AT&T Falls to 29-Year Low Amid Concerns of Cleanup Costs

Scott Moritz
Fri, July 14, 2023 



(Bloomberg) -- AT&T Inc. shares hit an almost three-decade low Friday amid growing concerns of the potentially high costs the phone giant faces if it must clean up contamination due to lead-clad wiring throughout parts of its nationwide network.

The issue was exposed earlier this week in a Wall Street Journal story that pointed to leaching lead cables that were part of early landline networks built by phone companies in the first half of the 20th century. Those networks are now owned by several national carriers including AT&T, Verizon Communications Inc. and Lumen Technologies Inc.

AT&T shares fell 4.1% to $14.50 at the close in New York, their lowest price since February 1994. Verizon declined 1.8% and Lumen dropped 10%.

Industry analysts have been trying to calculate the potential costs and risks that may await the carriers.

With a service area that covers about 40% of US homes plus an extensive long distance network, “AT&T will have the largest exposure,” JPMorgan analyst Phil Cusick wrote in a note Friday. Citing the uncertainty around the outcome, Cusick cut his AT&T target price to $17 from $22.

The lead concerns add to an already challenging year for the largest US phone company. In April, AT&T reported $1 billion in free cash flow, missing analysts’ $3 billion target and setting off alarms for the second year in a row about dividend payments. Last month, the company warned that wireless subscriber growth was less than anticipated. The company also clumsily obscured a massive restructuring and job reduction effort behind a new return-to-work policy.

AT&T declined to comment. The company has referred questions about the lead situation to USTelecom, an industry group, which has created a website featuring several statements including a claim disputing the charge that phone cables are a leading cause of lead exposure. The group, which represents most US phone companies, says it’s “ready to engage constructively on the issue.”

Hollywood strikes put pressure on streaming companies: 'The stakes are high'

Alexandra Canal
·Senior Reporter
Fri, July 14, 2023

Hollywood's double strike will likely pressure major media companies as the production pipeline grinds to a complete halt.

SAG-AFTRA — the union that represents approximately 160,000 actors, announcers, recording artists, and other media professionals around the world — joined writers on the picket lines early Friday after the guild failed to negotiate a deal with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of studios including Disney (DIS), Netflix (NLFX), Amazon (AMZN), Apple (AAPL), and NBCUniversal (CMCSA).

It is the first time SAG-AFTRA has gone on strike in over four decades and the first time since 1960 that both actors and writers are striking concurrently. The Writers Guild of America (WGA) strike is currently in its third month with no end in sight.

Third Bridge analyst Jamie Lumley, who interviewed a number of executives in the entertainment and streaming space, wrote that the two strikes come "amid the increasing pressure on traditional linear distribution models and the ongoing rise of streaming, which continues to change how content is consumed and monetized."

"We’ve been hearing that most streaming companies won’t feel the pain from strikes until 2024 given the pipeline of content that has already been locked in. However, streamers could be in trouble as soon as the velocity of content slows," he warned. "Our experts emphasize that content is still king and if streamers want subscribers to keep coming back, they need to have a steady feed of new movies and shows being released on their platforms."

SAG-AFTRA is fighting for more protections surrounding the role of artificial intelligence in media and entertainment, in addition to higher streaming residuals as more movies and TV shows go direct to streaming. These demands are similar to those posed by the writers guild.

"We had no choice," SAG-AFTRA President Fran Drescher said on Thursday following the strike announcement. "We are the victims here, being victimized by a very greedy entity. They stand on the wrong side of history. We stand in unprecedented unity. At some point the jig is up, you can’t keep being marginalized and disrespected. The business model has been changed by streaming and AI. If we don’t stand tall right now, we’ll all be in jeopardy."

Michael Pachter, managing director of equity research at Wedbush, said he agreed with Drescher's sentiments, telling Yahoo Finance Live, "I think the studios are just completely wrong on this one. I'm not suggesting that they cave, but I'm suggesting that they compromise and they just haven't even begun discussions with the writers. ... Content is their lifeblood. They're being really foolish about this."

He warned studio heads, such as Disney CEO Bob Iger, who called the unions' demands "unrealistic," risk creating "permanent damage" with the actors and writers they closely work with: "[Iger] is just completely wrong," he said.

'The stakes are high for everyone'

SAG-AFTRA president Fran Drescher from left, Duncan Crabtree-Ireland, SAG-AFTRA national executive director and chief negotiator, and actor Frances Fisher, right, take part in a rally by striking writers and actors outside Netflix studio in Los Angeles on Friday, July 14, 2023. (AP Photo/Chris Pizzello)

The media and entertainment industry today is being dramatically reshaped by the impact of streaming services. Streaming shows often have fewer episodes and less residual income compared to traditional network television, which often means less money in the pockets of both actors and writers.

At the same time, the majority of studios are no longer just "pure play" production houses. Rather, they have their own streaming divisions, which have brought on a new set of challenges as direct-to-consumer losses mount.

"Streaming companies have been feeling the heat from Wall Street to push towards profitability," Third Bridge's Lumley said. "This has put a number of players on challenging footing as they weigh content costs, strategic decisions, and the growth of their audience. With actors and writers seeing contracts and royalties heavily impacted by streaming, the stakes are high for everyone at the negotiating table."

Insider Intelligence principal analyst Paul Verna added, "While video advertising and subscription revenues are expected to grow by double digits this year and next, the dual strikes could threaten that economy, especially if the standoffs run deep into the fall season."

\

Thames Water Crisis Fragments Industry’s $60 Billion Bond Market

LARGEST INVESTOR IS CANADA'S OMERS PENSION FUND

Tasos Vossos
Fri, July 14, 2023 


(Bloomberg) -- The crisis at Thames Water Ltd. has left the $60 billion market for UK water utility bonds deeply divided.

A measure of the dispersion in spreads in the sector has surged over the past few weeks as investors try to separate companies they see as well run, with manageable debt loads, from those that face the most operational and balance sheet issues. The standard deviation almost tripled after reports of a possible temporary nationalization of Thames Water, before settling at around double typical levels, according to data compiled by Bloomberg.

