BHP Spent Just Half a Day’s Profit Looking for Copper Last Year

Thomas Biesheuvel
Tue, September 14, 2021,


(Bloomberg) -- Copper might be BHP Group’s most prized metal, but the world’s biggest mining company spent little more than it earned in an average 12-hour period last year exploring for new deposits.

The company spent just $53 million looking for the metal last year, when it posted record profit of $37.4 billion. In total it spent $516 million on exploration, with more than two-thirds directed at oil and gas, a business it’s in the process of exiting.

The world’s biggest miners are universally bullish on copper, expecting a surge in demand as the global economy decarbonizes, while long-term supply looks constrained by the lack of new mine development. Yet part of the reason copper is so favored by miners and investors alike is because new deposits have been so hard to find.

Still, BHP does have growth plans in copper, but from buying into smaller developers rather then spending a fortune on exploration.

The company has built a stake in SolGold Plc, which is developing Ecuador’s Cascabel project, potentially one of the biggest copper mines in the world. BHP is also in the process of trying to buy Noront Resources Ltd. to gain control of a nickel project in Canada.

The company expects its total exploration spend to jump to $800 million this year.

BHP handing unexpectedly small $3.9 billion clean-up tab to Woodside in oil merger

BHP's logo is projected on a screen during a round-table meeting with journalists
In this article:

Sonali Paul
Mon, September 13, 2021


MELBOURNE (Reuters) - BHP Group will transfer a smaller-than-expected $3.9 billion in oil and gas decommissioning liabilities to Woodside when it merges its petroleum business with the independent Australian gas producer.

Woodside's shares jumped 6.5% after the figure was disclosed in BHP's annual report on Tuesday, outperforming gains of around 4% among its peers.

"The long awaited BHPP (BHP Petroleum) abandonment provision number has been released, coming in below what we feared it could be," Credit Suisse analyst Saul Kavonic said in a note.

BHP said in its annual report that as of June 2021, its petroleum assets included "property plant and equipment and closure and rehabilitation provisions of approximately $11.9 billion and $3.9 billion, respectively".

When the merger was announced in August, investors had raised concerns as Woodside declined to reveal the rehabilitation liabilities that were assumed in setting the deal terms with BHP's petroleum business to create a global top-10 independent oil and gas company.

The oil and gas rehabilitation provisions, which are estimates of the cost of removing platforms and pipelines and cleaning up sites at the end of their lives, make up about one-third of BHP's total closure and rehabilitation provisions of $11.9 billion for all its assets.

Kavonic said he had assumed Woodside might inherit as much as $5 billion to $7 billion in decommissioning liabilities in the merger with BHP's petroleum arm, which comprises assets in Australia, the Gulf of Mexico, Trinidad and Tobago, and Algeria.

Citi had estimated BHP's decommissioning liabilities in Australia's Bass Strait alone at $3.4 billion.

Once tax offsets are taken into account, the actual decommissioning cost may be below $1 billion, Kavonic said, adding that those costs could be deferred through reusing sites for activities such as carbon capture and storage or offshore wind in the future.

Capital One Testing Buy-Now, Pay-Later Option to Battle Affirm

Jenny Surane
Mon, September 13, 2021



(Bloomberg) -- Capital One Financial Corp. will test a new buy-now, pay-later service as consumers flock to the options that let them split up a purchase and pay it off over time.

The company will begin beta testing the product with some of its existing customers at select merchants later this year, Chief Executive Officer Richard Fairbank said Monday at an investor conference. He declined to share more beyond saying the new offering wouldn’t be linked to the firm’s private-label credit-card business.

Buy-now, pay-later options -- with names such as Afterpay Ltd. and Affirm Holdings Inc. -- have swelled in popularity in recent years, especially among younger consumers looking to pay off purchases over time and often without interest. The offerings make most of their money by charging merchants a fee each time a consumers uses the product at checkout.

“We’re watching this product closely and certainly not taking this growth lightly, especially as many of these buy-now, pay-later providers form new financial relationships with a large number of consumers and merchants,” Fairbank said.

Capital One has been eyeing ways to juice loan growth in recent months. The McLean, Virginia-based firm has spent more on marketing in an effort to add new customers and has begun gradually increasing credit lines for existing clients. The lender’s latest move in the buy-now, pay-later business marks a bit of a reversal, though: last year, it barred customers from using Capital One credit cards for buy-now, pay-later options.

