Future Drought Fund’s first round of spending for farmers announced by Federal Government


The Federal Government has revealed how it will spend the first round of its $5 billion Future Drought Fund, designed to help farmers better prepare for dry times.

This round of money will assist farmers to become more financially savvy, while also funding better climate data information, research and development, and natural resource management.

Federal Agriculture and Drought Minister David Littleproud said the Government would allocate $20 million to help farmers develop and improve their business plans.

Mr Littleproud said refining financial literacy will work together with investment in a climate data service.(Supplied: David Littleproud)

“But our job as a Government using Australian taxpayers’ money is to give our farmers the very best tools possible to make them even more profitable.”

The Future Drought Fund was first announced in 2018 and allows the government of the day to provide $100 million each year for preparedness and so-called resilience programs.

Mr Littleproud said “refining farmers’ financial literacy” would work together with a $10 million dollar investment in a new, online climate data service, tailored to farmers’ needs.

He said the digital platform would provide “regional specific climate data” to allow farmers to make “real time decisions that gets them ahead of drought rather than behind it”.

Looking through a barbed wire fence to desolate paddocks as trees are pummelled by wind. Dust haze on horizon paints out the sky
Wind is blowing topsoil away and farmers fear it will take years for some landscapes to recover.(ABC News: Lucy Barbour)

The announcement comes after a Government-appointed committee, headed by former National Farmers’ Federation president Brent Finlay, conducted a six-week tour of rural communities to find out how farmers wanted the Future Drought Fund spent.

“This is not about whittling away money,” Mr Littleproud said.

“We as Australian taxpayers have a proud record of having a safety net, and that’s what we provide to not only Australian farmers but to the individuals out there to have a safety net when things don’t go your way.”

Farmers welcome climate data spend

Wool grower Oliver Kay, who farms at Bungarby in southern New South Wales, questioned whether money should be spent teaching farmers how to develop business plans.

“Farmers should be doing that themselves already, that’s just a no brainer,” he said.

“So there’s no excuse for any farm business not to have clear plans for the path based on what’s happened previously.”

But Mr Kay welcomed the investment in an online climate data information service, which would likely draw on information from the Bureau of Meteorology, the CSIRO, and the Department of Agriculture.

Another $20 million dollars will be spent on drought research and development, and $15 million on natural resource management.

That could include grants for individuals and farmer groups to improve their local landscapes by maintaining ground-cover and improving soils.

South Australian pastoralist Gillian Fennell said the Government had “done business plans to death” and would have preferred to see money spent on improving farm and town water infrastructure.

“There’s no amount of business planning that will help you get rain out of the sky and help you get water onto your crop or your cattle or sheep,” she said.



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Top super funds increasingly vote down climate resolutions


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Investors are increasingly using their voting power to put emissions reductions targets on the agenda at annual general meetings. Woodside Petroleum was hit with a record-breaking investor push in April to slash emissions and link executive pay to reduction targets. In the same month, more than 43 per cent of shareholders at oil and gas giant Santos’s AGM defied the board in a vote to set harder targets on carbon reductions.

Shareholder resolutions are non-binding in Australia, although chief executive of the Australian Council of Superannuation Investors Louise Davidson said directors take protest votes seriously. “If you see those big votes on the day, they do lead to changes in behaviour,” she said.

The ACCR report examines publicly available voting records of Australia’s 50 largest super funds that control a total of $1.8 trillion in assets. It found overall support for climate resolutions in 2019 was down, with AMP, MTAA and Media Super all supporting less than 10 per cent of proposals through the year.

“It’s pathetic, really. It really suggests they are not paying attention. If they are just following advice, perhaps they should be looking at the quality of this advice,” Mr Gocher said.

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Institutional investors often rely on advice from proxy firms to guide voting decisions and Mr Gocher said in some cases, the funds simply agree with board recommendations.

“The super fund industry generally has gotten so big, so they need to be more accountable. For these funds that are controlling tens of billions of dollars to not have a view or express that view is poor.”

At BHP’s annual meeting last year, AustralianSuper, Unisuper and Mercer were the only three funds to vote against a resolution that asked the mining giant to exit memberships of lobby groups considered to undermine the Paris Agreement goals, according to the report.

AustralianSuper’s environmental, social and governance director Andrew Gray said the fund had engaged with BHP on the proposal and decided involvement with industry groups such as the Minerals Council was necessary to encourage emissions reductions.

