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CHRIS KAYE JOINS PROSPECT’S NUCLEAR TEAM

Prospect is pleased to announce the further development of its multi-disciplinary infrastructure practice through Chris Kaye joining the firm as an expert on the negotiation and management of multi-billion pound infrastructure projects, particularly in the nuclear sector. On behalf of the Department of Energy, Chris led the review of Hinkley Point C’s waste and decommissioning plans, providing advice to the Secretary of State on the approvability of the power station’s Funded Decommissioning Programme, and liaising with private and public sector advisory bodies.

Prospect remains the only regulated firm to offer combined legal and technical services to clients in the infrastructure sector and its position is further strengthened by the addition of Chris Kaye.

Chris has over 40 years experience in negotiating, managing, and assuring the performance of multi-billion pound strategically and technically complex contracts within Government and private sectors. From 2006 to 2016 and prior to joining Prospect Group, Chris was a function head of a major UK Non-Departmental Public Body, where he was responsible for assurance and oversight of the private sector nuclear operator’s decommissioning strategy, planning and costing where the Government has an interest in its funding and risks. This work was primarily directed at assuring the robustness of detailed plans for decommissioning the UK’s most modern nuclear power station fleet and associated spent fuel liabilities, with a total value of c. $25bn.

Chris has also led the assurance, on behalf of the UK’s Department of Energy, of all three of the UK’s new nuclear power plants’ decommissioning plans and cost estimates, in order to support the UK Government’s decision on whether or not to approve the operator’s liabilities funding arrangements for this first of a kind development. This included Hinkley Point C.

Outside the UK, Chris also led assurance reviews of Canadian, Swedish and Swiss nuclear facilities’ decommissioning plans on behalf of their respective governments and has provided consultancy advice to the Taiwanese and Chinese governments and private enterprises. Prior to 2006, Chris worked as an independent consultant on various technical assignments for major clients including the UK Atomic Energy Authority, Arthur D Little and the UK Government, significantly influencing the eventual decision to create the Nuclear Decommissioning Authority (NDA).

Chris also participated in reviews of private sector companies’ performance as part of the UK Business Excellence Award process utilising the European Foundation for Quality Management Business Excellence model. He has also worked in a variety of roles in the UK electricity supply industry. Initially covering waste management R&D and policy, for 12 years Chris led the negotiation and management of all contracts for the supply of uranium, new fuel, and spent fuel management services for the UK’s private sector nuclear fleet. Chris has also been a ‘high risk projects’ reviewer for the UK Cabinet Office Infrastructure and Projects Authority, participating in major government infrastructure projects in overseas construction, justice, immigration, rail franchise and national emergency planning. He is a Member of the Chartered Institute of Purchasing & Supply.

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.       

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.

For more information please contact us on 020 7947 5354 or by email on: info@prospectlaw.co.uk.

For a PDF of this blog click here

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EURATOM

Despite rumours to the contrary, the UK government is now set in its declared determination to leave Euratom at the same time as departing from the EU.

On a political level, maintaining membership of Euratom would entail accepting jurisdiction of the ECJ.

The Government has not demonstrated that it has any desire to consider the absence of legal necessity to leave Euratom at the same time as leaving the EU, or at all. On the other hand, there does also appear to be a gradual recognition of the implications of Euratom exit, including various implications relating to energy security, management of the UK’s nuclear legacy and continued supply of medical isotopes.

It is to be hoped that a sufficient number of Euratom members will have an interest in maintaining a relatively stable UK nuclear industry and will agree to practicable transitional arrangements, allowing the UK sufficient time to develop its own adequate safeguarding arrangements as a basis for negotiation of bilateral nuclear cooperation agreements with the partners on whom the UK relies.

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.

This article is not intended to constitute legal advice and Prospect Law and Prospect Advisory accepts no responsibility for loss or damage incurred as a result of reliance on its content. Specific legal advice should be taken in relation to any issues or concerns of readers which are raised by this article. 

This article remains the copyright property of Prospect Law and Prospect Advisory 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.