“Competitors are amassing at the border, and it’s possible they will bid down the level of the merchant discount,” Fairbank said. “As there is a drop in margins, it could alter how the business works -- who pays for the loans, and which customers ultimately choose the product.”

ALL THAT IS OLD IS NEW AGAIN DEPT.

AFTER WWII AS THE ECONOMY GREW INTO THE 1960'S THE LAYWAY PROGRAM WAS YOUR BEST WAY TO BUILD CREDIT AND A CREDIT SCORE. GOOD CREDIT WAS KEY TO MY PARENTS GENERATION GROWING UP IN THE GREAT DEPRESSION.

BY THE NINTIES AND THE 000'S CREDIT WAS EASILY AVAILABLE AND SHOWED THE DOMINANCE OF FINANCIAL CAPITAL GROWING OVER ALL OTHER FORMS OF CAPITAL.

AND IT HAS REMAINED SO UNTIL IT IS NOW PART OF A GIG EXCHANGE...LAY AWAY RETURNS WILL RENT TO OWN COME BACK NOW TOO

Chinese delivery giants Meituan, Ele.me pledge to not force drivers to register as independent businesss

Wed, September 15, 2021

SHANGHAI, Sept 15 (Reuters) - China's online food delivery giants Meituan and Ele.me both said this week they will not force couriers who do work for them to register as independent businesses, a bone of contention amid ongoing scrutiny of the food delivery sector.

The promise comes as part of a broader push from regulators to improve conditions for 'gig-economy' workers, and during ongoing public scrutiny towards tech companies treatment of said drivers.

In August, several Chinese regulatory bodies met with a number of Chinese food delivery companies to call for better labour safeguards.

Many drivers for food delivery or ride-hailing apps are hired indirectly by the platform and do not receive basic social or medical insurance

This past week, a social media account covering labour law published an article alleging some drivers working for Meituan and Ele.me were operating as individual businesses, as opposed to employees of the platform company or a third-party company, thereby reducing the platform company's legal obligations to the driver. The piece spread widely across China's internet.

In a social media post published late on Tuesday evening, Meituan wrote that, "Drivers are important partners of Meituan. When it comes to protecting drivers' labour rights, we must make more improvements and need to do better."

The company said that following the publication of regulations targeting food delivery workers last July, it had formed a work group to examine its employment practices. It said this month it issued a document to over 1,000 delivery partners and held a video conference stating it prohibits forcing couriers to register as independent businesses.

The company added that it aimed to improve its treatment of riders in aspects such as income, social security, and health and safety. On Monday, Meituan said it would change its algorithm be more accommodating towards its drivers when facing tight delivery times.

On Wednesday morning, Ele.me published a statement also pledging not to force drivers to register as independent businesses. 

(Reporting by Josh Horwitz; Editing by Kenneth Maxwell)

Is Toyota Pivoting Away From Hydrogen Fuel Cells?


Editor OilPrice.com
Mon, September 13, 2021

Toyota is finally trying to get in on the electric vehicle (EV) revolution. The Japanese automaker has been dragging its feet for years, investing its time, money, and attention to lobbying against the spread of EVs while its rivals gave up the ghost and dove in. Now, Toyota is way behind and trying to catch up with a new investment of more than $13.6 billion into EV batteries.
Toyota To Embrace The Electric Vehicle Boom

Toyota is the world’s biggest automaker, but even their colossal industry sway couldn’t slow the changing of the tides away from gas-powered engines. But they sure tried their hardest to do so. Toyota execs have downplayed or disparaged all-electric vehicles for years, and have yet to launch a single EV outside of China. Instead of focusing on battery-powered cars, Toyota has historically promoted hydrogen fuel cells and hybrids. This new investment thereby marks the end of an era for Toyota, and stands as a major victory for the EV industry.

The company is investing 1.5 trillion yen (or $13.6 billion, as previously mentioned) into battery supply and research to be carried out by 2030. Investing in a reliable battery supply chain is paramount, as the EV industry is currently plagued by a shortage and the threat that the sector will run out of batteries entirely is a very real and present danger. In fact, it’s projected to happen by just 2020 if some major changes aren’t made in the immediate term, due to the increasingly rapid adoption of EVs and skyrocketing demand for lithium-ion batteries. A Bank of America Global Research report released in July announced: “Our updated EV battery supply-demand model suggests the global EV battery supply will likely hit [a] ‘sold-out’ situation between 2025-26, with its global operating rates reaching above 85%.”

