01/04/2010 - 00:00

Moral, ethical challenges in China business

01/04/2010 - 00:00

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Australia’s relationship with China is a two-edged sword, as the Stern Hu saga has shown.

AUSTRALIAN criticism of China for trying Rio Tinto iron ore salesman Stern Hu (sentenced this week to 10 years’ in prison) in secret has a ring of hypocrisy when you consider how secretive our society is becoming.

A recent example is the secret review by Treasury boss, Ken Henry, into the tax system, which taxpayers paid for, and which will change the way they pay tax, but which has been hidden away for three months and might never be fully released.

Then there are the unnamed Aboriginal families in Roebourne with millions of dollars, and eventually billions of dollars, squirreled away in secret trust funds fed by mining and oil companies, which have a government (taxpayer) licence to extract and sell commodities owned by all Australians.

Iron ore prices are a market-based secret, with a handful of senior executives swapping private notes with Asian steel mills about next year’s price of one of Australia’s most important exports, with the same men banning the media from attending certain sessions at a recent conference in Perth.

There is a pattern in these seemingly unconnected events, and that’s before we get to matters deemed by government to be covered by security laws, which cannot even be mentioned in the media.

What interests Bystander more than the events themselves is why we’re changing and becoming a less open society, and if you imagine this is a topic that doesn’t affect business, you’re wrong.

The first explanation for the rising level of secrecy governing matters that should be public is the fracturing of the news media, once a frontline guardian of the public interest (albeit a low-brow one at times) but now a largely dumbed-down peddler of soft social issues, and stories which appeal to advertisers. The internet has been a factor in this process. It is a fabulous tool, but it has created new avenues for scarce dollars.

The second is that we are starting to adopt some of the less attractive habits of some of our Asian neighbours, who see nothing wrong with inequality and the perpetuation of a society built on class difference. Those in power live comfortably and rule those beneath them with an iron fist.

China, the place we criticise for putting Stern Hu in a secret court, has a terrible record when it comes to inequality of the worst kind, such as the ‘disappearance’ of 100 million baby girls, killed at birth (or soon after) because of a ‘one child’ system that favours men.

For Australia, China is becoming a two-edged sword. Either we start to protest some of its excesses as the US and Europe are doing, or we adopt more of its business and social methods so we can sell more commodities to fuel its industrial machine.

Secrecy is one of those hallmarks of doing business the Chinese way, and it is also becoming the Australian way as the pursuit of profit outweighs questions of equality and morality.

Gas game-changer

SECRETS of a geological variety are starting to weigh on the minds of investors in energy companies, especially high-cost renewable energy sources such as geothermal, wind and solar.

Gas, which was once believed to be as scarce as oil but of less value, is emerging as a game-changing commodity which could bury the theory of ‘peak oil’ for the next 100 years, and turn a global energy surplus into a glut.

Bystander first considered the prospect of a gas glut last month when mentioning the drilling of a test well near Dongara to see whether shale rock in the region had similar properties to US shale, which has flooded that country’s gas market.

Shale gas has already played a role in driving US gas prices down from $US13 per million British Thermal Units to $US4.10/mbtu.

But the most impressive aspect of the North American gas glut is that a liquefied natural gas (LNG) terminal proposed for Kitimat on the west coast of Canada is being flipped around to become an LNG export business.

What’s happening at Kitimat is a remarkable twist in the world of energy, and there’s no reason to imagine that Australia will escape the type of change that it represents with a potential LNG market becoming an LNG competitor.

Next cab off the rank

THERE seems little doubt that the pressures of the modern world are making life very tough for government employees.

The botched home insulation scheme is an example of government not really knowing what it was doing when it tossed a fistful of dollars to private sector contractors – without sorting the honest and competent from the dishonest and incompetent.

The same problem, on a grander scale, can be seen in the largely useless Collins Class submarines, fears about the billions of dollars earmarked for the Joint Strike Fighter aircraft, and WA’s own 200 per cent cost blow-out on the Perth arena.

The big question is why we should expect the proposed overhaul of the health and education systems to deliver a different result.

Resources issue

HISTORY has a habit of repeating itself, which it did in the recent Rinehart versus Wright legal tussle over an iron ore deposit.

It was not so much in what was said in court but what Justice Murray said about the use of the court system, questioning whether: “Any two litigants should be able to consume the scarce resources of the court in a way which must be seen as having an impact upon the interests of others who would wish to use the court in the endeavour to resolve their disputes”.

Justice Murray’s words echoed those of a former attorney-general, Jim McGinty, who became rather annoyed about the endless, taxpayer-funded, inquiries into the death of iron ore pioneer, Lang Hancock.

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“Three can keep a secret, if two of them are dead.”

Benjamin Franklin

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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