October 2011 Edition 6       Welcome       This is the latest edition of “Hot Issues” from Burson-Marsteller’s Global Publ...
Singapore: Government seeks feedback on comprehensivedata protection policyThe Singapore Ministry of Information, Communi-...
owned companies. In contrast, the NTP’s “one nation,    policy is implemented, arguing that the omissionsone license” rule...
Danish energy supply will derive from renewable         towards BRIC and emerging markets was alreadyenergy sources. Somew...
South Africa: Information Bill threatens freedomof expression and transparencyThe Protection of Information Bill is design...
Argentina: Advances on e-waste regulationE-waste regulation is steadily advancing in different         Furthermore, the Le...
communications. The group’s forming and momentum           with temporary eviction when unlikely and unwittingis reminisce...
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B-M Hot Issues nr.6

  1. 1. October 2011 Edition 6 Welcome This is the latest edition of “Hot Issues” from Burson-Marsteller’s Global Public Affairs Practice. Every month, “Hot Issues” focuses on 10 new forthcoming legislative or policy issues that will impact business from around our global network of 130+ offices in Latin America, Asia-Pacific, Europe, Middle East, Africa and North America. The public policy dynamics in each country, let alone a particular region can be very different, demonstrated by the different experts we utilize in the countries where we operate. Conversely, there are similarities and you can see this in some of the issues we have picked out. Hot Issues are designed to give you a flavor of our global perspective and should any of the items raise particular interest with you please contact the designated person listed with that issue. Japan: New legislation to open opportunities for renewable energy companies In August, Japan’s parliament, the Diet, passed a new structures that will be put in place under those law to implement a groundbreaking feed-in tariff contracts, and industry observers expect this to be a (FIT) policy for renewable energy that will require the key area of contention for stakeholders across Japan’s country’s 10 regional power utilities to sign on to energy sector, including both renewable energy long-term contracts obligating them to buy electrici- advocates as well as representatives of Japan’s ty from wind, solar, biomass, and other renewable nuclear and fossil fuel industries and electric utilities. energy providers at above-market rates, as well as set Contract durations, environmental restrictions which national targets to increase renewable energy output could limit Japan’s ability to tap geothermal energy over the next decade. However, key policy details for resources, and a vague exemption clause that critics the law, which will take effect in July 2012, remain to argue allows electric utilities to opt out from buying be determined under Japan’s new government that renewable energy too easily are also expected to be could significantly affect the scope and impact of the key areas of debate. FIT legislation. The resignation of Prime Minister Naoto Kan and the Analysts say the legislation could provide a significant recent ascension of Prime Minister Yoshihiko Noda’s boost to Japan’s renewable energy sectors – including new government have cast additional uncertainty the solar, wind, biomass, and geothermal industries – on both the FIT legislation and the direction Japan if debates over final policy details are resolved in will adopt for its broader energy policy. Prime favor of renewable energy advocates. Japanese solar Minister Noda’s government has communicated cell manufacturers like Sharp and Kyocera are expec- a more favorable stance towards nuclear energy ted to be the biggest near-term beneficiaries of the than its predecessor, leading some to expect less final FIT policy, and Chinese and other Asian solar cell significant moves away from nuclear power in favor producers, geothermal technology companies, and of renewable energy sources. Debates on Japan’s foreign wind turbine manufacturers like Vestas, overall energy policy were scheduled to begin in GE, and Enercon that dominate the local wind October, and policy discussions to finalize the details energy market in Japan are also expected to see of the feed-in tariff legislation are expected to significant benefits. begin at the end of 2011. As drafted, the FIT policy will allow the Japanese Minister of Trade and Industry to set long-term contracts requiring Japan’s regional power utilities Contact to purchase electricity from renewable energy Hisaya Katsuike - Hisaya.Katsuike@bm.com producers at above-market prices. The current bill Aaron Packard-Winkler - Aaron.packardwinkler@bm.com does not specify any details concerning the pricing Global Public Affairs HOT ISSUES 1
