Are businesses responsible for the health of employees?

May 25th, 2011 Mar Posted in Articles, Culture, General No Comments »

Recently in France, an appeals court upheld (link is in French) a ruling in which the carmaker Renault was found guilty of “inexcusable fault” in the suicide of one of its employees in 2006.

A lower court had found last December that Renault had done nothing in the face of obvious signs (lack of appetite, loss of weight, listlessness) that the employee was emotionally unstable and a suicide risk.  It found that his symptoms were directly linked to the increasing pressures he faced at work. Among these were constantly rising targets and increasing pressures from his superiors over his work on an ongoing project.  The technician jumped from the 5th floor of a Renault building in 2006.

The French court’s upholding this ruling – and consigning the company to continue to pay the deceased’s wages to his widow and son — raises important questions about the extent to which a company must “protect the health and well being” of its employees.  Here in Hong Kong – where the employer—employee relationship is a one-way street in which the employer “says” and the employee “does” – could we imagine such a verdict?

What sacrifices must be made in the name of a “good economy” and “favorable business environment”?


Getting one’s point across using “unconventional means”

April 13th, 2011 Mar Posted in Articles, General, Greenwash No Comments »

So now we know that its outrageous to use “in your face”, confrontational protest techniques to get one’s point across. Government officials are claiming that use of such techniques really goes too far.

But let’s take a step back and look at the bigger picture.  Resorting to unconventional means is a reflection that the conventional no longer works.  People don’t use extreme methods as a first choice.  Give people a reasonable means to raise concerns, and they will, in most cases, take it. Witness functioning democracies around the world.

However,  Hong Kong’s “conventional” means to raise issue just don’t yield results,  and people know this.  Public consultations seem procedural and policies don’t follow that are in line with the public’s view.   Instead, policies result from closed-door consultation between bureaucrats and those who have money, influence and vested interests.

There are multiple examples that we could refer to.  Witness the government’s failure to protect public health through revised AQO guidelines and a realistic pollution abatement policy, notwithstanding the science, health and statistics.  It just doesn’t happen.  Or the URA’s lopsided thinking that urban renewal has to be profitable for the developers involved?  Or the government’s tacit approval of and MPF system in which the account holders (ie the public) don’t have a say on how their earnings are managed?

The government colludes with private capital and private interests using means that are technically legal and legitimate, and certainly very polite, while actively denying the public of an effective means to protect its own interests.  In such a situation, isn’t it understandable that one would resort to unconventional means?


Why recession is good for the planet

November 22nd, 2010 Mar Posted in Articles, Climate change, Earth, General No Comments »

One more piece of evidence that our growth-at-all-costs mentality is bad for the planet:  last year’s recession resulted in a drop in CO2 emissions by 1.3%, as reported in the specialist journal Nature Geoscience and subsequently by National Public Radio.

In short, the economy as currently structured – where reward is calculated without regard to current and future environmental and social impacts, and where growth is predicated solely on expansion of material outputs – is bad for the earth.  It may also be bad for people too.  Recall that poverty rates increased across the board last year too, except in emerging Asia which largely escaped the worst impacts of the recession.

It doesn’t have to be this way, and leading economists seem to agree.  The Commission on the Measurement of Economic Performance and Social Progress headed by Nobel Laureates Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi, suggested to restructure GDP around metrics that would reflect human or social development (quality of life), environmental sustainability, as well as economic development.

Of course, measurements of GDP under such a framework would probably look vastly different from our current measurements.  Logically, there are opponents all around, not only economists, but also businesses that have invested billions to achieve growth as currently structured.  Change may need to be gradual; people need time to adjust.  But we’d better start today, before we destroy the only planet we have.


What will you consume today, and why?

October 28th, 2010 Mar Posted in Articles, Culture, Earth, General No Comments »

Richard Welford has a timely, and also timeless, post on the CSR Asia website about the consumption conundrum: that is, if we know that excessive consumption is not environmentally sound or sustainable, how can an economy built around consumption ever be sustainable?  Indeed, CSR Asia’s sponsors include many companies who profit handsomely from an economy in which continually increasing consumption is viewed as good and where decreasing consumption is a cause of concern.

The post raises a key challenge:  how to reduce consumption among the rich and increase consumption among the poor. Unspoken is the need to restructure the economy so that increased consumption is not an automatic positive; we should instead be looking at the quality of that consumption, i.e. whether it is socially equitable and environmentally sustainable.

