BP makes record profit in 2022, slows shift from oil

Ron Bousso and Shadia Nasralla
Tue, 7 February 2023

Logo of BP is seen at a petrol station in Kloten, Switzerland

By Ron Bousso and Shadia Nasralla

LONDON (Reuters) - BP reported on Tuesday a record profit of $28 billion for 2022 and hiked its dividend, but infuriated climate activists by rowing back on plans to slash oil and gas output and reduce carbon emissions by 2030.

The blockbuster profit follows similar reports from rivals Shell, Exxon Mobil and Chevron last week after energy prices surged in the wake of Russia's invasion of Ukraine, prompting new calls to further tax the sector as households struggle to pay energy bills.

Three years after CEO Bernard Looney took the helm with an ambitious plan to pivot BP away from oil and gas towards renewables and low-carbon energy, the company said it will increase annual spending in both sectors by $1 billion with a sharper focus on developing low-carbon biofuels and hydrogen.

But it scaled back plans to cut oil output, now aiming to produce 2 million barrels of oil equivalent per day by 2030, down just 25% from 2019 levels compared with previous plans for a 40% cut.

As a result, BP reduced its ambitions to cut emissions from fuels sold to customers to 20-30% by 2030, from 35-40%. BP still aims to reduce its total emissions to net zero by 2050.

"We need lower carbon energy, but we also need secure energy, and we need affordable energy. And that's what governments and society around the world are asking for," Looney told analysts.

While many investors backed Looney's strategy, which he told Reuters "is working", BP's shares have significantly underperformed top Western energy companies since the CEO took office, remaining largely flat compared with a 17% gain for Shell and a nearly 80% rise in Exxon shares.

"If the bulk of your investments remain tied to fossil fuels, and you even plan to increase those investments, you cannot claim to be aligned" with the 2015 U.N. backed goals to battle climate change, Mark van Baal, founder of activist shareholder group Follow This said.

BP's $4.8 billion fourth-quarter underlying replacement cost profit, its definition of net income, narrowly missed a $5 billion company-provided analyst forecast.

The results were impacted by weaker gas trading activity after an "exceptional" third quarter, higher refinery maintenance and lower oil and gas prices.

But for the year, BP's $27.6 billion profit exceeded its 2008 record of $26 billion despite a $25 billion writedown of its Russian assets.

That allowed it to boost its dividend by 10% to 6.61 cents per share, after halving it in the wake of the pandemic, and announce plans to repurchase $2.75 billion worth of shares over the next three months after buying $11.7 billion in 2022.

BP shares ended 7.6% higher on the day, their best daily performance since November 2020.

Graphic: BP's annual results- https://www.reuters.com/graphics/BP-RESULTS/zdvxoakoepx/chart.png

ENERGY TRANSITION

BP reiterated plans to divide its spending to 2030 equally between the oil and gas business and its energy transition businesses, upping the total budget to up to $18 billion from a previously guided upper range of $16 billion.

Transition businesses, such as renewables and electric vehicle charging, account for around 30% of the current budget compared with 3% in 2019.

BP kept it returns outlook for renewables largely unchanged at 6%-8%, without taking into account debt, even though global offshore wind production costs have soared in recent months.

Looney said BP's wind and solar production will focus more on providing renewable power to generate biofuels and low-carbon hydrogen, focusing particularly in the United States where the landmark Inflation Reduction Act offers investment credits and tax cuts.

BP, whose trading operations further boost renewables returns, maintained plans to have 50 gigawatts (GW) of renewable projects under development and 10 GW operating by 2030.

It said it expects returns of upwards of 15% from its bioenergy business and its combined electric vehicle charging and convenience store businesses, while looking for double-digit returns on hydrogen.

It aims to translate this into a core profit from the transition businesses of $10 billion-$12 billion by 2030, out of targeted total group earnings before interest, tax, depreciation and amortisation (EBITDA) of $51 billion-$56 billion.

BP also wants to increase its focus on renewable natural gas having last year acquired U.S. producer Archaea Energy for $4.1 billion, and it has also set a target to produce 0.5 million-0.7 million tonnes a year of low-carbon hydrogen to initially supply its own refineries.

BP, which increased its 2030 oil price forecast by $10 to $70 a barrel, will focus its global oil and gas operations in nine regions, with plans to sharply increase output from its U.S. shale business and in the Gulf of Mexico.

Graphic: BP's quarterly profits- https://www.reuters.com/graphics/BP-RESULTS/zgpobkjakvd/chart.png

(Reporting by Ron Bousso and Shadia Nasralla; Editing by Kirsten Donovan and Mark Potter)

BP Adds to Big Oil Cash Gusher With Dividend Hike, Buybacks

William Mathis
Tue, 7 February 2023 



(Bloomberg) -- BP Plc hiked its dividend and extended share buybacks after posting a record profit of $27.65 billion for 2022, joining its fellow supermajors by reaping the rewards of soaring oil and natural gas prices.

The cash gusher is delivering significant returns to investors — a 10% increase in the dividend and an extra $2.75 billion of buybacks — while also highlighting a contradiction at the heart of Europe’s oil industry. As major producers talk increasingly about the need to cut emissions and switch to cleaner energy, their polluting fossil fuel business is becoming ever more lucrative as a result of Russia’s invasion of Ukraine.

BP pledged to accelerate investments in both low-carbon energy and fossil fuels. However, the company slowed down its plan to get out of oil and gas and will be less aggressive in curbing its carbon emissions.

