Joeleen's Pandora Box - Notes to Self

Leibniz Institute - Increased Efficiency for CIGS Solar Cells

2011-02-07T13:49:00.000-08:00

Ref: http://www.nanowerk.com/news/newsid=20023.php

Posted: Feb 7th, 2011

Increased Efficiency for CIGS Solar Cells

(Nanowerk News) Scientists at INM — Leibniz Institute for New Materials developed a barrier layer that separates the metal carrier from the absorber film and thus increases the efficiency of metal-based CIGS solar cells. For the first time, the INM program division "Optical Materials" presents this development in the German Pavilion at the international trade fair "nano tech 2011" and also nationwide at the Hannover Messe 2011.

Corrosion and poor isolation between substrate and carrier material cause a lower efficiency for CIGS solar cells apart from other influences. Solar cells consist of copper (C), indium (I), gallium (G), and sulphur (S). Glass as carrier material and the low efficiency prevent the flexible application of these future solar cells in the automotive industry, for example.

The developed layer is glass-like. "It works as iron diffusion barrier and thus prevents corrosion and oxidation of the carrier", explains Peter William de Oliveira, head of the program division. "At the same time, the barrier works as insulating layer and reduces unintentional electrical currents from the absorber to the carrier", says Oliveira. Both functions increase the efficiency of metal-based CIGS solar cells by up to 13 percent.

The glass-like diffusion barrier is applied on the metal carrier by means of the sol-gel process. It is transparent and flexible and has a thickness of only a few micrometers. The INM scientists developed both the layer and up-scaled process. By means of dip coating and slot coating they produced foils in a DIN A3 size. The traditional roll-to-roll printing process allows the production of continuous layered foils up to a length of 50 meters and a width of about half a meter.

These and other applications are exhibited by INM at the international trade fair "nano tech 2011". Included are coatings with special properties, as for example transparent conductivity, antiadhesive, scratch-proof, antireflective or self-cleaning function, or layers for friction reduction or corrosion protection. Multifunctional coatings, which combine several of these properties, also belong to the INM research portfolio. The INM – Leibniz Institute for New Materials presents itself in the German Pavilion (Booth E-18-24) at the nano tech 2011 in Tokyo from 16th to 18th February 2011.

At the Hannover Messe, too, INM will present its skills and competencies at the Booth A-50 in Hall 2 – the Leading Trade Fair for Research and Technology and the International Leading Trade Fair for Research, Development and Technology Transfer.

The INM — Leibniz Institute for New Materials, situated in Saarbrücken (Germany), engages in fundamental and applied materials research – from molecules to pilot production. In interdisciplinary cooperation, the work of INM includes the fields of chemical nanotechnology, interface materials and materials in biology. Its focal research fields are chemical synthesis, physical analysis of surfaces, coatings and interfacial materials.

Background:

A recently published study of Lux Research Inc. confirms that the cost of goods sold for CIGS solar cells will rapidly decrease over the coming years. According to this study, an increased efficiency, among other things, will contribute to a gross margin of over 30 percent.

Contact:

Diffusion barrier, conductive transparent coatings, multifunctional coatings:
Dr. Peter W. de Oliveira
INM — Leibniz Institute for New Materials
Phone +49 681 9300 148
Email: peter.oliveira@inm-gmbh.de

Anti-adhesive coatings, scratch-proof coatings, coatings for friction reduction, multifunctional coatings:
Dr. Carsten Becker-Willinger
INM — Leibniz Institute for New Materials
Phone +49 681 9300 196
Email: nanomere@inm-gmbh.de

Source: INM - Leibniz Institute for New Materials

# # #

AsianDevBank - Migration Due to Climate Change Demands Attention

2011-02-07T13:43:00.000-08:00

7 February 2011

Migration Due to Climate Change Demands Attention - ADB
MANILA, PHILIPPINES - Governments in Asia and the Pacific need to prepare for a large increase in climate-induced migration in the coming years, says a forthcoming report by the Asian Development Bank (ADB).

Typhoons, cyclones, floods and drought are forcing more and more people to migrate. In the past year alone, extreme weather in Malaysia, Pakistan, the People's Republic of China, the Philippines, and Sri Lanka has caused temporary or longer term dislocation of millions. This process is set to accelerate in coming decades as climate change leads to more extreme weather.

"No international cooperation mechanism has been set up to manage these migration flows, and protection and assistance schemes remain inadequate, poorly coordinated, and scattered," the report states. "National governments and the international community must urgently address this issue in a proactive manner."

ADB expects to issue the report, Climate Change and Migration in Asia and the Pacific, in early March as part of a broader ADB project aimed at increasing awareness of, and enhancing regional preparedness for, migration driven by changing weather patterns.

The report highlights specific risks confronting climate change "hotspots", including megacities in coastal areas of Asia. These hotspots of climate-induced migration face pressure from swelling populations as rural people seek new lives in cities. The problem is compounded by greater dislocation of people caused by flooding and tropical storms.

Climate-induced migration will affect poor and vulnerable people more than others," said Bart W. Édes, Director of ADB's Poverty Reduction, Gender, and Social Development Division. "In many places, those least capable of coping with severe weather and environmental degradation will be compelled to move with few assets to an uncertain future. Those who stay in their communities will struggle to maintain livelihoods in risk-prone settings at the mercy of nature's whims."

On the positive side, the report says that if properly managed, climate-induced migration could actually facilitate human adaptation, creating new opportunities for dislocated populations in less vulnerable environments.

The ADB project, Policy Options to Support Climate-induced Migration, is the first international initiative that aims to generate policy and financing recommendations to address climate-induced migration in Asia and the Pacific.

To obtain a copy of the draft report, contact adbpub@adb.org or +63 2 632 6643.
For further information visit www.adb.org/SocialDevelopment/climate-migration.
Join a live online discussion with experts on 9 February 2011, 15:00 Manila time at http://www.adb.org/documents/events/2011/online-discussion-changing-climate/default.asp

# # #

Toshiba's Nuclear Deal in Turkey

2011-02-07T02:19:00.000-08:00

Ref: http://www.ft.com/cms/s/0/f4161b80-3222-11e0-a820-00144feabdc0.html?ftcamp=rss

Toshiba upbeat on Turkey nuclear deal
By Jonathan Soble in Tokyo and Delphine Strauss in Ankara

Published: February 6 2011 19:16
Last updated: February 6 2011 19:16

Toshiba, the Japanese electronics and engineering group, says it is confident that it will seal a deal to build a nuclear power plant on Turkey’s Black Sea coast, after talks between the Turkish government and South Korean reactor builders broke down last year.

Norio Sasaki, Toshiba president, told the FT a deal now hinged mainly on the provision of long-term risk insurance by the Japanese government. Tokyo has been working to strengthen financial support for its private sector nuclear groups to help them compete with state-backed manufacturers in Korea and Russia.

The Turkish project could help Toshiba hit its goal of selling Y1,000bn ($12.2bn) of nuclear technology annually ahead of its initial target of 2015. “Now we’re talking about 2014, and it could even be a little earlier,” Mr Sasaki said. Turkish authorities “have said clearly they want an ABWR” – the Advanced Boiling Water Reactor type, built by Toshiba. “If [insurance] can be settled, then electric utilities will come on board and I think it will go well.”

Toshiba bought the US nuclear plant builder Westinghouse in 2006 and has been investing in its own pre-existing nuclear business, which has built most of its reactors in Japan. It is looking to increase exports, including to middle-income countries such as Turkey that have little or no experience in nuclear power.

“They are looking for someone to build the plants, run them, and sell the electricity to recoup the initial costs,” Mr Sasaki said. “In a 15 or 20-year project like that, there are various risks that a private company can’t take on its own, like the risk of an earthquake or political change.”
Turkey has struggled for years to launch a nuclear power industry that would reduce its reliance on oil and gas imports. In a 2008 tender, it received only one bid – from Russia’s Atomstroyexport – because most companies felt its conditions did not give them enough certainty.

Since then, Turkey has reached a deal with Moscow to build a first nuclear plant – part of a web of energy agreements on gas supply and pipelines. It entered exclusive talks with Japan to build the second plant, in the Black Sea province of Sinop, after negotiations with South Korea’s Kepco broke down in November.

Turkey’s energy ministry said technical negotiations with Japan continued, with a deadline of the end of March before talks would be reopened to other bidders. But a ministry spokesman said there was no question of Ankara offering state purchase guarantees that had been refused to South Korea – one of the chief reasons for the failure of negotiations.

# # #

EICC Case-Study: Leadership in Developing a Supply Chain Code of Conduct for the IT Industry

2011-01-25T09:16:00.000-08:00

Leadership in Developing a Supply Chain Code of Conduct for the IT Industry

Organisation Name
Hewlett-Packard

Problem
Today, more than 80% of HP’s products are manufactured through alliances and partnerships and the company has taken significant steps to extend its social and environmental standards by introducing the HP Supply Chain Code of Conduct to its supply chain in 2002. It was the first code of conduct in the IT industry and provides an important foundation for HP’s ongoing efforts to ensure compliance with its Supply Chain Social and Environmental Responsibility (SER) Policy. With one of the IT industry’s largest and most complex supply chains also comes responsibility for setting standards in this industry. So in 2004, HP took the initiative to extend the Supply Chain Code of Conduct to the whole industry by playing a leading role in developing an industry-wide standard.

Solution
Since many electronics industry companies share suppliers, an industry-wide supplier code of conduct allows companies to work more effectively with suppliers to ensure compliance. In 2004, HP facilitated collaboration with some of the largest IT organisations, including Dell and IBM and major Electronics Manufacturing Service Providers, to develop a common Electronic Industry Code of Conduct (EICC).

The EICC promotes responsible business practices to improve social and environmental conditions across the global electronic supply chain and it aims to foster responsible management and operational practices in the areas of labour, human rights, environmental, health and safety (EHS) and ethics.

The EICC paves the way for a standards-based approach for monitoring suppliers' performance across several areas of corporate responsibility. Fundamental to adopting the code is the understanding that a business, in all of its activities, must operate in full compliance with the laws, rules and regulations of the countries in which it operates. The code encourages participants to go beyond legal compliance, drawing upon internationally recognised standards in order to advance social and environmental responsibility.

The Electronic Industry Code of Conduct may be voluntarily adopted by a business in the electronics sector and subsequently applied by that business to its own suppliers.

Over the last year, HP has had extensive dialogue with internal and external stakeholders regarding EICC provisions. In coordination with the original EICC founders, the company incorporated several changes into the EICC. The current (October 2005) version added open communication and direct engagement between workers and management.

HP participates in the EICC Implementation Group as the Vice Chair and is a member of the EICC steering committee.

Constraints
•Building consensus in developing an industry code of conduct took time and perseverance in the short run but has long-term benefits.

Benefits

•It was clear that there were advantages to addressing supply chain issues on an industry-wide basis, to develop common assessment, auditing methods and a central database for the technology sector.

•Standardizing SER tools and processes throughout the industry reduces confusion, increases efficiency, avoids duplication of supplier surveys and audit fatigue and increases focus on the core issues.

Period Of Implementation
2004

Place Of Implementation
Global

More Information
http://www.eicc.info/
http://www.hp.com/hpinfo/globalcitizenship/environment/supplychain/compliance.html
http://www.hp.com/hpinfo/globalcitizenship/gcreport/supplychain/supplyapproach.html
http://h41111.www4.hp.com/globalcitizenship/uk/en/bulletin/3/interview.html

Year Of Submission
2006

Themes
Mainstreaming CSR
Business Partnerships

= = =

Reference Link:
http://www.csreurope.org/solutions.php?action=show_solution&solution_id=45

A Japanese Woman Leading in 3-D TV, Breaking Japan’s Glass Ceiling

2011-01-19T00:06:00.000-08:00

Source: http://www.nytimes.com/2011/01/18/business/global/18screen.html

Leading in 3-D TV, Breaking Japan’s Glass Ceiling
By HIROKO TABUCHI

Published: January 17, 2011

TOKYO — It is the Achilles’ heel of 3-D television: the clunky glasses that viewers must wear to see images pop out in 3-D.

But Rieko Fukushima, a researcher at Toshiba, developed a way to do away with the glasses — and at the same time is helping to crack Japan’s glass ceiling for women.

“I’d be lying if I said it wasn’t tough as a woman,” said Mrs. Fukushima, 39, who led Toshiba’s effort to develop the world’s first “naked eye” 3-D TV. The project began nine years ago, when she had just returned from maternity leave.

“Sometimes, I’d see it in my colleagues’ expressions,” she said “ ‘What? A woman? This age? In charge?’ ”

It is too early to know whether Toshiba can create a big consumer market for its new 3-D TVs, which it introduced in Japan in October and demonstrated this month at the Consumer Electronics Show in Las Vegas.

But Mrs. Fukushima’s breakthrough is a rare example of a company that has successfully tapped what some economists call Japan’s most underused resource: women.

According to a 2009 government survey, women made up 8 percent of managerial jobs in Japan; in the United States, women hold 43 percent of supervisory positions, according to Catalyst, a nonprofit in New York.

Only 65 percent of college-educated Japanese women are employed, many of them in low-paid temp jobs, compared with about 80 percent in the United States — “a significant lost economic opportunity for the nation,” Goldman Sachs said in a report in October. Over two-thirds of Japanese women leave the work force after their first child compared with just one-third of American women, the report said, often because of corporate and societal norms, as well as insufficient child care.

If Japan’s 60 percent female employment rate in 2009 could match the 80 percent rate among men, the country would have 8.2 million more workers to replenish its rapidly aging population and raise its gross domestic product by as much as 15 percent, said the report, by Kathy Matsui, a managing director at Goldman Sachs Japan.

Mrs. Fukushima’s success has therefore been welcomed as an inspirational tale of what can happen when things fall into place: a driven woman, a supportive family, and a company trying to diversify its work force.

“As a researcher, her ideas are cutting edge,” said Yuzo Hirayama, the head researcher at Toshiba’s TV research unit. “Her communication and networking skills also never cease to astound me.”

It was in 2002 that Mrs. Fukushima, after maternity leave for her first child, helped set up a new research and development team to explore the possibilities of 3-D displays. At the time, there was skepticism at Toshiba over whether 3-D technology could be commercialized.

Still, Mrs. Fukushima saw the potential in an early prototype. From the start, she was convinced that the viewing glasses that accompanied most 3-D technology would have to go.

In conventional 3-D TV technology that uses glasses, images for each eye are rapidly displayed one after the other. Filters in dedicated glasses flash on and off in sync with the TV, so that the right eye sees one image, then the left eye sees the next image, creating the illusion of 3-D.

But Mrs. Fukushima proposed a new approach: developing an algorithm that draws on a Toshiba imaging processor called the Cell to display nine images for each frame. A sheet on the screen angles each image so that the right eye sees only images meant for the right eye, while the left eye sees only images meant for the left eye.

The biggest challenge was making a TV that displays 3-D images even when viewed from wider angles. Toshiba has not entirely solved that problem: its TVs work best when viewed from within a 40-degree zone.

Designing a mass-production setup to keep costs down also posed difficulties, something Mrs. Fukushima tackled by building a network of experts from around the company. But pressure mounted as the project progressed.

“When I was just a researcher, a setback would only reflect badly on myself. But now that I was leading a team, I had to make sure nobody lost faith,” she said.

“I needed to think things through harder than anyone else,” she said. “I often felt overcome with worry, but I tried not to show that at meetings.”

A big break for the project came at a companywide technology fair in May, when an advanced prototype caught the eye of Norio Sasaki, Toshiba’s president. After that came an effort involving hundreds of engineers that pushed production schedules forward as much as two years. “2010 was supposed to be the year of the 3-D glasses,” she said. “We beat our rivals by going glasses-less.”

In Japan, a 20-inch model sells for 240,000 yen, or $2,880. Developing models in bigger sizes would be crucial in marketing the TVs globally, analysts say.

Mrs. Fukushima credits Toshiba with creating a hospitable environment for women. When she was on maternity leave, her supervisor e-mailed her with updates on the latest research and to assure her she “had a place to come back to,” she said.

Toshiba introduced measures in 2004 to help women balance work responsibilities with those at home, including more flexible working hours and a career track with a reduced workload. Now, the majority of women who take maternity leave return to their jobs, officials say.

Women have made more inroads into research positions than in other company divisions: though women number only 12 percent of Toshiba’s 113,500 workers, they make up 20 percent of its main research and development staff. Toshiba still has a way to go in promoting them to advanced positions, however: just 360 of the company’s 21,011 managers are women.

Meanwhile, Mrs. Fukushima’s husband, whom she met in college, has been an important supporter. He encouraged Mrs. Fukushima, a chemistry major, to pursue a master’s degree. Now they share household chores, with her husband, a university lecturer, in charge of making breakfast and sending their daughter to school, while Mrs. Fukushima handles dinner and bedtime. On a typical workday, Mrs. Fukushima works from about 9 a.m. to 6 p.m.

It has not always gone smoothly for her. When she began looking for work in 1994, after the collapse of Japan’s economic bubble, many companies told her they were not hiring women, she recalled. Others said they had no experience in hiring women with master’s degrees.

But a Toshiba recruiter encouraged her to call, and after a short interview, she was hired along with another woman from the same university. “There were companies that weren’t even giving women interviews, but Toshiba hired two,” Mrs. Fukushima said. “I was elated.”

Now, she is held up as an example of a woman climbing Japan’s corporate ladder. Nikkei Woman, a monthly magazine for businesswomen, named Mrs. Fukushima its Woman of the Year last month.

Amid her newfound fame, Mrs. Fukushima says she considers her 9-year-old daughter her biggest fan. “She gets so excited to see me on TV,” Mrs. Fukushima said. The girl talks of being a researcher herself one day.

“It makes me happy,” Mrs. Fukushima said. “But these days I am careful to remind her that Daddy has an important job, too.”

= = =

The Chinese Yuan, Rare Earths And The Selection Of Critical Mining Projects — Technology Metals Research

2011-01-17T00:14:00.000-08:00

The Chinese Yuan, Rare Earths And The Selection Of Critical Mining Projects — Technology Metals Research

If you’re reasonably well informed about global trade issues, then you know that the USA and China disagree politically on the relative value, of the Chinese renminbi in US dollars, and that the renminbi’s exchange rate with the US dollar is set by the Chinese government. This is because the world market has chosen not to make the renminbi freely convertible (exchangeable for other currencies at a rate set by a free market, not by the issuing country). This is itself because the Chinese government exclusively sets the exchange rate, and its power to do so is based on the immense size of its trading economy surplus (of export value over import cost), and on the fact that China has now built up the world’s largest (ever in history) reserves of ‘hard’ currency (convertible to US dollars), in the form of US dollars themselves.

These two factors allow the Chinese to keep their currency pegged artificially low, relative to the value that the free market would give it in terms of US dollars. The US government, for all of its bravado and the ranting of internationally powerless members of the US Senate, can do nothing to force the Chinese to strengthen the yuan (the basic unit of renminbi).

China is thus enjoying a powerful advantage in that it takes fewer dollars to buy a yuan, than it should if the global free market operated in China. This is because China has accumulated so much ability, not just potential, to affect the world trading (export/import) markets.

With that introduction I am going to issue a caution, perhaps even a warning, to all of those calling for sustained increased prices for the rare earths. Be careful what you wish for.

“China speeds up yuan’s globalization” is a headline that appeared in the International Business Times last week. It joins a flood of other stories on this topic, now filling the news prior to a meeting between the US and Chinese presidents in this coming week. My first thought was to wonder how this Chinese move will affect the rare-metals market.

The US dollar supplanted the British pound sterling between World War I (a war which essentially made the UK insolvent) and the end of World War II (which made the UK bankrupt). Note well, that the British Empire gave up a century and a half of economic gains in a 31-year (1914-45) effort to decide the mastery of Europe, which the combatants started out believing would decide the fate of most of the world. Southeast Asia was a backwater in both wars as far as the issuer of the world’s de facto reserve currency (the UK) was concerned, in 1914 and in 1939. In 1947, Imperial Britain had been replaced by a fundamentally still-isolationist United States, as the absolute center of the financial world. In 1947, the USA held for its own account or for safekeeping, half of all the gold in the world. No greater accumulation of gold had ever before been seen, nor has it been since, at least so far.

The Chinese Empire collapsed in 1912, in a series of events more noticed in Hollywood than Washington, DC. Yet no Communist revolution immediately followed the fall of the last dynasty in China, as it did in Imperial Russia six years later. China literally seethed in revolutions and dictatorships until Japan, emulating European empires in their death throes, decided to create a protectionist trade zone with a complete self-sufficiency in the supply chains for metals, minerals and energy. It called its plan the ‘Greater East Asia Co-Prosperity Sphere.’ The first move by Japan was to try to conquer China, piece by piece, to get its resources and acquire control of its population for use as labor.

The Japanese were defeated in China by the USA, which belatedly came to southeast Asia’s rescue when the Japanese miscalculated the consequences of going to war, with a far-off enemy with a larger manufacturing economy. The Chinese in all their suffering, noticed the Japanese error and resolved to never let it happen to them again. Note that the Communist revolution and ascendancy in China started during the attempted Japanese conquest, which went on for 14 years! The Communists were successful in 1949 and China became The Peoples’ Republic of China, as it is called today.

America, sitting on a massive hoard of gold in 1949 and enjoying the greatest industrial manufacturing-based consumer boom in history,ignored the devastated economy of China as too big a problem to solve in a reasonable time. It decided instead to revive Europe (and as it turned out, Japan) as a hoped-for market for American goods and services, to be paid for with cheap labor at first. Even though no- one in the McCarthy era period of anti-Communist knee-jerk political correctness would admit it, there was a feeling that the Soviet Union could and would now get bogged down for generations in China, which was seen as a basket case.

Unfortunately, many Americans of the political and economic class are basing their decisions with regard to China, as if the USA could catch up with Chinese politics and economics by simply adjusting America’s 1960s view of China. It is too late for that.

The Chinese renminbi has now begun a journey that I think ultimately will result in the yuan and the dollar both being reserve currencies and then in the yuan surpassing the dollar as the stronger reserve currency. This will occur in lock-step with the US reducing its ability to create wealth, through the production of natural resources and their conversion into finished goods in surpluses that can be exported, while the US maintains its standard of living.

This will probably not happen overnight; it could take a generation, because we are still in the period where Chinese investors are accumulating the US dollar as the reserve currency because they still fear using their own currency as a safe harbor, and because they have so much of the reserve currency that they are able to affect the political choices of the issuer of that currency.

