Article 1: Clarke, Melissa, Federal Government threatens to build gas plant if electricity sector doesn't replace retiring coal-fired power stations. ABC news (Online) 15/09/20.
The Federal Government is threatening to build a gas power plant in New South Wales if the electricity sector does not commit to replacing coal-fired power stations that are being retired.
With the coal-fired Liddell Power Station in the Hunter Valley due to shut down in 2023, the Federal Government is worried there will not be enough dispatchable power, given the sector's focus on building wind and solar farms.
The Federal Government will demand electricity generators come up with a plan for 1,000 megawatts of new dispatchable energy in time for the end of 2023.
If it is not satisfied with the private sector's commitments by the end of April next year, Prime Minister Scott Morrison is vowing to intervene directly in the market.
"We won't risk the affordability and reliability of the NSW energy system and will step in unless the industry steps up," Mr Morrison said.
The Federal Government has tasked Snowy Hydro Limited with drawing up plans for a gas generator in the Hunter Valley at Kurri Kurri.
Mr Morrison will press the Government's case for more non-renewable power generation in a speech to business and industry in Newcastle on Tuesday.
Energy Minister Angus Taylor said the market needed to focus on new, dispatchable power, arguing current plans fall "far short of what is required".
"Over the last decade, the private sector has not built a single new reliable power plant in NSW," Mr Taylor said.
"The Government has always been clear — we need to see life extension or like-for-like replacement of Liddell.
"If industry steps up, we'll step back."
Government to unveil raft of new measures
The potential for a taxpayer-backed, gas-fired power plant comes as the Federal Government turns its eye to the troubled gas market.
The east coast gas market has boomed under the development of Queensland's coal seam gas fields over the last decade.
But while that has made for a profitable liquefied natural gas export market, Australian commercial and industrial gas users have continued to pay high prices.
The Federal Government will announce a sweep of measures aimed at addressing that imbalance, including:
• Setting up a National Gas Infrastructure Plan to identify the priorities for investment in the gas transport network
• Establishing an "Australian Gas Hub" at Wallumbilla in central Queensland for domestic trade
• Supporting an industry-led, voluntary code of conduct for gas producers and consumers (with the threat of a mandatory code if agreement is not reached by February 2021)
• Re-negotiating agreements with east coast gas exporters to ensure enough domestic supply at reasonable process
• Supporting the development of five key gas basins, particularly Beetaloo Basin in the Northern Territory
The Federal Government is promoting the initiatives as moves that will both lower gas prices and create jobs.
The Australian Competition and Consumer Commission (ACCC) has long raised concerns that local commercial and industrial users are paying more for gas than exporters are selling it for on international markets.
A domestic gas reservation policy has not been ruled out, nor has building terminals for importing gas.
The Government's focus on gas is expected to draw the ire of the renewable energy sector and environmental groups, which point to significant improvement in the capacity of wind and solar power to support the nation's electricity needs.
Labor's Climate Change and Energy spokesman Mark Butler questioned how many jobs would be created under the Government's plan.
"It's heavy on spin, it's light as a feather on substance. It's hard to see where you get a single job from this announcement in the timeframe we need, in the deepest recession in a century," he said.
He said a lack of investment in a replacement for the Liddell Power Station had been exacerbated by the Government's actions.
"If there is any slowness or reluctance about investment in that region it's because Angus Taylor and Scott Morrison, and before them Malcolm Turnbull, for five years have tried every trick in the book to keep that 50-year-old coal fired power station open," he said.
But Greens leader Adam Bandt accused Labor of going easy on the Government, by failing to reject gas as an option.
"Renewables are getting cheaper and gas keeps getting more expensive, so Scott Morrison's plan to tie Australia to gas is just a plan to throw public money at his mates in the gas industry," he said.
"We need to help households and business make the switch from gas to electricity, not push more gas on them.
Article 2: Linden, Andrew, The CPA saga demonstrates why Australia’s corporate governance code needs replacing. The Conversation (online). 21/6/17, np.
The ongoing saga involving CPA’s board of directors and CEO Alex Malley highlights the need for a new corporate governance code in Australia. The CPA, while not a publicly listed company, adheres to the ASX Code of Corporate Governance - in fact the CPA assisted the Australian Stock Exchange (ASX) in writing its code.
It is essential that the ASX code is replaced by a new code written by an independent body, in conjunction with stronger legislation. This will help combat future corporate governance scandals.