By 2030, production of fossil fuels will be about 25% lower than it was in 2019, excluding the contribution from Russia’s Rosneft PJSC. That’s a big revision to its 2020 goal to cut output by 40% by the end of the decade.

Shares of the company rose 3.2% to 493.5 pence as of 8:01 a.m. in London.

“We are growing our investment into our transition and, at the same time, growing investment into today’s energy system.” Chief Executive Officer Bernard Looney said in a statement on Tuesday. “It’s what governments and customers are asking of companies like us.”

BP said it would evenly split additional investment between low-carbon energy and oil and gas, spending up to $8 billion more on each by 2030. Annual capital expenditure could be slightly higher than previously planned, ranging between $14 billion and $18 billion each year for the rest of the decade.

The company will target petroleum resources that can be developed quickly, offer a fast payback and overall better returns. Last month, in its Energy Outlook report, BP predicted that Russia’s invasion of Ukraine would accelerate the world’s transition away from fossil fuels as countries seek to boost energy security by generating more renewable energy at home.

BP pledged to deliver higher returns from both clean energy and fossil fuels. By increasing investment and revising oil and gas price assumptions higher, the company said it would grow earnings per share before interest, taxes, depreciation and amortization by 12% a year through to 2025.

BP’s adjusted net income was $4.81 billion in the fourth quarter, down from the record-setting levels reached earlier in the year and missing the average analyst estimate of $5.11 billion.

The profit boom has been healthy for BP’s balance sheet, something that had been a source of investor concern in the years following the 2010 Deepwater Horizon oil spill. Net debt fell for the 11th successive quarter and was down by $9.2 billion over 2022.

--With assistance from Will Kennedy.

UK watchdog says Microsoft's Activision deal hurts gamers

Wed, February 8, 2023 


LONDON (AP) — Microsoft’s stalled $68.7 billion deal to buy video game company Activision Blizzard has hit a fresh hurdle in the United Kingdom, where the antitrust watchdog said Wednesday that it will stifle competition and hurt gamers.

Britain’s Competition and Markets Authority said its in-depth investigation found that the deal could strengthen Microsoft's position in the growing cloud gaming market, “harming U.K. gamers who cannot afford expensive consoles.”

The blockbuster deal also could hurt British gamers by “weakening the important rivalry” between Microsoft's Xbox console and Sony's rival PlayStation machines, the watchdog said in a provisional report.

The all-cash deal, which is set to be the largest in the history of the tech industry, is facing opposition from Sony and pushback from regulators in the U.S. and Europe because it would give Microsoft control of popular game franchises such as Call of Duty, World of Warcraft and Candy Crush.

Microsoft's deputy general counsel, Rima Alaily, said the company is “committed to offering effective and easily enforceable solutions that address the CMA’s concerns.”

The U.K. antitrust investigation is now set to drag on for a few more months. The regulator said it will now seek feedback, including possible options to address its competition concerns, from interested parties for its final report due April 26.

The move dashes Microsoft's hopes that a speedy favorable outcome could help it resolve a lawsuit brought by the U.S. Federal Trade Commission.

The FTC has sought to block the deal, arguing that the merger could violate antitrust laws by suppressing competitors to the Xbox game console and its growing game subscription business.

Microsoft told the FTC’s administrative judge in January that it was working to resolve the U.K. investigation, as well as a separate probe in the European Union, and hoped to bring back proposed remedies to U.S. regulators.

The Activision Blizzard deal is one of several regulatory hassles for Microsoft in Europe, amid expanded scrutiny for Big Tech companies on both sides of the Atlantic over worries that they have become too dominant.

The Associated Press

Britain says Microsoft's 'Call of Duty' deal could harm gamers



Paul Sandle
Wed, February 8, 2023 

LONDON (Reuters) - Britain's antitrust regulator said Microsoft's $69-billion purchase of "Call of Duty" maker Activision Blizzard could harm gamers by weakening the rivalry between Xbox and Sony's PlayStation.

The Competition and Markets Authority (CMA) said the deal could result in higher prices, fewer choices and less innovation for millions of gamers, as well as stifling competition in the growing cloud gaming market.

It said Activision's flagship "Call of Duty" franchise was important in driving competition between consoles, and Microsoft could benefit by making the game exclusive to Xbox, or only available on PlayStation under materially worse conditions.

The mega deal is being scrutinized in the United Sates and Europe as well as in Britain, where the CMA showed its willingness to take-on big tech in 2021 when it blocked Facebook-owner Meta's acquisition of Giphy.

In December, the United States moved to block the deal, citing Microsoft's record of hoarding valuable gaming content. The Federal Trade Commission has set a hearing before a judge for August this year.

The CMA investigation's chair Martin Coleman said his job was to make sure that British gamers were not caught in the crossfire of global deals that could damage competition and result in higher prices, fewer choices, or less innovation.

"We have provisionally found that this may be the case here," he said.

Microsoft, which has pledged to keep "Call of Duty" on PlayStation, said it would address the CMA's concerns.

"Our commitment to grant long-term 100% equal access to ' Call of Duty' to Sony, Nintendo, Steam and others preserves the deal's benefits to gamers and developers and increases competition in the market," Corporate Vice President and Deputy General Counsel Rima Alaily said.

The company stressed that equal meant parity on content, pricing, features, quality and playability for 10 years.

Activision Blizzard said the CMA's findings were provisional and both parties had a chance to respond before it issues a final report by April 26.

"We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals, (and) where competitive, fair-dealing business can innovate and thrive," a spokesperson said.

