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THE IMPACT OF BREXIT ON ENERGY INDUSTRY BUSINESS: ISSUES AND CHALLENGES

BREXIT appears to have put everybody in a frenzy, not only over the form of the UK’s withdrawal but also its future relationship.  For energy industry businesses, irrespective of any political accommodation, the challenge in trading with the EU will be immeasurably different and more challenging from 30th March.

Procurement Opportunities

As we all know, Central Governments across the EU have considerable influence over their domestic energy producers, and consequently procurement opportunities are published and managed in accordance with the procedures of the Official Journal of the European Union.  Irrespective of any ‘deal’, being outside the EU will reduce the opportunities for UK businesses to successfully compete.  The natural priority will be to award contracts to those companies residing within the 27 Member States, before considering those outside of EU jurisdiction.

We have all heard the words that business requires ‘certainty’, and that ‘uncertainty’ is bad.  However, ‘change’ is the watchword of business, with businesses continually investigating market positioning and product development in order to beat the competitor.  BREXIT provides some short-term uncertainty, but the entrepreneurial businesses are already looking into the future to define those new ‘rules for success’.

Future Approach

The UK business model, which is perceived as more adversarial and aggressive than the ‘Latin’ relationship approach, may not be appropriate.  Whilst the UK cost and contract driven approach has commendable attributes, particularly over certainty of delivery, continuity of client relationship has a much lower value and relevance – it is just not ‘bankable’.

One thing that is patently obvious is that the UK approach into Europe will have to change, and change quickly, if trade is to be maintained and grow.  Partnership, and the development of local targeted subsidiary businesses employing a mixture of local and UK personnel, may be an appropriate approach.

These risks and challenges are real and overnight success will not be achieved.  There are many imponderables e.g. which state; a satellite office or partnership; a mirror image business or one that has potential to diversify; financial exposure and potential return; and finally integration of the different business cultures into a cohesive profitable entity.

Conclusion

The opportunities available to the energy industry are real, with the UK able to provide innovative approaches and solutions to its many challenges.  Energy security with diversity is seen as reducing risk potential, be it from adversarial political influence, the effect of climate change or just bad-luck due to a major system failure.

There is no ‘one-size fits all solution’ open to governments, project developers and financiers.  A fully open mind is required to explore the issues, challenges and propose workable solutions: this is the skill and expertise offered by the UK Business as it looks with excitement, tinged with trepidation, at our changing energy world.

About the Author

John Ireland is an internationally experienced energy specialist and senior business executive skilled in the development, negotiation, and management of businesses and technically complex contracts within both the Government and private sectors.  John, a Chartered Engineer and Fellow of the Institution of Chemical Engineers, has been Chief Engineer advising clients on nuclear new build in Romania and investigating opportunities in Saudi Arabia, Jordan and Turkey, and Project Manager for the treatment and management of toxic and radio-toxic chemical wastes in the UK, Japan, and the EU.                                                   

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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HOME OFFICE ANNOUNCES SUSPENSION OF TIER 1 (INVESTOR) VISAS

The Tier 1 (Investor) immigration route will be suspended until further notice from midnight on Friday 7 December, the Home Office announced last night.

These “golden” visas are granted to applicants who are able to show that they have at least £2 million to invest in the UK economy, and have proved very popular with wealthy overseas investors and high net worth individuals. Depending on the amount of money an applicant has to invest, they provide a relatively quick route to settlement and British citizenship.

The scheme will re-open for applications at some point in 2019, with major changes to the rules such as the removal of government bonds from the list of acceptable investments. Instead, applicants will need to invest in active and trading UK companies, and they will also be required to provide comprehensive audits of their financial and business interests.

These changes have come about after a government review of the visa as part of a crackdown on money laundering in the UK.  Immigration minister Caroline Nokes said:

The UK will always be open to legitimate and genuine investors who are committed to helping our economy and businesses grow. However, I have been clear that we will not tolerate people who do not play by the rules and seek to abuse the system….

That is why I am bringing forward these new measures which will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system.”

A statement of changes to the Immigration Rules is due to be laid before Parliament later today.

About the Author

Alice Boyle is a solicitor with extensive experience in all areas of immigration law. She has specialised in immigration since 2003, is accredited as a Senior Caseworker at Level 2 and a Supervisor under the Law Society’s Immigration accreditation scheme. Alice can assist both corporate and individual clients with any immigration, nationality or asylum matter. She has a sound understanding of Tier 1 Investors, Tier 1 Entrepreneurs and Tier 2 matters.