  2. 2. Singapore: Government seeks feedback on comprehensivedata protection policyThe Singapore Ministry of Information, Communi- The current proposals published by the governmentcations and the Arts (MICA) has published a preliminary would require companies to give advance warning toframework of regulatory proposals to develop a consumers (including what data will be disclosed, tocomprehensive consumer data protection policy for whom, and for what purpose) and gain their consentSingapore. The preliminary framework outlines a before collecting or disclosing protected data. Therange of proposals for public review and commentary, current draft policy framework would also establish aincluding proposals for universal minimum data data protection council to oversee the implementationprotection standards, more stringent data protection and enforcement of the legislation. Details clarifyingregulations for certain industries, differentiated rules who would sit on the council, the full range offor public and private sector organizations, and hefty enforcement powers they would hold, and thefinancial and other penalties for code violations. definitions for different categories of protected data are still being debated.Singapore does not currently have any bindingcomprehensive data protection regulation. Some Consultations are already underway to gain publicbusinesses adhere to a voluntary data protection feedback on the scope of the law’s coverage as wellcode based on OECD guidelines, and others – as proposed data management rules, enforcementlike banks, statistics vendors, online retailers, measures, and the transitional arrangements forand government organizations – are regulated affected organizations. The Infocomm Developmentunder industry-specific data protection laws. A Authority of Singapore (IDA) has also promisedcomprehensive and binding data protection policy is consultations with business stakeholders to addressexpected to force a broad cross-section of industries concerns from the private sector. The governmentand companies that compile customer data to revise has not yet proposed a definitive timetable to movetheir data collection, use, and disclosure practices. the legislation forward, but MICA has announcedGovernment representatives say the new data that it hopes to submit a draft law for parliamentprotection law will curb excessive collection of to consider in early 2012.consumers’ personal data by businesses andattract increased investment in Singapore’s data Contactmanagement and processing service sectors. Evelyn Yeo - Evelyn.yeo@bm.comIndustry observers say it may also increase costs Aaron Packard-Winkler - Aaron.packardwinkler@bm.comand compliance demands for affected companies.India: Government unveils draftNational Telecommunications PolicyOn October 10, Telecommunications Minister Kapil offering Indian-owned firms preferential marketSibal unveiled a draft 2011 National access vis-a-vis their foreign-owned competitors.Telecommunications Policy (NTP) intended tostreamline regulations and boost growth in India’s Analysts characterize the draft NTP as a double-telecommunications sector. The draft policy includes edged sword for telecommunications companies inwide-ranging measures that could significantly alter India. Proposals to allow spectrum trading betweenthe operating environment for both foreign and mobile operators and to liberalize India’s M&Adomestic telecommunications companies in India. regulations - which some characterize as prohibitive -Proposals include revising national telecom have been welcomed by the industry as productivelicensing practices, liberalizing M&A regulations measures to help consolidate India’s crowded mobileand encouraging market consolidation, opening market, increase profit margins, and open newup spectrum allocation and trading practices, and business opportunities for both foreign and Indian- Global Public Affairs HOT ISSUES 2
  3. 3. owned companies. In contrast, the NTP’s “one nation, policy is implemented, arguing that the omissionsone license” rule, which would require operators to provide too much discretion for regulators to makegive up roaming charges that currently account for ad-hoc judgments and create harmful uncertaintyalmost 10% of their total revenue, has been less well for companies and other stakeholders in thereceived. Proposals to provide Indian-owned telecom telecommunications sector.equipment manufacturers with preferential licensingrights and government subsidies to increase their Several stages of consultation and approval remainmarket share at the expense of foreign manufacturers to be met before the policy can be enacted. The draftlike Ericsson, Nokia Siemens, Alcatel-Lucent, and NTP is currently posted for public feedback on theHuawei, who currently dominate the telecom hardware website of the Department of Telecommunications,market, have attracted particular controversy and and the Telecom Regulatory Authority of Indiaopposition from both foreign equipment manufacturers (TRAI) has also promised consultations withand some Indian operators who purchase their telecommunications companies and other privateproducts. sector stakeholders before a revised NTP draft is submitted to the Cabinet Committee on EconomicAnalysts have criticized the draft NTP for failing Affairs for final clearance. The Department ofto lay out crucial policy details on key issues like Telecommunications is targeting a finalized policyspectrum pricing structures, broadband spectrum by the end of 2011.allocation and trading between operators, andproposals to significantly revise industry M&A Contactregulations. Industry representatives have called Aaron Packard-Winkler - Aaron.Packardwinkler@bm.comfor the government to clarify these issues before theDenmark: New centre-left government to change focusThe newly appointed Danish centre-left government, the precautionary principle. Furthermore, theled by the social democrat Prime Minister Mrs. Helle government has promised a referendum to endThorning-Schmidt, will try to set a new direction for two of Denmark’s European opt-outs, namely thoseDanish politics including for Denmark’s involvement on defence policy and justice and home affairs,in the EU and across trade relations. The Government thereby still leaving Denmark outside the Euro.has taken the step of appointing both a Minister for Job creation and growth will be the government’sEuropean Affairs and a Minister for Trade and two main aspirations, and in line with that theInvestment to support the Minister of Foreign