(Reporting by Paul Sandle and Aby Jose Koilparambil; editing by Michael Holden and Bernadette Baum)

Microsoft’s Activision Blizzard acquisition will harm UK gamers, says watchdog

Mark Sweney and Dan Milmo

THE GUARDIAN
Wed, 8 February 2023 

Photograph: Dado Ruvić/Reuters

The UK’s competition regulator has ruled that Microsoft’s $68.7bn (£59.6bn) deal to buy Activision Blizzard, the video game publisher behind hits including Call of Duty, will result in higher prices and less competition for UK gamers.

The Competition and Markets Authority (CMA), which launched an in-depth investigation in September after raising a host of concerns about the biggest takeover in tech history, said the deal would weaken the global rivalry between Microsoft’s Xbox and Sony’s PlayStation consoles.

“Our job is to make sure that UK gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation,” said Martin Coleman, the chair of the independent panel of experts conducting the investigation. “We have provisionally found that this may be the case here.”

Related: Hogwarts Legacy review – wizarding wish-fulfilment whose magic wears off

The CMA said possible remedies to address competition issues included selling or spinning off the business that makes Call of Duty, or the entire Activision arm of the combined Activision Blizzard.

However, the watchdog acknowledged that a spin-off into a standalone operation would mean the new business “may not have sufficient assets and resources to operate as an independent entity”.

While the CMA did not completely rule out measures short of a divestiture – for example a “behavioural remedy” such as an iron-clad licence to guarantee distribution of Call of Duty to Sony – it said a structural solution such as a partial sale, spin-off or completely blocking the deal was its preferred option.

“We are of the initial view that any behavioural remedy in this case is likely to present material effectiveness risks,” it said. “At this stage, the CMA considers that certain divestitures and/or prohibition are, in principle, feasible remedies in this case.”

The CMA said there was a risk under the deal that Microsoft could try to make Call of Duty, Activision’s flagship game and one of the most popular and profitable global franchises of all time, exclusively available to Xbox console owners.

Last year, Microsoft attempted to allay competition concerns, saying it would offer its rival Sony a 10-year licence to ensure the title stayed on its PlayStation consoles. However, after Microsoft’s $7.5bn acquisition of ZeniMax in 2020, the parent of studios behind games including The Elder Scrolls, Fallout and Doom, Microsoft moved to make some titles exclusive to its own devices.

“Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own consoles, or only available on PlayStation under materially worse conditions,” the CMA said. “This strategy, of buying gaming studios and making their content exclusive to Microsoft’s platforms, has been used by Microsoft following several previous acquisitions of games studios.”

The CMA said the end result could be that gamers would face “higher prices, reduced range, lower quality, and worse service in gaming consoles over time”.

Microsoft said it believed its 10-year guarantee to continue to offer Call of Duty to rivals on equal terms would be enough to allay competition concerns. “We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns,” said Rima Alaily, the corporate vice-president and deputy general counsel at Microsoft.

The CMA’s ruling is of critical importance as it comes before the publication of official findings of investigations conducted by the European Commission and the US Federal Trade Commission, which in December launched legal action to block the deal.

Anne Witt, a professor of antitrust law at EDHEC Business School, said a full block by the CMA would force Microsoft to abandon the deal worldwide, unless it managed to get the decision overturned on appeal; while if Microsoft agreed to sell Call of Duty, such a move would probably satisfy other regulators.

“If the CMA gets Microsoft to sell Call of Duty it would probably meet the concerns of the FTC and the EU,” said Witt.

She added that regulators were less likely to accept behavioural remedies because they could be circumvented and were expensive to monitor. “If they don’t hammer out some kind of compromise and Microsoft does not accept the structural remedies, the CMA will have no other option than to prohibit the deal,” she said.

Activision Blizzard said it would attempt to change the CMA’s mind, “to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals”.

Microsoft’s all-cash offer for Activision Blizzard, which also publishes global hits such as World of Warcraft and Candy Crush, dwarfs its previous biggest deal, the $26bn takeover of LinkedIn in 2016.

The purchase would result in the Xbox maker becoming the world’s third-biggest gaming company by revenue behind China’s Tencent and Japan’s Sony.

Analysis-Brazil central bank autonomy becomes political punching bag for Lula


People walk in front the Central Bank headquarters building in Brasilia

Wed, February 8, 2023 
By Marcela Ayres and Bernardo Caram

BRASILIA (Reuters) - Brazil's central bank newfound independence that was designed to shield it from politics has turned it into a convenient punching bag for the new government that can use it to fire up its leftist base and blame it for economic woes.

Since his Jan. 1 inauguration President Luiz Inacio Lula da Silva has repeatedly attacked the bank, led by respected economist and financial markets executive Roberto Campos Neto, calling its interest rates excessively high and "shameful" and blaming them for stunting growth.

Further to his left, socialist leader Guilherme Boulos called Campos Neto an agent left in office by Lula's far-right predecessor Jair Bolsonaro to "boycott" the economy.

With the bank's autonomy established by law under Bolsonaro in 2021, its board of directors is no longer changed at the same time when new governments take office, so Campos Neto's term as governor runs until the end of 2024.

Two of his close associates told Reuters that Campos Neto was not considering leaving the bank despite government pressure.

They stressed, on condition of anonymity, that Campos Neto considered the central bank autonomy a crucial institutional gain, and that he played a role in safeguarding it by staying on until the end of his mandate.