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VicSuper was among four funds that supported more than 70 per cent of all climate-related proposals last year, including demanding Rio Tinto release a plan to transition away from fossil fuels. It also pushed insurer QBE for greater transparency on climate risks. This is in contrast to First State Super, which voted against 67 per cent of resolutions last year, according to the ACCR report. First State Super and VicSuper will merge at the end of this month to become the second-largest super fund in the country with about $120 billion in funds under management.

The two funds clashed over Origin Energy’s disclosure of coal-related public health risks, with VicSuper voting for more disclosure and First State voting against.

A spokesperson speaking on behalf of the two funds said the merged groups would use First State Super’s responsible investment policy but recent changes meant there would be greater alignment on voting.

“Whilst both funds had different voting and engagement policies and procedures in place, we share very similar objectives and are absolutely committed to the important role that responsible investment plays in helping shape better outcomes for all our stakeholder.”

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Unisuper, another member of IGCC, voted against more than half the climate-related shareholder proposals between 2017 and 2019. It comes as its sustainable fund has been criticised for holding a major stake in Rio Tinto following outrage over the blasting of a 46,000-year-old Aboriginal rock shelter site in Western Australia.

A UniSuper spokeswoman said it had been discussing climate change with Australian companies for the past decade and considered shareholder proposals where material risks associated with climate change were not disclosed.

Ms Davidson said measuring the number of shareholder resolutions approved by super funds was not indicative of their commitment to climate change as some proposals lacked merit.

“Shareholder resolutions are quite a blunt instrument and in our view sometimes failure to support a shareholder resolution is because the resolution itself isn’t too good,” Ms Davidson said. “I genuinely believe super funds are more focused now on climate change than they ever have before and that is leading to change at companies.

“Sometimes it is slower than everyone would like but at the same time change is happening.”

An AMP spokeswoman said the wealth manager held more than 80 company engagement meetings in 2019 over ESG issues, many about climate change and that it abstained from voting on resolutions that advocate for constitutional changes at companies.

“There is no doubt that shareholder concerns around climate change are on the rise, both in Australia and abroad. We look forward to continuing our constructive engagement with companies as to how, collectively, we can meet these expectations into the future,” the spokeswoman said.

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From beekeepers to giant pension funds, activist shareholders are being silenced by the coronavirus


Christoph Koch didn’t get into activist investing to boost his stock portfolio. He did it for his honeybees. 

In the spring of 2008, the German beekeeper nearly lost his livelihood when his bees started dying—at first in small numbers, then in big bunches. Up and down Germany’s Upper Rhine valley, honeybees perished by the millions. It became national news, triggering an investigation that pinned the likely cause of death on the pesticide clothianidin.

Even before the die-off, most beekeepers and farmers knew all about clothianidin, a bestselling insecticide developed by Bayer Crop Science, a division of the German agrochemical giant. It’s designed to keep crop-munching pests out of the cornfields. A growing body of scientific research, though, says the pesticide does real harm to pollinators like honeybees too. Clothianidin is the neonicotinoid family, so named because it’s chemically similar to nicotine, and some pollinators get hooked on it, studies show.

By the spring following the great bee die-off, Koch had become a Bayer shareholder and started protesting at annual shareholder meetings (AGMs, as they’re called) in Bonn. In subsequent years he got inside, where he addressed the board directly at the AGMs. 

Each year Koch makes the strip to Bonn to confront the company that he says killed his bees. 

In recent years, he’s escalated his broadsides against Bayer management. Last spring he took to the podium to criticize the company for its $63 billion merger with Monsanto, saying it’s neither good for Bayer’s bottom line nor for the health of Europe’s honeybees.

Beekeepers are a huge activist force in Europe. And for good reason. According to the European Commission, insect pollinators—in particular, the honeybee—are an economic marvel, contributing 22 billion euros in value to Europe’s agriculture sector. With so much on the line, Koch’s presentation at the Bayer AGM was eagerly awaited. When it was his turn to speak, he urged fellow shareholders to vote out the board. “Ladies and gentlemen,” he implored, “be brave and show the red card!” 