While the ASX code only directly applies to commercial corporations listing on the exchange, its governance principles are used to benchmark best practice elsewhere. Community organisations, sports, schools, universities, professional bodies and governments use or invoke the ASX code.
For example, non-listed organisations have used the ASX code to align executive remuneration with corporate peers. It has also been used to replace elected directors with non-executive independent directors - those with no direct links to either management or substantial shareholders.
How did we get here?
As a tool of industry self-regulation, the ASX code was written by, and for, corporate insiders. The ASX code was developed by the Corporate Governance Council, a body reporting to ASX Limited, owners of the exchange. The council is not monitored by a government body, and its members are not elected.
Members of the Corporate Governance Council include the Business Council of Australia, and key professional groups such as the CPA. This is highly problematic, not because industry groups are unimportant, but because other corporate stakeholders (i.e. employees) are excluded. The role of the CPA in particular is conflicted because it also has been given the role of regulating the professional standards of accountants who in turn audit companies.
In the wake of the collapse of the Bank of Credit and Commerce International in 1991, British accounting bodies the Financial Reporting Council and the London Stock Exchange established a Corporate Governance Committee chaired by Sir Adrian Cadbury (Cadbury Committee chairman) to produce updated corporate governance guidelines.
Cadbury’s committee reported in December 1992 that more independent directors should be appointed to company boards. This was seen as a way of making boards more transparent and more accountable to shareholders, while also giving CEOs less power.
Australia had a similar catalyst for corporate governance change when insurer HIH went bust in 2001. It was this A$5 billion collapse that prompted a response from the ASX, after the government announced a Royal Commission in 2003.
The commission identified failures in governance related to mismanagement, accounting issues and specific instances of breaches of directors duties. Royal Commissioner Justice Owen noted that: “All those who participate in the direction and management of public companies need to identify and examine what they regard as the basic moral underpinning of their system of values.”
Spurred on by the HIH findings and mirroring the strategic timing of the earlier Cadbury Report in the UK, the ASX adopted its code in 2003. Both Cadbury and the ASX ignored long known problems with the single board structure - a solitary board of directors consisting of executives and various others. Research shows that this structure entrenches the power of executive directors, especially CEOs.
As heads of the corporate hierarchies, CEOs have very wide personal discretion, personal access to immense resources and control over information. Board elections in a single board system are often undemocratic, because the board itself typically sets rules on who can run for election.
The code’s application has created adverse effects. An example is the failure of Principle 8 in the code to “remunerate fairly and responsibly” to control the rapid escalation in CEO compensation. For example, the vague wording of Principle 8 has translated into executives receiving exorbitant pay packets.
Two ad-hoc legislative changes, the 2010 two-strikes rule that allows shareholders to vote on executive remuneration and proposed rules for executive remuneration in the banking industry, are attempting to clean up the mess the ASX Code has created.
Moving towards a German model
Germany has been far more successful in preventing corporate governance scandals. This is partly due to the fact that their corporate governance code was developed by a commission created by the German federal government. The commission included employee elected and union nominated supervisory board members, management board members (executives) and community representatives.
This commission has been more effective because it operates in public and has focused on supporting the intent of the existing legislation. Research has indicated that a state commission is less likely to be hijacked by a single vested interest group. In addition, they also exert greater ability to make corporations accountable.
It is notable the German commission is overseen by the Minister of Justice and Consumer Affairs. This approach reflects the German government’s continued commitment to the idea of social partnership. My research in Germany indicates this commitment in also widely shared in the community, inside German companies including their boardrooms and by key actors such as business associations and unions.
The German system mandates the need for a two-tiered board structure opposed to our single board system. A two-tiered system includes a supervisory board made up of up to half employee elected and/or union nominated directors and shareholder elected members. This supervisory board appoints and oversees a separate management board.
This legal separation of executive and non-executive directors, coupled with broader representation on supervisory boards, constrains CEO power and pay. The two-tiered board structure prevents German managers from controlling the election of supervisory board members. Owner elected supervisory board members also have access to information and perspectives that are not voiced in Australian boardrooms.
Employees’ share of profit has been reduced over the last decade in Australia and the US. However, German employee and union nominated directors on supervisory boards have prevented a similar reduction. As a result, income inequality is less of a problem in Germany.
Adopting a German style code is not the only change that must be made to rebuild our broken corporate governance system. Legislative changes such as adopting two-tiered boards, introducing employee elected/union representation on boards and re-emphasising director duties are just three of many vital changes that must be made.