Political observers attribute Lula's irritation with the bank to a mix of slowing economic growth and high inflation that could threaten his government's re-election prospects in 2026.

But economists think Lula is putting on an act and see no real danger of him curbing the bank's independence.

"He needs to appease his political base to negotiate more freely later with the central bank," said André Perfeito, chief economist at brokerage Necton.

The bank's benchmark Selic rate is now at 13.75%, and its monetary policy committee has not ruled out further hikes to bring down inflation, which last was 5.87% in mid-January, still far from this year's 3.25% official target.

The committee kept the rate unchanged last week in its first policy decision under the new government, signaling rates would stay high for longer than markets expect due to fiscal risks under Lula.

Soon after taking office, Lula began criticizing the country's official inflation targets a too low. That spurred a rise in longer-term bond yields and weighed on the real, with the Brazilian currency underperforming its emerging market rivals.

Felipe Salles, chief economist of C6 Bank, sees small short-term risks for the independence due to the frictions, but said the government's actual objective could be raising inflation goals.

The official targets are defined by the National Monetary Council, currently comprised of the Finance Minister, Planning Minister, and central bank governor, meaning the federal government has two of the three votes in the committee.

Lula has already argued that the country should pursue its own inflation pattern rather than follow what he called the "European" model, but government officials have played down any possibilities of change.

The mandate of Campos Neto and his current eight directors will expire at different times between now and 2025, and it will be up to Lula to appoint all the replacements, starting with the Monetary Policy and Supervision directors, whose mandates expire by the end of this month.

Lula is expected to appoint a person aligned with his vision to the Monetary Policy position, which plays a major role in monetary policy decisions and oversees the foreign exchange and interest rate desks.

But even if Lula packs the board with people fully aligned with his ideas, Campos Neto and his current directors will retain a majority in the rate-setting committee until the end of the governor's mandate.

Former central bank director Alexandre Schwartsman warned that Lula could indeed ignore Campos Neto's suggestions for rate-setting panel replacements or raise inflation targets.

"If this is the path followed, make no mistake about it, inflation expectations would rise," Schwartsman said.

Former central bank chief Henrique Meirelles, who headed the institution in Lula's first term, suggested the president's talk of the bank's independence was counterproductive.

"The less he talks about the subject, the better one can control expectations and lower interest rates," Meirelles said.

(Reporting by Marcela Ayres and Bernardo Caram; Editing by Tomasz Janowski)

Americanas accounting scandal was a 'fraud,' says CEO of Brazil's Itau

Wed, February 8, 2023 

 People walk in front of a Lojas Americanas store in Brasilia

SAO PAULO (Reuters) - The chief executive of Brazil's biggest private lender Itau Unibanco said on Wednesday that the accounting inconsistencies that led retailer Americanas SA to request bankruptcy protection represent a case of 'fraud'.

Milton Maluhy Filho's remarks came after Itau, which had a multi-million-dollar exposure to Americanas, had to set aside more cash for bad loans in the fourth quarter.

Maluhy added that Itau has not identified any case similar to that of Americanas, which reported around $8 billion in debt after disclosing "inconsistencies" in its accounting.

(Reporting by Aluisio Alves; Editing by Steven Grattan)

Grocery CEOs snub Ottawa profiteering inquiry, exacerbating tensions with politicians


Jake Edmiston
Wed, February 8, 2023

metro-0208-ph

The heads of Canada’s top supermarket chains have so far snubbed parliamentarians investigating allegations of profiteering in the grocery business, exacerbating tensions with politicians who appear keen to confront the country’s oligopolies over inflation.

Quebec grocery giant Metro Inc. sent chief financial officer François Thibault to a hearing held by the Commons agriculture committee on the evening of Feb 6.

That’s not who some members wanted to see. Alistair MacGregor, the NDP member of Parliament from Vancouver Island who helped launch the profiteering inquiry late last year, wanted to know why Thibault’s boss, chief executive Eric La Flèche, didn’t show up instead.

“Your sector is going through a very deep crisis of confidence with the Canadian people,” MacGregor told Thibault. “Given the state of Canadian anger with the high cost of food, why wouldn’t Mr. La Flèche take the opportunity as the face of his company to publicly come here and defend it? Why is he not here today?”

Thibault responded: “Well, I’m a leader of the company.”

MacGregor was equally offended at the previous hearing, in early December, when Loblaw Cos. Ltd. and Sobeys’ parent Empire Co. Ltd., opted to send lieutenants instead of the CEO. The Retail Council of Canada, a lobby group that represents the grocers, said the original invitations didn’t ask for CEOs. But after the December hearing, MacGregor asked the committee to reissue invitations to Loblaw, Empire and Metro, this time specifically requesting that the head of the company show up.

But at the Feb. 6 hearing, La Flèche wasn’t there.

A matter of trust

MacGregor rattled off the various scandals that dog Canada’s big grocers, including the ongoing Competition Bureau investigation into allegations of bread-price fixing, and the 2020 Hero Pay affair that pushed Ottawa to strengthen rules against wage-fixing. The government is also pressuring the industry to create a new watchdog to stop the large retail chains from bullying farmers and food processors. And the Competition Bureau has launched a study of whether heavy consolidation in the food industry — where five retailers control roughly 80 per cent of sales — has helped drive inflation.

“And then we, you know, have a parliamentary inquiry into this matter, and for the three biggest chains in Canada, not one single head of the company came to publicly defend their company,” MacGregor said. “We do have the power to act, and whether that’s strengthening our competition laws or giving more resources to the Competition Bureau, those are options that we have. But my question to you sir is, what is the sector going to do to regain that trust?”