The German beekeeper Christoph Koch speaks to German media outside the 2019 Bayer AGM in Bonn. He has been attending annual shareholder meetings since 2009.
Courtesy of Christopher Koch

He was hardly the only Bayer investor who was in a foul mood last year. Outside the AGM meeting hall, all manner of protesters showed up. There were other aggrieved beekeepers, teenage Fridays for Future climate activists, and shareholders disgruntled by the stock price. The Roundup weed-killer lawsuits were sinking the share price, and change was in the air. “It was the biggest protest I’ve ever seen. And I’ve been protesting there for years,” Koch told Fortune.

In the end, shareholders issued a rare vote of no confidence against Bayer CEO Walter Baumann, but he clung to his job. 

Koch figured the 2020 meeting, scheduled for late April, would be the perfect time to pile on the pressure.

He never got that chance: This year, annual shareholder meetings are, by design, off-limits to shareholders. 

A protest banner reading “Bayer and Monsanto: Stay away from our land” hangs from a tractor during a demonstration outside the 2019 Bayer AG annual general meeting in Bonn.
Jasper Juinen—Bloomberg/Getty Images

Shareholder activism in the age of COVID

The coronavirus has effectively muzzled activist protests. Since the work-from-home revolution took hold, there’s nobody in those glass buildings to protest anyhow.

And, by order of social distancing rules, AGM meetings (those that haven’t been canceled) have nearly all gone virtual, presided over by a few company executives and their IT staff. In Germany, a last-minute federal law required companies to change the rules for AGMs.

Koch and his fellow Bayer activist shareholders weren’t completely muted. Bayer allowed shareholders to submit questions to the board in advance; 245 were read aloud at the AGM. But speechifying, a tradition at shareholder meetings, was nowhere to be found on the agenda.

“I know shareholders would have wanted their chance to speak” as in the past, said Tino Andresen, a Bayer spokesperson. “But we did answer all their questions. Two-hundred-forty-five is quite a big number.”

Dissatisfied with the new rules, Koch posted a trio of protest videos to YouTube. Combined, they have generated less than 500 views. He was hoping for a bigger bang. 

“They did respond to my question,” he said, “but it’s not what I had in mind.”

Shareholder rights

Annual shareholder meetings are a vital date on the corporate calendar. In many parts of the world, for example, companies need to schedule a shareholder resolution to vote on keeping the board of directors intact, or any matters that involve shareholders’ stock ownership—from raising new capital to executing buybacks. “In Germany, without a shareholders’ resolution, there would be no dividend for the year. You also need a shareholder vote to authorize the management to repurchase treasury shares,” says Staffan Illert, a Düsseldorf-based partner at Linklaters.

In normal years, it’s convenient to hold such weighty votes at an AGM, when a quorum is present. AGMs are also a big deal because they give influential shareholder groups the occasion to press for change: to push, for example, for a greener business model, to promote gender and racial diversity on the executive team, or to advocate for a reshuffle of a less independent-minded board.

COVID-19 has largely silenced this kind of stakeholder activism, though. Companies are experimenting with more interactive Q&As, but when you’re trying to push for meaningful change, Zoom hardly cuts it.

“In order to allow for shareholders meetings to happen at all this year, substantial cuts in shareholder rights, including the right for information and the possibility to file counter-motions, needed to be made,” said Illert. “Hence, there is substantial criticism from shareholders and shareholder associations. I would be surprised if the kind of virtual arrangement that we’re seeing this year would become a standard for the future.”

Still, the effect has been a powerful one. According to Lazard, nearly all forms of activist investor campaigns have collapsed since the outbreak of the pandemic. “As corporate behavior and priorities change in this new market paradigm, so too will activists’ ability to publicly agitate for change,” Lazard wrote in its most recent activist investor report. 

Some activists appear more willing to give companies a pass this year, but they’re still wary that some pandemic-era restrictions, matched with the zeal to take more big events on the corporate calendar virtual, could become a new standard.

Being there “does make a big difference”

In the U.S., which has a longstanding tradition of faith-based activist investors, Sister Nora Nash, director of corporate social responsibility for the Sisters of St. Francis in Philadelphia, says she’s making the best of the situation. “So far, so good” is how she describes her experiences with virtual AGMs. On the plus side: She’s been able to sign in and register her question at a battery of meetings, including sometimes multiple per day.

But she adds, “We would prefer not to have virtual meetings, because it does make a big difference.”

Nash is a steady presence at such meetings. She pushes companies on their labor practices, human rights records, and environmental standards. Being in the room brings an extra urgency, she finds. Nash typically mingles with board members before and afterward to get a “different perspective” from the company and other shareholders. Such interactions strengthen long-running relationships, she says. Most of that is lost in a virtual AGM.