In fact, the lithium-ion battery sector is bogged down by a litany of problems that could eventually have very real and problematic geopolitical ramifications. These batteries are reliant on rare earth minerals, such as lithium and cobalt, which are finite resources only found in certain areas of the world. As it stands now, China controls up to 90% of the market for some of these essential ingredients. As the world’s hunger for EVs grow, China’s chokehold on this essential part of the supply chain only intensifies, and Beijing has already shown that it is not afraid to use that power to sway international politics and diplomacy. It has even been speculated that we are headed for a clean energy resource war if superpowers -- most notably the United States and China -- don’t play nicely.

In the meantime, companies like Toyota are snapping up as many batteries as they can get. The company’s chief technology officer Masahiko Maeda has said that Toyota’s goal is to secure a supply of 200 GWh of batteries before the end of the decade. “We are assuming that we will go beyond the 180 GWh worth of batteries that we are currently considering and will ready 200 GWh worth of batteries or more if the dissemination of BEVs is faster than expected,” he was quoted by EV news outlet Electrek. According to their reporting, “at an average of 60 kWh per battery pack, it would be enough for the annual production of more than 3 million electric cars per year.”

This is a huge change in tune for a company that has been outright antagonistic to battery-powered electric vehicles. In fact, even as Toyota moves forward with EVs, making a late bid to become competitive in a largely developed market, the company is concurrently lobbying the United States government to slow down the production and adoption of electric vehicles. Despite Toyota’s best efforts, the Biden administration is continuing to push electric vehicles as a key part of its platform and as a central tenet of the infrastructure agreement and spending bill. On Friday U.S. Democrats announced a plan to significantly expand tax credits for EVs, with especially lofty subsidies for union-made models assembled domestically in a move that favors the nation’s Big Three automakers. It’s no wonder that Toyota sent an executive to protest in the U.S. senate as it looks like they will once again fall behind in the overseas EV revolution.

By Haley Zaremba for Oilprice.com

UH OH 

BACKWARDS TO THE FUTURE, FORWARD TO THE PAST

Japan’s Nikkei 225 Returns to Bubble-Economy Level Seen in 1990

Naoto Hosoda and Komaki Ito
Tue, September 14, 2021





(Bloomberg) -- Japanese stocks advanced for a third day, lifting the Nikkei 225 Stock Average to a level last seen during the nation’s bubble economy more than three decades ago.

The blue-chip gauge closed at 30,670.10 in Tokyo, surpassing this year’s previous peak in February to end at the highest since August 1990. KDDI Corp. and Fanuc Corp. were the largest contributors to the Nikkei’s 0.7% gain. Electronics makers and car companies gave the biggest boosts to the broader Topix, which advanced 1%.

Japan has been the world’s best-performing major stock market over the past two weeks amid hopes for new leadership, an acceleration of vaccinations and a reshuffle in the Nikkei 225 that will add heavyweights Nintendo Co., Keyence Corp. and Murata Manufacturing Co. Crucially, foreign money is returning, with JPMorgan, Baillie Gifford and BNP Paribas Asset Management among investors who say they’re becoming more positive on Japan.

“Global allocations to Japanese equities remain limited, suggesting room for investors to add exposure,” Goldman Sachs strategists including Christian Mueller-Glissmann wrote in a note. “The rebound in Japanese equities comes after a prolonged underperformance vs. the S&P 500 and other major indices since Q2.”

Hideyuki Ishiguro, a strategist at Nomura Asset Management Co. in Tokyo, said Japan’s progress against the pandemic has been supportive for the market. On Tuesday, Japan overtook the U.S. in the proportion of those of have received first doses of Covid-19 vaccine with 63.6% having received their first shot. More than 51% of Japan’s population is now fully vaccinated.

Japan Overtakes U.S. on Vaccination After Starting Months Later

“Japan’s vaccination rate has topped 50% and is on a similar level to that of the U.S.,” Ishiguro said. “Japanese equities had been showing unstable performance relative to U.S. and European equities because of political uncertainties and a delayed vaccination process but with the two factors having been resolved, investors’ moves to unwind their previous positions will continue.”