Producer labels and standards– e.g. FSC , Fair Trade and the like– can help by giving consumers signals about the sustainability of products that they buy.  But the real task is for each of us to rethink why we are consuming — and to reorient our consumption to be closer to need than to want.


Don’t clear your conscience just yet

August 19th, 2010 Mar Posted in Articles, Climate change, Greenwash No Comments »

The Wall Street Journal Asia weekend edition reviewed the Porsche Cayenne S Hybrid, proclaiming “Porsche takes a big step into being green.”  Just how big a step is that?

The Cayenne is a top-of-the line SUV which would normally be called a gas guzzler/emblem of conspicuous consumption. By using hybrid technology in the engine and adding electronic controls to cut fuel drain, the Cayenne hybrid achieves a 25-30% improvement in fuel economy, or around 23/26 MPG city/highway (9-10 litres per 100 km).  Porsche also boasts that the Cayenne hybrid reduces CO2 emissions to “just 193 g/km”.  This is significant, given that any other car with an engine larger than 4 litres will normally emit well over 200 and sometimes 300 g/km CO2.  These figures appear to be significant improvements indeed.

But, before you run out to buy the car in order to brush up your green credentials, do consider several factors which are conveniently disregarded in the WSJ write-up.

First, the environmental impacts of a vehicle include not just the fuel economy and CO2 emissions while operating, but the CO2 emissions and resources consumed in production.  The auto industry largely reports only on the CO2 emissions from their own facilities, but given that most auto parts have been outsourced to third party suppliers, it’s clear that a lot is excluded a priori.  Even under these conditions, the CO2 emitted in the auto brand’s own facilities is estimated to account for 15-20% of the auto’s total CO2 emissions over a life of 15 years.   The Cayenne Hybrid is five tons of steel –even a rough counting of the emissions from components and manufacturing come to much higher than just 20%.

Second, while the hybrid model emissions are an improvement upon the baseline 6-litre model, 193 g/km CO2 is still very high.  The EU is considering legislation which would put a cap on CO2 emissions of just 120 g/km for the majority of passenger vehicles. Non-hybrid sedans emit between 100 and 150 g/km.  Automakers argue that larger vehicles deserve a higher cap, which may be true when applied to buses and vans, but in the consumer segment, there are good reasons why choosing an SUV (over a sedan) is not a necessity, but rather an environmentally poor choice which should bear costs.

The US is the largest SUV market in the world, and it’s no surprise that US autos emit an average of 255 g/km CO2, compared to 130.8 g/km for Japan and 140 g/km for Europe.  Bringing these numbers down significantly requires that people steer clear of environmentally bad choices like SUVs, rather than looking to make marginal improvements on bad choices.  But this would be bad for Porsche, so they just don’t mention it. Indeed, any company that benefits from an economy in which rising consumption is good and in which happiness is defined in terms of possessions, would lose if it told consumers the truth about their choices.

Thus, we are subject to a constant stream of misinformation that peddles a fundamentally unsustainable product as something clean and green.  Don’t buy it.


Fair value and fair societies

August 16th, 2010 Mar Posted in Articles, Building, Earth, General No Comments »

With all the discussion about property prices and the many problems it spawns – such as the rising gap between the rich and the poor, mental illness and overwork from living in pint-sized apartments and spending hours in a metal tube getting to and from work, disillusionment amongst youth at the prospect of never owning their own home—it is worthwhile to step back and ask:  just how bad is the situation?  Is it all huff and politicking, with various interests using property as a way to advance their own agendas?

It’s always a good idea to start with facts.  The  Economist looks at “fair value” of property in major economies, which is based on comparing current ratio of house prices to rents, with its long-term average.  In other words, this will tell us how much the current situation is out of line with the long term.

The chart shows that prices in Hong Kong have risen the 2nd most globally on a year-on-year basis, exceeded only by Singapore.  But on a fair value basis, Hong Kong’s property is extremely overvalued, again ranking 2nd.  Hong Kong’s fair value reading is 53.6, with 0 being fair value, i.e. Hong Kong property is at 53.6% above its fair value.  And despite the much reported rise in Singapore property prices, prices are just 20.3% above long term trends.