Christopher Cox, associate director at Seventh Generation Interfaith Coalition for Responsible Investment in Milwaukee, sees a different danger in social-distancing activists out of the room. It has the effect of exacerbating the shareholder-management divide. Transparent, responsive companies will go out of their way to make the process fair, he says. The rest will take advantage of how a digital format can minimize even the most urgent calls to action.

“It would seem that a company that does not want to face its shareholders can find in a virtual meeting all the tools at their disposal to make sure a shareholder is not heard,” Cox says.

That’s especially troubling as labor concerns over mass furloughs and layoffs amid the pandemic mount, he says. But it’s also a reminder that corporate executives would do well to open their ears to new ideas and raising their standards—wherever they come from.

“Executives of corporations are wise if they allow for the voice of the shareholder,” he says. “They seem to think only really wealthy folk have good ideas.”

But small-time agitators-for-change and Wall Street heavyweights are on the same page in one key area: No companies will get a pass on good governance this year, or ever. “Companies can still demonstrate that they have effective leadership,” BlackRock‘s global head of investment stewardship said in March at the height of the pandemic. “In times of crisis that becomes more apparent, not less apparent.”

More must-read finance coverage from Fortune:



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Hopes microgrid funds will help Indigenous communities move to renewables



A series of feasibility studies will look at how best to shift remote Indigenous communities from diesel to renewable energy microgrids.

The federal government is providing more than $19 million to 17 microgrid projects through the regional and remote communities reliability fund.

It includes projects for Indigenous communities in the Northern Territory, Western Australia and Queensland, as well as a biofuel initiative at a dairy farm in New South Wales.

Energy Minister Angus Taylor hopes it opens the door for reliable, low cost, off-grid power supply.

“This funding will enable many communities to realise the potential of innovative technologies or distributed energy resources, like solar and batteries, or reduce their reliance on costly diesel generation,” he said.

“Lower cost energy is crucial to creating jobs in regional communities.”

The government is also working to develop a local hydrogen industry and has received 36 expressions of interest for a $70 million funding round.

The projects are worth more than $3 billion.

The Australian Renewable Energy Agency plans to announce the successful projects by the end of the year.



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Morrison funds new kitchens — slashes unemployment benefits


A huge number of Australians will be plunged into poverty overnight as others get to renovate their homes — courtesy of the Morrison Government. Tarric Brooker reports.

AS THE coronavirus economic crisis continues to unfold, millions of Australians face the prospect of joining the 1.6 million people already on Centrelink benefits when JobKeeper concludes in September.

To add insult to injury, the Morrison Government’s JobSeeker $550 per fortnight supplemental payment also concludes at the end of September. This will potentially leave millions of people far under the poverty line in an instant, during the worst economic crisis to hit our nation since the Great Depression.

Whether the Government is choosing this course of action due to a genuine belief that the economy will “snap back” to normal – despite warnings from the Reserve Bank and economists that it won’t – or simply due to the ideological priorities of the Coalition’s leadership, it doesn’t really matter, the end result is the same.

A huge number of Australians will be plunged into poverty overnight.

Want a home reno done? 

Meanwhile, the Morrison Government has confirmed it will be offering cash grants to homeowners to renovate their homes, in order to boost the construction sector.

However, builders seem to feel quite differently. In an interview on Monday with 3AW, president of the Builders Collective of Australia Phil Dwyer said he “can’t imagine why” the Government would introduce such a scheme.

Mr Dwyer told 3AW, the building sector is as busy as ever:

“At the moment I think it’s a little bit busier than usual! There’s a heap of renovations in every suburb in this town. I can’t imagine why we would need cash injections to help us. We’re just going to overheat the industry. I don’t think it’s needed.”

Mr Dwyer’s view is supported by the data from the Australian Bureau of Statistics, which shows that spending on residential renovation work was within nine per cent of all-time record highs during the December quarter of 2019 (the latest available data).

Unfunded empathy and a relentless ideological agenda

It’s like our nation has transited to some sort of weird parallel universe, where helping over a million unemployed Australians get back on their feet is unfunded empathy, but handing out large amounts of money for homeowners to renovate their properties is “superior economic management”.

Prime Minister Scott Morrison likes to say that the best form of welfare is a jobbut the number of jobs on offer has collapsed and economists are warning of the economy and labour market heading “off a cliff” when JobKeeper and mortgage holidays conclude. Yet the Government continues to be hell-bent on pursuing its ideological agenda.