The Nikkei 225 is now up about 12% for the year, with the Topix up 17%. That compares with a 19% gain for the S&P 500 Index and 17% advance for the STOXX Europe 600 Index.

The rally in Japan’s equity market is lifting a broad spectrum of stocks. The share of Topix members trading above their 200-day moving averages has climbed to 74% -- the highest since April -- an indication of strong market breadth. “It’s good that the gains seen recently aren’t targeted to a narrow group,” Nomura Asset’s Ishiguro said.

JPMorgan Chase & Co. strategists led by Marko Kolanovic advise adding to Japanese stocks. The resignation of Prime Minister Yoshihide Suga paves the way for a stable ruling party, a scenario that the firm says has historically produced better equity returns, they wrote in a client note. Taro Kono, a popular candidate among foreign investors, is the favorite among the public to replace Suga as the leader of the ruling party, according to a poll by Nikkei and TV Tokyo.

Foreign investors bought a net 662.7 billion yen ($6 billion) worth of Japanese equities and futures in the week through Sept. 3, the day news unexpectedly broke that Suga would not seek for another term as LDP leader. It was the most in a single week since February.

WEAPON OF ECOCIDE
Syngenta, Chevron Could Face Billions in Claims Over Weed Killer

Jef Feeley
Mon, September 13, 2021


(Bloomberg) -- Yet another popular weed killer used by American farmers for decades is becoming a costly liability for the companies behind the chemical.

Over the past seven months, new lawsuits have been filed almost every day claiming farmers or field workers contracted Parkinson’s disease from their exposure to Paraquat, a highly toxic herbicide developed by Syngenta AG and sold in the U.S. by Chevron Corp.

The surge in complaints comes as another company, Bayer AG, has set aside as much as $16 billion to resolve thousands of current cases and prepare for future suits tied to Roundup, the best-selling U.S. weed killer. While it’s still early days in the Paraquat litigation, personal-injury lawyers are blanketing radio, television and social media with ads seeking new clients who could demand billions of dollars in compensation.

“Even if there aren’t the kind of Roundup-level number of cases, I can see these companies offering several billion dollars just to make it go away,” Richard Ausness, a University of Kentucky law professor who specializes in product-liability cases, said of the Paraquat lawsuits. “Parkinson’s disease has a long, expensive tail that will drive up the cost of settling these cases.”

Syngenta has already started settling. The company disclosed in August that it agreed on June 1 to pay $187.5 million to resolve an undisclosed number of cases “solely for the purpose of bringing to an end these claims.”

What Bloomberg Intelligence Says

“Syngenta’s statement that it settled certain cases for $187 million in June could mean top-end exposure totals billions of dollars.”
-- Holly Froum, Litigation Analyst. Click here to see report.

Paraquat has been used on many U.S. crops since the 1960s, but it’s banned in more than 30 other countries over alleged ties to Parkinson’s, a brain disorder that leads to shaking, stiffness and balance problems. In the U.S., the chemical must be sprayed by a licensed applicator.

At the start of 2021, only a handful of lawsuits over Paraquat were making their way through state and federal courts in the U.S. Since February, there have been more than 400 new complaints filed in federal courts alone.

Thousands more are possible after a court panel in June consolidated all federal cases under a judge in Illinois, and the success of the Roundup litigation created an incentive for plaintiffs’ lawyers to find more Paraquat clients. Attorney Michael Miller, who sued Chevron and Syngenta, said there may eventually be as many as 35,000 cases.

Disputing Claims

The companies have steadfastly disputed the claims Paraquat causes the nervous-system disorder.“There is no credible evidence Paraquat, which has been widely used for more than 55 years, causes Parkinson’s disease,” said Saswato Das, a spokesman for Switzerland-based Syngenta. “No peer-reviewed study, including the largest study which involved 38,000 farmers, has ever concluded Paraquat causes Parkinson’s disease.”

Syngenta was acquired in 2017 for $43 billion by China National Chemical Corp., which combined it with other seed and fertilizer businesses. ChemChina disclosed in July it was seeking to raise $10 billion (65 billion yuan) in a Shanghai listing of shares that represent a 20% stake in Syngenta.