If you require any advice on these changes or other possible visa routes into the UK, please contact Alice Boyle on +44 (0)7775 902 935 or ajb@prospectlaw.co.uk.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For a PDF of this blog click here

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RECORD-BREAKING £1.5M PENALTY FOR “SLUMLORD MILLIONAIRE” WHO BUILT AN ILLEGAL BOXROOM BEDSIT EMPIRE ACROSS NORTH-WEST LONDON

Press Release, London Boroughs of Brent and Harrow, 5th December 2018

A notorious rogue landlord must pay £1,500,000 or spend nine years behind bars after justice caught up with him at Harrow Crown Court last Friday (30 November). The court found that Vispasp Sarkari had flouted planning rules for more than five years – converting properties across Brent and Harrow into substandard flats without planning permission.

Sarkari, 56, of Hawthorne Avenue, Harrow, had been cramming tenants into cramped and dangerous accommodation, charging them extortionate amounts in rent. His criminal enterprise included one property in Brent illegally converted into eight substandard box-room bedsits and four more similarly converted in Harrow.

He defied all planning enforcement warnings by both councils to stop the use of his properties and carried on with his criminal venture, raking in thousands of pounds from people desperate to have a roof over their head.

Cllr Tom Miller, Brent Council’s Cabinet Member for Community Safety, said:

“Slum landlords won’t be tolerated – plain and simple. If you ignore planning laws or leave tenants to languish in poor conditions, then we will find you, we will take action in court, and we will win. Anyone we find flouting planning or exploiting renters will feel a deep hole in their pockets after we’ve taken them to task.”

Sarkari was also separately fined £12,000 and ordered to pay both councils’ costs in full. It’s believed that he may have several further properties across the two boroughs, making him responsible for a significant proportion of illegal flat conversions and HMOs blighting North-West London.

Cllr Keith Ferry, Harrow Council’s cabinet member for planning, said:

“Justice means taking the ill-gotten gains off this slumlord millionaire. This is a man who thought he couldn’t be stopped. He was wrong, and thanks to our joint work with Brent Council, Sarkari’s criminal venture is finished.

But he’s not the only rackrent landlord out there, wrecking lives and ruining our boroughs by running illegal flats and HMOs. My message to the others is this: we’ll never stop, we’ll never give up, and when we catch you, we’ll punish you too.”

Extensive inquiries by both councils established the extent of Mr Sarkari’s criminal activity. Brent also secured a restraint order against Mr Sarkari, which means that he cannot dispose of his assets before the order is paid in full. If he doesn’t pay up, then the Council can force the sale of his properties.

In sentencing Mr Sarkari, Judge Wood described the breaches as “a flagrant abuse of the Town and Country Planning legislation”. She went on to thank everybody involved for their hard work in putting the case forward.

Harrow and Brent were represented by Counsel Mr Edmund Robb of Prospect Law, who said:

The Confiscation Order of almost £1.5 m which has been made in this case represents major recognition by the Crown Court of the personal misery and amenity damage which is caused by blatant and longstanding failures by developers to comply with planning enforcement notices issued by local authorities in London.”

Background Notes:

Mr Sarkari’s criminal lifestyle:

Mr Sarkari is no stranger to the courts. In 2012 a confiscation order under the Proceeds of Crime Act 2002 was made against him for £303,112.00 for exactly the same thing, flouting planning laws. Despite leaving the courts in 2012 with a hefty bill, he continued in the same vein, having no regard for the law, as he continued to flout planning laws and raked in large sums of cash from his unlawful enterprise by continuing to rent out the same properties which were in breach of planning enforcement notices in 2012. He did pay the order made in 2012 in full.

Mr Sarkari also has a string of previous convictions which relate to properties he rented out.

On 6th August 2008 at Harrow Magistrates Court, he was prosecuted for seven fire safety offences relating to a property on High Street, Wealdstone, contrary to the Regulatory Reform (Fire Safety) Order 2005. He was fined £400 for each offence totalling £2,800.00 and ordered to pay costs totalling £7,746.00.

On 22nd September 2009 at Brent Magistrates Court, he was prosecuted under section 179 of the Town & Country Planning Act 1990 for failing to comply with an enforcement notice which related to another property he owned on London Road, Wembley. He was fined £5,000.00 and ordered to pay costs totalling £739.50.

During January 2015, he was prosecuted under regulation 36(4) of the Gas Safety (Installation and Use) Regulations 1998 by the Health & Safety Executive, for gas safety breaches at a property in London Road Wembley. He was fined £10,000.00, was ordered to perform 150 hours community service and was given a 12 month suspended sentence.