“Going forward we should see more differentiation in spread terms among various water companies, driven by an increasing focus on operational performance, gearing and amount of inflation linked debt,” said Kshitij Sinha, a portfolio manager at Canada Life Asset Management.

Bonds issued by Southern Water Ltd. and the holding company of Anglian Water — along with Thames Water’s Kemble bonds — saw the biggest spread widening over the past few weeks. Debt issued by Severn Trent Plc had one of the mildest reactions, with only a single-digit increase in the risk premium.

Representatives at Thames Water and Anglian Water didn’t respond to requests for comment. A representative at Severn Trent said they had no comment to add, while a spokesperson for Southern Water also declined to comment on bond spreads.

Thames Water has been engulfed in a crisis as it’s had to borrow more to fund investments in its ailing infrastructure, while soaring inflation in the UK has driven up the cost of servicing its £8 billion ($10.5 billion) of index-linked debt. The company — which serves about a quarter of the UK population — said this week that it is confident of raising further funds after investors agreed to a £750 million equity injection, but UK regulator Ofwat said that there are still “significant issues” to deal with.

And in a sign of industry issues going beyond Thames Water, Southern Water was downgraded by Fitch Ratings last week, triggering clauses in bond documents that forced it to suspend dividend payments.

To be sure, avoiding losses in water company bonds since Thames Water made the headlines in late June would have been difficult, with spreads on the vast majority of issuers widening, based on data compiled by Bloomberg.


Still, the dispersion indicates that investors are starting to pick which companies they see as winners and losers in the group.

“Investors are not going to abandon the sector: these companies are still high-quality, offering attractive returns,” said Canada Life’s Sinha. “However, spreads will start reflecting the risk in the sector, penalizing the constant underperformers.”

Most Read from Bloomberg Businessweek

DANIELLE SMITH'S TALKING POINTS

Will Canada's oil & gas industry join Europe's 'green retreat?'

"Impractical time frames" for emissions cuts could drive investment away from the industry

Jeff Lagerquist
Tue, July 11, 2023 

The International Energy Agency sees annual oil demand growing marginally over the next few years, before hitting a peak in 2030.

 (THE CANADIAN PRESS/Jeff McIntosh)

As the world's largest oil and gas companies shrink from climate goals, Canada's fossil fuel industry continues to seek wiggle-room on its own fast-approaching emissions target.

European supermajors BP (BP) and Shell (SHEL) are top fossil fuel players in the energy transition. But recent actions have been dubbed a "green retreat" from the forceful plans they announced a few years ago to embrace renewables and slash emissions.

In February, BP backed off a pledge to cut emissions by 2030, lowering its target from a 35-to-40 per cent reduction, to between 20 and 30 per cent. At the same time, the company deepened its investments in oil and gas.

At Shell, the company's head of renewable generation recently left his role as CEO Wael Sawan pares back green spending. Last month, Shell scrapped its plan to cut oil output by 20 per cent by 2030, opting to keep production steady until the end of the decade, as the company defends its turf as the world's largest LNG firm.

"Oil demand is a really hard thing to make a dent in," said Kevin Krausert, CEO and co-founder of Calgary-based Avatar Innovations, in an interview. "Investors are not going to be happy with oil and gas companies that are basically giving up market share to other players."

Money talks and bullsh** walks. I think that’s what you’re seeing.Canadian public policy consultant Ed Whittingham

The International Energy Agency sees annual oil demand growing marginally over the next few years, before hitting a peak in 2030.

Krausert is an oil field services executive turned venture capitalist who pairs Canadian energy transition startups with some of the biggest firms in the oil and gas sector. He says Canadian producers will struggle to meet Ottawa's industry goal of cutting emissions from operations 42 per cent below 2019 levels by 2030, before hitting net-zero by 2050.

"I think you might see some recalibration. Is it 2030? Is it 2032? Is it 2035?" he said of the interim target. "If it takes us three years to get regulatory approval to build a major [carbon capture] project, and another three years to build it, and we still don't have the fiscal structure in Canada to get some of these projects across the line, you're starting to bump up against 2030."

Kendall Dilling, president of the Pathways Alliance, warns "impractical time frames" for emissions cuts could drive investment away from the industry, reducing production in Canada, while increasing output and emissions in other countries.

The Pathways Alliance, a partnership between Canadian Natural Resources (CNQ.TO)(CNQ), Cenovus (CVE.TO)(CVE), ConocoPhillips Canada, Imperial Oil (IMO.TO)(IMO), MEG Energy (MEG.TO), and Suncor Energy (SU.TO)(SU), is calling for more government financial support for its $16.5 billion carbon capture and storage network. The project, if completed, would be among the largest in the world.

"We can reduce our emissions by 42 per cent from 2019 levels. We have set a goal of net-zero by 2050 from operations. But reaching that as early as 2030 is simply not realistic given current technology, construction and regulatory requirements," he told Yahoo Finance Canada in a statement.

Alex Pourbaix, executive chair of Cenovus' board of directors, calls Shell's shift from green energy to producing more oil a "microcosm" of trends playing out across the industry. Meanwhile, BP is "throttling back their ambition to coincide with the actual ability to decarbonize," he said.

"It's going to be way more challenging, and take a much longer time than I think a lot of people had any idea," Pourbaix said on a July 5 promotional podcast from the right-leaning Canadian news and commentary website, The Hub. "I think a lot of companies and a lot of countries are starting to realize that."

In March, Pourbaix told Yahoo Finance Canada that Ottawa's aim for a 42 per cent drop in operational oil and gas emissions by 2030 is "not feasible by any stretch."

Canadian public policy consultant Ed Whittingham says oil and gas executives are stuck between a rock and a hard place, responding to continued demand for fossil fuels, as well as calls to pivot away from their profitable core business.

"I have a lot of sympathy for these oil and gas CEOs. Investors speak out of both sides of their mouths, saying we want good ESG performance and net-zero, but we want those high returns," he told Yahoo Finance Canada.