“Well, I firmly believe that customers show their trust every day,” Thibault responded. “We do hundreds of thousands of transactions every day.”

“So that’s it? You just – you think you do have the trust at present?” MacGregor said.

“Yes,” Thibault said. “We fight every day to gain that trust and keep that trust.”

“With respect, that’s completely opposite to what we’re hearing,” MacGregor said, just as his allotted time elapsed.

‘Look at the margins’

Canada’s top three grocers deny it, but they haven’t been able to shake accusations of profiteering from the worst food inflation since the early 1980s. Economists at progressive think-tanks, including the Canadian Centre for Policy Alternatives, have questioned how the chains have expanded margins and increased profits while grocery bills soared, up around 11 per cent year over year according to the latest consumer price index from Statistics Canada.

Metro, along with Loblaw, has urged its critics to consider their gross margins when trying to determine whether stores are marking up products more than necessary. Gross margin measures the portion of sales left over after subtracting the grocer’s cost on that product. So if a grocer hiked prices only enough to pass on cost increases from their suppliers, the company’s overall sales would increase but the margin would stay stable.

The grocers have said their gross margins on food sales are stable at best. Metro said in an earnings update last month that those margins are actually getting worse, as the company puts on more promotions to try to compete for cash-strapped customers.

“You have to look at the margins,” Thibault told the inquiry. “The food margin was lower and it was compensated by a larger margin in pharmacies.”

Metro owns the Quebec pharmacy chain Jean Coutu and Loblaw owns Shoppers Drug Mart. Both argue that as the pandemic waned, customers started buying more higher margin beauty products and over-the-counter cold medication, leading to an improvement in the overall gross margin. (Empire doesn’t own a national pharmacy brand and has said its improvements are coming from a three-year turnaround project that is aimed at finding $500 million in annual cost savings.)

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Accounting experts say the pharmacy explanation is plausible, but Metro and Loblaw’s public financial documents don’t break down the gross margin by category, so it’s impossible to confirm.

“When we look at the financial statements, there seems to be something a little bit opaque,” Bloc Québécois MP Yves Perron asked Thibault during the hearing. “Don’t you think that your industry would benefit from being more transparent about these kinds of facts?”

Thibault said Metro publishes its financial results according to the “accounting norms and standards that are in place.”

Liberal MP Leah Taylor Roy pressed further, asking why Metro doesn’t publish the data — regardless of whether it’s required by accounting guidelines.

“We can look at this any way you want and talk about all the costs that are coming through. But facts don’t lie. And executive pay has gone up. Dividends have gone up. You said investments have gone up. But workers salaries haven’t gone up,” she said. “I continue to hear this emphasis on margins and accounting guidelines. But I’ve also heard from you that you want transparency and everything has to be open. I don’t think there’s any requirement that you only report margins the way you are.”

Time ran out before Thibault could response to the question.

In a statement later, Metro spokesperson Marie-Claude Bacon declined to provide a breakdown of the company’s gross margins in food versus pharmacy. “It is information that we do not disclose,” she said in an email.

Canada announces plans to protect vast marine zone with Great Bear Sea project



Leyland Cecco in Vancouver

THE GUARDIAN
Tue, 7 February 2023 

Photograph: John Zada/Alamy

Nearly a decade ago, Canadian political leaders, environmental activists and Indigenous nations came together to shelter a sprawling 6.4 million-hectare area of trees, sea wolves, salmon and grizzly bears – a project that was named, with some branding acumen, the Great Bear Rainforest.

The plan has since been hailed as a triumph for protecting swathes of old-growth cedar and spruce and drawing global attention to an area of pristine forest the size of Ireland.

This week, Indigenous nations in British Columbia are hoping to replicate that success by extending the model out to the ocean: a new network of protected marine zones called the Great Bear Sea.

Grizzly bears were one of the species protected by the formation of the Great BEar Rainforest project. Photograph: All Canada Photos/Alamy


But amid the fanfare and optimistic proclamations from senior Canadian and Indigenous leaders, the project’s branding is a reminder for some First Nations of the challenge of having their voices and values reflected in major conservation agreements.

At the Fifth International Marine Protected Areas Congress, being held in Vancouver this week, leaders from 15 First Nations, alongside delegates from British Columbia and the federal government, have announced plans to protect a swathe of marine coastline along the province’s northern coast, safeguarding a 10 million-hectare corridor of ocean stretching from the top of Vancouver Island to the Canada-Alaska border.

The plan, hailed as a breakthrough in recognising the delicate balance of preserving vulnerable ecosystems with the needs of coastal Indigenous communities, is also a necessary part in fulfilling Canada’s goal of protecting 30% of its lands and oceans by 2030.

“This is one of the richest and most productive ecosystems left in the world, and we should be very proud of that,” said Christine Smith-Martin, executive director of the Coastal First Nations. “Salmon, bears, wolves, and whales, kelp forests and ancient cedars; it is also a home to all of our people in our traditional territories. First Nations stewardship of these lands and seas dates back more than 14,000 years – we can take care of our territories.”

Provincial leaders view the deal as a departure from previous ways of seeing the environment. “We require a mindset shift in order to achieve a more sustainable planet,” said Nathan Cullen, British Columbia’s minister of water, land and resource stewardship. “The longstanding mindset of ‘scarcity’ is combative. It’s not collaborative. We need an ‘abundance mindset’– building back up what nature wants to do.