For more information, please contact Jonathan Leech and Rupert Cowen on jrl@prospectlaw.co.uk and rcc@prospectlaw.co.uk, or by telephone on 020 7947 5354.

For a PDF of this blog click here

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PROSPECT ADDRESSES THE INTERNATIONAL FRAMEWORK FOR NUCLEAR ENERGY COOPERATION (IFNEC) MEETING IN PARIS

Rupert Cowen, a specialist nuclear lawyer at Prospect Law, has addressed the International Framework for Nuclear Energy Cooperation (IFNEC) Meeting in Paris on the impacts of Brexit on the European Atomic Energy Community (EURATOM).

Click here to download the presentation slides

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.

For more information please contact us on 020 7947 5354 or by email on: info@prospectlaw.co.uk

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INTERNATIONAL NUCLEAR LIABILITIES: THE CHANGING LANDSCAPE

The global nuclear liabilities landscape is changing. The last 2 years have seen significant developments, with the Convention on Supplementary Compensation finally entering into force on 15 April 2015 and significant progress towards ratification of the 2004 Protocols to the Paris and Brussels Conventions.

Please click here to download an article on this subject prepared by two of Prospect Law’s specialist nuclear lawyers, Jonathan Leech and Rupert Cowen.

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.

This article mentioned above remains the copyright property of Prospect Law and Prospect Advisory 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.

For more information please contact us on 020 7947 5354 or by email on: info@prospectlaw.co.uk

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UK GENERATORS: EMBEDDED BENEFITS SUBSIDIES TO BE CUT FOR <100Mw OPERATORS

OFGEM has announced cuts to embedded benefits payable to operators of diesel, biomass and wind generators of under 100Mw, who are seen as key to keeping the grid balanced. The generators often provide back-up power for peak winter demand.

The changes are set to be introduced over 3 years from 2018.

Given the significant impact of this decision we have been approached by clients wishing to judicially review the decision. For further information, or if your business is affected and you wish to discuss your situation, please call Jonathan Green on jng@prospectlaw.co.uk or 020 7947 5354.

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SYSTEMS THINKING, CORPORATE SOCIAL RESPONSIBILITY (CSR) AND CREATING SHARED VALUE (CSV) FOR THE ENERGY INDUSTRY IN THE TWENTY FIRST CENTURY: PART IV

CSR, CSV and their Influence on Corporate Decision Making

In my fourth article I consider ways in which CSR/CSV dynamics can affect corporate decision making in the energy sector, looking in particular at the example of Eni and how it has approached the matter of climate change.

Papua New Guinea is experiencing one of the largest capital investments in its history through the Papua New Guinea Liquified Natural Gas Project. The country must put in place the necessary governance and accountability mechanisms to ensure that the benefits of this investment are captured and fairly distributed among the nation’s stakeholders. At the same time, business needs a working regulatory framework in place.

In addition to making substantial direct investments in local human capital, workforce skills and enterprise development, it is important for the projects success to work with government to strengthen the enabling business environment, improve infrastructure and build capacity on revenue transparency, revenue management and broader development planning and implementation. This is an example of the kind of project that extractives companies are currently involved in across the world. Their project timelines extend over decades, and rely on the communities and countries in which they operate for success.

The sector often operates in isolated, remote areas that lack effective local and national governments and offer few public services. The societal and business imperatives to create shared value are undeniable.

The issue of climate change is of increasing importance for extractives companies, when considering ways in which they can create shared value with society. Otherwise they face the very real possibility of losing their Social License to Operate, as well as revenue as climate change starts to impact on the world. Eni is an example of an energy company which has faced up to the reality of climate change, and the conclusions of the Paris Conference, in order to preserve its viability as a business.

Eni has responded to the climate change challenge with the development of its model for the sustainable development of energy resources, and the company’s new mission: a model able to combine financial solidity and social and environmental sustainability in order to face the dual challenge of maximizing the rising demand for energy and fighting climate change.