We already know that Hong Kong’s residential property prices are already among the world’s highest—exceeded only by Monaco and London. What the Economist chart tells us is that things are getting worse, and that we are hitting the extremes of our own trends.

But this is not a “political” blog; so does it have anything to do with sustainability?

One of the keys to a sustainable society is that its citizens feel that what they give is justly in line with what they get, or at least that they have the prospect of reaching such a stage; and that the economic and ecological products of this relation can be sustained over time.  So long as high property prices end up disenfranchising more and more people, we should “call a spade” and say that the trend is unsustainable.

Hong Kong’s double whammy is that most of the building are also environmentally unsound in construction and operation, while producing no economic benefit to society at large (though they do produce profit for a small number of operators).  We need both environmental and economic sustainability.  In Hong Kong’s property market, we get neither.


Needs, aspirations, and the local property market

August 13th, 2010 Mar Posted in Articles, Building, General No Comments »

The South China Morning Post recently discovered that the largest developers are getting bigger and cornering the market for new flats (see an extract of the original article here). Although the article is hardly news to the large numbers of Hong Kongers who work hard, pull down a good salary, and still can’t buy a decent-sized flat, it is nice that it is given such prominence – a front-page billing–  since it does stand as stark evidence that the government’s effort “to respond to the aspirations and the needs of our citizens” is yielding limited results and may even be counter-productive.

Today the paper followed up with an editorial in which it analysed the situation correctly, in that our high property prices are due to the government’s land policy but which produces high property prices which then cascade through the rest of the economy and function like an indirect tax on the population.  The editorial also mentions that the government’s land policy also places disproportionate power (and profits) in the hands of the real estate sector.

As a solution, the SCMP proposes that the government increase the supply of land and sell it off in smaller parcels, thereby enabling more developers to bid to create competition in the property market. Here I realised that the SCMP should just stick to news. Does anyone really believe that the smaller property firms are less single-minded than the larger firms?  If anything, the smaller firms would have less “reputation” at stake and would therefore be more likely to cut corners, renege, and generally engage in unsanitary behavior.   That explains why China chooses to close 2000 small mills and steel plants, rather than persuade them to abide by national policy when they lack incentives and resources. Consolidation can actually clean things up.

In essence, property developers operating under a single fixed framework will vary only incrementally in their actions. It’s like arriving at the airport in the US and seeking a rental car.  There are 10 firms, but surprisingly, they all offer more or less the same package because they operate under the same framework and conditions.  Would adding an 11th or expanding counter space change the nature of the game? Buyers probably would not notice the difference.

Without changing the policy framework and rules of the land policy, expanding supply and changing the nature in which it is sold off will have only a marginal impact on the pricing and availability of flats. Solutions to this problem will only come by admitting that the current system does not provide for the “aspirations and needs of our citizens” and then fixing it, both from a supply and demand point of view, while not undercutting those who have already become homeowners.

First up must be to end the high-land price policy — gradually – and for the government to fund itself from sources more common for an advanced industrial society, namely income.  Having to pay more income tax isn’t as bad as it sounds:  if you only had to pay 15% of your income on housing, rather than 35%, wouldn’t you be glad to cough up a few extra dollars for the government?  First, you would end up ahead. Second, the government is actually obliged to do something useful with the money, whereas the property developers just pocket it as profit. So those gains come back to you indirectly.

Second must be to force speculators to pay the social costs of their speculation – in the form of tax on short term flipping (meaning less than 3-5 years) and greater rights for tenants.

Third would be to end the biases in government which have produced policies that further entrench the power of the real estate developers, such as the Urban Renewal Authority partnership programme, the mainland investors scheme , and the like.

It seems that enough people in positions of power know that the current land/property system is failing.  The key is whether they will have the political will to overcome vested interests, and do what is right for the majority of people in Hong Kong.


A commercial crime, depending on who you are

July 28th, 2010 Mar Posted in Articles, Building, General No Comments »

The Commerce and Economic Development Bureau (CEDB) has just started a public consultation on potential legislation to enhance consumer protection.  To enhance consumer protections, the Department proposes that under new legislation (for consideration in 2010-2011), unfair trade practices such as “bait and switch”, misleading omissions, aggressive sales tactics, and phishing (collecting money with no intention to deliver service) be prohibited and punishable by law.

Great ! you say.  With so much supposed pressure on property developers to be honest, one might be forgiven for thinking that the government is finally backing its rhetoric with the force of regulation.

