine and electric motor.

Faster charging with a wall box With a wall box installed in your home, a full charge can be achieved in as little as 2.2 hours. The wall box should be fitted by one of our specialists at a suitable location convenient to you.

Public For charging your plug-in hybrid vehicle away from home, you will need to use public charging stations which are available in various localities in Malta. Your vehicle’s in-car infotainment system can highlight charging points along your route.

For more information, visit www.muscatsmotors.com.mt or www.landrover.com.mt

TRADE FINANCE IS THE RIGHT PANACEA BY JOSEPH RODGERS Trade finance is briefly described as the granting of finance and provision of services related to the movement of goods and services either within a country or cross-border.

Services include a vast gamut of standard trade finance products such as documentary credits, documentary bills for collection and demand guarantees. Trade finance is labelled by some financiers as a complex form of financing.

However, for other lenders, it is a secured form of lending and considered as the right panacea for associated ills, particularly for trading companies with less sound financial capabilities.

‘phantom’ transactions.

This highlights the importance of trade finance being managed by specialists.

Bank of Valletta has contributed heavily towards Malta’s commercial activities and is well geared to handle even larger volumes. BOV’s fully-fledged Trade Finance Centre has the right mix of knowledge, skills and in-depth expertise to provide the tailored trade finance solutions, designed to protect the interest of its customers and create value that drives them to success.

Structured trade finance is self-liquidating. Putting simply, the trade finance exposure is settled by the liquidation of the underlying goods. The beauty of such financing is that the credit risk shifts from the obligor to an off-taker (preferably more than one) who should be an acceptable receivable to the financier or backed by a strong banking instrument. Some financiers consider this as an ‘off balance sheet’ financing, an asset-backed lending, which is safer than simply relying on the creditworthiness of the borrower or obligor. Naturally, the underlying goods have to be controlled by and to the order of the financier.

Joseph Rodgers MBA, BSc (Hons), CDCS, ACIB is a seasoned banker, with over 30 years of experience in trade finance both locally and abroad, a trade finance trainer and key speaker, and Executive Head at BOV Trade Finance Unit.

Trade finance has undoubtedly its own challenges and financiers must make sure that their trade finance products and services are utilised for genuine and legal business activities, and they should shy away from fictitious and

All trade finance products are subject to approval by the Bank and may be affected by changes in currency exchange rates. Terms and conditions are available from www.bov.com. Issued by Bank of Valletta p.l.c., 58, Triq San Zakkarija, Il-Belt Valletta VLT 1130. Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking in terms of the Banking Act (Cap. 371 of the Laws of Malta).

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THE IMPORTANCE OF EXPERIENCED KEY PARTNERS BY KYLE DEBONO Having a good set of experienced key partners is important for any business structure. By key partners I am also referring to directors, committee members and senior management. Having teams comprised of people with expertise in different areas is very important in order to gain a wider spectrum of knowledge and experience. Most areas that affect any business structure are constantly becoming more complex, with regulations becoming more stringent and with developments evolving across diverse areas. Hence, it is becoming increasingly difficult to have enough expertise through a small team of people, making a wider range of key partners even more important.

Besides ensuring that their teams and committees are diverse enough, thus affording different perspectives, businesses must also consider acquiring the help of experts in different fields. Such key partners could be relied upon either for a professional opinion, to provide specialised training or to take care of certain ancillary requirements that your business might not have the time or the expertise to focus on. For example, if your business is subject to antimoney laundering regulations, do your current employees have enough expertise in this field? The same goes for investment ideas: if your business is looking to invest a portion of its resources until a future need arises, does it make sense to try to do it yourself with your existing team,

or does it not make more sense to engage a professional licensed entity to provide you with a tailored portfolio management service?

Besides the increasing pressures from the regulatory side to have better composed boards, increased client demands with respect to Environmental, Social and Governance (ESG) factors are also adding to the need to engage different key players.