On 14th December 2017, he was prosecuted at Willesden Magistrates Court in relation to one of several properties he owns on London Road Wembley, HA9 7ET. This prosecution related to 6 offences for breaches of a selective licence that was issued by Brent Council and the breaches were contrary to section 95(2) of the Housing Act 2004. These breaches included fire safety hazards and a cockroach infestation. The defendant pleaded guilty and was fined £13,400.00 and ordered to pay £1,545.00 in costs.

About the Author

Brent Council Press Office – Karen Luke – Karen.Luke@brent.gov.uk 020 8937 1490

Harrow Council Press office – Masooma.sarwar@harrow.gov.uk 020 8420 9361

About Prospect Law Ltd

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

Click here For a PDF of this press release

Please click here to see the Guardian’s coverage of this prosecution

Please click here for the Metro’s coverage

Please click here to see the Daily Mail’s coverage

Please click here to see the Local Government Lawyer’s coverage

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REFLECTIONS ON THE EU-IRAN HIGH-LEVEL SEMINAR ON INTERNATIONAL NUCLEAR COOPERATION, 26-27 NOVEMBER 2018

We have previously commented on the Iran “nuclear deal”, more correctly known as the Joint Comprehensive Plan of Action (JCPOA), and the potential consequences of the Trump Administration’s withdrawal from it some six months ago.  

JCPOA

We noted there that Iran had “shown off” its capability to enrich uranium to worrying quantities, pushing the boundaries of the agreement in a manner designed not only as a retaliatory statement against Israel and the US, but also the EU if it did not live up to its side of the bargain. The EU, along with China and Russia, remains a supporter of the deal.

That threat came a step closer this week with a statement by Ali Akbar Salehi, Vice President and head of the Atomic Energy Organisation of Iran, who stated that Iran may resume enriching uranium to 20 per cent, well above the level needed for civil nuclear power plants. In an interview with Reuters, Salehi mentioned that Iran is failing to see the economic benefits of the 2015 deal, adding:

If we cannot sell our oil and we don’t enjoy financial transactions, then I don’t think keeping the deal will benefit us anymore.”

Sanctions

Clearly, US sanctions imposed after their withdrawal from the agreement are having an effect and making it difficult for Iran to trade, even though the EU has announced its intention to create a Special Purpose Vehicle (SPV) to “facilitate payments related to Iran’s exports (including oil) and imports, which will assist and reassure economic operators pursuing legitimate business with Iran”.

In the US context, it is worth noting that the International Atomic Energy Agency (IAEA) maintains that Iran is keeping its side of the agreement. In a statement to the IAEA’s Board of Governors on 22nd November, Director General Yamano stated: “Iran is implementing its nuclear-related commitments under the Joint Comprehensive Plan of Action (JCPOA). It is essential that Iran continues to fully implement those commitments.”

EU-Iran Seminar

Ali Akbar Salehi’s statement was made ahead of the third EU-Iran High-level Seminar on International Nuclear Cooperation, held in Brussels on Monday and Tuesday of this week with the aim of building confidence in the exclusively peaceful nature of Iran’s nuclear programme. In the margins of the seminar, Vice President Salehi met with the EU’s High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission, Federica Mogherini.

Salehi and Mogherini re-affirmed their commitment to the continued full and effective implementation of the JCPOA, took stock of recent developments and expressed their determination to preserve the nuclear agreement as a matter of respecting international agreements and a key pillar for the European and regional security. During their meeting, Federica Mogherini also reiterated the EU position on issues of concern, such as Iran’s role in the region.

Future Activities

The seminar also identified a number of future joint activities related to the nuclear governance framework, as well as research and training relating to nuclear safety and radiation protection.

These activities will include:

  • the organisation of seminars on nuclear law and on reporting under the Joint Convention,
  • participation in key European nuclear stakeholder conferences
  • sharing of experience and methodology for performing nuclear stress-tests
  • enhanced collaboration in the field of R&D
  • a further package of safety related projects financed under the Instrument for Nuclear Safety Co-operation
  • organisation of a stakeholders’ conference to leverage international support for the establishment of the Nuclear Safety Centre.

Participants also agreed to continue to implement the agreed roadmap on R&D co-operation, including a joint project on radioactivity measurement capabilities.

The seminar reconfirmed the existing understanding that international nuclear co‑operation, and nuclear governance, are important elements that should be developed in parallel in order to optimise benefits for all sides.