This model has focused on cooperation with the countries in which it operates, minimizing risks and the impact of its activities, as well as defining a clear road map towards a low carbon future. Eni has acknowledged the need to limit temperature increases below 2 degrees centigrade, outlining a strategy based on a carbon footprint reduction, low carbon portfolio and a commitment on renewables – while at the same time maximizing access to energy. Development projects for residents in areas of its upstream activity are crucial to the company’s strategy, including economic diversification, health care, access to water, education and infrastructure development.

The old model of CSR is dead. It has been replaced by the idea of the Creation of Shared Value – an idea to drive the very core purpose of companies. The increasing fragility of the nation state is a leitmotif of the twenty first century, as decentralization, devolution, globalization, political deadlock and austerity all combine to reduce the power of national governments to significantly impose their will on development. The opportunities for companies to increase profitability by adopting business models based on the concept of CSV are enormous.

In this blog I have considered the relevance of CSV to governance and accountability issues, and how Eni has responded to the challenges posed to the energy sector in terms of how it creates shared value.

By Mark Jenkins

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.

This article is not intended to constitute legal advice and Prospect Law and Prospect Advisory accepts no responsibility for loss or damage incurred as a result of reliance on its content. Specific legal advice should be taken in relation to any issues or concerns of readers which are raised by this article.

This article remains the copyright property of Prospect Law and Prospect Advisory 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.

For more information please contact us on 020 7947 5354 or by email on: info@prospectlaw.co.uk.

For a PDF of this blog click here

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SYSTEMS THINKING, CORPORATE SOCIAL RESPONSIBILITY (CSR) AND CREATING SHARED VALUE (CSV) FOR THE ENERGY INDUSTRY IN THE TWENTY FIRST CENTURY: PART III

The Relationship between CSR and CSV, and Ways in which these can add value to Corporate Decision Making

In this third article I look at the relationship between CSR and CSV, and consider ways in which CSV can add value to corporate decision making by energy companies. In my previous article I considered ways in which energy companies can create shared value, move from quantitative to qualitative growth and reorder their relationship with the environment to one based on regenerative activity, rather than the maximisation of profits.

Corporate Shared Value approaches acknowledge trade-offs between short-term profitability and social or environmental goals, focusing on the opportunities for competitive advantage from building social value propositions into corporate strategy.

CSV approaches differ from CSR ones in that, while they share the same basis of doing well by doing good, CSR is about responsibility and CSV is about creating value. CSV creates income by being a better capitalist, rather than being a good corporate citizen.

Professor Michael Porter has said:

“Extractives companies are major sources of income and economic growth. Oil and gas and mining operators, suppliers and related supporting industries represent an estimated five per cent of global gross domestic product. Three of the world’s ten largest companies are extractives companies. Although companies in this sector have a decidedly mixed record on social and environmental issues, they have helped create more vibrant economic development, new businesses, new jobs and opportunities for professional growth, reductions in the disease burden and more effective government. Close to four million people are employed by mining companies alone. ”

Reserves are often found in remote areas with limited economic activity and major societal needs. Operations require massive inflows of capital that often dwarf local economies. Companies and suppliers inevitably have multiple points of interaction with local communities, and yet the huge economic output of the extractives sectors has not always translated into improved social and environmental outcomes for the countries and communities where these companies operate. Nigeria is emblematic of this missed opportunity. Despite the presence of major oil companies in Nigeria since the early 20th century, the country still ranks among the bottom 20 per cent of countries in the HDI and its GDO per capita was 180th in the world in 2013.

Billions of dollars are being lost by extractives companies as a result of community strife, despite extensive community relations programmes.

“The norm is to respond to conflicts by focusing on the visible causes of tension – protects, permit delays, negative media coverage, and demands from local influences – so called on technical risk. Companies spend hundreds of millions on social investment projects even though research shows little correlation between the amount of money spent and the success of company-community relations. Investments based on community wish lists and attempts to placate the loudest voices in a community have led to ever shifting community requests, unilateral projects that have little impact, prioritizing image over outcomes, and missed opportunities for business and community alignment. Companies track dollars disbursed rather than societal outcomes.”

Aligning the business interests of extractives companies with community needs and priorities is the only real solution for companies and communities alike.