“That requires sharing of power and envisioning something that we can’t see in front of us right now. But the reality is that that’s hard.”

The agreement reflects not only hundreds of hours of meetings with residents of the 15 First Nations but two decades of effort from Indigenous communities to see the region protected from further harm.

A humpback whale breaching in Pacific coastal waters in the Great Bear Rainforest. Photograph: John Zada/Alamy

In recent years, populations of wild pacific salmon, the lifeblood of coastal First Nation communities, have collapsed. So too have eulachon, prized for their oil, alongside Dungeness crab and rockfish. The region has seen a spike in marine traffic as northern ports take on a greater share of wood pellet export, and there are plans for a surge in liquid natural gas shipments, presenting challenges in preserving an area that is becoming economically more important for Canada.

Marine biologists say the protected areas are vital in helping species recover and to improve their genetic diversity – a key way to help in adaptating to climate change. By establishing the network of protected areas, the hope is that the region will see cumulative benefits.

“Crown governments have had the power to implement laws and policies that could have slowed down or prevented us from getting here. [This is] the reckoning of that. If they were right, we wouldn’t be in this situation, this crisis,” said Gaagwiis, president of the Council of the Haida Nation.

Communities along the coast, whose inhabitants have relied on the marine environment for salmon, herring, seaweed and clams, also see their future ability to harvest from the ocean as a key metric of success. “It’s not just about ensuring that Indigenous title or jurisdiction is recognised in a proper way – we need to ensure that we have sustainable communities,” said Gaagwiis.

The timeline to get plans in place is “daunting”, said Gaagwiis, especially with the task of working with 15 Indigenous nations alongside two levels of government. “But we’re seeing a public commitment by the government to an international audience, so we’re optimistic that the conditions politically in Canada and internationally are aligned with Indigenous interests as well. It’s up to us all to figure out what it takes to get it done.”

Related: ‘A soul wound’: a First Nation built its culture around salmon. Now they have to fly it in frozen

The plan covers an area formally known as the northern shelf bioregion but it has been rebranded as the Great Bear Sea because it is linked to the neighbouring Great Bear Rainforest.

Dallas Smith, president of Nanwakolas Council, and a key negotiator for the rainforest plan, said the success of the model put Indigenous communities in a position to be able to hold governments accountable.

But the name itself, created by non-Indigenous activists in the 1990s to generate public interest and solidarity, has long been a point of contention among Indigenous peoples, who say it glosses over the fact that the sprawling forest is home to 26 First Nations and six distinct languages.

“I hate the term the Great Bear Rainforest,” said Smith. “But, that said, I respect it because, as a branding exercise, it was able to focus our goals in one collective thing.”

With the Great Bear Sea, Smith says that Indigenous communities have been able to “take back the narrative” that has historically been championed by outside groups, putting forward a set of requirements and conditions that reflect Indigenous knowledge and values.

A Kermode or spirit bear foraging in the intertidal zone, Great Bear Rainforest. 

Photograph: All Canada Photos/Alamy

“We waited too long for the government or industry, or even activists, to solve our problems for us. If governments want to wax poetic about ocean protection, climate change and reconciliation, you’re going to have to dance with us, instead of making us dance for you,” he said.

“With the Great Bear Sea, you’re going to dance to our tune now.”

UK

Exclusive: MPs' Staff Ballot For Strike Action Over 15% Pay Demand


Kevin Schofield
Tue, 7 February 2023 


MPs’ staff are to hold a strike ballot after rejecting a “woefully inadequate” 4.9% pay offer, HuffPost UK can reveal.

The parliamentary branch of the Unite union unanimously passed a motion demanding an increase for their members of the RPI rate of inflation plus 2%, which works out at around 15%.

Although the staff are employed by MPs, the budget and pay grades are set by the Independent Parliamentary Standards Authority (IPSA).

The Unite motion says: “Years of below inflation pay increases and a fundamentally broken system of employment has led to widespread insecurity and a depression of staff wages.

“The 2023/24 increase, which is half the current rate of inflation and lower than the private sector increase, will only further exacerbate the problem.”

It adds: “This branch resolves to begin the process of balloting for strike action and reiterates our call for an RPI +2% pay rise.”

In a letter to IPSA chair Richard Lloyd, Unite official Max Freedman said: “The branch meeting was one of the largest we have ever had and the motion passed without dissent.

“We are happy to meet with you at any point to discuss how we can call off action.”

Leeann Clarkson, secretary of Unite’s parliamentary staff branch, said in a letter to union members: “MPs as the employer must be the focus of the ballot but they will not be the target of the campaign.

“It is regrettable that IPSA have not negotiated over the pay that staff need and deserve at a time of soaring cost of living that has led to this situation.”

The IPSA website says the body “may provide additional funds to MPs’ staffing budget to facilitate a percentage annual increase to the salaries of staff members”.

It goes on: “Such annual increases will be applied automatically, except where a member of staff has been opted out of this arrangement.

“The amount of this increase will be determined by IPSA and communicated to MPs and their staff ahead of the start of the financial year.”

A copy of the Unite motion was also sent to Commons speaker Lindsay Hoyle.

His spokesperson said they would not comment.

The possible strike would be the latest in a line of industrial action taken by public sector workers over the last few months, including nurses and railway workers.

Last month Tory MP Lee Anderson - who was appointed the party’s deputy chairman earlier today - was accused of using a member of staff as a “political football” after he tweeted about her financial situation.