The EU and Iran expressed satisfaction at progress achieved so far in the areas of nuclear co-operation and governance, and agreed to hold a follow-up high-level seminar in 2019. However, the success of that may depend on the success of the SPV.

About the Author

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

Previous Articles

11th June 2018 Article about Iranian Uranium Enrichment

6th December 2016 Article about business in Iran, further to the lifting of sanctions

13th October 2016 Article about Dollar transactions with Iran

26th July 2016 Article about Iran’s quest for a credit rating

For a PDF of this blog click here

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CREATING SHARED VALUE IN COMPLEX ENVIRONMENTS: PART IV

Part IV of this series will cover a company’s approach to the acquisition of land and negotiations about land compensation, as well as company contracting policies and the impact of these on company-community relations. There will also be an overview of the need to incorporate long term economic development strategies into community projects, and the need to use local contractors where possible.

Acquisition of Land

A company’s approach to the acquisition of land often becomes one of the earliest major issues to strain company-community relations. Rural people often value land for its cultural, and historic interest as much as for its commercial value. Land in this context is identity.

Negotiations about land compensation often need to focus on the meaning of land, rather than just a negotiation about its commercial price. Companies must acknowledge the implications of cultural attachment to land, and recognize that discussions about compensation will have a long term impact.

Compensation packages should not just be financial. In particular, efforts which help farmers increase their yield can work, especially if they also receive support when constructing a business plan. Compensation rates have to be consistent, and this might mean not paying anyone until everyone has agreed. Compensation payments must be made promptly, and assistance given with the management of any money handed over.

An inclusive approach is needed, with individual compensation packages taking a back seat to community based ones. Resettlement programmes require particularly high levels of assistance, including the reestablishment of networks. Transparency in all matters relating to compensation programmes is essential.

Contractor Behaviour

The vast majority of community challenges are caused by contractor behaviour. Local contractors tend to lose out to larger, international or urban based contractors. The staff of these outside contractors, rather than company staff, can be the first representatives of the company to engage with communities.

A company’s contracting policies can have a much larger and more lasting impact on the quality of company-community relations than most managers realize. The challenge is to use local contractors as much as possible, and there are various methods that can help achieve this.

  • Integrating local contractors into project design should begin from a project’s pre-feasibility stage;
  • the removal of bureaucratic and administrative obstacles
  • the providing of seed capital to Entrepreneurs;
  • Sustainability should be built into local content strategy;
  • Local content may be integrated into corporate management systems;

Effective contracting policies will result in fewer complaints about contractor behaviour, communities crediting the company with the provision of opportunities to local contractors, the

company receiving requests from local contractors for pre-qualification training, local contractors understanding why they did not obtain a contract, fewer force majure claims and local contractors reporting an increased ability to gain outside contracts.

Community Consultation and Negotiation

Three elements are essential to positive engagement:

  • Relationship;
  • Procedure;
  • Content

Relationship – The relationship needs to be respectful, and transparent.

Procedure – There needs to be clarity and agreement about the procedures of engagement.

Addressing all three elements will allow companies and communities to move towards common goals.

Respect and trust are high priorities for communities and created by effective community consultation. Indicators of effective community consultation may include the following:

  • people reporting that they feel listened to, and that the company takes their concerns seriously;
  • people reporting that the consultation process is respectful, participatory and inclusive;
  • minority groups reporting that their interests are represented;
  • both company and community say the other is their partner, not an opponent;
  • a lack of sabotage/strike action due to community unrest

Community Projects/Development 

As a basic guiding principle, community development should seek to build a portfolio of strategic programmes with long term economic development strategies, rather than making one-off, reactive investments. Delivery of strategic effect will be vital in terms of acquiring an effective Social License to Operate, as well as ensuring community support in the locality of mining operations.

There is no correlation between spending on community projects and the health of company community relations.  Getting community projects right requires, first of all, acceptance of the complex mix of economic and political factors involved in true sustainable development.

Clear objectives must be determined for community projects, with a strategy devised that links such objectives to the business case. Projects must form part of a business process that ensures programmes are aligned with corporate objectives – the Creation of Shared Value as directed by corporate HQ.

Unless projects are integrated into this strategy, there is a danger that they fragment and lose momentum, due to pressure from other stakeholders. Clarity on goals and strategies provides clarity about what communities can and cannot expect.