"Some of the adjustments you're seeing, especially with the European oil and gas supermajors, are because they made bold statements and promises around diversification from oil and gas, and getting into renewables. They're discovering that's really hard, and they're trying to walk some of that back. But we haven't seen that to the same degree with the Canadian players," Whittingham added.

"Money talks and bullsh** walks. I think that's what you're seeing."

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

SCI FI TEK
California Shows Off New $25 Million Carbon Capture Technology Project

David R. Baker
Fri, July 14, 2023 

(Bloomberg) -- A $25 million project at a Calpine Corp. power plant near San Francisco will test a technology that could capture 95% of a plant’s carbon emissions, a process California officials say is critical to the state’s climate fight.

Carbon capture technology provokes fierce criticism from many environmentalists who consider it a license to keep burning fossil fuels rather than switch to cleaner energy sources. But at the unveiling of the Calpine project Friday, California’s top climate change regulator said some fossil fuel plants will still be needed to keep electricity service reliable as the state moves to eliminate its net carbon emissions by 2045.

“Capturing that carbon, starting as soon as possible, will allow us to stop emitting in situations where we absolutely need these plants for reliability,” said Liane Randolph, chair of the California Air Resources Board.

The pilot project at Calpine’s Los Medanos Energy Center in Pittsburg, California, will use a chemical solvent developed by ION Clean Energy Inc. to bind with carbon dioxide in the plant’s flue gas. ION, based in Colorado, says its process should be both more effective and cheaper than previous carbon capture technologies. Funded in part with a $19 million federal grant, the project will not store the captured carbon, instead releasing it back into atmosphere. In future plants, the carbon dioxide could be pumped underground for permanent storage.

Calpine bills itself as the nation’s largest generator of electricity from natural gas and Chief Executive Officer Thad Hill said carbon capture will be critical for the company. “For us, it represents the energy transition and natural gas’s role in it,” he said.

Protests swell in Tel Aviv for 28th week as anti-government movement vows more 'days of disruption'





 Tel Aviv, Israel, Saturday, July 15, 2023. (AP Photo/Ariel Schalit)


JULIA FRANKEL
Sat, July 15, 2023 

JERUSALEM (AP) — Tens of thousands of protesters packed the streets of Tel Aviv on Saturday night, marking the 28th straight week of demonstrations against Prime Minister Benjamin Netanyahu's plan to overhaul the country's judiciary. Protest leaders promised further “days of disruption” lie ahead.

Netanyahu’s government gave initial approval to a key portion of the overhaul earlier this week, breathing new life into the grassroots movement. The bill still needs to be approved in two more votes, expected by the end of the month, before it becomes law.

Saturday night protests have become a mainstay of the grassroots movement — but this week's was larger than usual.

In Tel Aviv, protesters unrolled a massive banner reading “SOS." They threw paint powder into the sky, streaking it pink and orange. “Handmaids” — women dressed in red robes as characters from the dystopian novel and TV series “The Handmaid's Tale” — once again took to the streets. Their jarring appearance is meant to drive home the notion that, if the overhaul passes, women could be stripped of their rights.

On Tuesday, protesters blocked major highways and disrupted operations at the country's main international airport after Netanyahu's parliamentary coalition advanced a bill that is part of the overhaul. Organizers said they would hold another “day of disruption” on Tuesday if he continues to move ahead with the plan.

The Israeli leader was hospitalized on Saturday for dehydration after suffering a dizzy spell and having spent the previous day in the sun without drinking water. He later released a video from the Tel Aviv hospital, saying he felt good. However, Netanyahu was to spend the night in the hospital, according to his office, and a weekly Cabinet meeting scheduled for Sunday was pushed to Monday.

Saturday’s protest in Tel Aviv was joined by others across the country. Protesters brandished lit torches outside Netanyahu’s home in Jerusalem and demonstrated in the coastal cities of Herzliya and Netanya.

After more than six months of protests, the movement shows little sign of abating. Israel's national labor union and its medical association have joined a long list of groups speaking out against the bill. Military reservists, fighter pilots and business leaders have all urged the government to halt the plan.

Arnon Bar-David, head of the country’s national labor union, the Histadrut, threatened a possible general strike that could paralyze the country’s economy.

“If the situation reaches an extreme, we will intervene and employ our strength,” Bar-David said, calling on Netanyahu to “stop the chaos.”

The Histadrut called a general strike in March as the government pushed the judicial overhaul legislation through parliament after weeks of protest. The move shut down large swaths of Israel’s economy and helped contribute to Netanyahu’s decision to suspend the legislation.

The Israeli Medical Association, which represents 90% of Israeli physicians, joined the Histadrut Friday, voting to “employ all available means, including significant organizational measures” to oppose the reasonableness bill.

The law will “devastate the healthcare system,” the chairman of the association, professor Zion Hagay, said.

The mass protests have taken place since Netanyahu’s far-right government presented the overhaul plan in January, days after taking office. The protests led Netanyahu to suspend the overhaul in March, but he decided to revive the plan last month after compromise talks with the political opposition collapsed.

The overhaul calls for giving Netanyahu’s allies control over the appointment of judges and giving parliament power to overturn court decisions. The Netanyahu government is the most hard-line ultranationalist and ultra-Orthodox in Israel’s 75-year history. His allies proposed the sweeping changes to the judiciary after the country held its fifth elections in under four years, all of them seen as a referendum on Netanyahu’s fitness to serve as prime minister while on trial for corruption.

Critics of the judicial overhaul say it will upset the country’s fragile system of checks and balances and concentrate power in the hands of Netanyahu and his allies. They also say Netanyahu has a conflict of interest because he is on trial for charges of fraud, breach of trust and accepting bribes.

NOTE THEIR PRIORITIES

Glencore, Anglo Join South Africa in $1.5 Billion Water Plan to Supply Mines and Communities



Loni Prinsloo and Antony Sguazzin
Fri, July 14, 2023 

(Bloomberg) -- Some of the world’s biggest mining companies are working with South Africa’s government on a 27 billion rand ($1.5 billion) water project to supply major platinum and chrome operations and several hundred thousand people with drinking water.