UK
More than 100,000 civil servants to strike on budget day next month



Tue, 7 February 2023

More than 100,000 civil servants are to strike on budget day in an escalation of a dispute over pay, pensions and job security.

The Public and Commercial Services (PCS) union has announced a new strike date of 15 March, when Chancellor Jeremy Hunt is due to unveil his spring budget.

It follows a strike last week that saw hundreds of thousands of members in 123 government departments walk out across England, Scotland and Wales.

The union warned that next month's strike could include a further 33,000 members working for 10 more employers, including HM Revenue and Customs (HMRC), whose ballot results are due on 28 February.

PCS general secretary Mark Serwotka said: "Rishi Sunak doesn't seem to understand that the more he ignores our members' demands for a pay rise to get them through the cost-of-living crisis, the more angry and more determined he makes them.

"PCS members are suffering a completely unacceptable decline in their pay. By April, one third of HMRC staff, for example, will be earning just the minimum wage. 40,000 civil servants have used a foodbank. It's an appalling way for the government to treat its own workforce."

Mr Serwotka said the prime minister "can end this dispute tomorrow if he puts more money on the table".

He warned: "If he refuses to do that, more action is inevitable."

The PCS union is calling for a 10% pay rise, protections to pensions and protections from job cuts.

The government has said the demands - which it says would cost £2.4 billion - are unaffordable.

The dispute is becoming increasingly bitter with Mr Serwotka calling talks last month to prevent the action a "complete farce" and warning future strikes "will be even bigger" if ministers do not act.

The strikes have impacted several key government departments and agencies including Border Force, National Highways, the Department for Work and Pensions and the Driver and Vehicle Licensing Agency (DVLA).

The new members being balloted include those working for HMRC, the Welsh government, the Care Quality Commission and Companies House.

Civil servants are among the thousands of public sector workers striking over pay and conditions amid soaring inflation and a decline in living standards.

Read More:
Strikes: Who is taking industrial action in 2023 and when?

Nurses continued with their industrial action today after walking out on Monday alongside paramedics and call handlers in what was the largest strike in NHS history.

Environment Agency workers will walk out tomorrow, while teachers and university staff will continue with strikes next week.

Union leaders have implored the government to act to prevent further strike action, but ministers in England have indicated that they will not budge on one of the main points of contention - pay for 2022/23.

Why retailers send your like-new returns to rot in landfills

Emma Cosgrove
Wed, February 8, 2023 

According to an estimate by the returns tech platform Optoro, as many as 9.6 billion pounds of returns ended up in landfills in 2021 — equivalent to 10,500 fully loaded Boeing 747s.

Martin Bernetti/AFP via Getty Images

Americans returned $816 billion in products last year, according to the National Retail Federation.

Whether items are returned to the store or shipped, they can still end up in a landfill.

Reducing returns is consumers' best shot at avoiding making the problem worse, according to experts.

Shoppers are returning more goods than ever, and some of those products end up rotting in landfills — even when they're in like-new condition.

It's hard to know exactly how many returns are sent to landfills because many retailers aren't eager to share this data, said Glenn Richey, chair of the Department of Supply Chain Management at Auburn University's Harbert College of Business. Getting caught trashing or destroying goods can lead to brand-damaging headlines.

On the flip side, strategies to avoid tossing returns could be seen as a competitive advantage worth guarding.

According to an estimate by the returns tech platform Optoro, as many as 9.6 billion pounds of returns ended up in landfills in 2021 — equivalent to 10,500 fully loaded Boeing 747s. The 2021 figures marked the height of the e-commerce boom and a 65% increase in estimated returns headed for landfills from the previous year.

Why returns end up in the garbage

Americans returned $816 billion in products last year, a 7% jump from the year before — but that's after a massive 78% increase from 2020 to 2021, according to the NRF.

For retailers without strong moral or environmental values, returns are a pretty simple math problem.

"If it costs more to process an item and get it to sell in another channel than it does to throw it away, then they throw it away," Optoro CEO Tobin Moore told Insider. Not all retailers are environmentally focused, "so things end up being thrown away because of the cost," he said.

Processing a return involves shipping, labor to inspect the item, materials to repack it, and additional shipping to transport it to a store or warehouse to resell — or to another location to be sold on a secondary market where it may sell at a discount.

"Some products will require deep cleaning or other more involved processing steps, and the costs of these extra steps are not always justified," said Mike Galbreth, a professor at the Haslam College of Business at the University of Tennessee.

With clothing returns, for example, processors may check for stains and smells. Often, the cost to remove these imperfections isn't worthwhile.

"And remember, when you sell things to a direct consumer online, if you resell it, there's also returns that happen again," Moore said.

The math doesn't always send goods straight to the trash. Some items, like electronics, keep their value for longer. Sometimes donations or recycling offer tax benefits. Returns processor Inmar Intelligence told Insider it sends less than 1% of goods to landfills after working for years on technology, process, and donation and recycling relationships.

Optoro claims its technology speeds up decisions to remove labor costs — diverting millions of pounds of waste from landfills. But it's still a common practice to trash returned goods, especially with certain types of products.

How consumers can avoid adding to landfills

Most retailers don't publicly advertise how they handle returns, unless they are particularly proud of their strategies. If consumers want to avoid contributing to landfills with their returns, there are a few things to keep in mind.

Consider the size and value of a product when purchasing. Some products are more prone to end up in the landfill because of their low value or high shipping costs. Big or heavy items like furniture, for example, are top contenders for landfills. Luxury brands, too, are more likely to trash returns to avoid products ending up in secondary markets and tarnishing the label's value. And fast fashion without much value to start with is less likely to be worth recirculating. Closely checking measurements and size charts can cut down on returns of these products.