The Chinese are well aware of the fact, conveniently forgotten by American politicians, that while the UK was the issuer and guarantor of the world’s reserve currency, it was also on the gold standard, and it was the world’s policeman, whether it liked it or not. Britain was the world’s policeman in order to protect its imperial trade routes. America did not take over this role after World War II. Instead, it immediately went to Cold War to prevent the ‘spread’ of communism. The greatest defeat in that Cold War was considered to be ‘the loss of China,’ although no-one suggested war either to prevent or redeem China’s ‘fall’, even when China as the newly minted PRC went to war with the US, by proxy, in Korea, which the US then, as now, refers to as a “police action.” In all fairness to the politicians of 1949 and the USA, we had just concluded a massive effort that destroyed China’s attempted conqueror, Japan, and the American people did not perceive the ‘loss’ of China as a near-term problem.

China is today still not a credible, conventional military threat to the USA. As in the Middle East, technology and training beat ill-equipped, ill-trained masses, every time. This means that militarily, without the direct and credible threat of mutual atomic annihilation, China cannot prevent the USA from acting anywhere in the world even as close to its own shores as Japan or Taiwan. China’s recent probing of Japanese resolve on sea floor rights to energy and minerals, has been cast as a rare-earth issue by myopic viewers of the international scene, and self-interested parties looking for drivers for investment in non-Chinese rare earth production. In fact, the confrontation was merely a skirmish in a larger war for natural resources, begun nearly a century ago by Japan, in emulation of Britain.

In the world of international trade of utilitarian commodities, metals, minerals, and energy sources, China is the demand driver overwhelmingly. Essentially all investment in new productive capacity for utilitarian commodities, is to add supply for serving Chinese demand. If this is a slight exaggeration, at least it is true that no-one would make anywhere near this level of investment, if it were not for the collateral of massive Chinese demand growth.

To put it mildly, China is in the driver’s seat (excuse the pun).

At the moment. China is the dominant player in the rare-earth space, which is where the operation of Western free-market capitalism, always seeking the lowest price, placed China. This cannot and will not change for two to three years, the least time it will take, if everything goes according to plan, for new or restarted production and refining in significant quantities of rare earths produced outside of China, refined outside of China, and incorporated in end-use products outside of China to come to the world market.

So, what is this to do with the value of the US dollar and the Chinese yuan?

If China continues to hold the price of the yuan where it is against the US dollar, then the only pressure to produce rare earths outside of China will be for strategic advantage to ensure security of supply, to maintain both civilian industry and military uses free of Chinese influence and control.
China today controls the rare-earth supply chain, because its price structure has moved that entire supply chain to China up to the point where high-purity metals and alloys are delivered to end users. Even there, at the point of end-use manufacturing, China is today the low-cost producer and so today, China is not only the monopoly producer of the rare earths, it is the dominant end-user of rare earths in the manufacturing of finished goods.

At least half or more of these rare-earth-containing finished goods are made in China for the export market. Therefore, it is in China’s economic interest to prevent the export of rare earths as raw materials. This has been the exact direction of Chinese export controls on rare earths since the beginning of this century.

If you believe, as the Chinese do, that the only remaining threat to their total control of the rare-earth supply chain is the Japanese rare-earth end-use products industry (such batteries, permanent magnets and lasers), then you will put pressure on Japan to move the last of the world’s non-Chinese, high-value-added sectors of rare-earth-based product manufacturing to China, or give the Japanese a reason to allow Chinese manufacturing competitors to compete in Japan (which today Japan does not do, in the case of magnets). Either of these moves would create jobs in China. which is always the goal of the Chinese economy, as it is the goal of the Japanese economy, and as it should be the goal of the US economy.

The point of all of this, is that it is China who will benefit most from price increases, for the rare earths as fabricated forms for industrial manufacturing end-use.

Chinese analysts predict that by 2015, China will produce just two-thirds of the world’s supply of new rare earths. Chinese analysts assume that Lynas, Molycorp, and perhaps, Toyota in Vietnam, will produce the remaining third.

The Chinese analyst community is silent about the overall percentage of the total value-add rare-earth supply chain that this one-third will represent.

I think that China will be completely self-sufficient in domestic rare-earth production for its supply chain in 2015 as it is today. I also think that higher prices for rare earths are inevitable as China cleans up the environment in general and in mining in particular. The one, the greening of rare earth mining, adds costs to rare-earth mining; the other, the greening of the Chinese economy, adds demand. Both are upward price drivers.

The real question is how much of the higher costs of rare earths can be absorbed by the Chinese supply chain, before increases in cost for value-add rise, to where a competitive supply chain can be economic in a foreign (to China) country other than Japan. Note that as rare-earth prices go up in China, they will also go up in Japan and that Japanese labor and overhead is vastly greater than that of China today. The gap will close, if it closes, only slowly even at Chinese rates of growth of costs. Those who think they will operate in the USA to add value to rare earths mined and refined in the USA, need to demonstrate that their supply chain total costs are below those of foreign competitors. Historically it is the very fact that this has not been so, which has driven the rare-earth supply chain to Japan and China in the first place.

China, in my opinion, has always wanted higher prices for rare earths, but has been prevented from getting them by fierce internal competition for supply from both legal and illegal sources. The elimination of unethical, dirty, and illegal competition is the target of the current consolidation and environmental remediation (of the rare earth mining sector) initiatives within the PRC.
Now, what about the value of the Yuan?

Chinese goods bought in China must be purchased in renminbi; that is the law. In order to buy or trade goods within China a foreign company must place a hard-currency deposit in a Chinese bank, as collateral for being allowed to purchase renminbi for use only in commercial transactions, at an exchange rate set by the Chinese Ministry of Finance.

So, if the Chinese re-value the renminbi up to reflect its strength as the US demands, then the number of dollars to buy the same number of renminbi will increase. Thus, without doing anything at all, the costs of Chinese goods to foreigners in the dollar/euro/yen economic zones (all of them are hard currencies exchangeable at market rates for one another), including rare rare earths, will rise, but the renminbi price will not rise just on that account.

If China, after imposing an increase in the value of the renminbi, then sees its internal rare-earth prices go up in renminbi, there will be a larger proportionate increase in the number of dollars it will then take to purchase the renminbi, to purchase the rare earths.

I believe that the cost of the rare-earth fabricated forms necessary to make end-use products in mass production, is only a small part of the final cost of the finished goods.

Therefore I believe that an increase in the prices of the rare earths in renminbi, without a contemporaneous increase in labor rates in China for workers who produce the finished goods, does not change China’s competitive advantage in the value chain for rare-earth-based products.
Unfortunately, such an increase will serve in the above case to make non-Chinese value chains even more uncompetitive, since other than in Japan, they will need to invest large amounts of capital to start or restart operations to refine, fabricate, and utilize rare earths in consumer products, and will at the same time have to train largely inexperienced engineers and workers to do jobs for which there is little or no domestic prior experience base to draw upon for instructors. Even if these barriers of capital and skilled labor are overcome, they will now have to play catch-up in technology and compete economically with long-established Chinese and Japanese industry, which has not been standing still waiting for them.

The best market plan for non-Chinese miners who plan to produce rare earths, is to acquire or JV with existing companies that already have the skill sets needed. These will be Chinese, Japanese, French, British, Indian, or Estonian companies. Some have already done this. Any mining venture that intends to go head-to-head with a Chinese mining venture, solely on the ability to produce ore concentrates or even separated and purified chemical compounds must, I think, fail.

There is also one more thing that all rare-earth end users must do. They must secure their supply of the total of the critical rare earths for their products or processes. This means to me, that they must secure their supplies of one or more of lanthanum, neodymium, samarium, europium, dysprosium, and terbium.

Since nature does not provide any one rare-earth deposit with commercial quantities of all of the rare earths, or all of the above critical rare earths, it is necessary always to choose one from ‘Column A’, a producer of the light rare earths, and one from’ Column B’, a producer of heavy rare earths. This is even true for the contemporary Chinese rare-earth-containing finished-goods industry.

The most critical of the current rare earths are dysprosium and terbium, two of the heavy rare earths, today produced only in China and historically produced only in the former Soviet Union and in China.

There are only a small number of rare-earth projects outside of China capable of producing commercial quantities of dysprosium and terbium. Some or all of these MUST be brought into production as soon as possible, because it is said by the Chinese themselves, that their heavy-rare-earth production has less than 25 years remaining at present levels, and much less if demand increases. China, like the rest of the rare-earth-using countries, is therefore also seeking out heavy-rare-earth production.

I believe that for heavy rare earths, and only heavy rare earths, strategic need will overcome simple economics, or at least the capitalization of strategic need will create the necessary economics to bring heavy-rare-earth-themed mines into production.

There will be no non-Chinese, rare-earth-based, mass-produced devices utilizing rare-earth permanent magnets, until a reliable steady supply of dysprosium can be secured. The lighting industry outside of China will founder ,without a secure supply of the heavy rare earth terbium.
Therefore, if there is to be a non-Chinese, rare-earth-utilizing manufacturing industry, one or more of the heavy-rare-earth deposits that are technically feasible, must be brought into production even if it is not economically sensible on a freestanding basis as a business.

You need to look at the TMR Advanced Rare-Earth Projects Index, produced and maintained by my colleague Gareth, as a metric to decide which rare-earth mines are going to be critical to Chinese and non-Chinese rare-earth supply chains. I am going to make my own selections in a separate article, so that I can explain to you why I chose some over others.
= = =

About Jack Lifton

Jack Lifton is today's leading authority on the sourcing and end use trends of rare & strategic metals. He is a Founding Principal of Technology Metals Research, LLC and President of Jack Lifton, LLC, consulting for institutional investors doing due diligence on metal-related opportunities. When not trotting around the globe, Jack calls the suburbs of Detroit, Michigan home. Check out Jack's full bio for more details.

Israeli water technology makes water safe for drinking from almost any source.

2011-01-17T00:04:00.000-08:00

Water, water everywhere and every drop to drink | environment

[Quote:]

"... Following a major earthquake in Taiwan in 2009, humanitarian aid workers from Israel brought along locally made WaterSheer products to ensure a steady stream of potable water for the survivors and to transport drinking water quickly to where it was needed most.

"You need high quality water in every circumstance, and we are able to provide it even in cases of disaster," says Yossie Sandak, CEO and co-founder of the three-year-old company based in Airport City, near Tel Aviv. "In Taiwan, within 48 hours our products were already in the field and purifying 16,000 liters (4,227 gallons) per day ... "

[Unquote.]

Read the rest on your own by clicking on hyperlink above.

BSi's Guidelines to Sustainability Report Assurance

2011-01-07T09:35:00.000-08:00

Ref Link:

http://www.bsigroup.com/en/Assessment-and-certification-services/management-systems/Standards-and-Schemes/Sustainability-Report-Assurance/

====================================================

Independent Sustainability Report Assurance (SRA) provides an objective verification of your CSR/sustainability report. Assessments are normally conducted in accordance with the globally recognised Global Reporting Initiative, GRI (G3) Guidelines, and AA1000 Assurance Standard.

The BSI assurance process addresses three key areas of your reporting:

Materiality - we'll assess your prioritization of issues and identify any omissions or misrepresentations that could influence the decisions or actions of your stakeholders. We'll also assess the significance of your report content in relation to your organization and your stakeholders.
Completeness - we'll evaluate your organization's diligence in identifying and understanding the material impact of your sustainability performance.
Responsiveness - we'll determine whether your report communicates and provides evidence that you have responded effectively to stakeholder concerns, policies and relevant standards.

On the successful completion of the assessment, we'll produce an Independent Assurance Opinion.

Matching your needs - precisely

Not all organizations require, or can attain, the same level of CSR/Sustainability Report Assurance. That's why our assurors can recommend any of four levels of SRA. Each one is specifically devised to meet the needs of organizations at differing stages of their reporting development.

Level 1: CSR/Sustainability Check
This entry level service is typically audited against the sustainable development maturity matrix in BS 8900. We evaluate whether your organization has processes defined and procedures in place to support the activities and programs needed to produce a meaningful report, and inform you of the outcome in a gap analysis report.

Level 2: Report Check
The information within your report is verified which may require one or two visits to your headquarters and discussions with senior management and other contributors. You will receive a recommendation aligned with the Global Reporting Initiative (GRI) Application Levels and a report commentary for your internal use.

Level 3: Limited Assurance
This higher level of assurance is similar to that provided by financial auditors commenting on a company's report and accounts. We will evaluate your report in accordance with the principles of the GRI G3 Guidelines and AA1000AS, assessing your underlying data and management systems as well as your sustainability performance.

The depth of engagement must be sufficient to provide assurance that your report is free from material misstatement, based upon sampling within the agreed scope of the assurance and the information you provide. Along with the public Independent Assurance Opinion, you will receive a confidential report describing the assurance team's findings and providing you with insights into potential areas for improvement.

Level 4: Reasonable Assurance
This highest level of SRA evaluates your report in accordance with AA1000AS and/or the GRI G3 Guidelines or other applicable standard.

We will assess your underlying data and management systems to provide assurance in the extent to which your company has performed against your sustainability objectives and assure that your report is inclusive, complete and responsive to stakeholder needs. You will receive an Independent Assurance Opinion for publishing in your sustainability report as well as a detailed confidential engagement report describing the assurance team's findings and indicating areas for further improvement.

View the sustainability report assurance process flowchart (PDF, 57KB).

A comparison between ISO 14001 and BS EN 16001

2011-01-07T08:56:00.000-08:00

Comparing ISO 14001 Environmental Management to BS EN 16001 Energy Management

The European standard for energy management systems – EN 16001 has recently been published and adopted as a British Standard, BS EN 16001:2009.

The European community of energy experts and practitioners has worked through the plethora of energy management standards and drawn up the best practice standard for energy management systems, BS EN 16001.

However, for those of you who are familiar with management system standards, you may be asking why there is a need for this standard when ISO 14001:2004, the standard for environmental management systems, addresses all environmental aspects including energy use?

Whilst BS EN 16001 is closely aligned to ISO 14001, the new standard places more emphasis on the identification and management of energy aspects rather than looking at all environmental aspects.

The remainder of this document aims to make a comparison between ISO 14001 and BS EN 16001 and highlight the differences clause by clause between them.

Ref Link:

Comparing ISO 14001 Environmental Management to BS EN 16001 Energy Management

Nanotechnology Used to Create Artificial Palladium

2011-01-07T08:14:00.000-08:00

Ref Link:

http://shop.bsigroup.com/templates/Shop/v2/DisplayNewsDetails.aspx?aId=800323638

05 January 2011

Posted by Jayne Kavanagh

Scientists in Japan claim to have employed nanoscience to create an artificial form of palladium.

A technique developed by Professor Hiroshi Kitagawa and researchers from Kyoto University has generated a synthetic form of the rare metal.

It was produced by combining molecules of silver and rhodium - two metals that usually do not mix together - to create particles of an alloy that has similar properties to palladium.

The nanoparticles were used to develop a fine solution spray of the alloy, which it is thought could be used in industrial applications rather than relying on Chinese imports of palladium, Professor Kitagawa told newspaper Yomiuri.

He explained further research is now taking place with auto manufacturers and electronics companies to develop the process.

In related news, RNCOS has forecast a compound annual growth rate of 19 per cent for the global nanotechnology industry from 2011 to 2013 in its latest forecast.

Schneider Electric implements an intelligent building management system for the Institut du Cerveau et de la Moelle épinière – ICM

2011-01-07T08:05:00.000-08:00

Ref Link:
http://www.schneider-electric.com/corporate/en/press/press-releases/viewer-press-releases.page?c_filepath=/templatedata/Content/Press_Release/data/en/shared/2010/09/20100924_schneider_electric_implements_an_intelligent_building_management_syste.xml

=============================================================

Rueil-Malmaison (France), September 24, 2010 – Schneider Electric has implemented an intelligent building management system for the Institut du Cerveau et de la Moelle épinière (ICM), a world centre for research, inaugurated today in Paris.

The ICM, which carries out both fundamental and clinical research, aspires to a better understanding of brain and spinal cord diseases and to rapidly develop effective treatments through research. The building, which is located at the heart of the Pitié-Salpêtrière Hospital Group, was designed to facilitate a new, collaborative vision of research over 22,000 m² of laboratories which bring together 600 researchers from around the world.

“Schneider Electric has implemented technologies which will provide the ICM and its occupants with comfort, energy efficiency, flexibility and a promising development,” said Frédéric Abbal, President of Schneider Electric France. “We have delivered efficient solutions to meet the requirements dictated by the nature of the ICM’s research activities. And by providing a “21 CFR part 11” compliant monitoring post, the Group has once again demonstrated its understanding of the particular needs of its health industry clients."

Schneider Electric has provided integrated technical solutions and services to achieve the highest levels of energy efficiency: Building Management System (BMS), metering system, live monitoring, etc. The systems will also ensure occupants remain comfortable: timer controls; lighting, heating and air-conditioning management systems, etc.

The BMS architecture is based on open protocols to control all functions: lighting, chilled beams, communication with electricity production, heating, and cooling systems, etc. The building has been fitted with a total of almost 5,800 control points, 4,600 of which are for heating or air conditioning equipment, and 1,200 for electrical distribution. The Group has provided specific control points for the ICM laboratories: temperature, fume cupboard¹ processes.

Using real-time energy consumption management and monitoring software, Schneider Electric has provided an innovative and simple intelligent energy management system. Energy consumption levels will be available to all occupants in real time, displayed on two screens in the cafeteria and the ICM offices waiting room, via an energy consumption control panel.

¹A device for extracting toxic fumes emanating from products used in the laboratories (similar to an extractor hood)

About Schneider Electric
As a global specialist in energy management with operations in more than 100 countries, Schneider Electric offers integrated solutions across multiple market segments, including leadership positions in energy and infrastructure, industrial processes, building automation, and data centres/networks, as well as a broad presence in residential applications. Focused on making energy safe, reliable, and efficient, the company's 100,000 plus employees achieved sales of more than 15.8 billion euros in 2009, through an active commitment to help individuals and organisations “Make the most of their energy”.

www.schneider-electric.com
www.icm-institute.org

Materials to Research On (Polycrystalline Silicon)

2011-01-07T08:00:00.000-08:00

Silicon Tetraflouride

Silane

Sodium Aluminum Tetrafluoride (SAF)

Silicon Powder

Polycrystalline Silicon

Doped Polycystalline Silicon

Crystalline Silicon - Arsenic Doped

Environmental Management in the Bauxite, Alumina, and Aluminum Industry in Brazil

2010-10-12T14:11:00.000-07:00

Link to Content: http://www.idrc.ca/en/ev-31010-201-1-DO_TOPIC.html

— Liliana Acero

This paper briefly presents the main results of a study of the bauxite, alumina, and aluminum industry in Brazil, conducted to investigate hypotheses of the Science Policy Research Unit network (Warhurst 1991a) and the Brazilian team within it (Rattner et al. 1991). Examining recent international trends, the study documented how that industrial sector operates in the economy (Acero 1993).

The main objectives were to:

(1) Document specific environment-management practices of various companies operating in Brazil;

(2) Relate these practices to recent governmental and societal laws and regulations on environmental controls and planning;

(3) Measure or illustrate possible industrial changes in environmental management and technical solutions resulting from legislation or the pressure of different social sectors; and

(4) Document community-level environmental impacts of current practices and the firms' responses, where possible.

A word on environmental costs

The basic rationale for environmental costs at the micro- and macrolevels has been widely debated in the past 10 years (see, for example, Hurrell and Kingsbury 1987; Adams 1990; Nappi 1990). Alternatively, it is argued that in developing countries, a level of environmental degradation is an unavoidable condition of economic growth that in the short run diminishes the costs of development; and that unless some environmental degradation is allowed, then enterprises tend to externalize the costs of environmental controls and antipollution measures, costs that are ultimately borne by the public in developing countries. More technically speaking, there has also been some concern about how to discriminate between the environmental and capital costs of any economic activity.

Although in this chapter I do not discuss these issues in depth, one should be aware of the magnitude of the academic and policy problems, which involve changes in the ways management and general administration collect data on economic and financial investments and costs, especially within developing countries. This issue exceeds the scope of the present study. However, I do take a practical approach to the issue here.

First, I tried to collect and analyze the fragmentary type of information that firms gather during their activities. Second, I analyzed, with the interviewees, the main parameters that firms use. Third, I organized the data so that I could do an interfirm comparison. Fourth, in some cases, I requested that similar data be gathered by firms that had not done this before. However, the information should be considered indicative of an order of magnitude, rather than a comparison of practices between establishments.

The firms' costs for their activities tended to be differentiated into two major categories:

Operating costs — These usually include all running costs attributed to the environmental department, such as wages of permanent and subcontracted personnel, material replacement, and input and capital costs of new laboratory materials, and amortization rates of existing capital; and

Investment costs — These involve costs of major environmentally oriented investments, such as specific projects, like the deposition of tailings and red-mud slurry, or major capital investments for antipollution purposes, such as the closure of prebaked cells.

In both cases, similar types of activities were listed for each firm. However, the results should be treated with caution: they are not to be regarded as absolute numbers of real performance. This is for a variety of reasons, some of which relate to the specific characteristics of the production processes for bauxite, alumina, and aluminum. First, some of the machines normally used in the production process embody antipollution technology, such as dry-scrubbing, that in turn is material or input saving. This is not commonly included either in operating or in investment costs. Second, minor technical adaptations considered more environmentally sound but undertaken for reasons of efficiency are also excluded from the parameters; an example of this would be changes in the feeding devices of prebaked cells. So, in some ways, the results underestimate activities immediately related to the environment.

Despite these limitations, these data were relevant to the study because this information provides a reference point for drawing comparisons and because, based on this type of information, enterprises carry out their negotiations with local policymakers and environmental bodies. Ultimately, these data also serve to illustrate the problems with making measurements of this kind in an industry that combines input and materials savings with environmentally sound technical solutions. In the next section this point will be discussed in detail.

Nature and extent of environmental degradation

The three phases of this industry — bauxite mining and exploration, refining, and smelting — can each have many effects that are potentially hazardous to the environment. But before addressing these concerns, I will briefly consider the production process, as described by Warhurst (1991a, p. 23):

Bauxite is the raw material from which alumina is extracted. Bauxite occurs in a small number of high-grade deposits mainly within a tropical zone extending up to 20 degrees north and south of the equator. The technology of alumina production varies with type of bauxite ores which fall into three groups: Monohydrate bauxite is generally found in boehmite in Europe and northern Asia and is processed using a European version of the American Bayer process (described below); Trihydrate bauxite is found as gibbsite in Surinam, Guyana, Guinea, Ghana and Australia and is processed by the American Bayer process. The Jamaican type of bauxite is characterized by a mixture of gibbsite and boehmite and is found in Jamaica, Haiti and the Dominican Republic. It is processed using a method which combines elements of the European and American Bayer process.