Chevron spokesman Tyler Kruzich said in an email the company didn’t believe it caused the plaintiffs’ injuries and “will vigorously defend against the allegations.”

The number of Paraquat lawsuits isn’t likely to be anywhere near as many as the claims against Bayer and Roundup, which is widely used by American farmers, landscapers and home gardeners. The global market for glyphosate, the active ingredient in Roundup, may reach $13.3 billion in 2027, according to estimates from researcher Reports and Data.

Paraquat’s market share is much smaller -- estimated by 360 Research Reports at about $100 million last year -- because it can only be used under a license. It’s mostly sprayed on corn, soybean and cotton fields, Syngenta says on its website.

Paraquat Pot

Paraquat also has been used in the long war on drugs. From about 1975 to 1978, the U.S. sought to reduce the flow of marijuana from Mexico, the biggest supplier at the time, by encouraging defoliation techniques the American military used during the Vietnam War. The U.S. spent about $30 million a year to aid Mexico’s spraying of Paraquat on the illegal crops, according to the American Journal of Public Health. A few years later, government agencies proposed spraying Paraquat on pot farms in California and Florida.

The litigation against Roundup “has set a massive precedent,” Garry Mabon, an analyst and founding partner at Scotland-based researcher AgbioInvestor, said in an email. But a key difference between the chemicals is that Paraquat is well understood as being a possible carcinogen, while the key ingredient in Roundup isn’t, he said. “As such, the weight of evidence would seem to be against Paraquat in any litigation.”

The lawsuits were assigned to U.S. District Judge Nancy Rosenstengel in East St. Louis, Illinois, because the state’s farmers are among the biggest Paraquat users and Rosenstengel already had 20 cases before her. The first trial of those cases is set for late next year. Suits also are being filed in state courts, including California and Illinois, according to Miller, the plaintiffs’ attorney.

Rosenstengel, appointed by President Barak Obama in 2014, will manage pre-trial information exchanges and test trials. It’s her first time overseeing a so-called multi-district litigation. “Its my job to bring this case in for a landing, whether that be trials or settlement,” Rosenstengel said at the initial status hearing in June. She didn’t respond to requests for additional comment.

The case is In Re: Paraquat Products Liability Litigation v. Syngenta Crop Protection, LLC, 21-md-3004, U.S. District Court for the Southern District of Illinois (East St. Louis)

Dem Plan Would Cut Taxes for Most, Hit Top Earners Hardest: Analysis


Yuval Rosenberg
Tue, September 14, 2021

The tax changes proposed by House Democrats this week would lower taxes for most Americans, at least in the near term, while hitting top-earning households with sizable increases, according to estimates released Tuesday by the bipartisan congressional Joint Committee on Taxation (JCT).

The Democratic plan, which is being debated again this week by the House Ways and Means Committee, calls for restoring a top marginal individual income tax rate of 39.6%, up from the current 37%. It also includes a host of other changes to individual, capital gains and corporate taxes that, combined, would raise more than $2 trillion for the U.S. Treasury over the next 10 years, according to the JCT.

The congressional tax scorekeeper estimated that households making less than $200,000 a year would see lower tax bills through at least 2025, largely as the result of the expanded child tax credit, while those making at least $1 million a year would face a 10.6% increase in federal taxes in 2023 and a 12.1% increase by 2025. The average federal tax rate for those top-earners would climb from 30.2% now to 37.3% in 2023 and 38.1% by 2027.

The JCT estimates don’t include Democrats’ proposed increase in the estate tax, meaning that the tax hit on wealthy households would be even higher.

“We are taking a significant step toward leveling the playing field,” House Ways and Means Committee Chair Richard Neal (D-MA) said Tuesday. “No one likes raising taxes, but thanks to the strength of our economy, we can afford to do this.”

A problem for President Biden? The JCT estimates show that households making between $200,000 and $500,000 a year face an average tax increase of 0.3% in 2023. They also show that if lawmakers allow temporary changes to the tax code to expire as scheduled, including the expansion of the child credit, households making between $30,000 a year and $200,000 a year would see their taxes go up slightly, on average, by 2027. Households making $30,000 to $40,000 a year would see their average tax bill rise by 0.1% while those earning between $100,000 and $200,000 would face a 1.5% average increase.