Extractives companies need to approach communities in a manner based on shared value. Shared value cannot substitute for shoddy operational performance, environmental damage or poor ethics. However, it offers a shift in purpose for these companies in the places where the resources are extracted.

In this way new businesses are produced, together with more vibrant economic development, new opportunities for professional growth, reductions in the disease burden and more effective government to facilitate the long term development of the community in which the company operates.

Shared value is the next competitive advantage. Competition in extractives will increasingly be determined by the ability to integrate economic and social factors.

In this blog I have looked at ways in which corporates are increasingly formulating their strategy in terms of the creation of shared value, rather than corporate social responsibility. I have also examined the relevance of CSV to business development strategies for the energy sector, especially in terms of mitigating the effects of community strife. In my next article I will consider ways in which CSR/CSV dynamics can affect corporate decision making in the energy sector, looking in particular at the example of Eni and how this company has approached the challenges of climate change.

By Mark Jenkins

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.

This article is not intended to constitute legal advice and Prospect Law and Prospect Advisory accepts no responsibility for loss or damage incurred as a result of reliance on its content. Specific legal advice should be taken in relation to any issues or concerns of readers which are raised by this article.

This article remains the copyright property of Prospect Law and Prospect Advisory 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.

For more information please contact us on 020 7947 5354 or by email on: info@prospectlaw.co.uk.

For a PDF of this blog click here

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SYSTEMS THINKING, CORPORATE SOCIAL RESPONSIBILITY (CSR) AND CREATING SHARED VALUE (CSV) FOR THE ENERGY INDUSTRY IN THE TWENTY FIRST CENTURY: PART II

In this article I look at the connection between ecological and systems thinking, and why it is that the illusion of perpetual growth is at the heart of the global crisis of affairs. Systems thinking argues for a transition from growth that is quantitative to growth that is qualitative.

To read Part I, please click here

Capra believes that mankind needs to relearn ecological thinking, which he defines as “the science of the relationship between the members of the Earth’s household.” Capra says that biological networks are in the realm of matter and that social networks are in the realm of meaning, which leads to non material outcomes like culture and values. Capra believes that mankind is currently shifting from a machine view of life to one based on networks. In Capra’s systems thinking there is a concept of spontaneous emergence of new order. For this to happen there need to be networks of communication and an openness to outside influence.

Fundamentally, Capra believes that the essential dilemma of our times is the illusion of perpetual growth. He says that the pursuit of this goal is the root cause of the current crisis of global affairs:

 “At the heart of corporate structure is the mandate to maximize returns for shareholders, even if this means sacrificing the well being of employees, the prosperity of local communities and the protection of the planet….the driving force of the systemic crisis is global capitalism-itself a network of financial flows, designed without an ethical framework. It promotes limitless growth and excess consumption, because these fuel profits. Underlying this system is not only economic growth but also corporate growth.”

Capra argues for a shift from quantitative to qualitative growth:

“Qualitative growth enhances the quality of life through regenerative activity- through cooperatives and other forms of ownership focused on supporting life, rather than on maximizing profits.”

This shift from quantitative to qualitative growth is at the heart of current thinking about how to create shared value. Companies can create shared value opportunities in three ways.

First, through the re-conception of products and markets in order to meet social needs while better serving existing markets, accessing new ones and lowering costs through innovation.

Secondly, through the improvement of the quality, quantity, cost and reliability in inputs and distribution while simultaneously acting as a steward for essential natural resources, and driving economic and social development.

Thirdly, by enabling local cluster development in order to ensure reliable local suppliers, a functioning infrastructure of roads and telecommunications, access to talent and an effective and predictable legal system.

In this article I have considered ways in which energy companies can create shared value, move from quantitative to qualitative growth and reorder their relationship with the environment to one based on regenerative activity, rather than the maximization of profits. In Blog 3 I will look at the relationship between Corporate Social Responsibility (CSR) and Creating Social Value (CSV),  and consider how CSV can add value to corporate decision making by energy companies.

By Mark Jenkins

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.