The basic Bayer process involves the following operations… . Dried, ground bauxite is mixed in a large digester vessel with caustic soda which dissolves the aluminum oxide under strong pressure. Impurities, such as iron oxide and silica, are filtrated out in their solid state. Then the sodium aluminate liquor is seeded with hydrated alumina crystals and part of the solution combines with the "seeds" to form alumina hydrate crystals. These are then calcinated in long rotary kilns under high temperatures. This leaves calcinated aluminum as a white powder which is then ready for transformation into aluminum metal. On average, 2.25 tonnes of bauxite generates one tonne of powder.

Finally, aluminum is separated from its oxide by the highly energy-intensive Hall–Heroult process. The process takes place in carbon-lined reduction cells. First, alumina is dissolved in a molten salt called cryolite to which aluminum fluoride is added continuously to maintain the required density, conductibility and viscosity. Second, a carbon anode is lowered into the solution causing a continuous electric current to pass through the mixture to the carbon cell lining, which acts as the cathode. This causes the dissolved alumina to separate out into aluminum metal and oxygen, and since the former is heavy it is attracted by the cathode to the bottom of the pot, while the oxygen settles on the carbon anode to form carbon dioxide. The molten aluminum in the pot is syphoned into crucibles and transferred to alloying furnaces to make alloys. Finally, the metal is cast in an ingot mould.

The potential hazardous impacts of these processes can be divided into those strictly affecting the physical and natural environment and those of a socioeconomic nature (UNEP 1984).

Mining

In ore mining, the environmental effects are highly site specific, but, on the whole, the main impact comes from clearing the vegetation in bauxite mining, exploration, and mine development. A secondary effect is that brought about by the dumping of wastes or the inadequate management of tailings. This can degrade the habitat of local flora and fauna and make future land use difficult for reforestation, agriculture, or cattle breeding.

Mining can also affect local water and air quality. For example, with the removal of overburden, runoff can become contaminated, more acidic, and more turbid. Erosion within the mined areas can be rapid if the soil is not recovered and reforested. The removal of vegetation can then bring about loss of flora and fauna, destruction of wildlife habitats, a possible spread of plant disease, increased soil erosion, changes in weather conditions, dust, and a possible need for runoff water treatment. In open-cast or surface mining, the areas cleared of vegetation may disrupt the landscape and produce a negative visual impact.

Beyond this, fugitive dust and noise from heavy machinery and explosives may be a source of disruption in the external environment for nearby communities and a health hazard in the working environment.

Adverse socioeconomic impacts depend largely on the proximity of the mines to established communities. Impacts can include breakup of cultural traditions, lifestyles, and kinship groups; substantive changes in agricultural crops, techniques, and marketing resulting from weather and soil disruptions; and lack of infrastructure, other employment opportunities, housing, and educational and recreational facilities for the personnel.

Refining

In refining or alumina production, the environmental impact largely depends on the composition and quality of the ore and the processes used to extract bauxite. The principal hazards arise from the disposal or storage of bauxite-residue slurry (red mud), which is the main alkaline effluent from the alumina plants. This is either disposed of on land or discharged (dewatered or untreated) into sealed or unsealed artificial or natural areas or into the deep sea. Liquid and solid phases in slurry have the following potential effects (UNEP 1984):

Seepage of the alkaline liquid into groundwater, which might contaminate industrial, domestic, and agricultural water supplies;

Spillage from damaged pipelines or from retaining-dyke failure;

Reduction in the availability of arable land;

Dust pollution in arid regions; and

Aesthetic impacts.

Airborne pollutants (dust and noxious chemicals) are another kind of hazard from stockpiles, mills, and calcination operations. The air pollutants are bauxite, lime, and alumina dust, SO2, NO2, dust from low-grade bauxite, and suspended vanadium pentoxide. The quality of SO2 pollution depends on its concentration in fuel oil, its specific form of consumption, and the ways power is supplied to the plant. Gas emissions not collected or insufficiently collected, especially in the case of SO2, can contaminate the workplace and the general environment and, in reacting with water, can produce acid rain.

Spills can occur at different stages in the refining process. Acidic drainage, if untreated, can damage local flora, fauna, and even human beings. The work environment can be extremely hazardous where people handle corrosive chemicals, such as caustic soda and acids, or where there are reverberation, fumes, dust, and certain toxic chemicals.

Aluminum production

In aluminum production, the main environmental problem is air pollution caused by fluoride emissions in the smelting process. These can have a strong effect on workers' health inside the plants (excessive intake can cause fluorosis and skeletal disorders), as well as on the surrounding flora and fauna. As molten cryolite is used in the electrolysis of alumina, the fumes emitted from the cell have gaseous and particulate fluorides. Gaseous fluorides are also contained in the exhaust gas of the anode baking furnace and are emitted if unscrubbed. They can also be generated at a lower degree from the cast-house furnaces. Other fumes emitted by some types of cells are tar fumes (that contain suspected carcinogens) and SO2 (when petroleum coke with sulfur is used for the anodes); SO2 is also produced by anode-baking and cast-house furnaces, especially in plants using thermal power. At these last two stages, nitrogen oxides are also emitted. Dust is found at different stages in the production of aluminum.

Other problems are polluted water, solid waste, noise, and heat. Water pollutants are stronger when a wet-scrubbing system is used to clean fumes emitted in the cells. The water contains fluorides and suspended solids, such as alumina and carbon, that need to be treated before discharge. The main solid-waste problem is that of spent potliners, as cells have to be relined every 4 or 5 years. The linings can leach fluorides and cyanides to surface or groundwater when they are stored in the open air and in pits. Cast-house furnaces generate drosses that can produce fugitive-dust losses or gases that can evolve into ammonia if wetted. Noise and reverberation in most smelting stages and heat in the potline rooms tend to be at very high levels and insufficiently controlled in Brazil. This can affect workers and inhabitants of local communities.

Another indirect hazard to the environment is due to the intensive consumption of electricity in the aluminum-smelting industry. These plants must be located near cheap sources of electricity, mainly hydroelectric dams. The construction and the operation of these dams also pose a potential threat to the environment. Large areas have to be depopulated and flooded for dam building, changing the ecosystem of a whole area. This has potential negative effects on flora and fauna and even jeopardizes human health in the area.

Economic restructuring

Several factors are contributing to the reduction in the growth rates in aluminum consumption worldwide. The growth of industrial production is slower than that the growth of the service sector in the developed world. The substitution process whereby aluminum gained market shares from other materials has slowed down. The only new and substantive market for aluminum has been that for aluminum cans (which have replaced tin ones). This market is still expanding, especially in the developing world. In the rest of its final uses, aluminum has maintained its quotas; however, aluminum recycling has increased significantly in the last decade, further reducing the potential expansion of aluminum consumption.

Another reason for restructuring in the industry has been the increasing participation of developing countries, especially through government enterprises in different phases of the industry. Developing countries have tried to make better use of their comparative advantages in natural resources and energy, usually by raising the prices of exported raw materials and obtaining a higher elaboration in mineral production (products with value added). In this sense, the new strategy adopted by large world producers has been either to increase the value added and quality of their products or to explore new types of activities, such as developing new aluminum products (for example, Kaiser Aluminum Corporation) or using more modern materials (for example, Alcoa Alumínio S.A.).

An additional factor has been aluminum's appearance on the London Metal Exchange (LME), which took away the major companies' control of overpricing, removing one of the industry's most important entry barriers.

In 1990, Brazil had an installed production capacity for primary aluminum of 1.132 x 106 t. Bauxite production accounted for 9.875 x 106 t, of which 55.3% was exported in 1990; alumina was of the order of 1.654 x 106 t; and aluminum reached 930 000 t. The domestic price for primary aluminum, as fixed by LME, was internationally competitive: 1738.69 United States dollars (USD)/t in 1990. This was partly due to the subsidized energy tariffs charged to most of the large aluminum complexes. These tariffs were 25.61 USD/MW·h for high-voltage transmission to ALUMAR and Alumínio Brasileiro S.A.–Alumina do Norte do Brasil (ALBRAS-ALUNORTE), for example, and 27.48 USD/MW·h for low-voltage transmission to firms in the southeastern region (in São Paulo and Minas Gerais). Most employment is in the primary-aluminum integrated firms; in 1990, for instance, 40% of the 66 780 people working in the alumina and aluminum sector worked at such firms. Meanwhile, 1 543 people were employed in bauxite firms that year.

In 1980–90, Brazil had the second largest growth rate in production (257%) among the largest primary-aluminum producers. It was only outweighed by Australia (307% growth). Since 1989 it has become the fifth largest producer in the world and holds the third largest bauxite reserve (10.2% of the world's 22.7 x 109 t). Almost 60% of production was exported in that year. Production continued to grow until the present, with export rates substantially outweighing expansion for the internal market. In 1990, sales in the industry represented 0.8% of the gross domestic product. However, Brazil has one of the lowest per capita consumption rates among the main primary-metal producers (2.7 kg per person in 1989), but it is an average level when compared with other industrializing countries in Central and South America.

The next section will explore the legislation that directly or indirectly affects activities carried out in this sector in Brazil. It will emphasize the implementation of the environmental-control laws since the new Constitution that have had the most recent effect on the industry.

Regulatory and institutional mechanisms

Four types of regulatory mechanisms, established in the last decade or so, apply directly or indirectly to activities carried out in the bauxite, alumina, and aluminum sector:

The constitutional norms of 1988 relating to the mineral sector;

Legislation on the exploration and use of mineral resources;

Environmental legislation on mining and its industrial transformation; and

Tax laws.

Currently, there is no new mining code functioning (the last one being from 1967). Actual practices are ruled by a set of independent laws, based on the spirit of the 1988 Constitution and passed after it. However, a law project to form a mining code was presented to the national Congress in 1991. The main innovations within the Constitution are the following:

The republic has sovereignty rights over mineral resources (including those of the subsoil), resources of the archaeological and prehistoric sites, and natural resources of the continental platform. This allows the republic to dispose of these resources as their sole owner and makes the republic obligated to protect them. Dual property rights, over land and subsoil, plus sovereignty rights of the republic over minerals shape the spirit of the new mineral rights and public policy, legitimizing the republic's sovereignty. However, the Constitution allows the owners of mining concessions to have ownership rights to the products they extract.

The republic may decentralize administrative functions pertaining to natural-resources management. The Constitution establishes that only the republic can pass legislation governing mineral resources, not the states (as had been the case in the former Constitutions). It admits that new laws might be passed allowing the states to legislate on limited and specific questions. In turn, the latter can register and monitor mining concessions, as can municipalities. In future, these tasks will be distributed, depending on technical and administrative competence, between them and ruled by a mining code.

All levels can pass legislation pertaining to the defence of natural resources, the protection of the environment, and protection controls. If the laws are contradictory, the republic has to fix the more general criteria.

The republic has the right to limit the form of participation of foreign capital in mining.

By law, as of April 1991, the National Defence Council (CDN) has authority over the use of national-security areas (especially frontier regions) and the preservation and exploration of natural resources of any type. The Departmento Nacional de Produção Mineral (DNPM, national department of mineral production) verifies whether these demands are fulfilled, because the attributes of the CDN are still formulated in very generic terms. Two of the main new norms are that 66.6% of employees in the companies operating in such areas and the majority of management must be Brazilian citizens.

The states and municipalities are to receive compensation for the results of natural and mining-resource exploration. This is tied in with tax laws.

The republic imposes a new system of taxation for the mineral sector and revokes the Imposto Único sobre Mineral (unified tax on minerals), a unique tax.

The forms of mining concessions and their life spans have also changed. Durations of mining-research permits have been shortened. Some entrepreneurial groups have been fighting for a lifetime research concession, a mode of operation that would rule out contractual agreements and is thus internationally outmoded. Moreover, research and exploration authorizations have been restricted to Brazilian firms with national capital or Brazilian individuals. Thus, foreign capital is only allowed to have a minority participation in the firms, whose effective control and capital are to belong to local residents. However, subsequent regulations, known as the "transitory dispositions," ameliorate these limitations by allowing 4 years for companies to adapt to new restrictions and by virtually eliminating the restrictions for those firms that in that time locally promote the industrialization of their mining and beneficiation activities. These firms can receive research and extraction concessions if the minerals are intended for use in local industrial processing. Authorizations can be canceled if they were not initiated in the terms established. The Constitution makes a clear division between the rights of the owners of land and the rights to the subsoil. But it is guaranteed that the owner of the land receives benefits for the results of mining. Finally, mining research and extraction on lands occupied by native populations require Congressional approval; mining titles are suspended in those lands because Congress has still not passed ordinary laws concerning this.

Environmental legislation was virtually nonexistent in previous Constitutions, but the 1988 Constitution devotes a whole chapter to it. The Mining Code of 1967 only mentioned generically that the owner of the mining concession should avoid air and water pollution resulting from its works. But already in 1981 the first National Policy for the Environment was passed as a law (law No. 6, 1981), and it established the Systema Nacional de Meio Ambiente (national system for the environment). These previous laws were taken up and given constitutional status in 1988. Four main aspects are considered in the Constitution:

The firm's obligation to have an environmental-impact study (EIS) before setting up any activity with a potentially hazardous impact on the environment;

The firm's obligation to rehabilitate degraded environments;

The establishment of penal and administrative sanctions for the degraders independently of their obligations concerning rehabilitation; and

The ruling of responsibilities for damage caused to the environment.

Mineral extraction is subject to laws passed by the Republic and by the states and must comply with laws passed by both. Licencing depends on the state or on the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais e Renováveis (IBAMA, Brazilian institute of the environment and renewable natural resources), when appropriate. Two resolutions of the Comisión Nacional del Medio Ambiente (National Commission of the Environment), passed in 1989 and 1990, deal specifically with environmental licencing in mining.

For research, the companies require an operational licence, which includes an evaluation of its environmental impacts and an analysis of the measures to be adopted to solve them. For extraction, three types of licences are required: the preoperational licence, which also includes the EIS; the installation licence, which requires a detailed plan for environmental controls; and finally, for actually operating, registration at DNPM (if the ministry approves the operational licence).

The EIS should cover the following technical activities:

An environmental diagnosis of the area;

A baseline analysis and description of the environmental resources and their interactions (before the project);

The definition of suitable measures against negative impacts; and

A program to monitor the positive and negative environmental impacts.

A second report, the relatório de impacto ambiental (RIMA, environmental-impact report), is accessible to the public. It must

Discuss the conclusions of the EIS, mainly to outline the aims of the project;

Describe the technological alternatives;

Provide a synthesis of the area diagnosis, including a description of possible environmental impacts;

Characterize the future atmospheric quality of the area;

Estimate the possible results of the proposed impact controls;

Establish a detailed monitoring program;

Recommend the most favourable control alternatives; and

Provide illustrations (maps and graphics).

The EIS and the RIMA should both include a program for post-operation land recovery and rehabilitation. Both documents have to be developed by a multidisciplinary team, which must be authorized to carry out this type of work.

A further environmental-policy tool provided for by the 1988 Constitution is public audiences. The public environmental bodies set up these public audiences, at which they present, for discussion, information on the project's probable environmental impacts. This discussion is compulsory in some states, such as those in the Amazon region.

A number of sanctions have also been established for enterprises that fail to fulfil the above requirements: fines, the loss or restriction of fiscal incentives or benefits, the loss or suspension of the firm's participation in government loans, or the temporary or definite suspension of its activities. New developments in environmental laws (a preproject formulated by a commission assessing the Executive and sent to Congress) suggested that two important amendments to the Constitution would be included in its revision, foreseen for 1993. First, all licencing concessions for mineral activities should be concentrated at IBAMA, thus disengaging the authority of the states to rule over and administer them. Second, licencing evaluation should take into account the economic need for mineral extraction. These two clauses, as well as one on garimpos that does not relate directly to our research, tend to make procedures more bureaucratic and to centralize decision-making. This contradicts the original spirit of the constitutional text, although it means regulating aspects more related to minerals policy-making.

The tax system provisions for mining and processing activities is complex. National, state, and municipal departments administer direct and indirect taxes: taxes on revenue, profits, and sales; taxes on products, services, and loans; and social taxes. The main taxes are the Imposto de Renda Pessoa Jurídica (IRPJ), a rent tax; the IPI, a tax on industrial products; the ICNS, applied to the circulation of products and services; the Imposto Sobre Operações Financeiras, charged on financial operations; the Financeiro Compensação Pela Exploração de Recursos Minerais, a financial-compensation tax for mining; and a number of social contributions, such as Finsocial, Fundo de Garantia por Tempo de Serviço, the family wage, and the Programa de Integração Social applied to sales. Tax reductions for IRPJ are given to firms operating in underdeveloped regions, and tax exemptions for IPI are given to exporters.

The current Constitution has advanced enormously in legislating mining operations and processing, as well as their environmental impacts. But the country seems to be caught in a transition between a very liberal law in the past and the present legal framework, characterized by instability and contradictions between different laws and policy instruments. In several areas, the constitutional decrees still lack regulations, mainly those needed to cover mining in native peoples' lands, the landowners' rights over the products extracted, and the relative decentralization of the administration of mineral resources. The new Mining Code has not yet been approved. Moreover, in practice, restrictions are only applied to foreign mining companies in frontier regions. Also, the past government explicitly intended to do away with most of the proposed restrictions on the operation of foreign capital.

Three main aspects of environmental laws have been somewhat neglected:

A thorough cost–benefit analysis to help evaluate the feasibility of environmentally related investments vis-à-vis profit, by type of firm and by size;

The need for uniform criteria across legal requirements, given the devolution of legislative responsibilities and administration to the states and municipalities; and

An evaluation of the states' expertise to manage environmental policy and of the quality of their specific legislation.

As a result, entrepreneurs are faced with conflicting demands and are left much on their own to administer and harmonize conflicting interests and make them sector specific. This will be widely illustrated in the next section with case studies of specific firms in the bauxite, alumina, and aluminum sector.

Environmental behaviour of mining companies: strategies and responses

Five main phases can be distinguished in the history of the Brazilian bauxite, alumina, and aluminum sector.

In the 1940s to 1950s, primary-metals production began, especially in the southeastern region (Minas Gerais and São Paulo). These operations were carried out both by transnationals (mainly Alcan) and domestic firms, such as Compañía Brasileira de Alumínio. Most inputs at that time were imported, and the local and smaller bauxite reserves, especially in the state of Minas Gerais, also began to be mined.

In the 1960s, the big bauxite reserves in the Amazon were discovered, and the older firms continued to expand production and began to export.

The 1970s saw greater expansion of aluminum projects oriented toward the domestic market while the largest projects in the North and the Amazon were being established.

In the 1980s, however, expanded capacity at Alcoa's ALUMAR complex and at Compañía Vale do Rio Doce's (CVRD's) ALBRAS–ALUNORTE complex was directed mainly to exports. Meanwhile, the state-owned CVRD further activated its bauxite extraction and beneficiation project in Trombetas, developed by Mineração Rio do Norte (MRN).

The 1990s, in contrast, seem to be oriented toward further rationalization of ongoing projects (especially those distant from the southeastern region), further verticalization, and reduced energy and labour costs. However, environmental measures only began to be applied in the 1980s, especially after the new Constitution.

The case of Compañía Vale do Rio Doce

CVRD entered the aluminum sector in 1974, but it wasn't until 1990 that this became its second main activity. In 1986, the firm supplied 72% of domestic bauxite production, and its primary-aluminum production (by ALBRAS and Valesul Alumínia S.A.) accounted for 25%. CVRD's aluminum-related exports constituted 57% of Brazil's total aluminum exports.

Four main periods can be distinguished in the firm's environmental policy. In 1956, the firm bought part of Mata Atlantica in southern Brazil for wood to build a railway line. But this unintentional initiative became, in time, a 21700-ha private conservation area. In the 1970s, the company undertook its first projects with ecological aims. The projects related to feasibility studies for the Carajas project, the Minas Gerais mines, and the port of Tubarao; and to pollution controls for the Vitoria–Minas railway. In the 1980s, CVRD created GEANAM, an independent scientific-research area for environmental subjects and specializations. The firm formed seven internal commissions for environmental control, in different areas of the firm.

Two main types of environmental action were also defined: the corrective and the preventive. The first is included in all of the company's projects. The socioeconomic diagnosis of the Carajas project initiated the second. It was extended in the 1980s to environmental-engineering and natural-resource diagnoses, as well as scientific research, on specific topics, administered by university departments. The firm set up two laboratories for air and water control.

In 1986, the firm established the Superintendency for the Environment, subordinate to the Direction of Entrepreneurial Communication and Environment. The firm's subsidiaries set up their own environmental departments and internal environmental commissions (CIMAs) (17 in all). At present, the area of vegetation research is very developed within CVRD. Work is undertaken jointly by the Wood and Cellulose Superintendency, the Studies and Research Superintendency, and Rio Doce Florestas. Eight research centres function in the Amazon region, developing genetic studies of native and exotic species.

The 1990–95 environmental program established the following priorities: (1) the management of natural resources; (2) environmental engineering; and (3) the development of research and studies in the area. Fifty-three percent of the environmental investment was to be applied to carrying out the second priority, especially for pollution-control reforms in old operating systems and for preventive actions in new mining areas. In natural resources, 30% of the investment was to be used to develop a master plan and manage the wildlife-conservation areas of the firm, a total of 764 x 106 ha distributed in north, south, and central Brazil.

In 1980–88, the cumulative total investment in and operational costs of environmental management were 314 million USD, of which investments in infrastructure, equipment, and other improvements in the system accounted for 88.5%. Most of the firm's personnel for environmental tasks work for firms linked to CVRD and carry out reforestation.

Mineraçao Rio do Norte

MRN is the main producer of bauxite in Brazil. It is formed by domestic private, state, and foreign capital. However, in 1990, CVRD held 46% of the shares, with the participation of Alcan (24%); CBA (10%); and Billinton B.V., Billinton Metals S.A., Norsk Hydro, and Reynolds (5% each).