Glencore Plc and Anglo American Platinum Ltd. are among the companies attempting to secure half of that amount in financing by the end of the year with the rest of the funds to be sourced by municipalities and the government.

The companies involved in Lebalelo Water Users Association are in talks with about 10 local and international banks for funding, according to Bertus Bierman, its chief executive officer. The project stretches for about 170 kilometers (106 miles) across Limpopo province in northeast South Africa and is expected to be completed by 2030.

The plan is unprecedented in South Africa where almost all water infrastructure, especially initiatives of this scale, have been led by the state. Now, after years of neglect and mismanagement, the government is seeking investment in infrastructure and help in running operations from power plants to rail routes and water facilities.

“This could get a new model into South Africa where government is acting as the regulator and the private entities in partnerships with governmental institutions do more of the work on the ground,” said Bierman in an interview in Pretoria, the capital, this week. “We would like to get construction started early next year.”

Glencore, which operates a chrome smelter in the area, is a global coal and metals mining and trading company, while Anglo Platinum, controlled by Anglo American Plc, is the world’s biggest platinum producer.

Lebalelo plans to build 400 kilometers of pipelines and will supply 250 million liters (66 million gallons) of water a day, about a third of the consumption of Cape Town, which has more than four million inhabitants.

Water will also be supplied to people in the city of Polokwane and Mookgophong, a town north of Johannesburg. Lebalelo’s 16 members also include Impala Platinum Holdings Ltd. and Northam Platinum Ltd. as well as the Department of Water and Sanitation, the Sekhukhune District Municipality and the Mogalakwena Local Municipality.

The project will be rolled out in phases and PricewaterhouseCoopers LLP will arrange the funding, Bierman said, declining to identify the banks that the group is in talks with as the negotiations are confidential.

The project is just one of the initiatives being pushed by South Africa’s government to try and improve the country’s dilapidated water infrastructure.

The state-owned Development Bank of Southern Africa is separately setting up a $1.4 billion facility that will include private investors to fund water reuse projects. State-run companies from the Netherlands and Spain are working with South African counterparts to fund construction in the country.

If the association’s plan is successful the model may be replicated elsewhere in the country, Bierman said. Some of the companies involved in Lebalelo are beginning to discuss a similar energy initiative to generate electricity for mines and communities that could cost about 40 billion rand, he said.

Flipkart makes $700 million payout to employees following PhonePe split


Image Credits: Manish Singh / 

Manish Singh

TechCrunch
Updated Fri, July 14, 2023 


Flipkart commenced a $700 million "one-time discretionary" cash payout to employees on Friday, the single-largest such compensation in the Indian startup ecosystem.

The Walmart-backed Bengaluru-headquartered startup is compensating employees for the separation of fintech PhonePe from the e-commerce group, a move that devalued Flipkart's shares.

The two firms completed a full ownership separation late last year in a deal that was structured to allow shareholders in the Singapore entities of both firms to purchase shares directly in PhonePe’s India entity. PhonePe, in addition to separating from Flipkart, has also moved its headquarters to India and raised $850 million in recent quarters as it bulks its war chest and enters new categories, including e-commerce.

In an email to employees earlier Friday, Flipkart Group CEO Kalyan Krishnamurthy said the "much-awaited compensation will be made today." He added: "We have exciting times ahead, and as we continue to grow across businesses, I look forward to your continued dedication and determination to bring about the future that we envision and scale new heights together."

A Flipkart spokesperson told TechCrunch that the payout had been made. More than 20,000 current and former employees are receiving the payout.

The payout comes at a time when Flipkart has contemplated another round of financing from investors. The firm, which competes against Amazon in India, raised $3.6 billion at a valuation of $37.6 billion in mid-2021. Flipkart, which also counts Tiger Global and SoftBank among its backers, has already exhausted most of that capital, according to a person familiar with the matter.

Flipkart has also been looking to file for an initial public offering for several years, but has deferred the plan due to the ongoing poor market conditions.

The firm's chief rival, in the meantime, is slowing down its growth in India and shutting down some business lines. Amazon said last month that it intends to invest $15 billion in India by 2030 -- $12.7 billion of which it has earmarked for AWS.

Both the firms are facing competition from Reliance, the Indian conglomerate that also runs the nation's largest retail chain. The firm, run by Asia's richest man, Mukesh Ambani, is poised to eventually outpace Amazon and Flipkart in the race for the country’s $150 billion e-commerce market, brokerage firm Bernstein projected in May this year.

Bernstein’s projection hinges on a quartet of compelling advantages that they argue will propel Reliance to the top: a robust retail network, a sweeping mobile network, a holistic digital ecosystem and a “home field advantage” in a notoriously challenging regulatory landscape. These factors should help Reliance seize the majority of the massive e-commerce market in the longer run, the brokerage firm said.

Chinese-Owned Mine Hit by More Delays in Key Peru Copper Expansion Project

Marcelo Rochabrun
Thu, July 13, 2023 


(Bloomberg) -- A unit of state-owned China Minmetals Corp. is bracing for further delays in building a second pit at its troubled Las Bambas copper mine in Peru, while the military there continues to buffer the operation from protest disruptions.

A long-delayed project to mitigate depletion at the current pit was slated to begin in the second half of the year. That’s looking increasingly unlikely due to delays in negotiations with an indigenous community.

“We hope we can finish negotiations this year, but it’s too early in the process yet to know how fast it will go,” Troy Hey, who heads corporate relations at Hong Kong-listed MMG Ltd, said in an interview from Lima. “Once we get an agreement, it’s probably up to three months to get to mining.”

Las Bambas, located in a remote part of the Peruvian Andes, is one of the world’s biggest and most troubled mines. It’s faced recurrent protests from indigenous communities since opening in 2016 at a cost of $10 billion. Blockades and other disruptions have exceeded 600 days in that span, interrupting shipments to smelters in China.