The world has changed; the Coalition hasn’t

The reality is, the world has changed and even nations such as South Korea – which were hit with the pandemic early and dealt with it extremely well – are now struggling. Economic forecasts around the globe continue to be downgraded and unemployment predictions revised upwards.

Even with the global economy in recession and despite the United States literally burning under the strain of current events, the Coalition continues to insist that somehow the economy will quickly “snap back” once COVID-19 restrictions are lifted.

As our nation heads into this dark and uncertain future, it’s concerning to think that the Morrison Government may continue to pursue its ideological agenda, regardless of the reality being experienced by everyday Australians.

So far, the proposals put forward by the Coalition Government to kickstart the economy have been variations on the its ideological greatest hits. Including some of their top favourites, such as industrial relations reform, cutting corporate taxes and subsidies for the fossil fuel industry.

Ultimately, it’s a worrying time to be an Australian, as a Government devoid of a grand vision of the future attempts to navigate the largest economic storm in almost a century, while simultaneously continuing to attempt to pursue its narrow ideological agenda.

How this all ends is anyone’s guess, but it seems likely that there will be homeowners who are going to get a subsidised kitchen renovation, courtesy of the Morrison Government, while needy Australians go without even the basics.

Tarric Brooker is a freelance journalist and political commentator. You can follow Tarric on Twitter @AvidCommentator.

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CEO of liquified White Ribbon charity ‘eminently qualified’ to steward taxpayer funds



The previous CEO of White Ribbon Delia Donovan has “walked out of the rubble” of her previous role at the now liquified anti-domestic violence charity, and “straight into a taxpayer funded office,” Sky News host Paul Murray says.

She will now be responsible for the $21 million dollar funding boost which the NSW government has made available for domestic violence services.

NSW One Nation leader Mark Latham said “if you were running White Ribbon and it went broke, you are probably eminently qualified in the eyes of the NSW government to run the publicly funded agency Domestic Violence NSW, because this too has been a public policy disaster and a waste of money.

“We have spent billions as a nation on these domestic violence projects, re-educating school boys and all this sort of totalitarian stuff”.

“It hasn’t had any noticeable impact on anything … because they have had the wrong approach” which is based on the concept “100 percent of men are inherently bad,” he said.

Image: Getty



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Why Norway fund’s divestment from the oilsands could trigger a bigger fund exodus


CALGARY — The world’s largest sovereign wealth fund has divested from four Canadian oilsands companies over concerns about carbon emissions, adding to the woes of the already embattled domestic energy sector.

Shares in Suncor Energy Inc., Canadian Natural Resources Ltd., Imperial Oil Ltd. and Cenovus Energy Inc. all tumbled between 5 per cent and 7 per cent Wednesday after Norges Bank Investment Management, the country’s $1 trillion oil fund, said it would exclude those companies from its portfolio, citing their “unacceptable greenhouse gas emissions.”

The fund reportedly held stock worth $1.15 billion in the Canadian companies at the end of 2019.

The decision is ‘poorly informed and highly hypocritical’

Alberta Energy Minister Sonya Savage

NBIM, which is a unit of the central bank, said it had taken a long time to sell shares of several of the blacklisted companies in a reasonable manner due to the “market situation, including liquidity in individual shares.”

It always sells its holdings before any exclusions are announced, to avoid excessive market movements.

In addition to those four oilsands companies, the fund also dropped Swiss-based Glencore Plc., U.K.-based Anglo American Plc, Germany’s RWE AG, South African petrochemicals firm Sasol and Dutch company AGL Energy. Egypt’s ElSewedy Electric Co., and Brazilian companies Vale SA and Electrobras were also excluded for causing environmental damage.

However, the Canadian oil industry believes the exclusion did not account for the industry’s efforts to reduce emissions in recent years.

“Pulling investments from the oilsands and claiming it’s for climate change reasons is more about publicity than fact,” Cenovus president and CEO Alex Pourbaix said in an emailed statement, adding that the company has cut its emissions intensity by 30 per cent in the past 15 years and plans to cut it by another 30 per cent over the next 10 years.

“Our company is committed to finding solutions to the global challenge of climate change while continuing to be a significant contributor to the Canadian economy through taxes, employment and buying goods and services from businesses across this country,” Pourbaix said.