MRN's production is key to Brazil's status in the international bauxite market. In 1986, with its production capacity of 5.5 x 106 t/year, MRN was the fourth largest bauxite-mining company in the world; by 1988, it was ranked third. Moreover, together with Guinea and Australia, Brazil has some of the largest bauxite reserves in the world. In 1987–88, it contributed 8.6% of world production (UN 1988). The firm has, since its origin, directed most of its production to export. By the end of 1988, MRN had commercialized 38 x 106 t of bauxite, with 81% in the international market and only 19% in the local one. However, in 1990, it expanded its sales to the local market (28%), as a result of ALUMAR's having bought a significantly increased volume.

The firm's environmental department has two sections:

The technical section, consisting of only one person, who is a senior employee, botanist, and special assessor reporting directly to the company's general superintendent; and

The operational section, consisting by nine employees at the time of this research (November 1991): one general manager, one fieldwork contractor, one environmental engineer, three environmental technicians, two botanist auxiliaries, and one administrative auxiliary.

The department is part of a general department called Environment, Health and Security, and each section (including Security and Occupational Health, with eight people) has its own coordinator and is semiautonomous in decision-making. Actually, one of the problems expressed by our informants was that they tended to work too independently of each other.

The two sections in the environmental department proper have totally different functions. The operational section is responsible for revegetation, erosion control, pollution control, landscaping and gardening, greenhouse operations, meteorology, environmental inspection, and internal and external technical assistance. The technical section is in charge of formulating and following up on the environmental master plan (describing and relating the environmental risks of MRN's projects, problems, and solutions). This plan is revised every 2 years. The technical section develops or subcontracts relevant research and develops education and training plans for the environment in the firm and the community, carries out the internal monitoring, keeps a regular data bank, designs environmental rules and norms for the company, and establishes permanently protected areas. In 1989, the company persuaded the government to create a national forest of 429 600 ha around the bauxite reserves to protect the surrounding virgin forest. MRN maintains the physical integrity of this forest (for example, felling of trees and hunting are prohibited) and another 385 000 ha on its side that forms the Trombetas' Biological Reserve. MRN supports IBAMA's scientific research in those areas.

MRN has been concerned about the environment right from the beginning. The environmental department, run by the environmental assessor, was created in 1978. The firm has had a CIMA since about that time (as is the general policy in CVRD). The size of the department has varied throughout the years, but it was only subdivided into two sections recently. The plan for the future was to have the three subsections, including Health and Security, interact much more and bring environmental responsibility as much as possible to the shop floor. As part of the total-quality-control (TQC) plan, everyone becomes responsible for what and how they produce. The master plan can be translated into TQC measures for the environment. Beginning in 1992, the environmental assessor was to organize, according to the Environmental Executive Measures, a plan for environmental training of managers. Then, in turn, these superintendents and top managers were to train their people in each department, with support from the training department.

CIMA reports to the environmental department and the directorate and receives about 250 000 USD annually from the company. The main criticism of this type of organization is that it has a tendency to act as a political, instead of fiscal, body. Moreover, it acts as a normative body and not as an executive body, given that all firms within CVRD have their own environmental departments. The suggestion for the next few years is replace CIMA with another body that can really act as a fiscal body. It might include independent representatives from the community, such as householders, school teachers, and doctors.

Environmental costs can be divided into annual investment, which can vary substantially from year to year, depending on specific measures; and operational costs, which are more stable. Operational costs only vary according to the number of personnel in the department and the number of hectares deforested and reforested at the mine. The general superintendent's estimates of operational costs for 1992 are shown in ~~Table 1~~.

Total expenses for the year were about 1.6 million USD, which is in turn 0.41% of the original investment in the Trombetas project (390 million USD) and only 2% of the profit for 1991 (60 million USD). This was one-third of the environmental investment planned for 1992. Informants among top management supplied information on investment planned for 1992 (~~Table 2~~). However, sometimes there are extraordinary expenses related to reclaiming degraded areas. In 3 years, MRN had to spend 70 million USD, about 1 year's profit, to transport the washing plant to the mine site, partly recover Batata lake, and build new lakes (near the mine site) for the disposal of red mud from the extraction and washing of bauxite.

The master plan was formulated in March 1988, before the relocation of the washing plant (November 1989). So some of the environmentally degrading actions were already partly stopped. Although it was said that the plan is revised every two years, I did not have access to these revisions, if they were available.

~~Table 3~~ shows the main problems in the Trombetas' environment and their causes. The master plan points out that the worst problems are found in the area bordering Rio Trombetas, where one finds the industrial installations and urbanization. These degrading actions covered 1 752 ha in all by March 1988: 1 000 ha (57.1%) from Saracá mine (although 315 of 700 ha was reforested), together with the railway. The second important areas were those eroded by red clay from bauxite washing: 418.5 ha, or 23.9% of degraded areas.

MRN's reforestation projects seem to be the most advanced in Brazil (and can even be considered an example for the other mining companies, says Alcoa's environmental manager at Poços de Caldas). The environmental assessor made a detailed study of the species of the region and determined the format that reforestation must take, in what would otherwise be a rain forest. The format follows a natural process of succession of species, considering especially those that will bring the fauna back, such as fruit trees that the local birds enjoy. The birds will propagate, via seeds in their excrement, new trees in the region. These innovative reforestation criteria are based on the way the forest grew originally — very different from the type of reforestation that focuses on fast-growing, nonlocal trees or aggressive plants and grasses and seems to aim at merely maintaining a green appearance. Ninety native species and about 12 exotic ones are used in replanting. After 10 years, when the soil has been rebuilt, shade-loving forest species will be introduced to finalize the reforestation process. The cost of this type of reforestation was estimated in 1989 at 2 500 USD/ha, which is 0.07% of the direct costs of the mine. In 1991, bauxite costs (shipping price) were about 10.5 USD/t, whereas the year before they were higher (13.64 USD/t). Almost half (500 ha) of the mined land was already reforested at the time of this research.

MRN bauxite deposits cover 40 000 ha of its 420 000-ha concession. At present, on average, 70 ha is mined annually. The wood from the rain forest, which used to be cut and burned, is nowadays used commercially. This has been enforced by an IBAMA law, and the company is still developing its plans for recutting the wood from trees felled near the mine and establishing the commercialization process. This process is not so easy because of the distance of the place from other populations and the high costs of transport.

The recovery of Batata lake, the site of one of the most denounced environmental problems in Brazil, needs to be discussed further. Since the beginning of the reclaiming of silted areas from this lake, different researchers from the University of Rio de Janeiro have evaluated the programs and recommended solutions. Professor F. de Assis Estevez did research on models to establish a new ecological equilibrium in the eroded regions. The main aim of such work is to recover the part of the lake affected by residue slurry, but a second objective is to help train scientists specializing in the recovery of tropical lakes. The erosion took place on the sides and in the western portion of the lake, and it had impacts on the flora, the fauna, especially the fish, and the hydrophilic vegetation. The extension of the eroded area is 318 ha of Batata lake (including the buried red mud); 92 ha of the small river or arm called Igarapé Caraña, which was being recovered; 5 ha of the Agua Fria branch; and 3.5 ha of Fundao Igapó. Solid effluent in these rivers ranges from 6 to 9%. The only impact on water quality is a higher turbidity where the water mixes up with the red mud; the clay itself is nontoxic. Analysis of water samples gathered at four stations (the first three affected by the red mud and the fourth without residue) show a smaller concentration of nutrients, such as phosphorus and nitrogen, at the first three points (MRN 1990).

An indirect problem developing from this change in the ecosystem is the exposure of the soil to the erosion produced by heavy rains in the region. This lack of protection for the soil, in turn, inhibits the permanent recycling needed by the nutrients in the biomass, which maintains soil fertility. In sum, the soil has lost fertility in the whole of Batata lake and surrounding area. However, the research projects focus on the creation of an organic substratum in the lake, with characteristics similar to the natural one; the revegetation of the whole area; and the recolonization by fauna (native species, especially fish). Two other problems pointed out during fieldwork on soil erosion have been the erosion of the sides of various rivers and the landslides and loss of forest from the slopes of the plateaus in the early stages of bauxite mining. The latter is being controlled by leaving a 5-m belt of bauxite at the margin of each plateau. The first of these two issues has not been satisfactorily tackled.

The ALBRASALUNORTE complex

In 1974, as a result of an agreement between CVRD and the Light Metal Smelters Association of Japan, feasibility studies were developed to establish a project in the municipality of Barcarena, in the state of Pará, to produce alumina and aluminum. But because of delays in negotiations with the Japanese counterparts (financial, machine, and technology suppliers), its first exports of primary-metal ingots did not take place until 1986. That year, as a result of a lack of capital, the construction of ALUNORTE had to be temporarily stopped. Until 1990, ALBRAS had to rely partly on the imports of alumina and partly on supplies from ALUMAR.

ALBRAS — ALBRAS was conceived as a project oriented toward the export of primary metal; CVRD had an explicit policy of not competing for the internal market with the former local suppliers of aluminum. ALBRAS' environmental policy derived from CVRD's general policy for the Amazon-region ecosystem and was monitored by the local body, SESPA, the State Secretariat of Health of Pará. So far, the main problems faced by the firm have been the following:

Fluoride gas emissions from the open prebaked cells in potline 1 of the smelting area — Thirty percent of the gases generated in this reduction line are still treated by the wet-scrubbing system, which generates mud residues with fluorides. These have to be deposited and treated, a difficult task because it can provoke liquid pollution, especially in a microregion so full of small rivers. To avoid the generation of liquid residue, the cells are being closed off and their feeding system is being changed.

The need to change all gas treatments to dry-scrubbing, also in the anode baking factory — These changes are also under way.

Damage to the vegetation surrounding the factory related to excessive levels of fluoride deposits — Measures are being taken to evaluate fluoride levels, but there is not a well-organized program. Every month, SESPA monitors these levels at eight points distributed between 1.0 and 8.5 km from the industrial plant. Similar problems in the fauna of local small rivers have been detected, but they have not been as thoroughly examined.

Interviews showed the problems had been detected but had not been thoroughly faced. Two reasons were given:

The lack of personnel to tackle the problems, as a result of the complicated organization of the firm's environmental planning; and

The lack of adequate prevision of effects because these issues had been loosely dealt with in the past.

The past is now coming to light. Flaws are informally attributed to inadequacies of the technical assessments of the past, on which the company had relied heavily; the problem was that the Japanese assessors had been unfamiliar with the climate and geographic conditions of Brazil. Besides these problems, observations from fieldwork showed that hazardous wastes and noise pollution, along with workers' health, would probably require closer attention. Quantitative information on noise pollution and health aspects is also scanty. This may be considered another indicator of the possible significance of the problem.

ALBRAS' organizational chart for the environment shows 150 employees. CIMA, established after the firm was set up, has representatives from the state and municipal governments, the Federation of Industries of Pará, and the Compañía de Desenvolvimento de Barcarena (Barcarena development company), responsible for the port's construction. CIMA dedicates a lot of its effort to environmental-education campaigns. It is more a political and diffusion body, although in the past, CIMA made some major decisions regarding policy implementation, such as the establishment of controls for emissions affecting water supplies near the plant; and decisions on the form of treatment and dumping of solid residues. It was also decided to set up six air-sampling stations for air-quality measurements. CIMA must regularly survey the results of the fume-collecting system, environmental hazards in transportation, industrial waste, sanitary sewage system, reforestation plans, and environmental-laboratory functioning. CIMA is not, however, an executive body.

Environmental investment was estimated at 120 million USD at the completion of phase 2 (August 1989), but the firm had not yet systematically calculated operational costs at the time of this research. These costs are for air- and water-quality monitoring. Air-quality control is done at the soil level and at the level of atmospheric emissions. The plant has a network formed by four automatic stations and 20 monitoring points. SESPA collaborates in this area to fix sulfation rates. The water-quality plan is rather limited and follows the specifications established by SESPA. But considering the dimension of the problem in a water-rich area (according to number of river branches and level of rainfall), it seems low. According to such programs, the standards reached in air emissions, liquid effluent, and vegetation were for 1990 (year for which information was available) in agreement with those fixed by the federal and state governments. However, the agency's local headquarters in Barcarena were not functioning.

ALUNORTE — The ALUNORTE project was initiated in 1980 and continued successfully until 1983, when it met adverse international market conditions. Then it stopped altogether in 1986, when NAAC froze its participation. However, a preferential agreement was reached in 1988, whereby ordinary capital and part of the already-granted financial aid became preferential shares. Then, with favourable market conditions, the project was reinitiated, but as a national private-capital firm. CVRD has its control and management and is looking for new potential partners. In August 1990, total final investment for the project, including what had already been paid, was estimated at 806.4 million USD.

During the interviews, environmentally oriented investment was estimated with the help of specialists in the field. Initial direct investment in environmental controls — including construction of tailings for red-mud slurry, urbanization and landscaping, sand and mud filters, laboratory equipment, and red-mud pumps — added up to 14 820 USD. This would be only 1.84% of global investment and 4.04% of total direct investment. ALBRAS is expected to provide much of the environmental experience and organization of ALUNORTE. However, the actual details of its functioning are not yet entirely clear. Information obtained from the interviews shows that beyond introducing adequate controls within production, little is really being done for the environment in this implementation phase, nor is the topic really seriously thought of or debated in management. Lack of advanced training on the issue is also among the flaws in this phase, especially given that much emphasis was placed on general training before project implementation.

Valesul

The history of Valesul begins with a proposal from the Reynolds' group to build an aluminum smelter near Rio de Janeiro. In a phase of high imports of primary metal and delays in the construction of the ALBRAS–ALUNORTE complex, the Brazilian government decided to take over the initiative. The government controls Valesul by having CVRD's majority of shares in the new firm and defining it as a public enterprise. The firm was created in 1976, but the participation of the Reynolds' group decreased over time. Subsequent operations only started in 1986. One of the main reasons for the interest in setting up this project was the possibility of locating the firm near the main urban centres with industries that use the primary metal, mainly Rio de Janeiro, Minas Gerais, and Sao Paulo.

The Environmental and Laboratory Division was established basically to execute the decisions made at a more global level by the firm. It was formed in 1991 with 7 permanent employees, 26 subcontracted workers, and 1 autonomous worker. The distribution of employment by type of qualification, form of contractual agreement, and task shows that 50% of the personnel carry out reforestation and 36.4% take care of residue treatment and conservation of green areas. For liquid-effluent treatment, there is only one operative. Finally, these staff constitute only 4.3% of total Valesul employment. Permanent, skilled employees (chemical engineers and technicians) constitute only 0.92% of total employment.

The environmental master plan was directed mainly to implementing a green area around the industrial complex in 1989. The general superintendency of CVRD for the environment, together with Rio Doce S.A. Forests, designed and established the implementation and maintenance costs of that endeavour. The latter company could draw on its previous experience at Tubarao and was hence responsible for technical support. But Valesul was to provide the operational human resources, materials, and equipment. The aim was to isolate the pollution sources, improve the scenery, and make the environment comfortable. CVRD's greenhouse at Linhares (state of Spiritu Santo) provided the species to be planted. By the end of 1989, 72 326 plants of 69 species had been planted in the following proportions: pioneers, 77.7%; secondary, 6.4%; fructiferous, 9.3%; and ornamental, 6.6%. Until then, the total costs of the initiative had been 38 060 USD, a cost per plant planted of 0.52 USD. In June 1991, this cost increased to 0.63 USD, including maintenance, and this made the initiative totally feasible. Other aluminum plants in Brazil have taken the green area as a model.

Other programs for the environment involve, first, monitoring the plant's pollution levels, done jointly with Fundação Estudual de Engenharia do Meio Ambiente (FEEMA, state foundation for environmental engineering), with parameters established by FEEMA in February 1985. Monthly and yearly emissions of total particulates, as well as total fluorides, are significantly lower by international and FEEMA's standards, with more efficient treatment of particulates than of fluorides. Second, there is a plan for the deposition of solid wastes, spent potliners, and dross. Although the problem has been studied sufficiently, with environmentally sound solutions either proposed or under study, not much has actually been implemented. In 1988, the Environmental Laboratory Division started coordinating efforts in this area, but lack of investment or political decisions have somehow delayed this program. Several important studies for the recovery of solid waste are under way at local universities and other firms, which will provide input to possible future solutions.

General information from the firm's archives showed that Valesul's cumulative investment in the environment before 1989 was about 28.42 million USD. This included the purchase of dust-collection equipment (by Brazilian standards, an advanced pollution-solving technology), the creation of a solid-waste facility, landscaping, and the purchase of necessary equipment for the environmental laboratory. Environmentally oriented investment has a constant tendency to increase.

For 1990, the operational costs and investment chart of the firm showed that investment in environmental protection for this year was minor, only 12.83% of the total environmental expenditure (1.304 483 million USD). Almost the total capital is used by the firm for the reproduction of its operations, on a scale similar to that of the year before. Moreover, 75.74% of operational costs were in the smelting section, and 77.84% of investment was used by the laboratory to purchase equipment and accessories for pollution-control operations.

The study of CVRD's firms' environmental protection showed that much remains to be done, especially in water-quality control, dust and solid-waste deposits, and recycling. Workers' health and safety measures are also deficient.

The case of Alcoa

By the end of World War I, Alcoa had become a model of large-scale integration, from the mining of ore to the production of finished aluminum. With World War II, aluminum demand doubled, along with Alcoa's production capacity. Postwar demand for peace-time aluminum products helped the company grow still more in the 1950s and 1960s. It also started an aggressive program to sell aluminum on the international market. Today, Alcoa is the world's largest aluminum company, with activities all over the world. The United States has 105 of its operations. Brazil follows, with 15, and Mexico and Australia have 13 each. The firm is vertically integrated in all production stages and in raw materials, energy, and transport. But a clear-cut division exists between mainly local operations and those abroad. Third World operations involve the main bauxite mining and alumina and primary aluminum production, and these are on the rise.

Since the 1920s Alcoa has taken some type of action for the environment. Its basic concerns have included making environmental control compatible with economic growth. For this reason, it tries to collect and recycle all the materials it can within the production process and to incorporate controls into this process. Chemical materials, if recycled, reduce possible discharges of different types of liquid effluent. The technology has mostly been developed by Alcoa in the United States to satisfy both aims, especially since the 1970s, when controls tightened in the United States. The Clean Air Act amendment passed in 1970 to control air quality led to the creation of the Environmental Protection Agency, which established types and standards of pollution control. Alcoa increased its environmental investment from 5% of invested capital in 1971 to and 14% in 1979. This was a consequence of pressure from environmental movements of the late 1960s and legislation passed in the 1970s. In the 1970s, Alcoa spent 288 million USD on environmental protection alone. In 1981, Alcoa in the United States invested about 63 million USD in capital expenditures (9% of total capital investment) in the environment and 49.5 million USD in operating expenses for environmental needs. But the company recovered 43 million USD worth of materials to be used again. Smelting is a good example: in 1981, the value of materials recovered through effective control technology in the smelting division exceeded 35 million USD, not enough to recover all of the operating and capital costs required to install, run, and maintain the equipment, but certainly a sizeable sum.

Alcoa in Brazil

Alcoa has operated in Brazil since the 1960s, and in 1970 it started its primary-metal production at Poços de Caldas in Minas Gerais. But the company Alcoa bought had been producing bauxite locally since 1930. In the late 1970s, Alcoa expanded its activities in the Poços de Caldas area, buying an electric-wires plant and installing an aluminum-powder plant. In 1980, it also began the country's most ambitious alumina and aluminum project, the ALUMAR complex in São Luiz, in the state of Maranhao. This was mainly to recover from setbacks to expansion already obvious at the Minas Gerais' operations. This process led to significant sales growth in the domestic market, opening of new export markets, and launching of new products in lamination, aluminum, metallic structures, and car bodies.

For general guidelines and execution, Alcoa in Brazil has differential managerial levels, complementary, but with different functions. The Corporate Department of Environmental Issues reports directly to the firm's local directorate. It has under its charge the formulation of policies and objectives for the environment and articulates with the departments in the plants. They in turn develop daily controls. They coordinate their work with that of the CIMAs, which are formed by representatives of all departments in the plant. In conjunction with the environmental department, they periodically analyze the relevant problems.

~~Table 4~~ shows the principal activities of the Corporate Department of Environmental Issues in São Paulo. The programs for the evaluation of environmental impacts, the audits, the plans for the prevention of environmental accidents, and the plans for environmental monitoring are the main executive vehicles of the plants' environmental departments and managers.

~~Table 4~~. The Corporate Department of Environmental Issues of Alcoa: principal tasks.

Type of activity Tasks

Normative and political Establish and implement aims

Revise, interpret, and provide alternatives to environmental legislation

Represent Alcoa's position on the environment to private and governmental organizations

Assess its factories to obtain legal licences

Technical and diagnostic Assess factories in the implementation of environmental controls

Promote and follow up on monitoring programs for air, water, soil, and vegetation

Promote exchange of technical information with government bodies

Revise impacts of expansion projects or new investment to determine equipment needs for environmental control and monitoring

Research and determine the possible environmental impacts of different projects

Assess the firm's solutions to environmental problems

Source: Research.

Alcoa (Poços de Caldas)

In 1967, Alcoa organized the firm Compañía Mineira de Alumínio (ALCOMINAS), which had Alcoa as almost its only shareholder (99.9% of capital) and the support of the state government, through the Instituto Desenvolvimento Industrial (institute for industrial development) and the Banco de Desenvolvimento do Estado de Minas Gerais S.A. (development bank for the state of Minas Gerais). In 1980, Alcoa reduced its shares to 67.9%. But in 1982, it reinvested. By 1984, it recovered the position of control it had had at the beginning.

In 1970, ALCOMINAS was the first local producer of aluminum, and it also produced alumina. This was Brazil's first project to include investment for the environment.

The environmental policy and operations for alumina and aluminum production follow the same pattern as those of the ALUMAR complex, described later, so special emphasis will be placed here on those developed during bauxite mining. However, relevant control and measurement standards were not obtained during the field research on activities in Poços de Caldas. Probably the older technology in use (Soderberg type) made this material unavailable.

The firm is on a plateau near the city, which in turn is 180 km from São Paulo. The plateau is circular; it is 1 200–1 600 m high and about 400 m high at the periphery. Bauxite is concentrated in the northern part of the plateau. Alcoa works yearly on 5–10 ha and has an overall reserve of about 356 ha. Topsoil from the area to be mined is stockpiled until it is needed for recovery and reforestation.