The mine, previously owned by Glencore Plc through its acquisition of Xstrata, can produce as much as 400,000 metric tons a year. But it’s repeatedly underperformed because of protests and declining ore quality. Opening the second pit would see Las Bambas run at full capacity. Without it, the mine will produce about 300,000 tons next year, assuming no disruptions, Hey said.

It’s currently operating with military protection. Tensions reached a peak a year ago when the Huancuire community entered Las Bambas and built a camp on land they had sold to the company for the second pit. Hey said Huancuire members had finally left the area, but that talks were not done yet. MMG is encouraged by new community leadership and is overhauling its approach to community relations, Hey said.

“We are in the best place we have been for a long time in terms of negotiations but it’s tough to see what time-frame it will be,” he said. Huancuire leadership turnover had stalled talks for more than six weeks but MMG hopes to restart negotiations next week, Hey said.

Transporting semi-processed copper from Las Bambas to a seaport has long been the company’s biggest challenge. It uses a mostly unpaved road that traverses about 70 indigenous communities, many of which have long complained about insufficient financial benefit from mining.

President Dina Boluarte has managed to keep copper flowing since March by deploying military to the area. Her administration plans to keep soldiers there until further notice.

“Having police and military presence to keep things calm is not a long-term solution, though I think at the moment we greatly appreciate the support of the government to do that,” Hey said.

Without the military, Las Bambas probably would have seen renewed blockades, he said. “It’s a chronic problem, and so if we do nothing differently we should expect to see the same outcome.”

THE KING AND JUNTA RULE
Thai Election Winner Seeks to Strip Senate of Voting Power

Patpicha Tanakasempipat
Fri, July 14, 2023 

(Bloomberg) -- Thailand’s Move Forward, the party that won the most seats in the May general election, is trying to strip some of the Senate’s powers after the military-appointed upper house of parliament blocked pro-democracy leader Pita Limjaroenrat’s bid to become prime minister.

Move Forward submitted a bill Friday to abolish an article in the 2017 military-backed constitution, which gives the unelected Senate the power to select the prime minister alongside the elected lower house.

This isn’t the first time that someone is trying to challenge the Senate’s voting right. Six attempts have been made in vain since 2020 by political parties and civil society groups to curb the power of the Senate, because such a proposal ironically needs support from at least a third of the 250-member upper house to pass.

Move Forward’s submission came a day after its leader Pita, the sole nominee of the eight-party coalition that has staked a claim to form Thailand’s next government, was thwarted in his bid for premiership by senators, the majority of whom rejected Pita outright or abstained from voting. In doing so, they undermined the result of the May 14 election where voters had overwhelmingly supported pro-democracy parties.

“We don’t know how many times the prime minister selection will be held until it concludes. So, we can do this hand in hand,” Chaithawat Tulathon, secretary-general of Move Forward Party, told reporters at the parliament house. “Since the Senate didn’t want to vote anyway, we’re only looking for a solution for everybody.”

Among the 250-member Senate, as many as 159 members abstained from voting and 34 voted against Pita outright on Thursday. Only 13 backed the popular mandate. But Chaithawat said the party will seek support from more senators for Pita at the next round of prime minister selection next week.

Many members cited Move Forward’s platform to amend Thailand’s lese majeste law, which prohibits criticism of the king or other royals, as a reason for withholding support. Pita has vowed to not back down on the proposal, raising further tension with the pro-military royalist establishment.

The bill was accepted by house speaker Wan Muhamad Noor Matha, who confirmed at the briefing that the second vote to select the prime minister will be held by the joint National Assembly on July 19, at 9:30 a.m. in Bangkok.

“I’ll process this as soon as possible as this is an urgent matter,” Wan said.

 Bloomberg Businessweek

Thailand's Move Forward seeks to curb Senate powers after loss in PM vote


Thailand's parliament votes for a new prime minister

Updated Fri, July 14, 2023 
By Chayut Setboonsarng and Panarat Thepgumpanat

BANGKOK (Reuters) -Thailand's Move Forward party filed a motion in parliament on Friday seeking to curb the power of the military-appointed Senate, a day after the body thwarted its party leader's bid to become prime minister.

The role of the 249-member Senate in deciding a prime minister along with the elected lower house - a system designed by the royalist military after a 2014 coup - is seen as a constitutional safeguard to protect the interests of the generals and the conservative establishment.

Move Forward won the most seats in an election in May but despite being unopposed and having the backing of his eight-party alliance, its leader Pita Limjaroenrat lost the crucial vote on the premiership on Thursday, after the Senate and parties of the outgoing, army-backed government closed ranks to deny him the top job.

Only 13 senators backed 42-year-old Pita, with the rest voting against him or abstaining, which his party said indicated some were acting under duress.

Party secretary general Chaithawat Tulathon filed a motion on Friday to amend part of the constitution, saying "This is a solution that all sides will feel comfortable with".

"There are forces from the old power to pressure the Senate - from the old power to some capitalists who do not want to see a Move Forward government," he said in an earlier television interview, adding it could take about one month to pass.

Pita, a liberal from the private sector, has won huge youth support for his plan to shake up politics and bring reforms to sectors and institutions long considered untouchable.

That includes the monarchy, more specifically, a law that prohibits insulting it, by far Move Forward's most contentious policy and a big obstacle in its attempts to persuade legislators to back Pita.

MAJOR BLOW

Pita vowed on Thursday not to abandon those policies or give up his fight for the premiership. He can run again if nominated in the next vote for the post, which takes place on July 19, the House speaker confirmed.

The defeat on Thursday followed a major blow for Pita on the eve of the vote, when the election commission recommended he be disqualified over a shareholding issue, followed hours later by the Constitutional Court announcing it had taken on a complaint over his party's plan to amend the royal insult law.

The political tension this week had been widely expected.

Thailand has been locked for two decades in a power struggle between reform-minded parties that win elections and a nexus of old money and the military establishment determined to stifle them.