Oilsands companies have been under unrelenting pressure in recent years to reduce greenhouse gas emissions and improve their environmental performance after a string of European banks such as BNP Paribas, ING and HSBC Plc have also pared back on lending to the industry.

A number of European oil companies such as Royal Dutch Shell Plc have reduced their investments in the oilsands to cut their carbon footprint and pivot toward less intensive forms of energy such as natural gas.

Now, the exit from the sector by the world’s largest sovereign wealth fund with assets, built up through oil revenues from Norway’s offshore oil reserves, further exacerbates that pressure.

Canada’s federal government added to the industry’s woes Wednesday, noting that fossil fuel companies must be more transparent in their approach.

“We’ve seen investors around the world looking at the risks associated with climate change as an integral part of investment decisions they make,” Prime Minister Justin Trudeau said Wednesday, adding that many companies in the energy sector understood the investment climate is shifting.

“There is a need for clear leadership and clear targets to reach on fighting climate change to draw on global capital,” he said.

On Monday, Ottawa rolled out a bridge financing plan for companies with at least $300 million in revenues, which is expected to aid aviation and energy sector.

Companies that ask for the help will also have to show how they are contributing to reducing greenhouse gas emissions over the coming years, tying the cash to the Liberals’ promises on the environment. That will include oil and gas companies that are also facing a hit from a global drop in oil prices.

Suncor, Canadian and Imperial did not respond to a request for comment before deadline.

NBIM is now the highest profile fund to exit the oilsands after a number of university endowment funds divested over the past few years. Japan’s Mistubishi UFJ Financial Group joined a long list of European banks to signal they would reduce transactions in the industry on Wednesday.

Shares in all four companies fell sharply Wednesday morning, but analysts say their tumble was roughly on pace with the broader decline in oil and gas stocks.

“They’re underperforming the market but they’re not underperforming energy,” Eight Capital analyst Phil Skolnick said, adding that “energy is having a really bad day.”

Skolnick said most of the market expected the Norwegian fund to divest from Canadian Natural and Cenovus as it had already signalled it would move away from exploration and production companies in the oilsands, but he said there was a chance that Suncor and Imperial would be spared the exclusion because of their integration with refineries.

It’s becoming increasingly difficult for large fund managers to buy into the Canadian oil and gas industry because large funds try to buy large-cap indexed players and the market capitalization of the domestic oilpatch has shrunk, Brompton Funds senior vice-president and chief investments officer Laura Lau said.

“Part of the problem is there’s no market cap left to buy,” Toronto-based Lau said, noting that companies such as Husky Energy Inc. were now part of the small cap indices.

Lau said Canadian oil and gas companies need to do a better job communicating their efforts to reduce their emissions to prevent the continued exodus of large funds from the sector.

“I think they have to do a better job of communicating. I think they actually have done a good job of bringing (emissions) down but it’s the communication they need to improve,” Lau said.

Norway’s sovereign wealth fund was built up over decades using the proceeds of oil revenues and the country’s state-controlled oil producer, Equinor SA, is planning to ramp up its drilling program this year. As a result, the decision is “poorly informed and highly hypocritical,” Alberta Energy Minister Sonya Savage said in an emailed statement Wednesday.

“As Norway, the 15th largest oil producer in the world, is set to drill more oil wells than ever before, one could only imagine Norges Bank’s decision to be more focused on commercial competitiveness rather than environmental consideration as the world looks for reliable source of oil to fuel the coming decades,” Savage said.

The Norwegian government owns 67 per cent of the shares in Equinor, which is also a joint-venture partner with Suncor in drilling projects in the North Sea and offshore Newfoundland and Labrador.

Equinor spokesperson Erik Haaland said in an email there is “no connection between Norges Bank Investment Management and Equinor” and the two operate independently.

“The decision does not impact Equinor’s relationship with Suncor,” Haaland said.

Earlier this month, Equinor, suspended its forecast but maintained its long-term forecast for average output growth of 3 per cent per year from 2019-2026.

With files from The Canadian Press and Reuters

• Email: gmorgan@nationalpost.com | Twitter:





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‘Pandemic bonds’ squander global health funds for COVID-19


Global health experts say last month’s $133 million writedown on the World Bank’s pandemic bonds is “too little too late” squandering public health resources on paying investors.