When the mining is completed, terraces are created in the sloping soil. The terraces allow rainfall to concentrate but stop the soil erosion that would otherwise occur. Topsoil is then distributed to the mined areas to prepare for planting. Calcium and chemical fertilizers are added because high acidity levels and lack of nutrients have been discovered. Drainage systems orient rainwater to reservoirs built in the mined area. This increases the soil's capacity for absorption and avoids erosion.

At present, the reforestation program uses native species and has the input of professional staff from the University of Campinas in São Paulo. This is the modern approach used by Alcoa; in the past, reforestation depended on commercial and homogeneous species, such as eucalyptus. Reforestation costs depend on the specific characteristics of each area, but since 1979 they have been about 0.00065 USD/t of ore mined. This is quite a small relative cost, even if, considered in absolute terms, the recovery of a whole mined area seems costly. For example, in 1982–83 an area of 4.42 ha (a year's mining work) was recovered for 7 425 USD. But as it produced 225 234 t, the relative cost was of 0.00145 USD/t. The firm has been developing these operations since 1977 and has already recovered 135 ha. Labour costs in operational costs for each stage of recovery (terraplain, drainage, revegetation, maintenance, and greenhouse) were 55.80% of total costs. In sum, the cost of recovery per tonne of bauxite is about 1% of the cost of mining it and transport it to the alumina factory; that is to say, it is economically feasible.

The ALUMAR complex

The ALUMAR alumina and aluminum complex is on São Luiz island (which has an area of 900 km2), in the state of Maranhao. The complex occupies 1 700 ha. It is part of the Northeast Region in Brazil, but legislation made it part of Legal Amazon in 1967 (decree 200). This means that it has a right to all the subsidies for economic projects in that region, but it is also subject to all the controls. The area has a very rich hydrological system; the most important rivers for ALUMAR is Rio dos Cachorros and its tributaries, Igarape Andiroba, Pedrinhas, and the little Coqueiros river, which is the main drainage system for the plant. Only 34.5% of the 1 938 km of rivers is navigable, because of the lack of more adequate infrastructure. Mango trees occupy 15% of the island. However, many of the previously existing species were devastated by the activities of people, and this reduces the variety of animals for human consumption and accelerates the area's erosion.

At ALUMAR, the concept of incorporating environmental controls into the production process implies a major initial and gradual investment. The environmental department's budget for 1990 was about 2 million USD, used mainly for operating costs, such as training, wages, landscaping activities, and laboratory controls. During the fieldwork for this research, investment in 1990–92 for environmental activities at ALUMAR was estimated at 55.14 million USD, distributed as shown in Table 5. Levels are high because they include the rehabilitation of one of the lakes for deposits of red mud.

~~Table 5~~. ALUMAR's investment in environmental control and recovery, 1990–92.

In 1984, the consortium built and started operating a lake for bauxite residue, covering 15 ha. It had been designed to be used for 4.5 years, but it was enlarged to increase its capacity. The artificial lake is formed by dykes built with local solids, and it has a double impermeable membrane of polyvinyl chloride, 0.8 mm thick, that covers the base of the lake and the sides of the dykes. This membrane avoids the infiltration of residue into the superficial waters, which could thus be contaminated. In 1990, a new lake was put into operation. Investment in this was about 27 million USD. The lake has a capacity for 4 x 106 m3 of residue and took more than 1 million working hours to build. As this new lake begins to receive residues, the older lake no longer collects effluent, but it is still not deactivated. In 3 or 4 years, through rainfalls, it is expected to have a natural cleaning process. Only when its water is considered environmentally sound will it begin to be recovered. This is an ongoing process.

The environmental effects of the construction and operation of this complex were studied for 3 years before the project was implemented. This study had the participation of the environmental department of ALUMAR and Alcoa, the Hydrobiological Laboratory of São Paulo University, and the State University of Maranhão through contracts and consulting agreements with ALUMAR. It is very interesting that the evaluation of environmental impacts anticipated the Brazilian dispositions that began to be applied in 1986; ALUMAR started operating in 1984.

Total fluoride emissions and particulates were above international standards in the potroom in 1990. For fluorides, this continued into 1991, although at a much lower level. The environmental department is working hard to limit them, especially those related to the operators' inadequate handling of the equipment, such as when they keep pots open for too long while they perform certain functions. Because of this, a third instrument, a spill-prevention plan, was established to identify and inventory all potential spills. Accidental spills of oil or hazardous products resulting from operating failures or breakage of tanks or ditches can cause critical pollution problems for the environment and the workers. As part of this plan, every morning and before each new shift, 10 min is devoted at the ALUMAR complex to discussions of hazardous working-environment issues.

Both cases

In both the case studies (CVRD and Alcoa), the following environmental-control procedures were used:

An EIS, whose monitoring measures are mainly applied to fluoride emissions and particulates;

Partial land and tailings recovery;

CIMAs; and

Some form of environmental training (although here there were substantial differences between the content and extent of the programs applied by each company).

What also varied between companies was their knowledge of the best practice for certain environmental controls and their applications. The multinational firms had wider knowledge. The companies also used basic health, safety, and accident-prevention monitoring, which will be further discussed in the next section. However, very few companies had sufficient water-quality controls, locally specific land recovery, or full reforestation. Dust controls were virtually nonexistent, and so were noise- and heat-level controls. The companies did very little recycling of by-products. Solid wastes from alumina and aluminum production were not thoroughly protected in stocking. Finally, monitoring of local flora and fauna was inadequate (especially near tailings). Moreover, environmental-laboratory technology tended to be either outdated or insufficient.

Innovation and human-resource development

This section explores the main approaches to innovation and technical change, employment, training, and health and safety in this sector. Whenever possible, I will be drawing on more detailed information from the case studies.

Technology

Technological change in the domestic industry is represented by two main stages in the smelting process: Soderberg smelting and prebaked smelting, which is a more environmentally sound technology. The two types of smelting differ in the type of anodes employed: prebaked smelting involves a multianode; the Soderberg continuous anode, which is baked in situ, uses the heat generated by an electrical current passing through the cell (UNEP 1986a). However, a series of incremental innovations is a later part of either stage, although this is more characteristic of the prebake technology. Both types of pots can be closed or opened, hooded or unhooded, which makes a big difference in the gas emissions in the workplace and in the atmosphere. The types of cells also differ in the ways the anodes and alumina are fed into the process and the ways the anodes are replaced. The less the inputs are in contact with the atmosphere or the operator, the cleaner and safer is the technology. Other incremental technical changes have taken place in the size of the smelting pots, process controls, magnetic stability in the pots, and operational and control parameters in alumina feeding.

Since 1930 researchers at Alcoa in the United States have searched for an effective system to collect and recycle fluorides. In 1967, the first unit of Alcoa 398 technology was put into operation. It is a dry system of fluoride-fume treatment and recovery; 99% of fume-fluoride content can be collected and recycled in the smelting process. New plants were built with that process, and almost all older plants have had their systems replaced. In 1979, people thought that if the system was changed in all plants, this would produce savings of 80 million gal (1 gal = 4.546 L) of water and reduce fluoride supplies by half. In 1975, the 446 process was designed, a dry-scrubber to remove tarry materials with fluoride from the carbon blocks in the baking process. Other less extended developments have included, in 1979, the new smelting technology to produce aluminum without cryolite, avoiding fluoride emissions altogether. With that technology, dry-scrubbing is still needed for other contents of gases (particulates, chlorines, and other compounds). The policy with respect to water is conservation plus reuse. Both the 389 and 446 technologies help to reduce water pollution insofar as they do away with wet-scrubbing. By replacing 75 wet-scrubbers with dry-scrubbers, Alcoa reduced water use in 1967–90 by more than 5 x 106 gal/d. Another advance has been an improved treatment system to recover almost 90% of waste water for reuse; this is achieved through the elimination of dilute oil. Other Brazilian firms now use similar prebake technology and dry-scrubbers.

All aluminum smelters in Brazil have foreign technology, although some incremental technical changes have been designed and applied locally. However, larger projects make no provision for developing local technology, except of course in terms of some of the architectural designs that are so central to the industry. Research and development (R&D) institutes and centres are scarce in this industry; any that exist are found mainly locally in ALBRAS, Alcan, and CBA. The main areas of R&D have been in process automation, optimization of technical parameters in smelting, selection of more efficient materials, reduction of energy consumption, etc. On selected topics, the industry has professional input from R&D at local universities.

Innovation is largely embedded in imported machinery. However, plenty of scope exists for incremental technical change, especially in the smelting rooms. These can be environmentally oriented, as this also reduces waste of materials, thus making it economically feasible. Still, power failures, which are not infrequent, can reduce the productivity and environmental soundness of increasingly cleaner technologies. This seems to be an urgent problem. Lack of communication between the technical and production departments and the environmental and health and safety sections also hinders the firms' implementation of a more integrated innovation policy; it also reduces environmental quality. The role that training can play in the developmwnt of a more integrated effort will be discussed in the next two sections.

Employment

Table 6 shows the distribution of direct employment in the aluminum industry by type of activity and type of job for 1990. Total employment was 66780 people, with the majority (84.4%) occupying technical positions. The latter include blue-collar workers, as well as technicians and professionals. The table shows the importance of the independent manufacturers as employers: 56.3% of employment was in that subsector, whereas 40.3% was in the primary-aluminum integrated firms, those mainly studied in this research.

~~Table 6.~~ Brazil's direct employment in the aluminum industry, 1990.

The evolution of employment in 1984–90 by type of job shows an increasing share of technical jobs in general employment. Technical jobs were responsible for all employment growth in 1984–90. However, in the 1990s, the number of jobs has decreased in absolute terms. This reflects the policy adopted by the large corporations in this sector. Among integrated primary-metal producers, the policy was mainly to decrease administrative jobs so as to reduce production costs and maintain competitiveness in the international market as metal prices fell. This was partly a result of specific management techniques, such as TQC. In contrast, technical jobs remained quite constant in this period in the category of primary-metal integrated firms and rose more regularly in the other two subsectors. Brazil is one of a group of countries that have low wage costs; the others are Australia, India, South Africa, and Venezuela. Social wages form a large part of average wages, although the proportion is not necessarily higher than in other producing countries. Furthermore, during the recession, the producers have shown a preference for hiring workers on a subcontractual basis. Social costs are then to be borne by the subcontractor, rather than the employer. However, subcontractors are subjected to fewer government controls.

Other information on employment and wages, published by the Instituto Brasileiro de Geografia e Estadistica (IBGE, Brazilian institute of geography and statistics), shows that in terms of number of jobs and wage levels the recession in the domestic industry has been stronger in the mineral-extracting sector. This has resulted in job losses and wage decreases (IBGE n.d.). Unfortunately, the criteria for collecting employment data in bauxite production in Brazil differ from those used in the aluminum industry. The DNPM data are the best available and are published in the Brazilian Mineral Yearbook (DNPM 1990). This source is built with periodic information filled out by the firms themselves. Employment was at 1 543 in 1989, with the vast majority being blue-collar workers, and this level remained stable for several years.

Strategies for training, health, and safety

All firms studied had their own training departments. Some of these training departments (such as those of ALBRAS and ALUNORTE) were even operating during the development phase of the project, before installation. Many of the engineers, technicians, and managers had been sent abroad to train or retrain at the mother company or with technology suppliers. Local retraining was usually done systematically, during operation. For example, by August 1989, already 92% of ALBRAS' workers were local people. They had all been trained in the plant, because no one in the area had had previous experience with aluminum or heavy industry. Delays in project implementation gave the compnay time to develop, well in advance, training plans to be used locally and in the national universities. However, technical personnel had to be recruited from outside the region and even from outside the state, sometimes from other CVRD firms. To initiate the project, the firm also had 60 Japanese technicians and aluminum specialists from Mitsui. However, it was harder to estimate what proportion of this training was related to the environment. In the environmental departments, usually only the heads had such training abroad; middle managers and technicians participated in national conferences and courses, but not systematically.

Alcoa had one of the most advanced training programs in the sector, and this can be illustrated using the employment and training practices at ALUMAR. In June 1991, permanent and subcontracted employment was at 3 358 persons, almost one-third of Alcoa's general employment in Brazil. Permanent employment was at 2 872: 68% were paid hourly; 15% were paid monthly; and 17% were hierarchical technical and managerial staff (15 in all were employed in the environmental department). Personnel had higher wages than similar workers in other regional industries, and their jobs were more stable than similar ones at MRN. Schooling levels were also higher than at other local firms. Moreover, ALUMAR did systematic and permanent in-plant training, especially in the most technical areas. It also regularly sent top- and middle-ranking managerial and technical staff overseas for training. Table 7 shows the firm's training budget, 579 374 USD, for 1991: of this, 8 011 USD, or 1.38%, was destined for personnel in the environmental department.

~~Table 7~~. ALUMAR's budget for personnel training, 1991.

The company also had daily 5-min discussions of health and safety — a legal requirement. However, part of this time was sometimes used to discuss environmental issues. Training is one of the main methods for dealing with these issues — training in emergency-action plans at the level of day-to-day details and routines. At ALUMAR, a follow-up was also made: information on the number of accidents and the attitudes of those involved was added to a data bank. For example, at ALUMAR in 1990–91 (until July 1991), of 18 accidents occurring in the calcination section, 5 (27.8%) were caused by human error. Of 116 accidents in the clarification section, 40 (34.5%) were caused by human error; 15 (12.9%), by spills in tabulations; and 14 (11.9%), by faulty equipment. The environment departments investigated each accident to classify it by degree of environmental damage, identify its cause, and establish corrective or preventive action. If human error ranked high as a cause of accidents in a section, a questionnaire was distributed to that section's operators. This was supposed to be a consciousness-raising experience and was considered useful in evaluating and eventually increasing — through training — the workers' knowledge of environmental and personal risks in their section.
Other departments at ALUMAR carry out other training activities complementary to those strictly oriented to the environment. I must at least mention general training activities and industrial-hygiene programs. The first considers, in a limited way, environmental training in the recruitment phase. All recruits are shown a film on environmental controls at the plant; for certain jobs, environmental aspects are included in initial training programs. Workers in some situations, such as potline workers, receive environmental training when certain pollution standards are not being met. The plant also promotes some environmental training with community groups, offering 1- or 2-d programs with open discussions of the topic, etc., and also gives technical assistance for setting up communal greenhouses. In the past, the company made some fairly high investments in retraining its process engineers and environmental engineers, either domestically or abroad. However, the recession drastically reduced its training investment.

Industrial-hygiene programs are crucial in this industry because one of its main problems is the need to improve the direct working environment, principally in the potrooms, at the anode-fabrication plants, and in some sections of refining. Heat and noise levels tend to be high at most stages of the production process. At ALUMAR, this is especially so, considering the location of the complex is already extremely hot and damp. Mean exposure levels by job class, as agreed internationally, are periodically compared with real levels attained in various sections of the plant. Two of the main difficulties are still the reduction of noise levels and human exposure to corrosive chemicals. For this reason, the plant provides a complete list of the main agents and the numbers of people potentially affected by their activities per stage in the production process. This is used to monitor workers and technology.

MRN has also developed a very comprehensive program to tackle health and safety problems, and the firm has been most interested in reducing work-related accidents, which are common in all mining activities. In 1991, a new program was developed to reduce the accident rate relative to 1990. The firm elaborated some policy instruments for supervisors to put into practice in various areas. The firm uses posters, talks, etc., to publicize the general security policy. Also of use are monthly meetings on health and security; daily 5-min security talks; auditing of insecure actions; preventive analysis for various jobs; and programed security inspections.

Tables 8 and 9 show the number of accidents among permanent employees and subcontracted ones at MRN between January and September 1991, along with those foreseen by the company for that period. The tables indirectly measure the level of risk of each accident according to two categories, that is, whether or not they resulted in lost time. Most accidents were without lost time (more than three-quarters of cases among both types of personnel). The company's predictions were somewhat higher than the results.

~~Table 8~~. Work-related accidents among permanent employees at MRN, January–September 1991.

~~Table 9~~. Work-related accidents among subcontracted employees at MRN, January–September 1991.

The number of accidents among the subcontracted workers was 4.5 times higher than among the permanent personnel. But the number of subcontracted workers (2 869) was more than double that of permanent workers (1 282) for that year. The data show that MRN's industrial security policy has much greater success reaching the permanent personnel. The mine is obviously the most risky place to work. The mine, the port, and the beneficiation area together account for 84.61% of all accidents. Fieldwork observations showed that the workers most affected by accidents are, in order of severity, maintenance personnel, blue-collar workers, and drivers. Accidents usually happen because mechanical parts bump inattentive workers or tools fall from their hands. Company estimates show that fingers are the body parts most frequently affected. This category accounts for 21.88% of cases; arms and face, 9.38%; and back and forearms, 6.25%. Other body parts are rarely injured.

In ALBRAS–ALUNORTE and Valesul, training in general and training on the environment and safety were less advanced than at the other companies studied. But conflicts arise in all companies over the articulation of training endeavours — between the general training offered by the personnel and training department and the more specific forms of training needed by the environmental and health and safety sections. Moreover, the environmental input does not inform all these training policies, which tend to function independently in most firms. Above all, hardly any systematic integration exists between the technology and production sections and the different training initiatives. This partly shows how little environmental training has been planned in this transition phase. Environmental training is done without taking a holistic approach to all sections of the company. The next section, however, analyzes indications that this might begin to happen in companies or in the government's future plans.

Company strategies and government policies for the future

Main conclusions and policy recommendations

The case studies illustrated, to the extent possible, the everyday environmental behaviour of two central Brazilian companies. The data from these two companies cannot be extrapolated to the whole sector, but the studies offer a sound illustration. From this, some trends can be derived regarding the relationship between environmental regulations and company behaviour (environmental management and technical solutions) and — although in a more limited way — between social pressure and company behaviour.

The case studies revealed the main forms of relationship between environmental regulations and company behaviour:

Regulation, either local or home country in the case of transnationals, is a necessary but not sufficient condition for implementation of a sound environmental policy at the company level in Brazil.

The level of environmentally sound behaviour varies between aspects of environmental planning, showing a set pattern across companies. In other words, some regulations are more systematically applied than others. This in turn is positively correlated with the direct economic gains companies obtain from obeying regulations and only secondarily with the existence or enforcement of the regulations or social pressure. For example, fluoride-emission control is heavily monitored across companies, whereas sound reforestation and riverbank erosion are controlled less uniformly.

Regulations and social pressure are the main motivators for the companies to implement adequate measures against negative environmental impacts that are more visible to the wider public or that affect a broader population. Regulations and social pressure are interrelated: usually, general social pressure results in new regulations, whereas particular social pressure results in a more thorough implementation of rules, along with careful monitoring.

Even in cases where environmental soundness in a company's behaviour is triggered by regulations established as a result of social awareness in the home country (as with Alcoa), companies can demonstrate time lags, resistance, or denial in carrying out the necessary adaptations to the local environment. This shows that the local environmental efficiency of some transnationals does not derive mainly from acceptance and enforcement of local regulations, but from the companies' greater technological and financial capacities, which are only in a limited sense a function of environmental regulations in the home country.

Corrective maintenance predominates in this sector. This is partly a result of the characteristics of local regulations for the sector (recent, flawed, or contradictory, as explained earlier) and partly a function of the type of growth the government fosters.

Even if regulation ix the more direct cause of positive changes in companies' environmental practices, flaws in the implementation of the laws and policy measures diminish the potentially positive impacts of environmental regulation.

Not all transnational companies are at the forefront in the use of environmental-control technology or management in Brazil — in certain respects, the national laws do not lag the industry's environmental practices. For example, CVRD's behaviour, as shown by this study, is more advanced than Alcan's local practices, and the national laws on reforestation and land rehabilitation using local species are very convincing and adequate on paper, if not in practice. The main problems are establishing an adequate institutional setting and the mechanisms to monitor implementation and to make regulations effective; and creating political power to enforce the regulations vis-à-vis different economic groups. These problems are clearly illustrated by the scanty application of environmental regulations that directly affect the workplace. These regulations are precise and available, but they are not effectively applied. The workers have little power, and government practices do not support the workers.

Ultimately, then, environmental soundness depends not only on the instrumentation of environmental regulations and sound technical choices but also on having an institutional setting that favours their application and having the educational skills and political power to create these instruments. Without these, neither regulations nor technical and managerial solutions are enough, although they constitute an essential precondition.

Let us look now at the case-study results in more detail. The case studies showed that most of the companies had production-expansion programs under consideration. MRN intended to expand its production capacity of 3.5 x 106 t/year to 5.5 x 106 t/year and to supply the ALUNORTE plant once it started operating. ALUMAR of Alcoa planned, for 1993, to increase production to 950 000 t of alumina and 380 000 t of aluminum, almost doubling its 1990 capacity, both for export and for the supply of its domestic manufacturing plants. It was continuing its verticalization process. ALUNORTE was to begin its operations as the main supplier to ALBRAS. With this, ALBRAS was to expand its production of primary aluminum substantially, to 340 000 t/year. However, ALUNORTE intended to produce 1.1 x 106 t of alumina/year for the global market by 1996.

For most of these initiatives, the companies upgraded their technology, usually through incremental technical changes. These resulted indirectly in a cleaner production processes. The best international practices were adopted for new endeavours, such as that of ALUNORTE or the expansion of potline sections within smelting, at ALBRAS. These tended to be environmentally sounder. ALUNORTE even chose the Giulini system for disposal of red-mud slurry — one of the most advanced systems in the world. However, in the plants operating with older technologies (the Soderberg vintages), less was being done in both these directions, that is, toward the expansion of operations and toward technological upgrading with environmentally sound hardware. Partly, this reflects the limitations imposed by the technology; partly, the firms' lack of motivation to innovate. Moreover, local R&D for these technologies is scarce, and so is the knowledge on best practices.

Differential environmental experience was shown within the firms studied. In most, the controls, whether regulated by recent laws or not, were applied more in a corrective than preventive manner. In other words, they were considered and used after the technology had been selected and only when some of the problems presented themselves. This trend had been stronger in the past among firms with less experience in producing bauxite, alumina, or aluminum, such as some of CVRD's plants. Some multinationals, such as Alcoa, had had environmental regulations in their home countries earlier. These companies also tended to have a greater capacity to embed the necessary controls in the technologies they developed. Familiarity with production and R&D capacity made it feasible for some companies to plan ahead and develop a preventive policy from the implementation phase of a new project. These activities also made it somewhat easier for these companies to keep up with domestic regulatory standards. However, the companies tended to lack experience in the specific environment they were dealing with.