For more information, visit FinancebyKD on www.financebykd.com

COVID-19 AND TRANSACTION MONITORING: MANAGING AML COMPLIANCE As a result of the ongoing global struggle with the COVID-19 pandemic, financial institutions are experiencing novel compliance challenges linked to this outbreak. The new strain of coronavirus has sent global financial markets into widespread turmoil and this, unfortunately, has presented criminals with new opportunities to generate and launder funds gained through illicit activities. As a result, financial authorities around the globe have taken to adjusting their AML/CFT approach to cater for the new patterns of criminal behaviour being recorded.

Changes in behaviour The current pandemic has seen numerous countries set up stringent control measures, such as restricting movement and, therefore, keeping people in their homes. The impact such measures have had on the global economy has brought about drastic changes in banking behaviours and in criminal behaviours too. Panicking at the current situation, people are withdrawing hard currency and are making more use of mobile apps, thinking that it is safer.

An increase in the use of virtual currencies has also been noticed.

Media monitoring The increased risk of money laundering activities brought about by the pandemic has, unsurprisingly, resulted in an increased presence of AML/CFT stories in the media.

In times of crisis like today, financial institutions and banks would do well to adjust their media screening to capture news story types that could indicate and point out potential money laundering crimes. Story types worthy to keep an eye out for include: 106 | SUMMER ISSUE

• Regulation – regulatory punishments may shed some light on the actions taken by authorities against other firms accused of activities like price-fixing and collusion.

• Financial difficulty – debt, bankruptcy, closures, redundancies, and departures of top-level staff.

• Violence or human rights abuse – violence or sex offences in connection with state-level offences such as human rights abuse.

• Criminality – accounting malpractice, financial crimes, dishonest billing, and predatory lending.

Adjusting compliance with ComplyRadar Since the ongoing pandemic poses great uncertainty as to when it will finally be eradicated, banks and financial institutions alike must adjust to the new reality of compliance monitoring. This is to accommodate the changing legitimate behaviour of consumers while identifying illegal activity from criminals. The upgrade of monitoring efforts not only includes the sufficient screening of transactions but should also incorporate changes to rule-sets to ensure that the software used is able to capture new typologies.

For more information on how ComplyRadar enables you to fulfil your AML obligations and help avoid reputational risk or potential fines, visit www.comply-radar.com or email info@computimesoftware.com.

BUSINESSAgenda BUSINESS UPDATE

UP, OVER AND BEYOND THE COVID-19 CRISIS WITH THE APS JET PACK The APS Jet Pack is the survival kit for local businesses experiencing cash flow problems. The loan provides working capital assistance to cover a number of costs – such as salaries and rental, energy and water bills, the acquisition of material and stock for business continuity, maintenance costs and expenses related to real-estate projects.

Features at a glance • Up to €10 million for SMEs and up to €25 million for large businesses (with prior approval from the Malta Development Bank); • No charges and fees from the bank; • Rate starting from 2.75 per cent (inclusive of guarantee fee) fixed for a loan of four years’ duration for an SME; • Commitment to pass on to the customer any additional Governmental aid, such as interest rate subsidy, once this becomes available; • Repayment period of up to four years, which can be extended to six years on a case-by-case basis (terms and conditions apply); • Six-month moratorium on both the interest payments and capital repayments (possibly extended to one year on a case-by-case basis).

The APS Jet Pack benefits from the support of the MDB COVID-19 Guarantee Scheme launched by the Malta Development Bank through the provision of a bank guarantee for €350,000,000 covered by a Government guarantee issued by the Ministry of Finance.

More information on the APS Jet Pack can be found at www.apsbank.com.mt/aps-jet-pack Approved and issued by APS Bank plc, APS Centre, Tower Street, B’Kara BKR 4012.

APS Bank plc is regulated by the Malta Financial Services Authority as a Credit Institution under the Banking Act 1994 and to carry out Investment Services activities under the Investment Services Act 1994. The Bank is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act 2018. The Bank is a participant in the Depositor Compensation Scheme established under the laws of Malta. Applications are subject to the Bank’s lending criteria and the Bank’s final approval. Terms and conditions apply and are available on request.