About the Author

Mark Jenkins advises clients on Corporate Social Responsibility (CSR), security and risk management issues affecting the viability of on and off-shore energy, mining and infrastructure sector projects in Europe, the Middle East and Africa. Mark’s experience has been focussed on creating reliable community support for projects through the development of a Social License to Operate (SLO) based on effective CSR initiatives. The success of these initiatives has been based on a thorough understanding of local environmental, commercial, and cultural dynamics, especially Islamic ones.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

Click here to read Part I of this series

Click here to read Part II of this series

Click here to read Part III of this series

For a PDF of this blog click here

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FURTHER REFLECTIONS ON THE INTERNATIONAL NUCLEAR LAW ASSOCIATION GATHERING IN ABU DHABI

The reports from the International Nuclear Law Association (INLA) gathering in Abu Dhabi, from my colleague at Prospect Group William Wilson, have made for interesting reading. At the INLA conference there was a whole session on nuclear liability and insurance which covered interesting and pertinent topics, but some of the other papers also caught my eye.

Nuclear Damage Compensation

Professor Dagauchi of Japan’s Waseda University highlighted the current state of compensation following the Fukushima nuclear accident.

He reported that to date, the amount of compensation paid to accident victims had reached approximately $80 billion. The entity established to handle claims was the Nuclear Damage Compensation Facilitation Corporation and its funds have largely been provided by the Japanese Government, with repayment due over time with future recoveries from the Japanese nuclear operators.

Although there is certainly more compensation to be paid out, Professor Dagauchi notes that 85% of cases so far have been settled largely without dispute, and this is attributable to, in part at least, TEPCO’s ‘positive attitude towards proposals for settlement’. However, part of this positive attitude includes leaving the way open to claims against TEPCO from the existing claimants for any further damage occurring in future. TEPCO had little choice but to accept this future potential liability in order to ensure claims were settled.

Radiation Measurements

In another INLA paper by Roger Coates (President of the International Radiation Protection Association), entitled “A Practitioner’s View of Radiation and the Law”, the complexity of the current radiation measurements are noted as being confusing and maybe contradictory, with dose limits for man-made radiation often much lower than actual doses received by the public from natural sources.

Mr Coates points out that this has resulted in operators and authorities spending vast resources on achieving compliance so that small numbers of people receive tiny doses, whilst hundreds of thousands of people can go on vacation in high radon areas and receive higher doses. This confusion matters because, as the paper points out, although the risk from low doses is assumed to be very small, there remains scientific uncertainty as to the level of risk from radiation at low doses.

Nuclear Accident Insurance

From the perspective of an insurer, both these papers demonstrate some of the uncertainties that exist for the providers of financial security to the nuclear industry. This uncertainty is one of the reasons why a financial gulf exists between the $80 billion plus cost of a nuclear accident at Fukushima and the c. $1.2 billion statutory financial security available in Japan.

Not having a clear understanding of how much compensation will be paid, and when it will be paid, holds back insurers, who cannot easily estimate the loss scenarios required for their capital models. If political or public pressure leads to a wider scope of compensation being paid after the event (as in Japan), this can make a material difference to the insurers’ commitment.

Similarly, if inconsistent dose limits mean much greater expenditure is required to remedy nuclear damage, nuclear exposure compares unfavourably to other classes of insurance with more certain claim patterns.

Clarifying these (and other) issues in advance of a future accident will help to attract more insurance support to the nuclear sector. With greater certainty, over time the level of private insurance available for severe nuclear accidents could begin to catch-up with the tens of billions of dollars readily available for other more regularly occurring catastrophes.

Mark Tetley, Prospect Law Ltd

About the Author

Mark Tetley has wide experience gained from senior positions across the London insurance market as both an underwriter and a broker , in a variety of sectors. He provides advice and assistance on a wide range of insurance and risk issues, including comprehensive nuclear liability and property insurance assistance, complex infrastructure project programme design and review, claims and policy reviews, assistance with project insurance design and implementation in developing countries, and many other aspects of risk mitigation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

Articles by William Wilson

Part 1

Part 2

Part 3

Part 4

Part 5

Part 6

Part 7

For a PDF of this blog click here

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CREATING SHARED VALUE IN COMPLEX ENVIRONMENTS: PART III

Part III of this series will cover corporate engagement with NGOs and the need for formal engagement at the outset, between NGOs and corporates on various CSR initiatives. There will also be an overview of the indications of a positive NGO-Corporate relationship, as well as discussion of the need to integrate a grievance procedure when consulting local communities.