Wrong again. The mooted legislation has already excluded finance, property development, and professional services – three of the most egregious offenders of the above tactics—from consideration, with the supposed excuse that these sectors are otherwise regulated by statutory bodies.

What justifies an exlusion a priori?   If the above tactics are so bad, shouldn’t they be punishable and forbidden across the board regardless of which department is responsible for enforcement?   And if those statutory bodies are doing their jobs, these unfair practices shouldn’t be allowed at all, and so forbidding them in another legislation would not really make a difference or add to anyone’s workload.

Or is this simply another vehicle that can be used to fry the small trader, while much greater offenses are quietly settled and suppressed after months of “investigation”?

Submit your views to the CEDB by October 31 by post (to Level 29, One Pacific Place, 88 Queensway, Hong Kong), fax (2869 4420), or e-mail (cpr@cedb.gov.hk).


Environment at the margins of policy

April 19th, 2010 Mar Posted in Articles, Climate change, General No Comments »

When we pointed out Hong Kong’s lack of an integrated sustainability strategy, we may be accused of speaking loosely.  Technically, Hong Kong does have a “first sustainable development strategy” published in 2004 under the Sustainable Development Unit, under then Chief Secretary Donald Tsang’s office.

The document, put together after input by key government departments and a range of “advisors” defined a broad-based sustainability strategy as comprising just three areas of action:  solid waste management, renewable energy development, and urban living space.  Even within this narrow scope, the strategy failed to define more than a few short-term moving targets.  The SDU was then re-cast as the Council for Sustainable Development, which has, since then, published reports on “progress” on the three areas and conducted numerous public engagement exercises.

For all the good intentions, nearly 7 years on, we’re basically back where we started, although we have many more studies to tell us where that is.

That you may have trouble placing these groups is not surprising.  Indeed public policy that challenges vested interests in Hong Kong is subject to the same marginalisation.  By putting all the sustainability concerns into one committee, the government has effectively gotten them out of the way:  the Council can come up with ideas that can be ignored.

In the same way, mandating that the EPD advocate single-handedly for environmental concerns is also fruitless because it gives other departments the go-ahead to ignore these issues in their work. The EPD operates at the fringes of policy whereas the other bureaus — Transport, Home Affairs, even the URA — have concrete (!) agendas, power and resources.

Those active in business will tell you corporate sustainability will fail unless the concern is embedded across and within a company’s operations – particularly at the level of strategy and design.  If sustainability remains in the “CSR” department, it will languish as a fringe concern.  The government needs the same treatment, and it must be led from the top.

As a side point, we can look at Singapore’s Inter-Ministerial Committee on Sustainable Development (IMCSD), which published Singapore’s sustainable development blueprint in 2009, a substantive, comprehensive document for the short and long term.

The IMCSD is co-chaired by the Minister for National Development and the Minister of Environment and Water, and although it has just three other members, they are all “heavy hitters”:  finance, transport, and trade and industry.  Clearly, Singapore understands that sustainability is about competitiveness and requires policy with teeth and environmental leadership.  Further, the committee’s compact structure mitigates against free-riding and compels each of the members to commitment and action.

Singapore is not perfect, but on sustainability, there’s no contest.  How will this affect our future?


No vision, no progress

April 18th, 2010 Mar Posted in Articles, Building, Heritage No Comments »

The April 2010 issue of  architecture and design magazine Perspective Monthly contains a transcript of its annual Green Roundtable, which brought together five local professionals to discuss Hong Kong’s progress towards becoming a sustainable city.  There are different views on the roles of the government, the private sector, and consumers in creating the movement towards a sustainable community.  This is surely an important debate, but one that will be in vain unless we can agree on what the goal is.

The roundtable pointed out that one of the glaring absences in Hong Kong is the lack of a master, integrated plan for a sustainable city.  For a city of this size and wealth, Hong Kong’s lack of a strategic vision in sustainability may be exceptional. Not only do we lose the opportunity to openly discuss what we want as a community going forward – thereby clearing space for bureaucrats to create their own visions together with their various friends and interest groups—but we also lose the chance to question whether the current institutions are sufficient to get us there. Singapore, KL, Seoul and most of the major metropolises in China have it — where does that leave Hong Kong?

More about the magazine and a preview of the current issue is available here