The House budget plan would extend the credit for four years and many Democrats want to make the new child tax credit permanent, but others have expressed concerns about doing so. Most notably, Sen. Joe Manchin (D-WV) is pushing for a new requirement that parents work in order to be eligible for the credit. “Tax credits are based around people that have tax liabilities. I’m even willing to go as long as they have a W-2 and showing they’re working,” he told Insider.

With the long-term fate of the credit unclear, the JCT estimates factoring in its expiration after four years opened the door for Republicans to claim that the plan violates President Biden’s pledge not to raise taxes on people making less than $400,000 a year.

“You’ll hear today that President Biden doesn’t break his pledge on taxing Americans making less than $400,000, but that’s false as well,” said Rep. Kevin Brady of Texas, the top Republican on the Ways and Means Committee.

Republicans oppose the tax plan and have warned that it will hurt the middle class as well as businesses large and small. Brady on Tuesday argued, as many economists do, that the corporate tax increase would be felt by individuals, too: “As you know, businesses don’t pay taxes, they collect them. And those burdens land on their workers, lands on their customers, lands on the retirees whose retirement depends on their success, and it lands on the communities that they live in.”

Warren Asks Fed to Break Up Wells Fargo After Regulatory Hit

Hannah Levitt
Tue, September 14, 2021


(Bloomberg) -- U.S. Senator Elizabeth Warren urged the Federal Reserve to force Wells Fargo & Co. to separate its traditional banking and Wall Street businesses, after the lender was handed fresh regulatory action and a $250 million fine this month.

In a letter to Federal Reserve Chair Jerome Powell, Warren called on the Fed to revoke Wells Fargo’s status as a financial holding company in order to effect a separation. The Fed should order the company to develop a plan to ensure its customers are protected through the transition, the Massachusetts Democrat said.

“Every single day that Wells Fargo continues to maintain these depository accounts is a day that millions of customers remain at risk of additional negligence and willful fraud,” Warren wrote. “The only way these consumers and their bank accounts can be kept safe is through another institution—one whose business model is not dependent on swindling customers for every last penny they can get. The Fed has the power to put consumers first, and it must use it.”

The New York Times earlier reported the contents of the letter. A representative for the Fed confirmed it received the letter and said it planned to respond.

Wells Fargo was fined this month over its lack of progress addressing long-standing problems, the first such sanction under Chief Executive Officer Charlie Scharf. The penalty adds to the more than $5 billion in fines and legal settlements the bank paid over the last five years tied to a series of scandals that began with fake accounts in its branch network.

The latest order, from the Office of the Comptroller of the Currency, cited deficiencies in Wells Fargo’s home-lending loss mitigation practices -- the steps firms take to avoid foreclosure -- that have prevented the bank from being able to “fully and timely remediate harmed customers.”

“Meeting our own expectations for risk management and controls — as well as our regulators’ — remains Wells Fargo’s top priority,” the bank said Tuesday in a statement. “We are a different bank today than we were five years ago because we’ve made significant progress.”

Fresh Questions

Warren cited the Bank Holding Company Act, which requires that banks are well capitalized and well managed. If a financial holding company falls short of these, the Fed is required to give a notice for the institution to correct its deficiencies.

Should the bank fail to remedy those within 180 days, the Fed can ask the company to divest control of any subsidiary depository institution -- or the bank can choose to cease to engage in activity that isn’t permissible for a bank holding company.

The latest sanctioning raises fresh questions about whether the bank meets the Act’s requirements that it be well managed, and whether the board and Scharf are capable of effectively running the lender, Warren said.

Progress Signs

Despite the regulatory hit, Wells Fargo has made progress under Scharf. A Consumer Financial Protection Bureau order tied to the firm’s sales practices levied in 2016 expired this month while in January, the bank was freed from a 2015 regulatory order over violations of anti-money-laundering rules. The Fed also confidentially accepted a plan for overhauling risk management and governance at the bank, Bloomberg reported earlier this year.

More broadly, Warren has also been pushing for executives of companies that don’t follow the rules to face personal consequences, she said in an interview with Bloomberg News.

“I am pushing hard for more personal liability,” Warren said. “These executives want to drag in the big bucks for running these companies, then they should be responsible when they preside over big companies that are breaking the law and cheating American consumers.”