NGO-Corporate Engagement

NGOs, in general, are operating at more levels, and becoming better organized and increasingly connected internationally. Corporate engagement with an NGO is often poorly thought out, and more concerned with public relations and corporate image than with engaging to correct mistakes.

Companies must recognize that NGOs often raise issues that need to be addressed, and that local communities will work with people who are most likely to solve problems. In a sense companies and NGOs are in competition with each other for the favour of local communities. This reality can give companies a great deal of control over how effective outside critics can become.

A mechanism needs to be developed for listening to the local voices that NGOs claim to represent, and there needs to be a focus on the objectives that companies and advocacy groups share.

Not all NGOs are anti-corporate. Some are keen to work with companies on issues relating to transparency, human rights, environmental preservation, development and humanitarian action. It is good to involve NGOs before a company finds itself subjected to campaigns. When a company highlights its positive efforts only after a campaign has already been launched against it, it loses credibility and allows critics to easily dismiss those efforts as a cover up. Formal structures need to be in place for engagement between NGOs and companies, so that those NGOs do not feel the only avenue through which they can affect company behaviour is via lawsuits or the media.

NGOs should be invited to help set company standards and audit company policies, practices and impacts. Such a policy can act as insurance for a company against future lawsuits. Where there are disputed facts companies and the relevant NGO should work towards agreement. NGOs are very good at identifying and voicing problems, but less good at identifying solutions. One useful tactic is to get NGOs to specify appropriate benchmarks of improvement.

Signs of a Positive Relationship

Finally, NGOs do not always represent the view of the communities they claim to represent. Sometimes it is worth calling their bluff! Indicators of positive relationships between a company and NGOs will include:

  • Community members, not NGOs, voicing community perceptions in media outlets;
  • A company being invited by NGOs to attend meetings;
  • NGOs accepting invitations from companies to attend meetings;
  • Credible NGOs asking to work with company;
  • NGOs publicly acknowledging that company is trying to address issues of concern;
  • NGOs start to use company’s best practices as examples in their discussions with other companies.

Establishing Effective Grievance Procedures

The establishment of a transparent and predictable grievance procedure is an important part of an effective community consultation process. An effective grievance procedure provides an indispensable tool for communities and companies to address difficulties in a non-confrontational manner. When stakeholders feel they have no mechanism for addressing problems in a peaceful manner, they turn to confrontation.

The key principle to designing a grievance procedure is respect for those submitting grievances. The process of handling a grievance is equally, if not more, important to the complainant than the outcome.

Grievance Procedures:

There are six characteristics of a respectful grievance procedure:

  • The process must be clear and transparent – a Company should provide feedback to the person who has submitted the grievance at each stage of the procedure;
  • The procedure must be accessible – the place where people can submit a grievance needs to be public and available to anyone in the community. Forms and processes need to be simple and clear;
  • Submitting a grievance must be safe and be seen to be safe – no one should face any danger or penalty for submitting a grievance, and the company must respect requests for anonymity;
  • The processes should be predictable and include a timetable – people should know when and how the community will respond to them and how they can inquire about the status of a grievance. Complainants should sign an outcome form both to acknowledge receipt and to confirm the grievance was handled in a respectful manner;
  • The procedure and the outcomes should be consistent;
  • The procedure should include a recourse mechanism – a company can establish committees or arbiters to ensure fair outcomes when there are disagreements.

Hiring

Issues surrounding jobs can become major sources of tension, and contribute to the loss of a Social License to Operate. In order to prevent hiring policies becoming an issue, short -term employment opportunities for local people should be maximised. Most communities know that very few of them can meet the standards for managerial/skilled positions.

At the same time Companies should show a willingness to invest in long term local employment opportunities. This can be achieved by supporting the education system, committing to local hiring targets and helping local people get officially certified for skills they already possess.

Hiring policies also need to address distributional impacts, and ensure that retrenchment processes are perceived as respectful and fair. Transparency in all hiring related matters is vital.

Part IV

Part IV will cover a company’s approach to the acquisition of land and negotiations about land compensation, as well as contracting policies, the impact of these on company-community relations, and the need to use local contractors where possible. There will also be an overview of the need to incorporate long term economic development strategies into community projects.