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LAYING SOLID FOUNDATIONS f o r INTERNATIONAL GROWTH

For this young motion picture production house, tapping international markets feels like the next logical step. But where to begin? Sean Aquilina, Managing Director at MAKA Visuals and Joe Tanti, CEO at the Malta Business Bureau, chat to Martina Said about achieving growth, valuable business mentoring, and navigating a young company through a pandemic.

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Ambition and determination are essential qualities for young entrepreneurs looking to establish themselves and their business in competitive markets – and Sean Aquilina, Managing Director at MAKA Visuals, possesses these traits in spades. However, as he attests, penetrating Malta’s market is one thing – taking to the international stage is a whole other. And, dealing with all of this, in what could be described as the aftermath of COVID-19, is purely uncharted territory.

BUSINESSAgenda BUSINESS PROFILE

Before delving into the company’s journey and the valuable business support assistance it received through the Malta Business Bureau (MBB)’s Enterprise Europe Network service, Mr Aquilina recounts how MAKA Visuals came to be. “When we started out, most of our team members were still finishing their degree year at MCAST. Our focus back then was not to build a business, but to be a team that could assist companies in their marketing through commercial videos.”

It began with a team of four creatives willing to put in all their time and effort into it, delivering end-to-end services, covering filming, motion graphics animation, 3D animation and also videos that combine all these elements together.

“We typically get a request directly from a client or advertising agency, we come up with an ideal strategic creative concept, and work on getting the video produced and delivered, while the client’s effort is invested in mainly green lighting our pre-agreed upon process. This proved to be a needed service, and at a point, we started to feel the natural shift towards turning it into a sustainable business,” says Mr Aquilina. “A few months after delivering our first project to a client we still service today, we started receiving organic interest in what we do. Clients started reaping their marketing benefits from our services and that was another moment where growing

Joe Tanti and Sean Aquilina during an online mentoring session

our business started to make sense, while maintaining the boutique approach.”

Discussing how video is fast becoming an essential medium to engage with audiences, Mr Aquilina expands, “our efforts are entirely targeted around the use of video in marketing. We invest our energy on advertising content that can make a difference. Anyone can shoot a video on their phone or ask a friend to use their SLR, but for it to strategically work, it goes way beyond that,” he asserts. “As any other effective marketing effort, a video is never there simply to make a brand look fancy. A video is there to help a brand grow, enhance the

“As much as we enjoy operating in our market, our ambitions as a team are bigger than what the local market could offer, so internationalisation is something we’ve been considering seriously and working on.”

SEAN AQUILINA, MAKA VISUALS MANAGING DIRECTOR

brand’s positioning in its respective field, help tell a product’s story, or reach new leads to convert them into sales.”

Reflecting on the use of video in local marketing efforts, Mr Aquilina states that, while this has improved since MAKA Visuals first started out, “unfortunately, the weight given to video is still not as it should be, and it’s understandable given the size of the market.” He adds that, traditionally, most companies extract video from an advertising campaign, rather than place video at the centre of the campaign and extract the rest of the content from it. And, the team are aware of the limitations imposed by Malta’s market.

“As much as we enjoy operating in our market, our ambitions as a team are bigger than what the local market could offer, so internationalisation is something we’ve been considering seriously and working on,” says Mr Aquilina.

“We’ve been building a team that allows us to still service the local market effectively, maintaining our high standards in quality and service, while also producing international projects.”

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with these ambitions, under the guidance of CEO Joe Tanti. “Joe listened to all my pain-points and took me on board as his mentee.

Together, we formulated a plan and we met up every couple of weeks to discuss, learn and evaluate. Given the situation, this all happened virtually via video calls,” which, he adds, turned out to be a huge advantage given their schedules.

Speaking of their collaboration, Mr Tanti explains that as an Enterprise Europe Network (EEN) service provider, the MBB is always looking for new locally-based start-ups or enterprises that have the potential to grow and develop through the support of EU funded schemes and initiatives.

“Sean Aquilina had initially shown interest in one of our previous outgoing company missions which we held back in 2019 as part of the EEN. He could not join us at the time. However, we kept in contact

as we saw a huge potential in his business. Given the aim and nature of the Network, it is expected that the clients with higher ambitions to grow, innovate and engage in business or technology partnering activities, stand a better chance of benefitting from the Network services,” says Mr Tanti.