Pro-democracy groups have called for protests. Activist group the United Front of Thammasat and Demonstration took aim at the senators and those who abstained in the vote, calling them spineless and "toxic to the will of people".

Thitinan Pongsudhirak, a political science professor at Chulalongkorn University, called the constitution a straitjacket on democracy, and said systematic attempts to stop Move Forward would see a public backlash.

"These old guard institutions, they need to maintain power because they have a lot to lose," he said.

"The kind of change that Move Forward demands would unwind Thailand's monarchy-centred system and then it would unlock institutional reforms... this would unleash a lot of the competitiveness of Thailand, Thailand's potential."

(Additional reporting by Napat Wesshasarter and Juarawee KittisilpaWriting by Martin PettyEditing by Frances Kerry)

Ambitious liberal fails in first bid to become Thailand's next leader

Thailand's parliament votes for a new prime minister

Thu, July 13, 2023
By Devjyot Ghoshal and Panu Wongcha-um

BANGKOK (Reuters) - In the 60 days since a stunning election victory, the leader of Thailand's Move Forward party forged and managed a coalition, cajoled the royalist military establishment and rallied his troops with a single goal - to become prime minister.

On Thursday, 42-year-old Pita Limjaroenrat failed in his initial bid to win the premiership after he was unable to secure enough votes in a joint sitting of Thailand's 750-member parliament. Another vote is expected to be held next week, which Pita can contest if nominated again.

The setback came despite Move Forward's victory in the May general election, where it emerged the single largest party after running a slick, social-media powered campaign that promised progressive, transparent government to Thai voters.-

But Pita and Move Forward's agenda - particularly a once-unthinkable proposal to amend Thailand's "lese majeste" law - also pit them against the country's powerful conservative establishment, which controls the 250-member appointed senate.

"Give Thailand the opportunity to have a majority government according to the will of the people," he said in a video message on Tuesday, reiterating a call to elected and unelected lawmakers to support him in the bicameral vote.

"I can be a prime minister who runs a country that embraces everybody's diverse dreams," he said.

Yet, by Wednesday afternoon - less than a day before the vote - Pita's quest for power was hit by a double-whammy.

First, Thailand's election commission recommended the Constitutional Court disqualify Pita as a lawmaker because of his ownership of shares in a media company in violation of electoral rules.

Second, the Constitutional Court said it had accepted a complaint against Pita and his party over plans to amend the lese majeste law, Article 112 of the criminal code that punishes insulting the monarchy with up to 15 years in prison.

The actions were a throwback to 2020, when a court ordered the predecessor party of Move Forward dissolved and some of its leaders banned from politics for a decade for violations of election rules.

It was into that breach that Pita - then a first-term lawmaker from a politically influential family with experience working in the technology sector - stepped, becoming the leader of the newly-formed Move Forward.

The position foisted the Harvard University graduate on to the centre stage of Thai politics, which was roiled by a youth-led reformist movement that saw thousands take to the streets, sometimes leading to violent clashes in the heart of Bangkok.

The young protesters took on the military-backed rulers head on, calling for deep-seated reforms, a new constitution and questioning the monarchy's long-held influence on politics and society.

Some of those protesters - and some of those demands - were part of Move Forward's electoral juggernaut, including a call to amend the lese majeste law.

'ABLE TO COMPROMISE'

In a country where many consider the monarch semi-divine, analysts doubted whether a Pita-led Move Forward would be able to push aside a raft of conservative and pro-establishment parties that had dominated domestic politics for over a decade.

At the hustings, Pita drew large, adoring crowds - many of them young voters. The party's trademark orange logo and sharp messaging flooded social media. Late in the campaign, the first-time prime ministerial candidate saw a surge in popularity.

"Vote for Move Forward to change this country together," Pita said in a slick campaign video, taking off a pair of sunglasses and winking.

To millions of Thais weary of an almost decade-long military-backed rule, Pita offered an raft of changes, including increase in minimum wages, dismantling of business monopolies, streamlining of the armed forces and legalising same-sex marriage.

When the numbers rolled in late on May 14, Move Forward not only trounced the ruling coalition but also bettered the populist Pheu Thai Party - the opposition outfit backed by self-exiled tycoon Thaksin Shinawatra, a former prime minister.

The outcome pushed Pita to switch gears from candidate to coalition builder, as a group of seven parties - including the Pheu Thai - coalesced around Move Forward to win power.

"Pita is a democratic representative who can elevate Thailand on the global stage in a dignified way," said Kannawee Suebsang, a member of parliament from the Fair Party, which is part of Pita's eight party-coalition.

"He is a strong leader with charisma but is also able to compromise."

(Reporting by Devjyot Ghoshal and Panu Wongcha-um; Editing by Nick Macfie)

Thailand’s PM Race Can Take a Whole New Turn, Here’s How









Philip J. Heijmans and Patpicha Tanakasempipat
Thu, July 13, 2023 

(Bloomberg) -- After failing to win over Thai conservatives in his first attempt to become prime minister, things are looking increasingly difficult for pro-democracy leader Pita Limjaroenrat to secure a victory even if he were to try again.

The parties outside of Pita’s Move Forward-led coalition and the majority of military-appointed senators are opposed to his key campaign promise of amending the so-called lese majeste law that punishes anyone for defaming or insulting the king or other royals.- 

Also, the Harvard-educated politician risks disqualification as a lawmaker after the poll body found him in breach of election rules — saying he held shares in a defunct media company while running for public office. While he may still go for a second chance at premiership when parliament meets next on July 19, analysts expect support for Pita to wear thin within his alliance should he lose again; although there’s no limit on the number of re-votes he can seek.

“I think they will run him again,” said Kevin Hewison, emeritus professor of Asian Studies at the University of North Carolina at Chapel Hill. Another attempt by Pita will probably harden the stance of conservatives and only weaken support for the pro-democracy alliance, according to Hewison.

The longer it takes for Thailand to form a new government, the more investors will lose confidence in the $500 billion economy whose expansion has been lagging emerging-market peers in Southeast Asia through the pandemic and after. Political wrangling between pro-democracy and conservative groups have also hurt the country’s stocks, bonds and currency markets.