About the Author

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

Mark Jenkins advises clients on Corporate Social Responsibility (CSR), security and risk management issues affecting the viability of on and off-shore energy, mining and infrastructure sector projects in Europe, the Middle East and Africa. Mark’s experience has been focussed on creating reliable community support for projects through the development of a Social License to Operate (SLO) based on effective CSR initiatives. The success of these initiatives has been based on a thorough understanding of local environmental, commercial, and cultural dynamics, especially Islamic ones.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

Click here to read Part I of this series

Click here to read Part II of this series

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REFLECTIONS ON THE INTERNATIONAL NUCLEAR LAW ASSOCIATION CONGRESS IN ABU DHABI (PART 7 OF 7): NUCLEAR TRANSPORT

Prospect has been invited to attend the bi-annual meeting of the International Nuclear Lawyers Association (INLA) in Abu Dhabi from 4-8 November 2018 – click here to see further information about the event 

On 6th November 2018, The International Nuclear Law Association congress in Abu Dhabi held important sessions on Nuclear Transport.

The following is a sample of the topics covered by the Nuclear Transport section of the International Nuclear Law Association congress in Abu Dhabi on 6 November 2018. We hope to be reporting more fully on this topic on a future occasion.

Tracy Murray, Sellafield Ltd, UK, described ‘Consignor Duties/Obligations During Transport Outside Transport Contracts’.

Khalil Bukhari, International Nuclear Services, UK spoke on the ‘Recovery of Nuclear Material During a Transport Incident – Risk, Liability and Insurance’. 

He discussed the particular transport risks inherent in loading/unloading, entering/exiting ports, canals and high seas, and the strategies for addressing and limiting these risks. He gave one example of a canal authority requiring shipowners to use the canal authority’s pilot, but still subjecting them to unlimited liability for any damage done to the canal. He showed a video of best and worst practice of loading/unloading.

He went on to discuss nuclear transport contracts, when liability passes, liability limits, exclusions and excesses and some of the day to day headaches of nuclear transport in practice. Residual liability issues such as salvage could be very significant. The key lay in careful preparation, and he advocated a focus on avoiding incidents.

Jean-Dennis Treillard, ELINI, France discussed the application of different liability conventions, and their impacts on the practical risks described by Khalil Bukhari. For a nuclear incident, responses would depend whether there was or was not radioactivity leakage. He reviewed the detailed implications set out in the different conventions for a radioactivity release for liability and applicable law. Both the Paris and Vienna Convention were silent about matters such as salvage liability and costs.

Ben Whittard, International Nuclear Services, UK had presented in an earlier session on ‘Cyber Security in Nuclear Transport’.

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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REFLECTIONS ON THE INTERNATIONAL NUCLEAR LAW ASSOCIATION CONGRESS IN ABU DHABI (PART 6 OF 7): RADIATION PROTECTION

Prospect has been invited to attend the bi-annual meeting of the International Nuclear Lawyers Association (INLA) in Abu Dhabi from 4-8 November 2018 – click here to see further information about the event 

On 6th November 2018, The International Nuclear Law Association congress in Abu Dhabi held important sessions on Radiation Protection.

This session of the International Nuclear Law Association congress in Abu Dhabi was highly technical but serious and important.

Roger Coates, OBE, former President International Radiological Protection Association gave the keynote speech on a ‘Practitioner’s View on Radiation and the Law’. This note attempts to do justice to his points, but is written by a non-scientist, who is responsible for any inexactitudes.

He noted that the IRPA had links with 52 Associate Societies in 67 countries and 18,000 individual members. It aimed to be the international voice of radiation protection worldwide.

He showed a slide measuring ‘likelihood of effects’ against ‘radiation dose’. The challenging point was at the lower end of the spectrum, where there was no direct evidence of effects. This was the area of uncertainty in which much regulated activity took place.

The primary aim of the system of regulation was to protect people and the environment from the harmful effects of radiation without limiting its beneficial effects. He ran through the principles of Justification, Optimization and Dose limitation, and Planned, Emergency and Existing exposure situations, ICRP publications and IAEA Standards. He then turned to some of the practical considerations applying to this system.

Mr Coates said that Dose limits are always seen as central to the rules of radiation protection, but in practice exposures are essentially determined by ‘optimisation’. The language of ‘limits’ suggested delineation between safety and danger. Natural exposure for everyone was at least 2mSv/y – but in emergencies 20mSv/y were allowed, which was confusing for the public.

Natural background dose could be increased by individual decision, such as flying, or living in a radon area. But much money was spent, for example, in getting potential doses from radioactive waste down to ‘clearance’ levels.

A ‘trivial’ dose of 0.1microSv/a was routinely required of the system of radiological protection, whereas holidaymakers in Cornwall might receive a few mSv of dosage without thinking about it. The challenge was how to bring that discrepancy into balance.