The general environmental laws applied to the sector are contradictory regarding standards and types of controls or they are highly specific to each state or region. This makes it complex to set up common guidelines across activities within one company or across companies. As the regulations are generic for mining or for industries as a whole and deal with air pollutants, chemicals, or water pollutants by type, entrepreneurs and environmental departments are generally left to decide their own activities. Fortunately, the Associação Brasileira da Indústria do Alumínio (ABAL, the Brazilian association of aluminium producers) has been able to draw on its past experience in the sector, systematize the legal information (ABAL 1991), and informally draw up some common guidelines. The association holds periodic meetings for environmental departments, a general conference, and annual training workshops to discuss environmental information relevant to the sector. This seems the right forum for generating a more preventive environmental approach for the whole sector. Alcoa's initiative is very strong in ABAL, and it exerts its influence widely, given its longer trajectory in the area.

However, ABAL has accomplished little toward devising policies covering solid waste and dross recycling in the industry; aluminum can and scrap recycling; or heat, noise, and reverberation reduction. These are the most prominent environmental hazards still largely unresolved in the Brazilian alumina and aluminum sector.

There is no body that is equal to ABAL or develops similar tasks for bauxite mining, exploration, and development. IBAMA tends to fulfil a more administrative role as a government environmental agency. Some research on the local flora and fauna, as well as on specific rehabilitation of degraded land, is being done at the Goelde Museum in Pará; at local universities all over the country; at R&D institutes belonging to the companies, especially those of Alcan, Alcoa, and CVRD; and in the local environmental agencies. The latter often hire the heads of the companies' environmental departments for their expertise. However, there has been little systematic integration of research results.

The case studies also illustrate how much the advances in formulation of the laws are not reflected in coherent implementation practices within the companies. For example, some government measures are applied bureaucratically, that is, without assessing the possible results of differing implementation schemes in particular environments. Conflicts between departments in the firms make it difficult to devise a more integrated approach to training staff to implement environmental measures.

The skills of personnel in the environmental departments also need to be upgraded. This is especially the case with national firms, which either have too few people dealing with the environment or too few professionals and many more subcontracted labourers in manual operations. On the other hand, manual and low-tier supervisors and technicians have no access to vocational-training programs with an environmental approach. Until recently, SENAI (the industrial vocational institution) has not considered setting up any new programs with this concern or including this concern to any substantial extent in its regular curriculum.

A lot more needs to be done in all sectors to protect the workplace environment. This also applies to current domestic environmental regulations. The case studies show how relatively little has been done to diminish the adverse effects of heat, sound, or reverberation in the workplace or, in some cases, the nearby neighbourhood.

The proposed (preproject) amendments to the environmental legislation in the Constitution will do little to increase the environmental soundness of the sector. These are the clauses commented on in the second section of this paper: they call for further administrative and legal centralization of controls, monitoring at IBAMA, and restrictions on participation of foreign capital.

The regulation of the use of native lands for mining endeavours also awaits further resolution. For this, the wider participation of interest groups is not only desirable but advisable. The public-audiences policy instrument for the discussion of RIMAs before project implementation has not yet been widely promoted by government regulating agencies. Despite this, it may prove an interesting tool for public awareness and participation.

The following main policy recommendations arise from this research:

The need to emphasize a preventive versus a corrective approach to the environment among firms and in government policies and legislation;

The need to develop a more systematic social policy at both levels, which may in turn benefit the environment and the different actors; and

The need to further engage the various social agents in discussion and participation (for the sake of open dissemination of information) and in decision-making on environmental issues, as these tend to have a widespread effect at a local, regional, or national level.

A word of comparison

Using other studies undertaken for the Mining and Environment Research Network (made available from China and Ghana), I will briefly discuss some similarities and differences in the trends found in environmental management and land reclamation, most especially as they relate to the aluminum industry and bauxite mining (see Acquah 1993; Acquaisie 1993; Lin et al. 1993).

First, in all three cases — Brazil, China, and Ghana — strong regulatory institutional settings were in operation when the case studies were developed. These settings differed in their time frame, the type of pressure that set them in motion, and the degree of linkages with local industry to make their policies effective. China had the oldest initiative, dating from 1973, followed by Brazil. The more recent initiative is articulated in Ghana's National Environmental Action Plan for 1991–2000. Although in Brazil and China, environmental initiatives at the national level derive from general social awareness and pressure, in Ghana they stem more clearly from the World Bank's guidelines as preconditions for loans. A typical example is the Ghana Environmental Resource Management Project, a 5-year plan to develop the necessary institutional and technical capabilities to combat soil and resource-base degradation. Industry linkages seemed to be far reaching in the case of China; not especially notable in the case of Brazil; and apparently just beginning in the case of Ghana.

Second, the cases in Brazil and Ghana were similar in having a double channel for environmental soundness: on the one hand, government monitoring and control; and on the other, corporate practices (that is, transferring to the Third World the environmentally sounder technology developed to meet First World standards). In Ghana, transnationals seemed to be doing this, but practices were not so clear cut in Brazil. Brazil was also more complex, as some industrial initiatives were outside the hands of the transnationals. Because the transnationals were operating under technology-transfer agreements, they had a lot of room for in-plant adaptations and incremental technical change, which can alter environmental soundness significantly. In China, initiatives were developed locally, especially in land reclamation for bauxite production, and this always involved a high level of local R&D and research in situ at each mine.

Third, China seemed to have the highest levels of R&D expenditure on the environment at national and sector-specific levels. China was also the only country that had established quota-based, or market-type, instruments for environmental control: since the 1980s treatment-control funds have come from the polluting organizations, rather than from the state. As we have seen, Brazil has an orientation in this direction, but not Ghana, where the command-and-control approach predominates. Also, in China, by law, 7% of technical-innovation funds must go to the struggle against pollution (Rothwell 1992; Skea 1993).

Fourth, none of these countries had policies disaggregated to a sector-specific level, leaving associations of producers to determine largely their own parameters and operationalization, with the exception of the land-reclamation programs in China. These were highly sophisticated and mine specific, usually with the objectives of making mined land arable again and achieving the standards of the local farmers.

Fifth, in all cases, the general focus of policy, in theory, was on prevention, but in practice the focus was on environmental controls for problems that had already surfaced — that is, on correction rather than prevention. In all cases, the main obstacle was the lack of managerial skills for environmental preservation. The literature in the three cases also indicated that best environmental practices could be attained with community involvement in policy-making. These are specific concerns and setbacks in attaining environmental soundness in developing countries, and they should be taken much more into consideration by those who are developing research and policies for sustainable development.

--------------------------------------------------------------------------------

Brand Is Culture, Culture Is Brand

2010-10-02T20:54:00.000-07:00

Article taken from: http://blogs.hbr.org/taylor/2010/09/brand_is_culture_culture_is_br.html

Brand Is Culture, Culture Is Brand

8:33 AM Monday September 27, 2010

Two weeks ago, I spoke to a conference of marketing executives organized by the American Bankers Association. The talk among these bank marketers — a young, energetic, change-minded bunch — ranged from the needs and interests of Generation Y to the power of social media to the design of new products for new times.

My message to the group was much simpler than all that, almost a throwback. You can't really think about your bank's customers, I argued, unless you also think about your bank's people. Even the most creative business leaders I know recognize that success is not just about marketing differently from other companies: more daring ads, more new products, more aggressive use of Twitter and Facebook. It is also, and perhaps more important, about caring more than other companies — about customers, about colleagues, about how the organization conducts itself in a world with endless opportunities to cut corners and compromise on values.

That's what helps you stand out among your customers, and stand out from the crowd in a hyper-competitive marketplace. The new "power couple" inside the best companies, I concluded, was an iron-clad partnership between marketing leadership and HR leadership. Your brand is your culture, your culture is your brand.

So imagine my surprise when right after my talk, a banker by the name of Jana Dobbs, an executive with Corner Bank, a 138-year-old outfit based in Winfield, Kansas, shook my hand and handed me her business card. "Take a look at my title," she said with a Cheshire-cat grin. Jana's title, it turns out, is senior vice president of human resources and marketing. Forget a "partnership" between HR and marketing. At Corner Bank, the two functions report to the same executive. It's a title I'd never seen before, and I asked Jana how her fellow bankers tended to react to it. "They're usually kind of shocked," she admitted, "because at most companies the head of marketing and the head of HR have very different personalities."

Corner Bank has a great brand position in the Kansas cities and towns in which it operates — as an advocate for the little guy in an industry dominated by giants. That means the day-to-day interactions between customers and front-line employees are a huge part of the bank's brand identity. "Our people are our best marketing tool," Jana explained. "Advertising is important, the design of the website is important, but if customers have a positive experience every time they come into the bank, that's what builds our reputation. We've got mobile apps, we've got Internet banking, but what we rely on is a hometown feeling. When you walk into our bank, we know your name."

That's certainly a winning value proposition for a small, family-owned financial institution. But it works for major organizations too. One big company that embraces the connection between brand and culture is USAA, the insurance and financial-services juggernaut based in San Antonio, Texas. It's a huge, successful operation with 7.4 million members, 21,000 employees, and annual revenues of $18 billion. What most distinguishes USAA, though, is that it only does business with active or retired members of the U.S. military and their families. That's the customer base it serves — and it serves those customers fabulously well. Its customer-loyalty rankings are off the charts and it has become a legendary brand, both in terms of technology innovation and service.

One reason for its strong performance as a brand is the strong sense of identification between its front-line employees and its customers. USAA does business almost exclusively over the phone and the Internet, and it has more than 13,000 customers-service reps. The company has a much-admired training program in which employees learn the myriad technical skills they need to work efficiently. But what they really learn is to empathize with and see the world through the eyes of a soldier on active duty in Afghanistan who needs to wire money to a sick parent, the wife of a soldier in Iraq who needs to finance a car, and all of the other unique pressures and demands on its 7.4 million members.

How do employees develop that sense of empathy? A BusinessWeek feature tells the story well. When they are about to start their training, employees review "deployment letters" that real soldiers get: "Report to the personnel processing-facility" tomorrow, the letter reads, and get your affairs in order beforehand. They eat MREs (meals ready to eat) on many occasions during their training, to get a "taste" for the life of a soldier. They walk around in 65-pound backpacks. They read actual letters from soldiers in the field to their families back home. USAA calls it "Surround Sound" — immerse employees in the real life and emotional needs of customers. "There is nobody on this earth who understands their customer better than USAA," one consultant has said.

That kind of personal identification between employees and customers is what gives USAA the drive to not just provide great service but to unleash big innovations. For example, it was the first financial-services company to allow customers to deposit checks by iPhone. You get a paper check, you take a photo with your iPhone, and email it to the bank. It was the first financial-services company to allow you to check deposit balances via text message. You text your account number and get a return text with the relevant information. USAA has proven itself to be a technology leader — not because the company is obsessed with technology, but because it is obsessed with customers.

The simple lesson behind the success of both small-fry Corner Bank and big-boy USAA: You can't be special, distinctive, and compelling in the marketplace unless you create something special, distinctive, and compelling in the workplace. How does your brand shape your culture? How does your culture bring your brand to life?

= = =

Win-Loss Studies and Four Sequential Steps to Synchronize Sales & Marketing

2010-10-01T00:26:00.000-07:00

Extract taken from:
http://blogs.hbr.org/cs/2010/09/why_sales_and_marketing_are_at.html

Struggling companies all share something in common. Their sales and marketing efforts are at odds. Sometimes, they are even at war. The marketing team lectures the sales department, saying that if only the salespeople would follow their advice, their problems would be solved. Meanwhile, the sales department always says it needs something else from marketing. The salespeople are clamoring for the silver bullet that will convince the most ardent skeptic to buy.

The root cause of this situation is that sales and marketing have different views of the world. To the marketing department, selling is a series of steps that you guide a prospect through. These steps are based on the logic of purchasing the product, and the marketing team's job is to provide the tools to move the prospect to the next step.

Meanwhile, salespeople must work with the unpredictable part of the process: people. Their job is to formulate an account strategy based upon the people to whom they are trying to sell. They need intuition about what to do and say in a particular competitive situation.

As a result, friction between the two areas develops. Salespeople feel they must translate what they see as marketing's theoretical arguments into a practical message, while the marketing team often believes the salespeople themselves are the problem because they are not following their product positioning. Having analyzed hundreds of sales cycles and conducted thousands of interviews as part of the win-loss studies I have performed on behalf of my Fortune 1000 clients, here are four sequential steps to define the intuition that sales needs so sales and marketing are synchronized.

Step 1: Identify Customer Decision-Making Politics

The premise of most marketing departments is that the customer is purely a rational decision maker. Therefore, the best product should naturally win and they believe their product is always the best. However, prospective customers have personal biases and are influenced by organizational politics and the personalities involved in group decision making.

The first step is to understand the people involved in the sale. Analyze at least thirty recent key sales cycles (consisting of an equal number of won and lost accounts) and map out all of the people who were involved. List their titles and roles in the organization, and hypothesize about the selfish interests that motivate them to buy.

Step 2: Determine Sales Cycle Turning Points

Every deal has a critical moment or turning point that determines the winner and the losers. In some cases, the turning point is easy to spot. For example, while a salesperson is presenting his solution, he encounters a deal-breaking objection that he is unable to overcome. Even though the customer remains cordial for the rest of the meeting, a turning point has occurred and the deal is lost. Recognizing when and why you lost momentum during the sales process is necessary to keep it from happening again in the next account. List the turning points for each of the sales cycles analyzed in the first step.

Step 3: Conduct a True Win-Loss Analysis

Win-loss analysis is very important, but unfortunately, it's a lost art. True win-loss analysis based upon extensive customer interviewing is the best way to understand customer behavior during the selection process. The goal is to have customers comment on the company, selection process, competition and give their perceptions of the sales cycle experience and product opinions. They should also be solicited for their advice and recommendations.

Step 4: Perform a Marketing Tools Audit

The final step is to amalgamate the data from the steps above in order to perform a marketing tools audit. Summarize important qualitative information about the political, organizational, and technical aspects of customer decision making into common themes. Then make a comparison to find where gaps exist between the tools marketing provides (customer success stories, product demonstrations, competitive comparisons, analyst reports, etc.) and the materials needed to counteract business or technical objections and overcome key deal-stopping turning points. After the audit is completed, sales and marketing leadership should then define the nature of their relationship and how they will interact in the future (see this excellent HBR article for more insight on this).

Closing Thoughts

The ongoing conflict between sales and marketing is the "elephant" in the room at many companies. No one wants to talk about the problem until it becomes so disruptive that it must be dealt with. By following these four steps, the divergent viewpoints between sales and marketing can finally be aligned.

Steve W. Martin teaches sales strategy at the USC Marshall School of Business. His latest book on sales neurolinguistics, Heavy Hitter Sales Psychology, is based on his successful 20-year sales career.

= = =

GreenBiz.com - A New Life for Plastics: End-of-life Solutions in the Age of Greener Materials

2010-09-27T10:23:00.000-07:00

Content extracted from GreenBiz.com:
https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=245220&sessionid=1&key=F08533090C40503C83A210E84A5E635A&sourcepage=register&utm_source=GreenBuzz&utm_campaign=93241c3dce-GreenBuzz-2010-09-27&utm_medium=email

A New Life for Plastics: End-of-life Solutions in the Age of Greener Materials

October 5, 2010, 8:30 AM PDT / 11:30 AM EDT

Plastics in the waste stream have long been a concern, and companies have been finding new ways to address this challenge. After all, why must a polymer that has the potential to last thousands of years in the environment be used in single-use packaging applications? Many companies are now turning to biopolymers instead of traditional petrochemical-based plastics to address waste management challenges and create localized energy.

Biobased plastics can degrade in two ways: in oxygen-laden environments, and in environments that lack oxygen. Certain biopolymers have been shown to have characteristics that allow them to degrade in an industrial composting setting.

This free, one-hour webcast will shine a light on how global biotechnology and chemical firms are driving innovation to help find a solution to plastics in the waste stream. Join us as we explore recent trends in the plastics industry, including:

* Use and inclusion of biopolymers

* Innovative technologies linking plastics to energy generation

* End-of-life considerations from the design phase

* Standards development

You will learn:

* the benefits of using biopolymers over traditional plastics

* the differences among commonly-used biopolymers and their end-of-life solutions

* challenges faced by the plastic manufacturing, waste management and packaging industries

* how degradation of biopolymers can help reduce our dependence on fossil fuels

Join Joel Makower, Executive Editor of GreenBiz.com, in conversation with Robert Whitehouse, Director of Applications Development for Metabolix, Inc., a leading bioplastics company; Kelly Lehrmann, consultant with the German bioplastics firm FKuR; and William Hoffman, environmental scientist in green chemistry at UL Environment.

Panelists include:

Robert Whitehouse, Director of Applications Development for Metabolix, Inc.

Dr. Robert S. Whitehouse has been involved with the plastics industry for over 40 years with a number of organizations. He obtained his PhD in Polymer Chemistry – Heterogeneity in Adhesive Films at Wolverhampton University and has authored many publications, book chapters and over 50 patents in the polymer, surface chemistry and recycling fields. In 1999 Bob became involved with Metabolix Inc in the development of polyhydroxyalkanoate polymers for a range of applications. At this time he became involved in understanding the role of microbial organisms in controlling the biodegradation of plastics materials as an end of life scenario. He has taken an active role in ASTM D20-96 committee in the development of new biodegradable test specifications include ASTM D6400 and D7081 and more recently in new applications such as ambient soil degradation, Home Composting and anaerobic degradation.

Kelly Lehrmann, consultant with the German bioplastics firm FKuR

Kelly became interested in the biodegradable industry after working as a consultant for a landfill corporation and realizing the potential value of the industry. She attended UW-Eau Claire and Mankato State University to obtain a B.S. in Finance. Kelly has 21 years of sales, marketing and management experience with 14 years of that holding management and executive positions. Throughout her career she spent 7 years in retail management where she received hands on experience with inventory control, distribution channel management, purchasing, sales management, market research and public relations. She has been a part of FKuR’s family of companies since 2007 first as the agent for North America and now as a consultant for FKuR Plastics Corporation in the United States.

William Hoffman, environmental scientist in green chemistry at UL Environment

Bill is currently working on the development of standards and guidance for standards within UL Environment including the green chemistry and sustainable chemistry aspects of product environmental performance, validation of claims and product certification. The goal of this work is to provide a strong technical basis to product environmental performance by using a deep scientific analysis of the environmental impact of a product while also assuring companies producing the product are using environmentally progressive manufacturing methods.

Moderator:
Joel Makower, Executive Editor, GreenBiz.com

Joel is Executive Editor of GreenBiz.com and author of "Strategies for the Green Economy," among other books. For more than 20 years, he has been a well-respected voice on business, the environment, and the bottom line. The Associated Press has called Joel "the guru of green business practices."

Sponsored By:
UL Environment

# # #

Green Notes

2010-08-12T23:39:00.000-07:00

Notes will be updated from time to time, information listed is not meant to be an exhaustive source of data.

Rule of Thumb: Criteria for Consideration
- The Market Need
- The Mission
- Knowledge to Start
- Capital Required
- Timing to Start
- Special Challenges

= = =

Fueling Green Energy

(1) Fuel Cell Backup Power
-   Provide fuel cells for backup power, emergency power, and mobile power
-   Business to sell and/or distribute
-   Capital - $$
-   Timing to start - months to years
-   Find a product to sell and/or distribute, and target the right market

Additional notes:
ABI Research, Power Air Corp (Zinc Oxide) - zero/low emissions, US Fuel Cell Council, ufcc.com, Wintergreen Research - Stationary Fuel Cell Market Opportunities, Strategies, and Forecasts, 2006 - 2012, wintergreenresearch.com

Developing new technologies
Distributing new fuel cells being produced
Licensing technology to sell and adjust to new uses, targeting a specific market niche, such as fuel cells for office use, cabins, etc.
Leasing of fuel cells and renting them on short-term basis as mobile power for special events.
Marketing in urban areas worldwide where electrical power is uncertain.
Suppling backup power to crucial computing and communication systems.
Providing power for emergency response.
Setting up cogeneration for fuel cells that produce significant heat, capturing both heat and power to increase efficiency.

= = =

(2) Solar
- Mobile power, freeing people from power grid
- Build solar into ubiquitous mobile power source
- Knowledge to Start: Solar, electrical, design, engineering
- Capital - $$
- Months to years
- Finding a specific need and designing the right product for the market

Additional notes:
Sierra Solar Systems (solar charger), iSun (iPod charger), Solio (Berkeley CA), Powerfilm (Ames, Iowa)

Developing solar bags, briefcases, etc.
Integrating laptop solar chargers with high-efficiency laptops
Using small solar panels in electronics and small appliances
Retailing solar gadgets

= = =

(3) Seeding Entrepreneurial Green Careers

- Reduction of a company's carbon footprint
- Businesses to outline their business risks related to environmental impacts and climate change (Ref: Sarbanes-Oxley Act 2002): how do these business risks affect the rules of financial disclosure. Biz are required to describe their climate/carbon fooprint, what programs are in place to offset that footprint.

Additional Notes:
Google's Bill Weihl, Climate Savers Computing Initiative, Jason Kovak

Minimize Environmental Risks
Compliance
Green business opportunities

= = =

(4) Green Philanthropy Management
- Greatest environmental impact per dollar invested
- Non-traditional accounting system to measure value to society

Additional Notes:
New Philanthropy Capital (London), The Centre for Effective Philanthropy in Massachusetts, effectivephilanthropy.org , GiveWell, givewell.net, Holden Karnofsky, Elie Hassenfeld

Natural Resources Defense Council (NRDC), Karen Wayland, Environmental Entrepreneurs (E2), Roger Ballantine

= = =

(5) *Green Technology Transfer

Additional Notes:
Aurora Biofuels, Matt Caspari, algae-derived biofuels, UC Tech Transfer, ucop.edu/ott,

The FLC Technology Transfer Desk Reference from the Federal Labouratory Consortium for Technology Transfer, May 2006, [ federallabs.org/pdf/T2_Desk_Reference.pdf ]

* Impt to form a consolidated database of green patents

= = =

(6) Green Lawyers
Additional Notes: Bill Sloan, Morrison & Foerster (Cleantech Legal Practice), mofo.com, Wendel, Rosen, Black & Dean, wendel.com

= = =

(7) Building Green Buildings and Businesses

Additional Notes: architecture2030.org, cool roofs, Berkeley National Laboratory, reflective coatings (little or no VOCs), Endurance Building Systems (Houston, Texas), Carlisle Syntec, waterproofing & heatproofing membranes, Dinyari Inc., dinyari.com, Bill Shevlin, infrared pigments in green paints, Oak Ridge National Laboratory, Bill Miller, Jan Kosny

= = =

~ Work-in-progress ~

CHINA Huaneng Group's Investment in Biomass Cogen Energy

2010-08-10T11:54:00.000-07:00

Notes to Self:

Construction of clean coal/biomass plant on Jurong Island begins

China Huaneng plant to draw new petrochemical investors
EDB says some have reserved land at Tembusu, but not started on projects
Ronnie Lim Business Times 12 Nov 09;

CHINA Huaneng Group's latest $2 billion clean coal/biomass cogeneration investment on Jurong Island - which is expected to shave 10 per cent off customers' utilities bills - will be a catalyst in helping to draw new petrochemical investors at the greenfield Tembusu sector.