Here are some other scenarios that could play out:

Pita Supports Pheu Thai

Pita could step aside and instead support his coalition partner Pheu Thai, which finished second-place in the May 14 general election and is linked to exiled former leader Thaksin Shinawatra.

Isra Sunthornvut, a former member of parliament for the Democrat Party, said he wouldn’t be surprised if next week Pita throws his support behind Pheu Thai to lead the government “for the sake of the country and democracy.”

The only challenge to this scenario is that Pheu Thai may find it difficult to muster support from the conservatives while still being an ally of Move Forward, which has refused to back down on its push to amend the royal insult law.

Pro-Democracy Group Splits

That could leave Pheu Thai inclined to consider breaking away from Move Forward’s coalition and try forming a government led by one of its three candidates for the post, including real estate magnate Srettha Thavisin and Paetongtarn Shinawatra, the youngest daughter of Thaksin.

Thaksin, who has been considering returning home, had previously said Pheu Thai would not support any attempt to reform the lese majeste law. That makes it easier for Pheu Thai to win enough support from the 250-member military-appointed Senate, helping put a new government sooner than later.

The private sector wants the new government to be in place as soon as possible, so our economy can continue to grow as expected, Thai Chamber of Commerce Chairman Sanan Angubolkul said Friday.

Military-Backed Minority Government

A third scenario involves the Senate supporting a minority government led either by Bhumjaithai’s Anutin Charnvirakul or one of the military-backed parties. That outcome, however, risks sparking protests by supporters of pro-democracy groups.

Since the Senate’s ability to vote for the prime minister expires next year, any minority government is at risk of falling in a no-confidence vote. To guard against that, it’s possible that the establishment may petition the courts to disband Move Forward as what happened in the past to their predecessor, using the push to amend the royal insult law as a pretext, and even annul the election result.

“But that might take some time,” Hewison said referring to the process of disbanding Move Forward and annulling the result. “That said, going to an election quickly is unlikely to produce a different result. But conservatives in Thailand are a balmy lot.”

However, any move to ban the nation’s popular politicians may lead to massive demonstrations. And this time the risks are even higher for the royalist establishment, as protesters have recently been much bolder in directly targeting the monarchy than in previous years.

Such a turn of events could end up hurting tourism, the only economic engine that’s firing on full cylinders and supporting Thailand’s growth amid a downturn in global demand for goods.

--With assistance from Suttinee Yuvejwattana, Cecilia Yap and Anuchit Nguyen.

Thailand's Election Commission says a reformist candidate for prime minister may have broken the law



 Leader of Move Forward Party Pita Limjaroenrat arrives before the signing of a memorandum of understanding on attempt to form a coalition government between Move Forward Party and other parties during a news conference in Bangkok, Thailand on May 22, 2023. 

Thailand's state Election Commission announced Wednesday, July 12, it has concluded there is evidence that the top candidate to become the country's next prime minister, Move Forward party leader Pita Limjaroenrat, has violated election law, and has referred his case to the Constitutional Court for a ruling. (AP Photo/Sakchai Lalit, File)

JINTAMAS SAKSORNCHAI and GRANT PECK
Updated Wed, July 12, 2023 

BANGKOK (AP) — Thailand’s Election Commission said Wednesday there is evidence that the top candidate to become the next prime minister — a reformist with strong backing among progressive young voters — violated election law and referred his case to the Constitutional Court.

The commission’s decision included a request that the court order Move Forward Party leader Pita Limjaroenrat to be suspended as a member of Parliament until the panel issues a ruling.

The alleged violation involves undeclared ownership of media company shares, which are banned for lawmakers. Separately, the court also said it would review a complaint that Pita and his party may have violated the law by proposing to amend Thailand's strict legal provision against defaming the monarchy. Thai media said the court would not make any ruling on Wednesday and that it might need some to consider the issues.

Pita can still be nominated on Thursday when Parliament meets to vote for a new prime minister. But the commission's move raises new doubts about whether he can muster enough votes to get the post, already a struggle because of Thailand's deep political divisions.


The Move Forward Party, with a progressive reformist platform, swept to a surprise first-place finish in May’s general election, capturing 151 seats in the 500-member House of Representatives and the most popular votes. Move Forward has assembled an eight-party, 311-seat coalition with which it had planned to take power.

But Pita's path to power is difficult because he must win 376 votes in a joint session of the House and the conservative, 250-seat, non-elected Senate. The Senate largely represents Thailand's traditional ruling establishment, which suspects Move Forward's proposals for minor reforms of the monarchy endanger the royal institution, which they consider to be the center of Thais' national identity.

Pita's party responded to the Election Commission's decision by questioning its fairness and even its legality. It said its decision was unnecessarily hurried and violated its own procedures by failing to call Pita to give a statement.

The commission had earlier said it acted correctly but Move Forward alleges its members may have engaged in malfeasance, or carrying out duties in a wrongful manner, a crime punishable by 10 years imprisonment and a fine.

The election law complaint against Pita, lodged by a member of a rival party, alleges he ran for office in 2019 while failing to declare his shares in a media company.

The case the commission referred to the court accuses Pita of running for office with awareness that he was ineligible, a criminal violation punishable by maximum imprisonment of three years and/or a fine of up to 60,000 baht ($1,720). The party faces a fine of up to 100,000 baht ($2,865).

Caretaker Deputy Prime Minister Wissanu Krea-ngam, the government’s top legal advisor, has been quoted as saying that a ruling against Pita could be grounds for nullifying the May election results and holding a new election.

There have been fears since the election that Thailand’s conservative ruling establishment would use what its political opponents consider to be dirty tricks to hold on to power. For a decade-and-a-half, it has repeatedly used the courts and supposedly independent state agencies such as the Election Commission to issue controversial rulings to cripple or sink political opponents.

The dissolution in 2019 of the Future Forward party, a forerunner of Move Forward, triggered vigorous street protests by pro-democracy activists that trailed off only when the coronavirus pandemic took hold.