The World Bank designed pandemic bonds in the aftermath of the 2013-14 Western African Ebola epidemic, which killed 11,310 people, as a way of financing responses to pandemics in developing countries by transferring risk onto markets.

‘The bonds were the wrong instrument to begin with,’ said Olga Jonas, a senior fellow at Harvard Global Health Institute who worked at the World Bank for three decades.

In July 2017, the World Bank issued $320 million USD in bonds to investors. The bonds include risky and less risky tranches that pay 11.1% and 6.5% interest above the London Inter-Bank Offered Rate (LIBOR) respectively.

High thresholds, such as the number of deaths and affected-countries must be met for the bonds to pay out to the World Bank’s Pandemic Emergency Financing Facility (PEF), who use them to support developing nations fighting pandemics.

The PEF was funded by Australia, Japan and Germany who sit on the PEF steering body responsible for dispersing the funds to low-income countries, alongside the World Health Organisation (WHO), World Bank, Haiti and Liberia. 

Jonas said:

‘The fact that they were triggered late and will now slowly pay out a small amount because of the worst pandemic in more than 100 years does not change this …The core principle of disease outbreak control is early action.’

On April 17th, AIR Worldwide – the risk modelling agency hired by the World Bank to design and arbitrate the criteria for payout – ruled that all $95 million from the riskier tranche A of the bonds and $225 million (16%) of the less risky tranche B would be transferred to the PEF. But they will not be released until May 15th. The decision comes 32 days after WHO first declared a pandemic.

Jonas says the conditions that need to be met to trigger a payout of the bonds is ‘are by design and not predictable by design’.

AIR Worldwide previously ruled on April 11 that the “exponential growth” condition had not been met to trigger a payout. By this time, the global death toll had reached 88,145 and total cases 1,512,439 and investors had received $115 million in coupons.

Dr Felix Stein, a senior research fellow at the University of Edinburgh who studies the financialization of global health security, said, ‘the PEF payout criteria were structured so as not to pay out for pandemics’.

An analysis published in the British Medical Journal found that, over the past 15 years, only two outbreaks would have met the bond’s thresholds for payout: the 2006 Rift Valley fever and Ebola epidemic.

In contrast, the WHO’s Contingency Fund for Emergencies, funded by donor states, has rapidly provided funds to developing nations 66 times since its 2005 creation.

Dr Stein suggested that:

‘The Bank should be much more open about who designed the PEF (Munich Re and Swiss Re) and who invests in it. What relationships exist between groups designing the PEF & investing in it? Munich Re & Swiss Re are themselves major investors.’

The World Bank and AIR Worldwide refused requests to share information on who purchased the bonds.

Information is scarce from the few dedicated catastrophe investors, pension funds and asset managers who admitted to taking part in the scheme.

In a letter to the World Bank’s Executive Directors on April 2, Jonas asked:

Why did the World Bank have to issue the pandemic bonds, which have an extremely high financing cost, especially in this time of low-interest rates? IDA [the International Development Association] has $29 billion in Liquid Assets and a financing capacity of $27 billion/year, so it can promptly finance outbreak responses.

The bonds were oversubscribed 200% in 2017, but it is unclear how positively investors will receive them when they are next issued this July.

Catastrophes bonds are marketed to investors as a way of diversifying credit risk because they are uncorrelated to general markets. However, unlike earthquakes and cyclones, COVID-19 is on track to coincide with a global recession.  

‘This pandemic is a game-changer because of the radical economic effects it has. So the risk diversification selling point is very weak in my eyes,’ said Dr Stein.

Adil Imani, a manager from AIR Worldwide’s Insurance-Linked Securities (ILS) group is more optimistic:

“While any prediction is speculative by definition, we believe this could very well be a catalyst for parties throughout the risk transfer chain to explore ILS as an avenue to better protect themselves against these types of events.”

‘The investors understand the exceptional nature of this situation,’ said Jonas.

She continued:

‘They would buy these bonds again because they were an attractive deal for them. On the other hand, the bonds were a very bad deal for IDA countries and will remain a losing proposition in the future.’

Jeremy Nadel is a student at the University of Melbourne and an aspiring journalist.

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Prince Charles’s charity set to provide funds for child abuse redress scheme


The Prince’s Trust, the charity founded by Prince Charles, is set to provide funds for abuse survivors who make claims under Australia’s child abuse redress scheme.

The Trust had been facing calls to join the scheme itself because of its links to the former child migration charity the Fairbridge Society, which is facing claims under the scheme.

