Pension benefits raised - Oman Daily Observer

8
OMAN/THE WORLD THURSDAY, MARCH 24, 2011
Rio CEO decries ‘curse
of resource nationalism’
HONG KONG — Rio Tinto’s
chief executive said increased
government involvement in
the resources sector is constraining
efforts to meet demand
across the globe and
slammed what he called the
“curse of resource nationalism.”
CEO Tom Albanese, who
is under pressure to give up
the company’s rights to part of
Guinea’s giant Simandou iron
ore concession, said Rio needs
to do a better job of liaising
with the governments at a
time when the miner is facing
pressures of higher taxes and
royalties.
“From a Rio Tinto perspective,
we have to do a better
job on the curse of resource
nationalism,” Albanese told a
packed audience at the Credit
Suisse Asia Investment Conference
in Hong Kong yesterday.
Albanese said the supply is
hampered by a combination of
technical and human factors.
On the technical side, he said
in certain cases resources are
in deep and difficult locations
in emerging countries.
“Besides technical constraints,
we are also seeing
human constraints. We are
seeing a combination of resource
nationalism in some
cases,” he said, citing “difficult
governance” in certain
countries.
“And in countries with
good governance and infrastructure,
you have this very
new pattern that is increasingly
challenging for our sector
of activism of stakeholder
engagement,” he said.
The fight for natural resources
has intensified over
the past few years, leading to
some high-profile cross-bor-
LONDON — J Sainsbury, Britain’s thirdbiggest
supermarket group, missed fourthquarter
sales forecasts, adding to signs of a
slowdown in consumer spending growth as
inflation climbs and government spending
cuts bite.
Sainsbury, which trails industry leader Tesco
and Wal-Mart’s Asda in annual sales, said
yesterday sales at stores open over a year rose
1 per cent, excluding fuel but including VAT
sales tax, in the 10 weeks to March 19.
That was a slowdown from 3.6 per cent
growth in the previous quarter and compared
with a forecast for 2.4 per cent.
“We expect the consumer environment to
remain tough, with our customers facing fuel
price inflation, uncertain employment prospects
and government spending cuts,” Sainsbury
said.
A procession of British retailers have
said trading conditions have got harder since
Christmas, as the government embarks on an
der takeovers being blocked
by governments.
Last year, the Canadian
government killed BHP Billiton
Ltd’s $39 billion bid for
fertiliser maker Potash Corp
Rio, which invested $680
million in what it said is the
world’s largest undeveloped
iron ore deposit in Guinea, has
been in dispute with Guinea
over blocks 1 and 2, which
the government gave to BSG
Resources.
Last year, Rio Tinto also
fought the Australian government’s
planned resource super
profits tax, which Albanese
called his number one sovereign
risk worldwide at the
time.
Rio worked with BHP and
Xstrata to convince the Australian
government to cut the
tax and limit its application to
iron ore and coal.
The chief executive did
not shed any new light on the
company’s A$3.9 billion offer
for Riversdale Mining, saying
only that emerging market demand
was driving the deal.
Albanese told CNBC after
the speech that he was restricted
on what he could say on the
matter, given that it’s a pending
transaction.
Mozambique-focused coal
miner Riversdale’s shareholders
will receive A$16.50
a share if Rio reaches more
than 50 per cent acceptances
by March 28. The offer reverts
to A$16 a share after that and
remains open until April 6.
Albanese said while the
long-term demand for copper
remained strong, in the shortterm,
supply could catch with
demand as Chinese growth is
beginning to mature.
“At the demand rate we are
seeing now...we could be in an
environment where over the
next 20-30 years, the world
will consume as much copper
as it consumed through all
of human history,” Albanese
said.
Big miners such as Rio
and BHP have benefited from
strong metals demand from
rapidly growing emerging
economies such as China, India
and Brazil.
Albanese said the focus for
Rio is to spend its vast cash
flow to expand into iron ore,
develop new copper resources
and to grow “organically.”
Sainsbury misses forecast
as shoppers squeezed
NEW YORK — Chief executives
should not use shareholders’
money for philanthropy,
says Nestle Chairman
Peter Brabeck-Letmathe, who
instead focuses the world’s
biggest food maker on making
money by doing good.
The growing corporate
trend has been dubbed “creating
shared value” and Nestle
now publishes an annual
progress report on goals such
as increasing the nutritional
value of products and reducing
its use of water and quantity of
greenhouse gas emissions.
Brabeck spoke about the
concept at the Council on Foreign
Relations in New York on
Tuesday. He said Nestle concentrates
its efforts on rural development,
water and nutrition.
“Creating shared value has
a big attractiveness because
it really takes into consideration
the interests of both
sides (business and society),”
Brabeck said. “We have integrated
this now into the purpose
of our company.
“Philanthropy basically is
doing good for no other reason
than doing good,” he said.
“This you can do with your
own money but I don’t think
you can use the money of your
shareholders to do philanthropy,
to do good.”
Brabeck said creating
shared value certainly had its
challenges, such as dealing
with issues like deforestation
and child labour, a problem
that Nestle was trying to address
by providing education
for the children.
“If they have the access to
good schooling, then the child
labour as such if it is helping the
fathers in the field and helping
with the harvesting, I don’t think
this is a problem,” he said. “The
problem is when you use the
children only for that and don’t
allow them to go to school.”
Charitable contributions
by corporations were valued
at $14.1 billion in 2009, according
to a Giving USA
Foundation report researched
by The Center on Philanthropy
at Indiana University. Twothirds
was cash and in-kind
contributions from company
budgets and the rest grants by
corporate foundations.
Five years ago Brabeck
said he stunned global and
business leaders at the World
Economic Forum in Davos
when he declared that corporations
did not need to give
austerity drive aimed at slashing its deficit and
following an increase in VAT sales tax.
For Finance Minister George Osborne, the
fiscal squeeze would not be taking too much of
a toll on growth prospects.
Sainsbury has been growing sales faster
than most of its rivals for several quarters,
helped by strength in the more affluent south
of England as well as an expansion into online
and convenience shopping and non-food
ranges like clothing.
The group said its fourth-quarter performance
was ahead of the broader grocery market
and non-food sales were growing at three times
the rate of food.
Total sales, including fuel and new selling
space, were up 6.8 per cent in the quarter.
Sainsbury shares have outperformed the
STOXX Europe 600 retail index by 15 per cent
over the past year. They closed at 354.3 pence
on Tuesday, valuing the business at about £6.5
billion ($10.6 billion). — Reuters
Nestle head emphasises
profiting from doing good
back because they had not stolen
anything from the world.
“I was just shocked that in
a very short period everybody
started to say, ‘Yes, I agree we
have to give back to society,’
and I was thinking, ‘Well,
we’re creating value for society,’”
he said. “If you have to
give back it means you have
taken something that doesn’t
belong to you.”
Since then Nestle has established
a Creating Shared Value
Advisory Board, which includes
Michael Porter of the Institute for
Strategy and Competitiveness at
Harvard Business School, who
is responsible for the creating
share value concept.
Brabeck said there are
600,000 small poor farmers
around the world who work
exclusively for Nestle and the
company has helped them produce
higher yields and quality,
increase their income, reduce
their environmental impact
and boost Nestle’s reliable
supply of good coffee.