Hours after the Election Commission announced its referral of the shareholding case, the Constitutional Court said it had has accepted a separate petition against Move Forward and Pita concerning their campaign promise to amend Thailand's harsh lese majeste law,.

The law, also known as Article 112, mandates a three to 15 year prison term for defaming the king, his immediate family, or the regent. Critics of the law say it is abused for political purposes, and Move Forward wants changes to rein in such abuses, which it claims actually do damage to the monarchy's reputation.

Royalists soundly reject all efforts to amend the law, and courts have sometimes treated such proposals themselves as tantamount to violating the law. The military and the courts consider themselves stalwart defenders of the monarchy, and the Senate members overwhelmingly share their viewpoint.

If the court agrees that the accused's actions constitute trying to overthrow the constitutional monarchy — a separate provision from Article 112 — they will not be subject to punishment but can be ordered to cease all activities related to their proposed amendment, subject to prosecution if they continue.

Analysis-Thailand's monarchy looms over battle for prime minister
 

Vajiralongkorn, King of Thailand

Move Forward Party leader Pita Limjaroenrat thanks voters ahead 

of the vote for a new prime minister on July 13, in Bangkok


Mon, July 10, 2023 

By Panu Wongcha-um and Panarat Thepgumpanat

BANGKOK (Reuters) - The role of the monarchy in Thailand is at the core of a looming deadlock that could tip Southeast Asia's second-largest economy into crisis, with reformers once again vying to dislodge the grip on power of the royalist military establishment.

Despite a stunning victory with its allies in a May 14 election over pro-military parties, the progressive Move Forward party led by Pita Limjaroenrat faces an uncertain path to government.

The main reason is that part of Move Forward's political platform is the once-unthinkable proposal to amend Thailand's "lese majeste" law, Article 112 of the criminal code that punishes insulting the monarchy with up to 15 years in prison.


In a country where reverence for the monarch has for decades been promoted as central to national identity, the idea is so radical that minority parties and many members of the appointed Senate have vowed to block Pita from becoming prime minister.

"The proposed amendment is disrespectful and is offensive to the monarchy," Senator Seri Suwanpanon told Reuters.

The military has for decades invoked its duty to defend the monarchy to justify intervention in politics, and used the lese majeste law to stifle dissent, critics say.

In parliament, a giant portrait of King Maha Vajiralongkorn hangs over the chamber where on Thursday members will vote for a prime minister.

But the battle over who gets the job could lead to weeks or even months of deadlock thanks to the votes of a 250-seat Senate, appointed by a junta, that could block the election-winning progressive alliance from securing its choice in a combined vote of both chambers.

The system was set out in a constitution drafted after a 2014 coup led by then-army chief Prayuth Chan-ocha, the prime minister whose party lost badly in the May election.

Much depends on whether Move Forward's main ally, second-place winner Pheu Thai, sticks with it or seeks other coalition partners if Pita's bid looks doomed.

King Vajiralongkorn, 70, who has no role in choosing a government, has remained silent on the lese majeste issue since the election. The Royal Palace did not respond to a request for comment.

SWEEPING CHANGE

Move Forward's proposed amendment reflects cultural changes that have in a few years swept Thailand, where the monarch has for decades been held up as almost semi-divine.

On the surface, much remains the same. The king's portrait hangs on city streets and buildings. The nightly Royal News airs the royal family's good deeds.

But subtle changes are evident. In cinemas, many no longer stand for the royal anthem before every film. Satirical memes spring up on social media before the government orders them removed.

The biggest change, however, is political. In the last election in 2019, no party would have dared suggest amending the lese majeste law.

But Move Forward not only dared, it won the most seats in May though the amendment was only one plank of a progressive platform.

The shift emerged with student-led demonstrations in 2020 that began as protests against military rule but evolved into criticism of what the protesters called a military-palace power nexus, and finally into criticism of the king.

Politicians did not lead the protests but Move Forward called for reform of the lese majeste law when activists began to be charged under it.

About 250 of the 1,900 prosecutions linked to the 2020 protests were under Article 112, according to the group Thai Lawyers for Human Rights.

The prosecution of so many under the law pushed the issue into mainstream discourse, analysts say.

"We can now see the real fault line in politics is the role of the monarchy in Thailand's political order," said Thitinan Pongsudhirak, a political analyst at Bangkok's Chulalongkorn University.

NUMBERS GAME

With many senators expected to vote against Pita for prime minister, Move Forward's 312-seat alliance of eight parties in the 500-seat lower House of Representatives may not be enough to secure him the premiership.

To get to the 376 votes he needs, Move Forward and main partner Pheu Thai need to convince 64 lawmakers from the Senate, or from other parties in the lower house.

If Pita falls short, other scenarios come into play.

Pheu Thai, which has 141 seats to Move Forward's 151, could nominate its prime ministerial candidate with the eight-party alliance intact.

Loyal to self-exiled former Prime Minister Thaksin Shinawatra who was ousted in a 2006 coup, Pheu Thai has been more careful in its messaging on lese majeste, so one of its prime ministerial candidates could win enough votes.

Another possibility is that Pheu Thai seeks other partners in the lower house for a coalition without Move Forward. Pheu Thai, however, is vowing to stick with Move Forward.

Titipol Phakdeewanich, dean of the faculty of political science at Ubon Ratchathani University, said using the law to crush dissent had backfired.

"By over-using Article 112, the conservatives dragged the royal institution deeper into politics," he said.

Move Forward says amending the law will prevent its misuse and benefit the monarchy. It wants the penalty reduced to at most a year in prison, and only the Royal Household Bureau to be able to file a complaint instead of anyone.

"Some senators misunderstood ... accusing Move Forward of wanting to topple the monarchy," party executive committee member Amarat Chokepamitkul told Reuters.

"We want to amend it to maintain good relations between the monarchy and the people."

(Reporting by Panu Wongcha-um and Panarat Thepgumpanat; Editing by Kay Johnson, Robert Birsel)