The project will contribute significantly to the petrochemical island's integration strategy, 'especially as competitive utilities options are particularly critical to the energy and chemical industry, which is a large consumer of steam and power', said Economic Development Board (EDB) chairman Leo Yip at its groundbreaking yesterday.

While he did not specifically say so, the project should encourage chemical companies, which Mr Yip said, 'despite adopting a cautious approach during the recession, are continuing their project studies on new investments, in readiness for the upturn'.

A number of petrochemical investors have already reserved land at Tembusu, but have not started building their projects yet, according to Julian Ho, who heads a multiple portfolio including chemicals at the EDB, but he declined to name them.

Germany's Lanxess is, for instance, expected to start building its 400 million euro (S$832 million) synthetic rubber plant at Tembusu around mid-2011. Others in the wings include the Jurong Aromatics Corporation US$2 billion project and possibly Mitsui Chemicals.

Despite still-shaky economies, Cao Peixi, China Huaneng president and chairman of Huaneng Power International - which bought Tuas Power for $4.2 billion - said that the group was confident enough about the Singapore market to give the go-ahead to its Tembusu Multi-Utilities Complex (TMUC).

'Investing in Singapore is an important part of Huaneng's global strategy,' he said.

'We will leverage on our expertise and resources to support Tuas Power's growth and maintain its competitive advantage in the Singapore energy market . . . at the same time, we also hope that we will be able to contribute to Singapore's energy diversity and security.'

The TMUC project - which will use low-sulphur coal (80 per cent of the fuel mix) and palm shell kernels and wood waste (20 per cent) - will provide 160MW of electricity and about 1,000 tonnes of steam per hour when completed. It will also provide chilled water and treat industrial waste.

Because of the use of biomass, the plant's advanced technology such as special circulating fluidised boilers, and careful handling of the coal and coal ash, TMUC's emission levels will even be lower than some oil-fired power plants.

Furthermore, as each unit of electricity is produced at a lower cost, it will translate to cost savings of about 10 per cent of a customer's utilities bill compared with energy generated by a gas-fired plant, the company said.

Lim Kong Puay, Tuas Power president and CEO, said that while the original plan was to build the entire project at one go, it will now do so in tandem with customer demand. This will see the project being done in two phases, with part of the clean coal/biomass cogeneration plant ready by 2012, and the rest by 2014.

Financing for the $2 billion project will come from equity from the parent company, as well as from bank financing.

While the 2,670MW Tuas Power currently has a 24-25 per cent share of Singapore's electricity market, Mr Lim declined to give a figure on what its targeted share of the utilities market on Jurong Island will be, come 2014. 'The Jurong Island market is big enough for a new player,' he would only say.

'We see the standalone TMUC project as a long-term investment commitment, and as is (with China Huaneng's go-ahead), we are already seeing renewed interest coming from potential customers there.'

= = =

Construction of S$2b multi-utilities plant begins on Jurong Island
Ryan Huang, Channel NewsAsia 11 Nov 09;

SINGAPORE: Construction works have begun on the Tembusu Multi-Utilities Complex - a S$2 billion facility on Jurong Island for generating steam, chilled water, electricity and treating industrial waste.

The multi-utilities plant is expected to help develop Singapore's petrochemical sector, as well as bolster the country's energy security.

"As a utilities provider, it is important to put in the necessary infrastructure in place, and this will provide the impetus for new investors to invest in Jurong Island," said Lim Kong Puay, president & CEO, Tuas Power.

The move is in line with the nation's plans to develop the Tembusu area of Jurong Island as a new petrochemical sector over the next five years.

The new plant is expected to be about 10 per cent more cost-efficient than conventional ones due to synergies from producing the various utilities. One example is the simultaneous production of steam and electricity.

The facility will be completed in two phases, and will be partially ready by 2012. The rest of the complex will be ready by 2014.

The facility will be run by Tuas Power, which is a member of China Huaneng Group. It represents one of the most significant Chinese investments in Singapore and is expected to further enhance the island's position as a platform for firms to go international.

Leo Yip, chairman, Singapore Economic Development Board, said: "We welcome the opening of Tuas Power's Tembusu Multi-Utilities Complex to enhance the range of third party utilities options as well as competitiveness on Jurong Island.

"With Asia becoming an increasingly important consumer of energy and chemical products, Singapore is well positioned to be a strategic base for Chinese energy and chemical companies seeking to internationalise and access new markets to drive business opportunities."

- CNA/sc

= = =

Cheaper power for petrochem firms
Jonathan Kwok, Straits Times 11 Nov 09;

PETROCHEMICAL companies looking to set up processing plants at the Tembusu area of Jurong island can look forward to around 10 per cent of savings on their utility bills, with the construction of Tuas Power's $2 billion multi-utilities plant there.

The plant, with an initial opening planned for 2012, will supply steam, chilled water and electricity, which when co-produced, will lead to higher efficiency.

These cost savings will be passed on to customers through more competitive rates, which will be around 10 per cent lower when compared to energy from gas-fired plants, said Mr Lim Kong Puay, president and chief executive of Tuas Power, at the plant's official ground-breaking ceremony on Wednesday.

Tembusu is an as-yet-undeveloped area in the northwest of Jurong island that the Economic Development Board has earmarked for growing the petrolchemicals industry.

With a US$3 billion (S$4.17 billion) petrochemical cracker complex by Shell to be completed on Pulau Bukom by the first quarter of next year, Mr Julian Ho, executive director of energy, chemicals and engineering services at EDB, expects interest from downstream companies to set up processing facilities at Tembusu.

# # #

15 Steps for Successful Strategic Alliances

2010-08-09T10:14:00.000-07:00

Link to Article: http://s.hbr.org/b5yXsM

1. Be open to romance, but court carefully. At the beginning of new relationships, selective perceptions reinforce dreams, not dangers. Potential partners see in the other what they want to see, believing what they want to believe. Hopes, dreams, and visions should be balanced by reality checks.

2. Know yourself. Build your strengths. An organization seeking partners should identify assets that have value to partners and strengthen them. Networks of the weak do not survive. The best alliances join strength to strength.

3. Seek compatibility in values. In rapidly changing environments, compatibility in values, philosophy and goals is more important than specific features of an immediate business deal. The basis for collaboration must be more enduring, and there must be a foundation for mutual trust to help weather inevitable changes or problems.

4. Treat the 'extended family' respectfully. Include other partners and stakeholders. Rapport between leaders of partner organizations is not enough. Other people and organizations who are the 'relatives' in each organizations' extended family must also be won over.

5. Put the lawyers in their place. Leader-to-leader relationships are important. Partnerships and network formation shouldn't be turned over to third-party professionals, such as staff analysts, lawyers, consultants, or deal-brokers.

6. Vow to work together until business conditions do us part. Commit to a first project, to exploring growth in the relationship, to monitor change, and to remain friends if changing conditions require a graceful exit.

7. But don't count on the contract. Formal agreements can't anticipate everything, and interpretations of the agreement vary — even within the same organization.

8. So keep communicating, face-to-face. Matters are more easily sorted out when partners' leaders keep talking long after their initial deal-making and dedicate people to watch over the relationship — a partner or alliance 'ambassador' (the equivalent of key account managers).

9. Spread involvement. Create more ties for more people. Alliances begin with a few direct connections among top leaders. As projects unfold, more people at more levels must get involved, and they need to feel connected, too — that they know their counterparts in their partner organization. The more people feel included, the more they have a chance to see the others face-to-face and come to know them, the easier it will be to implement partnership activities.

10. Build organizational bridges — formal structures. Active collaboration occurs when organizations develop structures, processes, and skills for bridging organizational and interpersonal differences and getting value from the relationship. Bridges include formal governance (a partnership board), joint project teams, and alliance ambassadors.

11. Respect differences. Alliances, partnerships, and networks are most helpful when they involve differences — when partners give each other something they do not already have. But differences in "specialty" desired by partners are accompanied by more "inconvenient" differences in behavioral style, motives and goals, operating methods, or cultural assumptions. Respect is essential. Time must be invested in understanding differences and transcending them.

12. Teach partners. Learn from partners. People from across the partnership network must become teachers as well as learners. Often the ultimate value of a partnership is the new knowledge and skill it brings. Organizations that derive greater value from their alliances tend to have greater communication internally, share more information, and promote an atmosphere of learning.

13. Be prepared to change yourself. Partners must be willing to be influenced by one another. To make linkages possible requires operating compatibilities, project by project and sometimes even in a larger sense. This can mean learning the other's language and style or inventing a new one; changing to the other's system or creating a joint one.

14. Help everyone win. Mutuality is the hallmark of organizational collaboration. Balancing benefits so that each partner gets something of equivalent value can be hard to do in the short run, but it is essential in the long run. The best alliances try to maximize the value of the whole relationship, which then makes it more valuable to each partner.

15. Get closer, change course, or exit gracefully. Like living systems, relationships evolve. Change should be expected. But the best guarantee that organizations will be closer in the future is success in what they try to achieve today. Success strengthens relationships.

To ensure that your partnerships are effective, apply these principles at every stage of the relationship.

= = =

Rosabeth Moss Kanter is a professor at Harvard Business School and the author of Confidence and SuperCorp.
Connect with her on Facebook or at Twitter.com/RosabethKanter.

The Impact of the Irrelevant on Decision-Making

2010-06-02T18:17:00.000-07:00

Economic View

The Impact of the Irrelevant on Decision-Making

Published: May 28, 2010

By ROBERT H. FRANK

TEXTBOOK economic models assume that people are well informed about all the options they’re considering. It’s an absurd claim, of course, as most economists are well aware.

Even so, when people confront opportunities to improve their position, they’re generally quick to seize them. When energy prices rise sharply, for instance, consumers are quick to adjust their thermostats. So most economists are content with a slightly weaker assumption: that people respond in approximately rational ways to the information available to them.

But behavioral research now challenges even that more limited claim. For example, even patently false or irrelevant information often affects choices in significant ways.

Consider the people who set their watches a few minutes ahead, to prod themselves to arrive at appointments on time. When asked what time it is, they effortlessly perform the required subtraction before answering. So, in one sense, the false image on the watch face doesn’t fool them at all.

But that same image is fed into their brains through multiple neural pathways. Some lead to the circuits that do the subtraction. But others lead directly to emotional circuits, which react to the image at face value. The resulting anxiety is why the practice works.

An intriguing example of transparently irrelevant information that affects behavior comes from a 1974 report on an experiment by the psychologists Daniel Kahneman and Amos Tversky. In the experiment, subjects first spun a wheel that supposedly would stop at random on any number between 1 and 100. Then they were asked what percentage of African countries belongs to the United Nations. For one group of subjects, the wheel was rigged to stop on 10; for a second group, on 65. On average, the first group guessed that 25 percent belong to the United Nations, but the second group guessed 45 percent.

All subjects would have insisted, correctly, that the number on the wheel bore no relation to the correct answer to the question. Yet, obviously, the number profoundly influenced their responses.

In short, even demonstrably false or irrelevant information can influence judgments, which in turn influence decisions. In such cases, Professors Tversky and Kahneman wrote in 1981, “the adoption of a decision frame is an ethically significant act.”

Policy makers have long recognized the potential danger of false statements by advertisers. But in the belief that most adults are suitably skeptical about promotional puffery, Congress has tried to prohibit only the most blatantly false or explicitly misleading claims.

But what about merely irrelevant statements, or only implicitly misleading ones? Standard economic models say such claims are, well, irrelevant, so there should be no need to regulate them. But according to recent behavioral research, it’s a distinction without a difference.

Although cigarette advertisements, for example, typically portray smokers as young, healthy and attractive, smoking can make people look older and less healthy. Such ads make no explicitly false claims, but that doesn’t make them less misleading, even for informed consumers.

More troubling are instances in which politicians employ patently false statements to shift the terms of important public debates. Decades before President George W. Bush tried to privatize Social Security, for example, Democratic presidential candidates regularly frightened Florida seniors with groundless accusations that their opponents would gut the program.

Of course, politicians of both parties have long taken liberties with the truth. But as even conservative political commentators have begun to point out, Republicans have lately been far more aggressive in stretching traditional boundaries. When Sarah Palin said that if health care reform legislation were adopted, her parents and her child with Down syndrome “will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society,’ whether they are worthy of health care,” most people probably realized the president had made no such proposal. Her statement nonetheless shifted the terms of the debate, making it harder for legislators to focus on genuinely relevant issues.

CAN anything be done? For a variety of practical reasons, legal sanctions promise little protection against blatantly false statements. It is helpful, to be sure, when journalists call out politicians who stray too far from the truth. But merely knowing that a statement is false doesn’t nullify its impact. To be effective, a remedy must act prospectively. It must discourage people from making false statements in the first place.

Economists have long recognized that social sanctions are often an effective alternative to legal and regulatory remedies. As Adam Smith argued, moral sentiments are extremely powerful drivers of human behavior. People who know they’ll be ridiculed for telling untruths are more likely to show restraint.

Some social sanctions are less effective than others. In recent years, the most conspicuous public falsehoods have been ridiculed by independent bloggers and Comedy Central’s faux news hosts. But television and Internet audiences are highly segmented. Many of Jon Stewart’s targets may never hear his riffs about them, or may even view them as badges of honor.

That’s why it’s important for the circle of critics to widen — and why we need to remember that framing a discussion appropriately is “an ethically significant act.”

Robert H. Frank is an economics professor at the Johnson Graduate School of Management at Cornell University.

A version of this article appeared in print on May 30, 2010, on page BU5 of the New York edition.

Noah Kagan on Building a Valuable Business

2010-06-02T18:01:00.000-07:00

Building a billion-dollar business

By NOAH KAGAN

EVER since I was a little kid I wanted to be rich. I think most of us do; however, we might not think about how to get there.

I once had a friend who was a child prodigy, highly respected by the Silicon Valley community. His sole goal was to create a billion-dollar business - nothing else mattered. Because of this, he rejected ideas that were either way too small or did not monetise well enough.

He took one year to develop different ideas and one idea in particular grew very large. However, at the end of the year, he threw it all away. This was because despite having millions of users, he had no real product, no value, no love and no engagement. His main problem was that he put the business before the users.

Having spent a lot of time both failing and succeeding, I have assembled some advice for aspiring entrepreneurs on how to build a billion-dollar business.

1. Focus

Focusing on how you can become a big business is the first mistake. Instead, it is better to focus on creating something ultra-valuable to your users.

Focusing on large billion-dollar exits only sets your business too far in the future and misses all the details you need to get there. The question you should be asking your users is, 'How would you feel if we were not around any more?' It is when they answer that they cannot live without it, that you know you have a winner.

2. Start small

IBM, Facebook, Google, Mint, Microsoft - all these companies started out small and were run by just a few people. They were not overnight billion-dollar companies. They started with a few people who came together to solve a problem. I doubt that the founders planned from day one to make a billion dollars.

Large things form from small beginnings. So do not worry if your idea is not immediately worth a billion dollars. Instead, plant the seed and help it to grow.

3. It takes time

The vast majority of companies do not create over a billion dollars in value in less than three years. Building a billion-dollar business will take significant time and resources, be prepared for this.

4. Validate

It is also best to make sure that before you start building something, you have an idea of the problem that you are trying to solve. Not validating the problem was one of the mistakes my colleagues and I made when we spent six months building up a new company.

Time and money wasted then could have been spent on validating the problem. For instance, by questioning potential users, conducting surveys online and putting up advertisements to test the market and identify how likely tentative interest is to translate into actual buyers of your product or service.

One of the best ways to validate your business is to ask for an upfront contract with potential users. You could go even further and ask them to pay you ahead of time.

5. Learn

The best thing you can do is fail and make many mistakes. However, after doing so, make sure you ask the right questions in order to learn from your mistakes.

6. Organisational behaviour

While I would admit to not always being the most-organised person, here are some tips on what organised, successful companies do:

Ensure that there are daily check-ins with everyone in the company about what they are doing that day.
Have a complete list of all things you are working on, which is available to everyone in the company
Keep meetings efficient. Make them no more than 30 minutes long. One good way to ensure this is to hold 'stand up' meetings, and limit the number of people at each meeting to no more than five.

7. Define the objective

Once the objective is clearly defined, you can then work backwards to see how to meet it. For example, I had a friend who wanted to be a New York Times best-selling author. When I asked how many books he needed to sell in order to make it to the best-sellers' list, he had no idea.

But once we had figured out this amount, it was easy to work backwards through marketing channels, priorities and strategies, in order to guarantee that he would get that specific number of sales needed. And he did!

In addition to the above-mentioned tips, there are also a range of different tools out there to help entrepreneurs save precious time. Time which they can then spend on growing their companies. These include:

tungle.me, a scheduling application that synchronises with your existing calendar,
rescuetime.com, a useful automated time tracking and management website that can help to boost your productivity, and
macjournal, which blocks out your screen while you are writing, so that you need not be distracted.

And, of course, you should turn off all instant messengers so you can focus on the work you are doing.

While it is important to put the users in front of the business, it is also important not to just end up doing things to please only your end users.

Remember to build something that you want for yourself. If you create something that you would actually pay money for, then it is hard to go wrong - even if you end up just with one customer.

This article was first published in The Business Times.

Note to Self

2010-05-06T23:41:00.000-07:00

Parabienta Green Wall

http://www.asla.org/2009awards/043.html

http://www.azuremagazine.com/magazine/backissues/features.php?id=1774&c=2

http://ellerg.blogspot.com/2009/05/greenest-wall-of-them-all-10-cool-green.html

Parabienta green wall. Developed by the Japanese companies Shimizu Corporation and Minoru Industrial Company, it employs a sheet of polyester-blended soil, heated with steam, moulded together, and mounted in a modular steel frame. Complete with an irrigation system that senses changes in temperature and the soil’s moisture content, it adjusts water and nutrient flow accordingly.

Revised RoHS Directive, and an Erroneous Name in RoHS 2

2009-12-10T01:39:00.000-08:00

Article Clipped from:

ElectroIQ

By Lev Shapiro, Component Master Ltd.

The European Commission (EC) proposes several changes to its RoHS Directive. Medical devices and other exempted end products will be affected, product labeling will change, and the character of the RoHS legislation will be reinvented. However, calling this revision "RoHS2" is a misstep, based on the informal but generally accepted RoHS5/6 terminology.

On December 3rd, 2008, the Commission of the European Communities issued the proposed revision of the original RoHS Directive. The objective of proposed reforms is to develop "a better regulatory environment, one that is simple, understandable, effective and enforceable".

The major changes that are in these proposed amendments include:

1. Categories 8 (medical devices) and 9 (monitoring and control instruments) of WEEE will be included in the scope of RoHS Directive in a stage manner commencing 2014 through to 2017.

2. Exemptions will be granted for a maximum validity period of four years (currently exemptions are granted with no expiration date).

3. It is provided a binding list of products for each category of equipment covered by RoHS.

4. For demonstration of compliance, products must have an EC declaration of conformity from the manufacturer and they must bear the CE mark.

5. The term "producer" is replaced with "manufacturer," distributor," "importer," or "authorized representative" — to be collectively known as "economic operators."

6. The list of banned substances is not changed; however, four substances are identified for priority assessment in view of a possible future inclusion in the list of banned substances.

In official European Commission documents, there is no concrete and definite name for this proposal; however, in many articles and publications, the revised RoHS Directive is already called RoHS2.

An erroneous name like RoHS 2 may seriously mislead the electronics industry and generate wrong interpretations. For example, the terms RoHS5 and RoHS6 became popular a few years ago. These terms are related to existing exemptions of RoHS (section 7 of the Annex), "... lead in solders for servers, storage and storage array systems, network infrastructure for switching, signaling, transmission as well as network management for telecommunications ..." According to this exemption, the products of exempted industries may use components and materials containing lead (Pb) on second level interconnect (components-to-PCB connections). For these products, only 5 of the 6 restricted substances are described as within the scope of RoHS. Lead is exempted. In other words, RoHS5-compliant parts do contain lead >1000 ppm, but meet the concentration limits for the other five hazardous substances. Such leaded components and applications are called RoHS5, in comparison with RoHS6, which reflects a full RoHS compliance.

The terms RoHS5 and RoHS6 are slang abbreviations that have not been formally adopted by the EU Commission. They are not defined either in the RoHS documents or in any standards related to lead-free technology. Despite this, today they are wide-spread definitions. In a Google search, about 20,000,000 references are found for RoHS5 (RoHS-5 or RoHS 5/6).

Intel and many other semiconductor manufacturers, together with manufacturers of passive and electro-mechanical components, offer the ROHS5 compliance certificates and sometimes even define the RoHS 5 (RoHS 5/6) components in their data sheets. Under these circumstances and this terminology history, the name RoHS 2 for new RoHS proposal will be erroneously perceived by many users. Based on the analogy of RoHS5, some may conceive of RoHS2 as a vague "two substance" restriction.

The European Commission must define a correct name for the revised RoHS Directive and avoid the doubtful name that is exposed to wrong interpretations. Otherwise, the main objective for proposed revisions to make RoHS legislation more "simple" and "understandable" will be not achieved.

# # #

Lev Shapiro, Lev Shapiro, M.Sc. E.E., may be contacted at Component Master Ltd., Tel Aviv, Israel, lev@compmaster.co.il. Read his recent article for SMT, Avoiding Counterfeit Electronics: The Role of Component Manufacturers, OEMs, and CEMs.

Autodesk’s Ambition to Change the Green Building Industry

2009-09-03T16:36:00.000-07:00

Source: Reuters

By Justin Moresco - Earth2Tech

When software is designed well, it can radically improve the way an industry works. That’s the vision behind ongoing efforts at Autodesk to upgrade its building performance modeling software — to make energy retrofits of buildings cheaper and easier.