coalition has promised renewed focus on exportsAffairs. Domestically, the greatest challenge will be and foreign investments. Most attention will be onto initiate growth and create jobs, and it will be on the BRIC countries, where the government willthis that the success of the new government will be establish concrete strategies for each country, andmeasured. But aspirations are high on other issues initiate a more coordinated effort in these as wellas well, especially climate and energy. as other emerging markets.When it comes to foreign policy, two of the new Domestically the government wants to stimulategovernment’s policies call for particular attention: growth by investing more in the renovation of The new government has made it clear that it infrastructure and by improving the business wants Denmark to be a pioneering country within environment through greater competitiveness of the EU on issues such as consumer protection and Danish businesses and attracting foreign companies. food safety. In particular, it is expected that the A specific objective will be job creation within green government will focus on using the REACH pro- technology, which goes hand-in-hand with the high gram to tighten European laws on chemicals. This aspirations of the government when it comes to will put emphasis on a stricter interpretation of climate change and energy policy. By 2020 the the precautionary principle alongside focus on the government wants 50% of Danish energy to derive so-called cocktail-effect that takes the cumulative from wind power and to reduce CO2 by 40%. By 2030 effects of chemicals into account when applying coal will no longer be used and by 2050 the entire Global Public Affairs HOT ISSUES 3
  4. 4. Danish energy supply will derive from renewable towards BRIC and emerging markets was alreadyenergy sources. Somewhat surprisingly, the new initiated by the former government, so implementationcentre-left government has promised to lower of this will also take form over the coming months.Danish income taxes, currently the world’s highest, On the energy agenda, the government has promisedto stimulate growth and job creation in the country. immediate action and will put forward a comprehen-This will most likely be financed by higher green sive plan of action on climate change by 2012, includingtaxes and taxes on unhealthy food. specific goals for reduction of CO2 in those sectors not covered by the EU Trading System (ETS).The government took office on October 3rd andwill have a busy time over the coming months.Apart from formulating a new budget for 2012, thegovernment has to prepare for the EU presidency Contactand decide on issues to bring forward when it takes Janus Lodahl - Janus.Lodahl@bm.comthis over on January 1st. The strategic approachHungary: National Protection PlanHungarian Prime Minister Viktor Orbán is moving particularly amongst poor, often Roma, communitiesahead with his “National Protection Plan”. Shocking in provincial Hungary. Orbán said the Criminal Codethe international banking industry with his plan to will be amended to allow for the more efficientallow foreign mortgage payers to clear their prosecution of loan sharks. Furthermore, the totaloutstanding forex debts at a discount rate of annual cost including interest and service chargesexchange, Orbán said the new proposal would be of any personal loan will be capped at 30 per cent.a further step towards mitigating the Swiss francmortgage problem. Further proposals include Cheaper utilitieslimiting the charges which banks can pass on to The government plans to introduce a system ofclients, and the fixing of a transparent level of central control that strictly limits the prices, utilitymortgage interest linked to a benchmark rate. companies (water, sewerage, refuse collection) charge to consumers. Electricity and gas are alreadyFinancial Protection Plan regulated.The “battle” against Hungary’s sovereign debt hasbecome a mantra for Orbán’s government over Work programme for the unemployedrecent months. While not necessarily approving of Orbán said that public works schemes for theits methods, the cabinet’s strategy that the budget long-term unemployed will be stepped up next yeardeficit has to be reduced to below 3 per cent has met if current trial runs prove successful. Farming, energywith general market approval. Rescue loans from the and large-scale national investment projects will beIMF and the EU will be paid back this autumn to the able to draw upon those who stand to lose welfaretune of EUR 3 billion. The prime minister added that benefits - up to 300,000 could join the scheme nextHungary is seeking EU approval for a change in year. The prime minister also suggested that in-kindVAT on agricultural products. Only affecting firms, payments may be phased in to replace current cashnot private individuals, the buyer would be support for those living on state support.responsible for passing on the VAT to the taxman.The government also wants Brussels to agree to a35 per cent VAT band for luxury items (the current EUmaximum is 25 per cent, the current rate of sales taxin Hungary). ContactUsury Severin Heinisch - s.heinisch@chapter4.atThe first part of the plan involves a crackdown Attila Pakolicz - a.pakolicz@chapter4.huon loan sharks, known to be a serious problem Global Public Affairs HOT ISSUES 4