In a statement to RN Breakfast, the Prince’s Trust has now confirmed it has reinstated Fairbridge as an independent body, with the hope it will join the scheme.

“The Prince’s Trust is providing Fairbridge with funds, to give victims and survivors the opportunity to make claims and it is also our hope that Fairbridge will sign up to the Australian redress scheme,” a spokesperson for The Trust said.

“We are in proactive and ongoing talks with the Australian authorities and with the administrators of Fairbridge and we are committed to finding the best way to support the victims and survivors.”

The Prince’s Trust is dedicated to helping young people with education and training.(Reuters: Chris Radburn)

“We categorically condemn all forms of child abuse. Although The Prince’s Trust has never had any involvement in child migration schemes, we once again want to say we are deeply sorry for the hurt and suffering experienced by victims and survivors.”

Australian man asks Trust to join

The Prince’s Trust had been asked to join the scheme by 67-year-old Australian man Christopher Crooks, who was abused in the late 1950s when he was living in a Tasmanian children’s home operated by the Fairbridge Society.

An elderly man with a grey beard, wearing a blue shirt standing outside looking into camera.
Christopher Crooks was a child migrant to Australia, and after he arrived was placed into a care home in Tasmania.(ABC: Dwayne Wyles)

In 2012, the Fairbridge Society was rolled into the Prince’s Trust, a global charity founded by Prince Charles, who now serves as its president.

Mr Crooks said if the Prince’s Trust signed up to the scheme, it would be a major win for him and other former child migrants with claims against Fairbridge.

“Because I don’t think anybody cares.”

Mr Crooks has welcomed the statement from the Trust.

The National Redress Scheme was set up in the wake of the Royal Commission into historic child sexual abuse as a way to compensate the tens of thousands of people who were abused as children in the care of institutions around Australia.

The Australian Government has set a June 30 deadline for charities to indicate if they will join the scheme.

Other Fairbridge survivors could now come forward

The Fairbridge Society was founded in the early 20th century and was deeply involved in child migration, sending British children to live in other parts of the Commonwealth including Canada and Zimbabwe.

Between 1947 and 1965 alone, it sent nearly 1,000 children to homes across Australia.

Mr Crooks is one of thousands of child migrants who moved to Australia from the United Kingdom in search of a better life.

Along with his sister, he arrived in 1958, travelling ahead of their mother.

A black and white photo of a large house, raised above the ground on stumps.
The Tresca home in Tasmania was operated by Fairbridge and housed child migrants who arrived from Britain.(Supplied: National Archives of Australia)

The children were transported by the Fairbridge Society and placed in a facility they operated called the Tresca home.

It was in the care of the home Mr Crooks was physically abused by the warden, Harry Richmond and his wife Lily.

He received an apology from the Tasmanian government and $23,000 in compensation in 2006.

He was later also paid 20,000 pounds by a British scheme set up to compensate child migrants.

But Mr Crooks said the full extent of the abuse he suffered has never been recognised.

He launched an application under the National Redress Scheme and said he was sexually abused on three occasions while under the care of Fairbridge.

Although Mr Crooks says the sexual abuse took place during an unsupervised trip away from the Tresca home, his lawyers believe he may have an eligible claim under the scheme.

An elderly man wearing a blue shirt and jeans bending down to pat a dog
Christopher Crooks said he had found it difficult to trust people.(ABC: Dwayne Wyles)

Even six decades later, Mr Crooks finds it very difficult to recount his time as a child migrant in Tasmania.

He said he has lived a successful life but has always found it very hard to trust people.

“Every time I think about my year at Tresca, and after having filled in a 64-page application to the National Redress Scheme, I very often feel extremely suicidal,” he said.

“But I’ve been talked out of that and continue to just fight because the fight won’t go out of me until I die.”

If Fairbridge does sign up to the redress scheme, Christopher’s claim will be able to proceed.

A portrait shot of an elderly man wearing glasses
Christopher Crooks said he has been exhausted by the slow process after lodging his application with the National Redress Scheme.(ABC: Dwayne Wyles)

He’s not the only one who has been waiting for a breakthrough.

Anna Swain is the acting principal lawyer at Knowmore, which was set-up to help abuse survivors lodge claims under Australia’s National Redress Scheme.

“This really impacts a lot of people, a lot of survivors who have waited so long and are ready to get some acknowledgment from the institution.”



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