Ex-Wells Fargo execs square off with U.S. regulator in trial over phony account scandal

Jody Godoy and Chris Prentice
Mon, September 13, 2021,

FILE PHOTO: A Wells Fargo logo is seen in New York City


By Jody Godoy and Chris Prentice

WASHINGTON (Reuters) -The civil trial of three former Wells Fargo & Co employees over their alleged roles in a scandal involving phony accounts kicked off on Monday, a rare public confrontation between a top U.S. banking regulator and former high-level bank executives.

The Office of the Comptroller of the Currency (OCC) is squaring off against executives it says are partly culpable for the San Francisco lender's misconduct before an in-house OCC judge in Sioux Falls, South Dakota, in a hearing expected to last at least two weeks.

The long-running scandal over Wells Fargo's pressurized sales culture that led staff to open millions of unauthorized or fraudulent customer accounts has cost the bank billions of dollars in civil and criminal penalties and has badly damaged its reputation.

The OCC alleges that Wells Fargo's former risk officer, Claudia Russ Anderson, former chief auditor David Julian and former executive audit director Paul McLinko failed to adequately perform their duties and responsibilities, contributing to Wells Fargo's "systemic sales practices misconduct" from 2002 to 2016.

The proceedings mark a significant step for a regulator that has been criticized in the past for being too soft on the banks and executives it oversees, said regulatory experts.

"It's an attempt at personal accountability for big-bank executives we have not seen in a long time, including in the aftermath of the 2008 crisis," said Jeremy Kress, an assistant business professor at the University of Michigan.

In testimony on Monday, OCC official Greg Coleman laid out the OCC's view that the three former Wells Fargo executives were responsible for the misconduct because they were the bank's key "lines of defense" against bad behavior and other risks.

Wells Fargo's "incentive sales program was implemented without risk-management controls, without proactive monitoring and it essentially incented the bank employees to open fraudulent accounts, to provide misleading information to customers, resulting in significant harm," said Coleman, OCC's senior deputy comptroller for large bank supervision and the first witness to testify.

The regulator brought https://www.reuters.com/article/us-wells-fargo-regulator-charges/u-s-bank-regulator-charges-ex-wells-fargo-executives-for-role-in-sales-scandal-idUSKBN1ZM2M2 civil charges last year against the trio, as well as other former Wells Fargo executives, and has demanded they pay nearly $19 million combined to settle the matter. The OCC is also seeking to bar Russ Anderson from the banking industry over the allegations.

Attorneys for the trio did not respond to requests for comment.

Matthew Martens, an attorney representing Julian, said during the hearing that the trio's attorneys had been blocked from gathering background information on OCC examiners and from calling OCC witnesses.

"We were stopped from calling four OCC examiners who would have provided testimony that we believe would be evidence of bias, incompetence" and credibility issues, he said.

A spokesperson for Wells Fargo declined to comment beyond a January 2020 statement in which CEO and President Charlie Scharf said the OCC's actions were consistent with holding the firm and individuals accountable for "inexcusable" sales practices issues.

Investor group sets tough climate blueprint for Big Oil

 

FILE PHOTO: A 3D printed windmill and oil pump jack are seen in front of displayed BP (British Petroleum) logo in this illustration picture


Ron Bousso and Simon Jessop
Wed, September 15, 2021

LONDON (Reuters) - Investors managing more than $10 trillion on Wednesday published an ambitious blueprint for energy companies seeking to tackle climate change, including sharp cuts to greenhouse gas emissions and a winding down of oil and gas production.

The unprecedented initiative - dubbed the Net Zero Standard for Oil and Gas - details 10 required standards to help money managers compare companies' strategies and understand whether they are aligned with United Nations-backed efforts to reduce global carbon emissions to net zero by 2050.

Oil and gas companies such as BP and Royal Dutch Shell have published targets and strategies aimed at battling climate change, but the huge variation in scope, definitions and ambition makes analysis and comparison exceedingly difficult for investors.

At the same time, pressure has grown on portfolio managers and banks to ensure that their investments chime with the 2015 Paris accords to limit global warming to no more than 2 degrees Celsius above pre-industrial levels.

With the next round of global climate talks taking place in November, concern is growing that too many plans are flaky and unlikely to provide material help by reducing absolute emissions at the rate needed to limit global warming.