This article is not intended to constitute legal advice and Prospect Law and Prospect Advisory accepts no responsibility for loss or damage incurred as a result of reliance on its content. Specific legal advice should be taken in relation to any issues or concerns of readers which are raised by this article.

This article remains the copyright property of Prospect Law and Prospect Advisory 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.

For more information please contact us on 020 7947 5354 or by email on: info@prospectlaw.co.uk.

For a PDF of this blog click here

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SYSTEMS THINKING, CORPORATE SOCIAL RESPONSIBILITY (CSR) AND CREATING SHARED VALUE (CSV) FOR THE ENERGY INDUSTRY IN THE TWENTY FIRST CENTURY: PART I

In this first article I look at what is meant by “radical engagement” with society, and also the relevance of Systems Thinking to CSR, and the energy industry.

John Browne, former CEO of BP, estimates the risk for a company having the wrong relationship with society, of neglecting those aspects of their activity that go beyond narrowly legal requirements at about 30 per cent. He advocates a policy of “radical engagement” as the basis for how companies should engage with society, using four main principles:

  • Businesses do well when they have a good understanding of the world around them, and of their place in the world;
  • Businesses need to understand better how to communicate their total contribution to society – activities that make a social contribution should be construed as being part of a company’s central purpose;
  • CSR and sustainability should be “part of the performance contract of a business and evaluated as such”;
  • In an interconnected world it is important not to engage or communicate only when you have to. Business engagement with society should be radical, not grudging and episodic.

One of the issues that has changed in corporate policy making is the notion that profit should be an “outcome”, rather than the goal of commercial life.

The question of “purpose” and “meaning,” and the role of “value” are at the heart of Fritjof Capra’s systems approach. Capra’s work has been heavily influenced by the insights of quantum science, in particular the work of Werner Heisenberg, author of “Physics and Philosophy.” Interviewed about the influence of Heisenberg on his work, Capra said:

“…the exploration of the atomic and subatomic world brought them in contact with a strange and unexpected reality. In their struggle to grasp this new reality, they became painfully aware that their basic concepts and language, indeed their whole way of thinking were inadequate to describe atomic phenomena. The problems were not merely intellectual, but amounted to an intense emotional, and one could even say, existential crisis. It took them a long to overcome this crisis, but in the end they were rewarded with deep insights into the nature of matter and its relation to the human mind.”

Capra’s systems thinking originates in this intellectual crisis of the 1920s. Out of that crisis came the realization that there are no fundamental constituents of matter. Instead everything is a web of connection and interrelationship. Solutions to the world’s current multiple crises cannot be isolated. They must be interconnected.

Capra says:

“The problem of energy cannot be solved by finding cheaper sources of energy. If we had hydrogen fusion right now, or some new energy source that was cheap and safe, all our other problems would only get worse. If you fuel a system that is out of balance, you have just the same system but on steroids. We would damage the rainforests, deplete the ecosphere, pollute the air and increase health problems. In other words, the energy problem is also a health problem and a food problem and a water problem.”

John Browne believes that energy companies must engage radically with society. He believes that profit should be an outcome, rather than the goal of corporate decision making. The systems thinking of Frithjof Capra has much to say in relation to debate about meaning, and purpose. Furthermore, it advocates an approach to strategy that considers energy issues within a wider context than the industry itself.

In my second article I will look at the connection between ecology and systems thinking, and why it is that systems thinkers believe that the illusion of perpetual growth is at the heart of the global crisis of affairs. I will examine the possibility that society needs to transform its understanding about growth from one that is quantitative to one that is qualitative.

By Mark Jenkins

Prospect Law and Prospect Advisory provide a unique combination of legal and technical advisory services for clients involved in energy, infrastructure and natural resource projects in the UK and internationally.

This article is not intended to constitute legal advice and Prospect Law and Prospect Advisory accepts no responsibility for loss or damage incurred as a result of reliance on its content. Specific legal advice should be taken in relation to any issues or concerns of readers which are raised by this article.

This article remains the copyright property of Prospect Law and Prospect Advisory 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.

For more information please contact us on 020 7947 5354 or by email on: info@prospectlaw.co.uk.

For a PDF of this blog click here