The principle of Optimisation or the ‘As Low As Reasonably Achievable’ ‘ALARA’ test had been an important and successful principle. But there was a growing concern amongst regulators that interpretation of this principle was moving towards ‘minimisation’. How low is ‘low enough’, when this costs more and more money?

On the concept of ‘prudence’, he illustrated the difference by showing a photograph contrasting the equipment needed to hike on an Alpine glacier with that needed for a stroll round his home village. Multiplying the factors of prudence and taking a conservative view limited the ‘clearance’ of material and escalated costs. He thought that we had to do better to get good value for society.

The ‘graded approach’ was recommended in many standards, such as those governing Naturally Occurring Radioactive Material ‘NORM’ in mining. Material above 1Bq/g was classed as ‘radioactive’ but often constituted little or no risk.

He thought that standards delivered by practitioners were generally higher than basic legal requirements. But he questioned the continuing efforts to spend resources on achieving ever lower levels of radiation at high cost to society.

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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REFLECTIONS ON THE INTERNATIONAL NUCLEAR LAW ASSOCIATION CONGRESS IN ABU DHABI (PART 5 OF 7): NUCLEAR SAFETY AND NON-PROLIFERATION

Prospect has been invited to attend the bi-annual meeting of the International Nuclear Lawyers Association (INLA) in Abu Dhabi from 4-8 November 2018 – click here to see further information about the event  

On 6th November 2018, The International Nuclear Law Association congress in Abu Dhabi held important sessions on Nuclear Safety and Non-Proliferation.

This session was chaired by Carlton Stoiber from the USA, a highly experienced Nuclear Lawyer. Carl is co-author of the IAEA’s ‘Handbook on Nuclear Law’, has helped develop, revise and improve nuclear laws in dozens of countries, and has taught and mentored hundreds of nuclear lawyers through IAEA schools, workshops and publications. Apart from a most distinguished career in public service in the USA, which included fascinating experience at the US Department of Justice during the Civil Rights Movement period, he is also a well known cartoonist, and punctuates meetings with the production of sly cartoons, to general consternation. Working with Carl on the nuclear law in a country in the Far East was a chance to learn from a genuine expert.

Kathryn Rauhut, Stimson Centre, USA discussed the concept of Design Basis Threat or ‘DBT’, and the distribution of responsibilities for security between the state and the operator. She covered the evolution of the DBT concept, from the Cold War and Cuban threats in the 1960s to its modern evolution and NRC requirements for aircraft impact assessment and provision for cyber security. She asked “How do you calculate risk when an AK-47 becomes a laptop computer?”, and discussed emerging threats from cyber attacks.

Jacqueline Kempfer, Stimson Centre, USA, said that on cyber attacks, utilities in Connecticut have reported more than a million probes into their systems, on infrastructure such as pipelines and dams. She argued that it was paramount that operators prepared, and showed that they had met the necessary standard of care. The standard of care required was constantly evolving as technology and the challenges to it evolved. In response to questions, the speakers agreed that the operators were truly in the front line for responsibility to defend against cyber attacks, except possibly in some cases of state sponsored attacks. Participants also discussed the low tech threats from people and insiders, for example causing sabotage or introducing viruses, or unwittingly responding to cyber attacks carelessly and thereby increasing exposure to them.

Anthony Wetherall, National University of Singapore spoke about the Amendment to the Convention on the Physical Protection of Nuclear Materials ‘CPPNM’. This covered physical protection provisions, criminalization and related provisions and international cooperation provisions. The CPPNM had originally focussed mainly on physical protection. The Amendment finally entered into force in 2016. Its provisions included new offences of smuggling and illicit trafficking, new definitions, a new suite of relevant IAEA guidance and a set of fundamental principles.

He discussed the application of the Amendment to international and maritime nuclear shipments, and the levels of protection required, as well as the awareness of their obligations of states where nuclear shipments, export and imports or transit took place in a flagged ship within their legal responsibility.

Abdelwahad Biad, Professor in International Law, University of Rouen spoke about the Treaty on the Prohibition of Nuclear Weapons. He said that the Treaty was prompted by the lack of any real progress in nuclear disarmament, and the failure of Nuclear Weapons States to meet their obligations under the Non Proliferation Treaty for negotiations in good faith to end the arms race at an early date.  It targeted the comprehensive abolition of nuclear weapons. No nuclear power had participated in the conference on the Treaty.

Ben Whittard , Head of Security & Resilience, International Nuclear Services, contributed a paper on the highly topical subject of ‘Cyber Security in Nuclear Transport’.

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here