"We need to have a level playing field now on disclosure because it's not possible to compare and contrast across the sector," said Adam Matthews, who is head of responsible investment at the Church of England Pensions Board and chaired the investor-company process to develop the new initiative.

Other investors to back the plan include Amundi, Europe's biggest asset manager, along with Britain's Legal & General Investment Management, HSBC Global Asset Management and state-backed Canadian investor Caisse des Depots among others.

Given the fossil fuel industry is responsible for the lion's share of global emissions, the investor group said it is introducing a minimum set of standards to ensure that energy companies' plans are "credible".

NET ZERO TARGETS

Among these is a requirement to reach net zero carbon emissions by 2050, meeting emissions-reduction targets along the way while aligning capital expenditure and production plans with the net zero target.

The standards also demand commitments to disclose and independently verify strategies.

Shell, Italian company Eni and Norway's Equinor have all set targets to become net zero emissions by 2050, meaning that any emissions they produce will be offset by carbon capture technologies or other solutions, such as reforestation.

Other companies, including BP and TotalEnergies, aim to reduce emissions from part of their operations to net zero by 2025.

The investor group behind the new plan acknowledges that winding down oil and gas production "can be a very legitimate strategy", Matthews said.

Although it has not set a deadline for companies to adhere to the standards, investors are willing to vote against transition plans and the appointment of certain directors if they feel company boards are not doing enough, Matthews said.

The new standard will be piloted by leading energy companies including BP, Shell, Eni, Repsol and TotalEnergies ahead of wider adoption by the sector, the investor group said.

This group said its plan had been developed by the Institutional Investors Group on Climate Change with support from the Transition Pathway Initiative and in consultation with Climate Action 100+, non-governmental organisations with specific expertise in the sector as well as oil and gas companies themselves.

For a factbox on Big Oil's climate targets, click

(Reporting by Ron Bousso and Simon Jessop; Editing by David Goodman)

ANOTHER READY MADE FOR CONSPIRACY THEORY

Greece probes crash that killed witness in Netanyahu trial

DEREK GATOPOULOS and LAURIE KELLMAN
Tue, September 14, 2021, 

ATHENS, Greece (AP) — Authorities in Greece on Tuesday opened an investigation into the crash of a private plane from Israel that killed a prosecution witness in the corruption trial of former Israeli Prime Minister Benjamin Netanyahu.

Haim Geron, a former senior official at Israel's ministry of communications, and his wife Esther, were killed in the crash late Monday off the island of Samos. The Israeli Foreign Ministry identified the victims, both 69, adding that consular officials and the ministry were working with the family to return the bodies.

Geron was one of more than 300 witnesses that prosecutors listed for Netanyahu’s trial on corruption charges. He is on trial for allegedly accepting expensive gifts from wealthy associates. Netanyahu, now the opposition leader in Israel’s parliament, has denied all the accusations and mocked the size of the witness list.

Greece's Air Accident Investigation and Aviation Board is investigating the causes of the crash, officials said Tuesday.

The single-engine Cessna 182 took off from Haifa, Israel, and crashed near Samos Airport.

“Shortly before landing, communication with the control tower on Samos was lost and the Civil Aviation Authority informed the search and rescue center about the loss of communication,” the authority said in a statement.

The bodies of the two Israeli occupants were recovered by the coast guard several hours later with the help of divers. Fishing boats as well as vessels from the European Union's border protection agency, Frontex, joined Greek coast guard vessels in the recovery effort.

Witnesses on the island interviewed by local news media said the crash occurred as the plane made an unsuccessful approach to land at Aristarchos International Airport.

As Israel's longest-serving prime minister, Netanyahu spent a total of 15 years in office, but recent years were marred by the corruption allegations and a string of deadlocked elections. The trial resumed Monday after a three-month break.

___ Laurie Kellman reported from Jerusalem.

Greece Israel Plane

A coast guard vessel arrives with two bodies at Pythagorio port, on the eastern Aegean island of Samos, Greece, late Monday, Sept. 13, 2021. Authorities in Greece Tuesday opened an investigation into the crash of a private plane from Israel that killed a prosecution witness in the corruption trial of former Israeli prime minister Benjamin Netanyahu. Haim Geron, a former senior official at Israel's ministry of communications, and his wife Esther were killed in the crash late Monday off the island of Samos. 

(AP Photo/Michael Svarnias)