Avoid "bracketing" and "wardrobing. "Bracketing," when shoppers buy multiple sizes of the same item and only keep one, and "wardrobing," where shoppers buy things to wear once and then return, are two habits Galbreth and Richey said consumers should break if they want to avoid sending their goods to landfills. Buying high-quality products that will last if kept, or hold up well in shipping and returns processing is another tip from Richey.

Make fast returns in original packaging. Some retailers offer months-long return windows. But returning things soon after delivery helps ensure the items are still current and will retain their value. "For those inevitable returns that do happen, return the item as quickly as possible to reduce the risk of obsolescence," Galbreth said. Returning things in their original packages and in pristine condition is also helpful.

Moore said there are some reasons for optimism, too. Retailers are investing more in returns technology, services, and other advanced strategies as returns volumes grow. Consolidation strategies used by Amazon and other major retailers cut down on shipping costs by pooling returns together at stores. And some solutions have sprung up to tackle tough categories. Floorfound is a startup specializing in returned furniture. Rebel Stork is vetting and sanitizing open-box baby gear.

"We do have other retail clients also who are getting really smart about what to do with the things that are damaged beyond repair," Moore said.

Exclusive-Peru mines on power despite protests, though halt risk looms

A view shows a makeshift dwelling near an area where hundreds of artisan miners have found a rich seam of copper, in Peru

By Alexander Villegas and Adam Jourdan

Wed, February 8, 2023 

ESPINAR, Peru (Reuters) - Peru's biggest copper mines have been able to maintain production despite road blockades, attacks and protests that have roiled the Andean nation for over two months and led to warnings of production halts, an analysis showed on Wednesday.

The analysis of power usage data by Reuters at some of the key mines in Peru, the world's no. 2 copper producer, indicates that activity at the deposits remains near normal levels, although a source close to one major mine said the risk of stoppages was rising.

The South American nation has been gripped by anti-government protests since the Dec. 7 ouster of leftist President Pedro Castillo. Highways have been blockaded throughout the copper-rich south, threatening production and transport of the metal, hitting some company shares, and boosting already high prices.

But the data suggests mining activity has been resilient, at least for now.

This includes massive deposit Las Bambas, owned by China's MMG Ltd, which previously said it would have to halt production from Feb. 1, and Glencore's Antapaccay, which stopped production in mid-January but has since resumed.

The power data from COES, which represents firms in Peru's energy sector, shows that nearly all major mines are drawing normal or near-normal levels of electricity. The data has traditionally been a reliable indicator of mining activity.

GRAPHIC: Peru Mines: Power use 

https://www.reuters.com/graphics/PERU-MINING/zjpqjwqokvx/chart.png

A source close to Las Bambas said the mine, which previously said it faced a production halt from Feb. 1 due to key provisions not reaching the mine, said it had been able to keep operating at a minimum level after getting "last minute supplies."

The mine, which normally supplies some 2% of global copper, has been hit by regular blockades for years, usually causing its power use to fall sharply during the periods of disruption. This has not yet happened this time around, despite the protests.

The person added, however, that the mine risked fully running out of supplies by Wednesday, which would force it to move into a "care and maintenance" mode with its machinery that would use half the normal level of power.

GRAPHIC: Las Bambas: Power and protest 

https://www.reuters.com/graphics/PERU-MINING/gdvzynngzpw/chart.png

The data shows some mines experienced temporary dips in power use in recent months, including Peru's largest mine Antamina, co-owned by Glencore and BHP, and Glencore's Antapaccay around the middle of January.

Antapaccay reopened on Jan. 31 after a temporary halt and has been operating again at full capacity.

Hudbay Mineral Inc's Constancia mine has seen power use start to decline recently. Others, like Freeport-McMoRan's Cerro Verde are at normal or elevated levels. A combined index of six key mines is near normal.

Freeport-McMoRan spokesperson Linda Hayes said: "We are continuing to operate, but have limited our mill throughput by about 10% to deal with intermittent supply disruptions."

The other firms did not immediately respond to requests for comment about activity at their mines in Peru.

The mining activity is key to keeping global copper supply flowing. Brokerage Jefferies said in a Jan. 31 note that some 30% of Peruvian copper supply was at risk from the unrest, a "potential positive for the copper price."

The protests - which have led to the deaths of 48 people and are the worst violence Peru has seen in over 20 years - could of course soon start to have a greater effect on mining operations. Demonstrators are becoming more determined as lawmakers struggle to agree on calling snap elections, a key protest demand.

This week, Peru's Buenaventura suspended operations at a key silver mine after protesters invaded the site.

At a blockade on the "mining corridor" highway, protester Wilber Toco Aragua Salcedo told Reuters that people felt like the mines took all the wealth and left little for locals.

"The south is quite rich, but the mining concessions that we have harm the people," he said, adding he had heard mines were stocking up on supplies. "The people do not get tired, the people won't go away, we will not take a step back."

GRAPHIC: Peru: mines and power 

https://www.reuters.com/graphics/PERU-MINING/byvrlkoxave/chart.png

(Reporting by Alex Villegas in Espinar and Adam Jourdan in Buenos Aires; Additional reporting by Ernest Scheyder, Melanie Burton, Valentine Hilaire and Fabian Cambero; Editing by Rosalba O'Brien and Bernadette Baum)