From that point, they continued building their client-journey relationship, where MBB learned more about MAKA Visuals, and assessed which services are best suited to take the company to the next level. “Most importantly, it allows us to build trust in one another. Building a trusting relationship is critical in building a strong foundation that will, hopefully, help the business innovate and grow internationally.

This is what the EEN business mentoring is about.”

The mentoring sessions involved informal one- to two-hour long discussions on team-management,

addressing team challenges when pursuing internationalisation efforts, access to finance, as well as new business ideas within the market, amongst others. The session concludes with a set of progressive pointers to be chewed on for the next meeting.

Mr Aquilina explains that “the full potential is appreciated when the candidate takes the sessions seriously, otherwise it’s hard to find help, if you’re not ready to help yourself.” He adds that his business was heavily affected by the pandemic, “so technical as well as motivational guidance by Joe were of great help for a young entrepreneur like me experiencing such challenges. Additionally, he never stopped at our chats – he was constantly helping me get in touch with other professionals in various fields so I could seek further assistance.”

The MBB CEO continues that, through EEN, they will continue to provide growth-oriented and innovation support services to help ambitious businesses like MAKA Visuals strengthen their competitiveness and grow their business internationally.

“Internationalisation has been on MAKA Visuals’ cards for quite some time, and, as such, we will continue to support them and help them find the right international business partner to expand their business abroad,” Mr Tanti says.

“To facilitate international partnerships, EEN has a business database which contains thousands of company profiles, so businesses looking for international partnerships can find the perfect match for their needs,” the MBB CEO adds. “We also organise a number of matchmaking events and company missions across Europe and beyond, where SMEs can meet potential business partners in person.”

Looking back at the mentoring experience, Mr Aquilina describes it as “fruitful”, which could result in learning new practical skills, “but most importantly, learning soft skills in business that not everyone SUMMER ISSUE | 113

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“Internationalisation has been on MAKA Visuals’ cards for quite some time, and as such we will continue to support them and help them find the right international business partner to expand their business abroad.”

JOE TANTI, MBB CEO

is able or ready to share, but which Joe never held back from doing. If he knows it, he’s going to share it to the full, and if he doesn’t, he’s going to find out and get back to you in the following session.”

As a young company, and a young leader at the helm of a company, Mr Aquilina considers the lack of contacts and business confidence as his greatest challenges. “Being a young player among bigger players can sometimes feel intimidating, but it’s a natural fear that can be overcome. In fact, through the mentoring I learned that certain worries are positive traits that should be embraced, and this was very helpful,” he asserts.

“Going forward, also in view of the business climate we’re facing, where unfortunately marketing is probably the first department brands will retract funds from, the EEN can be of great help in tapping funds, getting business tips and helping to push our business further locally and internationally.”

ENTERPRISE EUROPE NETWORK BUSINESS MENTORING As part of the Enterprise Europe Network, the MBB has started offering free business mentoring sessions intended to support the professional activity of entrepreneurs, helping them address doubts, explore alternatives, and face new challenges. “This is being offered to start-ups whereby we allocate a number of mentoring hours which are structured on a threefold approach, namely: information, advice, and continuous support,” says MBB CEO Joe Tanti.

He adds that the support service they offer through these mentoring sessions covers various areas ranging from start-up management, start-up sales, talent attraction, access to finance, internationalisation, and even seed investment attraction – while always tailoring the support to the company’s needs.

“With the global economy struggling under the

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unprecedented weight of the coronavirus pandemic, it is important that businesses now, more than ever, raise their ambition and embrace new opportunities into their business strategy and operations,” says Mr Tanti.

“Through EEN, which is the world’s largest support network for SMEs, we are pledging ourselves to provide business mentoring to those in need of support in these difficult times. We understand that keeping a business running during and following the crisis is challenging. However, we are here to continue guiding and supporting the Maltese business community on how to align their operations and help them embrace new practices such as sustainability and digitalisation.”