  5. 5. South Africa: Information Bill threatens freedomof expression and transparencyThe Protection of Information Bill is designed to effectively gives government officials wide powersprotect certain information from destruction, loss to prevent disclosure in the interest of ‘nationalor unlawful disclosure; to regulate the manner in security’. Dubbed the ‘Secrecy Bill’, these ‘secrets’which information may be protected; to repeal the need to be better defined to prevent abuse of power.Protection of Information Act, 1982 (enacted duringthe apartheid era); and to provide for matters The Bill has been postponed for further consultationconnected therewith. after intense public scrutiny and vocal opposition.However, the Bill in its current form contains a The legislation is expected to be concluded at thenumber of problematic provisions that establish end of 2011.serious hurdles for media, civil society and businessin terms of obtaining information on government Contacttenders, official corruption, mismanagement and Sandiso Shabalala - S.Shabalala@arcaybm.comgovernment service delivery issues. The BillColombia: New consumer statuteColombia’s Congress recently passed the new According to the Superintendent of Industry andconsumer statute, which attempts to update the Trade, Miguel de la Calle, the new consumer statuterules that regulate consumer-producer relations with should help to change the Colombian buyers’the aim of guaranteeing that the rights of citizens mentality, creating a new culture of complaint thatcome before the interest of manufacturers and sellers. does not currently exist. For instance, in PanamaThis law combines the growing trend of protecting there are 100 claims every 100,000 inhabitants. Inconsumers’ rights globally and adapts them to the Mexico there are 124 claims every 100,000 inhabitants.economic and social reality of Colombia. But, in Colombia only 24 claims every 100,000 buyers were registered. The Government’s aim is to moveThe body of the statute introduces several new from 25,000 to 40,000 claims a year.features to protect the consumer. It states that theproducer be held responsible for damage or a product This new law represents an opportunity for alldefect. It obliges retailers to offer a guarantee on all companies that are looking for or are planning togoods and services sold in the country, and creates a launch a new program to enhance the relationshipmechanism which easily enables consumers to with their customers. It is also critical to consideraddress protection issues. It also establishes that the new regulation when preparing and planningthose advertising products have specific obligations advertising and general communicationsto the consumer and introduces the right of first regarding products.refusal for all purchases made at a distance, whetherby internet or telesales, whereby the consumer doesnot have direct contact with the product. In thesecases, the buyer may return the product if it isdefective or does not correspond with the offer. ContactThe law also establishes that a minor is only able to Miguel Angel Herrera - miguel.herrera@bm.compurchase online with permission of his or her parents. Global Public Affairs HOT ISSUES 5
  6. 6. Argentina: Advances on e-waste regulationE-waste regulation is steadily advancing in different Furthermore, the Legislature of the province of Buenosjurisdictions in Argentina. Earlier this year, the National Aires recently approved its own regulation on e-wasteSenate approved and passed to the Chamber of management. It is focused on reuse of the wastes andDeputies for review the first national initiative to creates different provincial registries for manufacturingregulate a manufacturer’s responsibility for waste companies and e-waste managers. It also states thatproduced from their electrical and electronic devices. consumers who buy new electronic devices or homeThe initiative will be debated in the Chamber of appliances may take their old ones to the same shopDeputies, with the Natural Resources Committee to be delivered to e-waste managers and introducesexpected to begin its analysis in November, after the concept of waste classification as it bans individualthe recent national elections. consumers and companies to give e-waste the same treatment as general solid wastes.The project creates a new government body, fundedby mandatory contributions from manufacturers of In Santa Fe, the provincial government establisheddevices that generate e-waste. This body will define its own e-waste recycling program through an NGOthe specific costs associated to each kind of e-waste. which works with unemployed young people. The cityEach company will be allowed to submit its own of Buenos Aires also recently launched a program toe-waste self-management program, which will be recycle computers to be donated to public schoolsevaluated with the potential to lower payments to aided by the voluntary participation of the privatethe new government body. It will be headed by a sector.representative of the National Secretary ofEnvironment and will include five representatives of The e-waste issue is firmly on the public and politicalthe manufacturers, two representatives of the Federal agenda and the debate is intensifying. This presentsEnvironment Council (by appointment of the local a notable opportunity for companies to join theministers of Environment from each province), a discussion, through their chambers and associations.representative of the National Institute of IndustrialTechnology (INTI) and a representative of the mostrelevant association of industry and commerce. Theregulation also bans the sale of products containing Contactlead, mercury, cadmium and chromium among other Diego Campal – diego.campal@bm.comsubstances.U.S.: Sorry, it’s occupied -Wall Street protest sparks international movementThe Occupy Wall Street social protest, which began as labor leaders are paying close attention to the Occupya criticism of what the activists believe is the financial movement. “The labor movement needs to tap intosector’s involvement in perpetuating income inequality the energy and learn from them,” influential unionand social injustice, has grown more vociferous, more leader Stuart Applebaum told The New York Times.organized and more active as its message inspires “They are reaching a lot of people and exciting a lot ofcopycat actions around the United States and around people that the labor movement has been strugglingthe globe. While the group claims to remain leaderless to reach for years.” The popularization of the Occupyand has still failed to articulate the concrete outcome movement offers the labor movement the opportunitythat it seeks, it has succeeded in gaining more to rewrite its agenda. The AFL-CIO’s communicationsnotoriety and enlisting the support of other credible director defined this as a “crystallizing moment” fororganizations and individuals who sympathize with the labor movement, providing it with a new way tothe call for social change.  excite younger people with its message.Notable among those supporters are labor leaders. From a communications perspective, Occupy WallWith union membership continuing to fall each year, Street seemingly employs the full spectrum of tools,now less than seven percent of the private workforce, from cutting edge technology to the most primitive Global Public Affairs HOT ISSUES 6
  7. 7. communications. The group’s forming and momentum with temporary eviction when unlikely and unwittingis reminiscent of the Arab Spring movement that landlords, Brookfield Properties, sought police supportused social media, particularly Twitter, to organize to move the campers in order to allow for cleaning ofdemonstrations and in some cases revolutions that the area. This led to a tense standoff that was resolvedprecipitated significant political change in the Middle when the park’s owners rescinded the request.  East. With a nod to more traditional media, Occupy It’s hard to say what the future will hold for theWall Street also produces a weekly 4-color daily, the Occupations cropping up around the world, and“Occupy Wall Street Journal” to share information whether this new movement will yield any materialwithin the protestor community and educate benefits on Wall Street or Main Street.  Judging bypassers-by.  From a governance perspective, the reactions from political leadership, labor unions, andgroup also displays the same nascent behaviors of business leaders, it’s clear that many seek to capitalizea tribal democracy, with daily assemblies and votes, and harness the “Occupy” zeitgeist to rally support forand a steady stream of speeches and motions to their cause as well.  For organizations in financialguide the collective’s activity.  services, luxury brands or other potential targets of theOn Saturday October 15th, the Occupy Wall Street Occupy protest, it is prudent to update communicationsmovement mobilized 5,000 demonstrators to plans to reflect this new dynamic and be prepared toconverge on Times Square in Midtown Manhattan engage when appropriate to ensure that reason andin their largest show of force yet. This mass protest logic prevails in the face of an emotional social protest. came on the heels of a touring protest that visitedthe homes of well-known moguls throughout the city Contactincluding Rupert Murdoch of News Corp. and JamieDimon of JPMorgan. The group’s occupation of a David Vermillion – david.vermillion@bm.com Amit Khetarpaul – amit.khetarpaul@bm.compark in the Financial District was also threatenedU.S.: Reputation, reliability challenges for the renewables industryOver the last month, the news about the Solyndra damage the industry reputation, they are alsobankruptcy filing and the subsequent federal probe struggling against soft demand and falling prices,of the California solar-panel maker has not only triggering an increasing need to try to reassureembarrassed the White House, but has triggered investors and analysts that this is a temporaryspeculation about the business viability of solar setback rather than a longer-term trend.companies. Solar company stocks have fallen In the short term, the solar industry needs to dosignificantly over the past several weeks, making further damage control by separating itself fromthe outlook questionable. Solyndra.  In the medium term, the solar industry andThe near-daily news and commentary has also raised other renewables will need to prepare for dark cloudsquestions about the energy renewables industry in as the 2012 election season commences in earnest andgeneral. The Obama Administration provided the Congressional scrutiny on Solyndra and other federalinitial impetus to jump-start the clean energy sector, support for renewables continue to be used as anti-and Democrats in Congress have largely supported it. Administration political fodder.  For the longer-term,Now, the Solyndra issue offers fodder for political the renewables industry will need to continue clearlyposturing leading up to the 2012 presidential elections. articulating the business case for renewable energy,During the Republican primary season, candidates highlighting success stories such as bringing on-linehave already been taking potshots at the truly utility-scale solar power plants in the AmericanAdministration, and it is plausible that specific West,  and continue to advocate for elimination ofcompanies that have received federal government fossil fuel subsidies.funding will come under more scrutiny during thePresidential debates or through media investigations. ContactWithin the renewables sector the solar industry, in John Kyte – john.kyte@bm.comparticular, is not only fending off criticisms that Amit Khetarpaul – amit.khetarpaul@bm.com Global Public Affairs HOT ISSUES 7