The San Rafael, Calif.-based firm believes the improvements it’s making to its suite of construction industry software will compress the time it takes to do detailed sustainability analysis (energy, water, emissions) from weeks to days and as a result, make such analysis cheap enough to be accessible to a majority of the building market.

More than 100 million buildings in the U.S. are leaky and inefficient and could use an energy makeover with measures like better insulation, heating and air conditioning systems and natural ventilation. But most of these structures are relatively small (homes and offices), and the cost of building accurate computer models to do detailed analysis on them is often too high with current technology, according to John Kennedy, senior manager for sustainable analysis products at Autodesk. He says energy service companies (ESCOs) -– businesses that develop, install and finance energy efficiency projects –- today won’t touch a building less than 10,000 square feet.

But Autodesk believes the economics will dramatically change once engineers and architects can build a model in, say, a day or two and have it automatically spit out recommendations with the impact on cost and performance for each measure. Some of the new or improved features Autodesk is working on include: an increased use of cloud computing that would make sophisticated analysis quicker, more leverage of deep reservoirs of data about local weather conditions and the performance of different building products, more accurate and faster modeling of natural ventilation and water use, and an emphasis on making sure all of this “sustainability criteria” can be easily and accurately shared between the different software used by architects and engineers. Kennedy didn’t provide a timeline for these upgrades.

Autodesk also wants to incorporate the embodied energy of building materials (the total energy used in manufacturing, transporting and installing) more thoroughly into its software models. “It makes no sense to put triple-paned windows in a house in Los Angeles when the energy saved from its use would never exceed the amount needed to build it,” Kennedy said. Few vendors currently supply or even have this data to provide, he added.

Still, even with Autodesk’s planned improvements, it’s unclear how far down into the building market its software can penetrate. At some point, it will always be cheaper for boutique energy retrofitters focused on the residential market to analyze a home than an architectural or engineering firm charging $150 an hour.

Autodesk says that current versions of its software –- such as performance modeler Ecotect Analysis and its on-demand Green Building Studio –- has already shrunk the time it takes for sustainability analysis from months to weeks, and the firm can also boast of a growing customer base. But the use of building performance software, from Autodesk or anyone else, is still relatively uncommon among design firms.

Part of the reason for this slow adoption is the perceived high cost of using these tools. Another reason, however, is that the industry –- broadly speaking -– is still operating collectively as if energy and water use don’t need to be factored in during design. It’s what Dawn Danby, sustainable design program manager at Auodesk, calls a “cultural” problem. While stricter building codes and the growing prominence of green building standards like LEED are pushing the embrace of performance software, widespread adoption won’t happen until architects and engineers change their habits.

That helps to explain Autodesk’s mounting marketing push alongside its software development. As part of that effort, in July the firm announced its “Clean Tech Partner Program” through which it will give away software packages worth up to $150,000 each to 100 early-stage cleantech startups. According to Danby, the firm is working hard to inform designers and building owners that its software is relatively easy to use, inexpensive and gives quick feedback.

Still, changing the construction industry will be a long slog, even when one of the strongest pushes is coming from a fast-moving software company.

Hyundai Wins Building Bid for Singapore Oil Cavern Storage Facility

2009-04-17T15:30:00.000-07:00

Pictures Source: The Straits Times, Singapore.

Via Your Industry News:

Friday, Apr 17, 2009

Singapore moved forward with plans to build a 9.5 million-barrel rock cavern oil storage facility by awarding on Thursday an S$890 million ($594 million) building tender to South Korea's Hyundai Engineering (000720.KS: Quote).

The first phase of 1.48 million cubic metres (9.5 million barrels) comprises five caverns on offshore Jurong Island that could hold crude, naphtha, condensate and gas oil, most likely for commercial, rather than strategic purposes. The first two caverns are expected to be operational by early 2011.

A planned second phase could add another 1.3 million cu m of storage but a decision has not yet been made.

For cost and operational reasons, underground caverns are often used to hold long-term strategic stocks rather than more actively traded barrels.

The U.S. government stores its strategic crude reserves in four underground sites, while South Korea leases out its tanks to refiners to be used for strategic purposes.

Industry sources say underground caverns, which normally cost more than an above-ground facility of similar capacity, are typically used for barrels that remain in-tank for longer periods and are not traded in and out of tanks rapidly.

"The cavern facility will be used for commercial purposes, but there will be physical limitations for storage of trading barrels, particularly those that need to move quickly or be blended, as transferring of products will be involved," said a source in the storage business.

State-owned industrial landlord JTC Corp had said it would unveil the winning bid for the operator of the Jurong Rock Cavern project in the April-June quarter, delaying it from end of February.

A spokeswoman said the results would be unveiled before end-June.

JUMP IN STORAGE CAPACITY

This is not the first time the decision has been postponed -- the tenders were first called in late 2007, and the results have been plagued by months of delays since.

JTC said that more time was needed to study the design and construction process for the large-scale, complex project, as safety was a key priority.

Industry sources said bidders for the operation tender include Dutch oil and chemicals storage firm Royal Vopak NV (VOPA.AS: Quote), New York-based engineering and infrastructure consultants Parsons Brinckerhoff and storage operator Horizon Terminals Ltd, wholly owned by Emirates National Oil Company (ENOC).

Vopak already operates landed oil storage tanks next to the planned facility.

For phase one of the cavern project, there will be about 7.0 km (4.3 miles) of galleries and tunnels.

Once both phases are completed, the project could raise oil storage capacity in land-scarce Singapore to nearly 11 million cubic metres or almost 70 million barrels.

Since end-2005, Singapore has almost doubled independent oil storage capacities, but all of it has been leased out, leaving the market short of tanks despite slowing consumption.

For example, fuel oil storage capacity in Asia , following the opening of three new terminals with a Total of 4-5 million cu m since end-2006, has increased substantially but has not been balanced by a similar rise in demand for the residual fuel due to the economic downturn.

= = =

JTC Awards Contract To Hyundai Engineering & Construction For Oil Storage Project In Singapore

Published:17-April-2009

By Staff Reporter

JTC Corporation (JTC), a provider of industrial real estate solutions and services, has handed the construction tender for the city-state's rock cavern oil storage project to Hyundai Engineering & Construction Co., Ltd. Jurong Rock Cavern (JRC) is an initiative driven by JTC to increase underground oil storage capacity on Jurong Island. JRC will comprise an oil storage complex to be built at subterranean depths beneath the seabed of Banyan basin.

Upon completion, the underground caverns will have a potential storage capacity of close to three million cubic meters catering specifically to liquid hydrocarbons like crude oil, condensates and diesel oil.

Development works for Phase 1 of JRC, with a storage capacity of about 1.5 million cubic meters, had commenced at the end of 2006. JTC is currently appointing an operator to manage, operate and maintain the JRC facility.

The first contract of the Phase 1 JRC project involving the construction of two access shafts and start-up galleries is near completion. JTC is progressing onto the next critical milestone of the JRC project -- the construction of tunnels, caverns and associated facilities.

Work will now commence with the detailed design of the caverns/facilities and actual construction is expected to start by end of the year. When completed, the JRC will have an overall storage capacity of 1.47mil cubic meters. The whole project will be completed in stages, with the first two caverns targeted for completion in 2013.

Foundation stone ceremony at Neste Oil's NExBTL renewable diesel plant in Singapore

2009-03-07T09:55:00.000-08:00

Taken from: Fox Business News

Friday, March 06, 2009

ESPOO, FINLAND, Mar 06, 2009 (MARKET WIRE via COMTEX) ----- project proceeding on schedule and budget

Neste Oil held today a Foundation Stone Ceremony to officiate the construction of its EUR 550 million NExBTL renewable diesel plant in Singapore. Neste Oil's President and CEO Mr Matti Lievonen was in attendance, and Mr Lim Hng Kiang, Minister for Trade and Industry, Singapore was the Guest-of-Honour at the event.

"The construction of our NExBTL renewable diesel plant in Singapore is proceeding on schedule and on budget. The market has been highly unpredictable in the past year but the Singapore plant plays an important part in our long-term strategy for growth, and our commitment to the project remains solid. We are very grateful to the local government for the support they have given us and look forward to when the plant is officially inaugurated in 2010," stated Mr Matti Lievonen.

Upon completion in 2010, Neste Oil's renewable diesel plant in Singapore will be the largest in the world with an annual capacity of 800,000 metric tons. Neste Oil's patented NExBTL technology allows flexible use of any vegetable oil or animal fat in the production of NExBTL renewable diesel, the cleanest diesel in the world. NExBTL-diesel is the only renewable diesel in the world that is fully compatible with existing diesel engines and logistics systems. The use of NExBTL-diesel significantly reduces greenhouse gas and tailpipe emissions compared to even the best fossil fuels, thereby contributing to better air quality. Feedstock, to be used at the NExBTL renewable diesel plant, are animal fat, palm oil and other types of vegetable oils. When fully operational, the plant will employ around 100 people.

Neste Oil Corporation

Osmo Kammonen Senior Vice President, Communications

More information: Mr Jarmo Honkamaa, Deputy CEO and Executive Vice President, Renewable Fuels, tel. +358 10 458 4758

About Neste Oil

Neste Oil Corporation is a refining and marketing company concentrating on low-emission, high-quality traffic fuels. The company's strategy is based on growing both its oil refining and premium-quality renewable diesel businesses. Neste Oil's refineries are located in Porvoo and Naantali and have a combined crude oil refining capacity of approx. 260,000 barrels a day. The company had net sales of EUR 15 billion in 2008 and employs around 5,200 people. Neste Oil's share is listed on the NASDAQ OMX Helsinki. www.nesteoil.com.

About NExBTL renewable diesel

NExBTL renewable diesel is an advanced fuel, based on renewable raw materials, that performs more efficiently and has a lower level of environmental impact than fossil diesel or FAME-type biodiesel. Neste Oil requires its raw material suppliers to commit to responsible and sustainable production methods. Feedstock of this type ensures that NExBTL renewable diesel has a 40-60% lower level of greenhouse gas emissions over its entire lifecycle compared to fossil diesel. NExBTL renewable diesel can be blended with conventional diesel fuel or used as such, and it is suitable for all diesel engines.

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

SOURCE: Neste Oil Oy

= = =

From The Business Times, Singapore

Growing Market for Singapore Renewable Diesel Plant

By RONNIE LIM

OTHER investors may be scrapping their projects but it's flashing 'green' for Neste Oil's $2.4 billion investment in Singapore and Rotterdam. The Finnish giant is brimming with confidence about its two renewable-diesel refinery plants that cost $1.2 billion apiece and that will start operations in 2010 and 2011 respectively.

DOING THE SPADE WORK
(From left) Mr Honkamaa, Mr Lim, Mr Lievonen and Neste Oil managing director Olli Virtas laying the foundation for Neste Oil's renewable diesel plant in Singapore

In fact, it is already considering adding second lines at both to produce either more renewable diesel, or even renewable jet fuel for aircraft.

'We have no other competitor in 2G, or second-generation, biodiesel manufacturing,' Matti Lievonen, Neste's president and CEO, told media after a foundation stone-laying ceremony at its Tuas site. The two plants, when completed, will make Neste - until now, mainly a traditional oil refiner - the leading global producer of renewable diesel.

Both plants are 'on schedule and on budget', he said. Financing is not an issue at all, as Neste has a credit line of 1.6 billion euros (S$3.1 billion) until 2011, plus it has over 500 million euros in cash flow from last year.

Besides, given growing environmental concerns, the European Union is expected to pass legislation enforcing greater use of such renewable fuels soon. 'This is the whole logic for our renewable diesel - a market which mandates use of biofuels,' said deputy CEO Jarmo Honkamaa.

After earlier targeting 5.75 per cent mandatory biofuel use by 2010, the latest EU directive is that measures must be taken by all member countries to replace a minimum 10 per cent of all transport fossil fuels (petrol and diesel) with biofuels by 2010.

The Neste officials said this in response to questions on whether today's low oil prices of around US$40 - which means that normal diesel is roughly half the price of biodiesel - would impact the economics of its Singapore and Rotterdam biodiesel investments.

Each plant will produce 800,000 tonnes per annum (tpa) of renewable diesel - the largest such facility in the world - from one million tpa of renewable materials comprising vegetable oils such as palm oil, animal fat or tallow.

Neste - which operates two crude-oil refineries in Porvoo and Naantali with a total capacity of 260,000 barrels - already has a 170,000 tpa biodiesel plant at Porvoo, and is set to start up a second biodiesel plant of similar scale there this July.

'Neste is sourcing its biodiesel raw materials like palm oil and tallow on a group-wide basis, and is in talks with suppliers, like for instance, for jatropha in Thailand,' Mr Honkamaa said. Depending on the costs, over half of each plant's raw materials can be palm oil, with the rest tallow, although the biofuel refineries are completely flexible in their feedstock mix.

Neste is already in talks with big oil companies to take biodiesel from its Singapore and Rotterdam plants. 'We don't see a challenge in (securing) markets, the challenge is more in raw materials,' Mr Honkamaa said.

Speaking at the ceremony, Trade & Industry Minister Lim Hng Kiang said that Neste's project 'affirms Singapore's position as a trusted business destination', adding that 'the outlook of the energy and chemicals industries remains positive'. Underlying this, he said, are two main factors: the increasing emphasis on addressing environmental challenges and the Asian growth story, especially in China and India, and increasingly, Asean.

South Korea to Produce Wood-Pellet Fuel in Indonesia

2009-03-07T09:07:00.000-08:00

Taken from: Emirates News Agency

Mar 7, 2009 - 08:22 - SEOUL, 7 March,2009 (WAM) -- South Korea signed an agreement with Indonesia Friday to produce wood pellets that are cheaper and cleaner to burn than fossil fuels, Yonhap News reported.

The memorandum of understanding between the Korea Forest Service and Indonesia's Forest Ministry calls for 200,000 hectares of forest land to be set aside to produce wood for pellets starting in late 2010.

The Daejeon-based state forestry service said that the deal signed on the sidelines of President Lee Myung-bak's visit to the Southeast Asian country gives the South Korean government a free 99-year lease on Kalimantan Island, with Indonesia benefiting from investment that can lead to jobs for its people.

"The forest service will provide administrative support, with the actual building of the pellet-making facilities and everyday operations to be carried out by private companies," Yonhap quoted an official as having said in its dispatch from Jakarta,. He said the size of fuel production will be determined after the forest has been examined in detail to check for usable plants.

"The process will involve both cutting trees and planting to make up for those used as fuel," he said.

Wood pellets are made from finely ground and compressed wood that is cheap to use, has relatively good fuel qualities and does not release as much greenhouse gas as refined fuel products.

The cylinder-shaped pellets on average have lower heat value than diesel fuel, liquefied natural gas (LNG) and kerosene, but could provide an 99-square-meter living space with adequate heat for 1.8 million won (US$1,160) per year.

This is better than the 4.2 million won needed when burning diesel, 2.0 million won for LNG and 3.0 million won for kerosene.

The pellets have also been found to produce 12 times less greenhouse gases than diesel fuel.

At present, South Korea's wood pellet consumption is small and generally limited to use in some rural communities and greenhouses. It has only one operational wood pellet facility, with two more to be opened within the year. The majority of products used are imported from China and Canada.

The 200,000 ha deal, meanwhile, increased the size of forest land leased by South Korea in Indonesia to 700,000 ha.

The 500,000 ha leased in 2006 under a similar long-term arrangement is used by companies like SK Networks Co. and Inni Joa Co. to grow timber for wood products and palm oil.

WAM/MAB

How REACH impacts electronics components use

2009-03-03T08:53:00.000-08:00

Reference Link:
http://www.allbusiness.com/government/international-organizations-bodies/12283847-1.html

How REACH impacts electronics components use: seven steps on navigating the new set of regulations for those importing assemblies to the EU.

By Schultz, Steve
Publication: Circuits Assembly
Date: Sunday, March 1 2009

The requirements of the European Union's REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) Directive are massive and involve manufacturers and importers of chemicals, compounds and articles. Here are seven basic points about REACH that every manufacturer of electronics assemblies selling product in Europe must understand.

1. No data, no market. If your company builds electronic assemblies for import into the EU, you are directly impacted by the REACH requirements. Failure to comply with these new regulations risks having your products denied access to the European market.

2. Reporting requirements. Electronic components are "articles" under the definition of REACH, as are electronics assemblies, and are subject to specific reporting requirements with regard to Substances of Very High Concern (SVHCs). The REACH Directive requires that SVHCs be controlled, reported, and eventually phased out in favor of safer materials when it is technically and economically feasible.

The manufacturer of electronics assemblies must determine if the electronic components used in their products contain any of the SVHC restricted chemicals/substances. If present, REACH requires that importers to Europe of articles, or manufacturers of articles in Europe, provide information on SVHCs greater than 0.1% w/w in the article to the immediate downstream recipient and to any other consumer that requests it. This requires the manufacturer to aggregate the total weight of each SVHC contained in its finished product and represent it as a percentage of the total weight of its product. This information must be provided free of charge and made available within 45 days.

Starting in 2011, manufacturers and importers also will be required to report this information directly to European Chemical Agency (ECHA) if it is greater than 0.1% w/w and the manufacturer imports greater than one metric ton of the SVHC into Europe each year. However, manufacturers need not report this information if they can demonstrate that the substance is already registered for the same use, or prove that the SVHCs in their product cannot be released during its lifecycle or during the disposal process.

3. Why the concern about SVHCs? SVHCs have major health consequences. These are chemicals or substances that have been demonstrated to be carcinogens, mutagens and reproductive toxins; or they have been identified as being persistent, biocumulative and toxic; or fall into a category considered "Substances of Equivalent Concern," which includes endocrine disruptors.

ECHA identifies SVHCs on what the industry has come to call the "SVHC Candidate List" (Candidate Substances for Authorization). The initial "Candidate List" includes fifteen chemicals/substances and can be accessed at http://echa.europa.eu/chem_data/candidate_list_table_en.asp.

Over time, many more chemicals and substances will be added to the Candidate List, with some experts estimating as many as 1,500 SVHCs eventually will be identified.

4. Sunset date. At some point in the future, ECHA will designate a "Sunset Date" for each SVHC. After that date, manufacturers will be required to stop using the component containing the SVHC or to obtain specific ECHA authorization to continue using the component. Firms seeking authorization to continue using an SVHC after the Sunset Date must demonstrate that the socioeconomic benefits from its use outweigh the SVHC risk to society.

To maintain a global market for their products, component manufacturers will eventually have to replace SVHCs with substitute chemical/substances. If the electronics industry's experience with the European RoHS directive is any indication, this Sunset provision will result in the discontinuance of many components and the performance requalification of others.

5) No part number change. There is no indication component manufacturers will change part numbers as a result of the migration to substitute chemical/substances, and there is no official "REACH Compliant" designation for the component as there was with RoHS-compliant components. As such, there will be no component marking or labeling, making identification between a part number containing the SVHC and the same part with a substitute chemical/substance problematic. This situation becomes enormously more complicated when you consider that a component may have multiple SVHCs that are phased out of the component manufacturer's supply chain at different points in time.

6. Obtain SVHC information from component manufacturer.

Only the component manufacturer is in position to provide detailed SVHC data on the electronics components that they manufacture. They control the manufacturing process, and only they are in position to know when their internal processes change or when they change raw material vendors. The industry will be best-served if component manufacturers work together to uniformly list SVHC data openly on their websites using standard material data reporting formats.

7. Establish a REACH task force. As with the RoHS transition, many firms are underestimating the time, expense and energy necessary to meet all REACH requirements. REACH is much more complicated than RoHS and will grow in complexity over time. Each company in the electronics industry, if not already doing so, should establish a cross-functional task force composed of engineering, quality, purchasing, operational, finance, marketing, IT, legal and other personnel to begin tackling this latest EU environmental initiative.

While REACH is expected to have a significant long-term impact on the electronics supply chain, distributors can help minimize the impact. Distribution plays a central role in the supply chain and the unique ability to facilitate communication between OEMs and component makers. Further, diverse technical resources offered by distributors can help guide OEM design engineers by offering component options that don't include non-registered chemicals or SVHCs. By establishing open communication channels early on with authorized distributor partners, manufacturers and importers of chemicals, compounds and articles can help minimize the possibility of future supply chain disruptions.

# # #

Steve Schultz is director, strategic planning and communications, Avnet Logistics (avnet.com); steven.schultz@avnet.com.

= = =

Stern Review on the Economics of Climate Change

2009-01-09T10:44:00.000-08:00

Sir Nicholas Stern, Head of the Government Economic Service and Adviser to the Government on the economics of climate change and development, is delighted to present his report to the Prime Minister and the Chancellor of the Exchequer on the Economics of Climate Change:

The Stern team has moved to the Office of Climate Change. Publications posted after the Stern Review including the series of papers printed in the World Economics Journal, are now available on the Stern team page on the Office of Climate Change website .

Siemens AG's $1.6 Billion Penalty for Bribing Foreign Officials is a Warning to the International Energy Industry

2009-01-08T11:57:00.000-08:00

Via Renewable Energy World:
Seattle, WA and Boise, ID
6 January 2009

For over 30 years, companies operating in the global energy arena have had to comply with the U.S. Foreign Corrupt Practices Act ("FCPA"). During the past 10 years, other countries have enacted their own versions of the FCPA. International energy companies that have thus far discounted or ignored these anti-corruption laws recently received a $1.6 billion warning from the U.S. and German governments.

The FCPA prohibits companies (both private and publicly traded) and individuals from paying or promising to pay foreign officials (defined broadly), directly or indirectly, anything of value with the corrupt intent of obtaining or retaining business. The FCPA also mandates internal accounting controls and record-keeping practices aimed at preventing and detecting illegal bribes. The penalties for FCPA violations are stiff. Companies may face criminal fines of up to $2 million per violation, civil penalties of up to $10,000 per violation, and disgorgement of any benefit the company received by the violation. Individuals face criminal fines of up to $100,000 or imprisonment for not more than five years, or both, per violation, and civil penalties of up to $10,000 per violation. Companies may also be prevented from participating in U.S. government procurement and contracting programs. On December 15, 2008, Siemens AG, a German conglomerate company, and three of its subsidiaries ("Siemens"), pled guilty in U.S. federal court to violating the FCPA. As part of its settlement with the U.S. Department of Justice ("DOJ") and the U.S. Securities and Exchange Commission ("SEC"), Siemens agreed to pay a $450 million criminal penalty and to disgorge $350 million in wrongful profits. On the same day, Siemens announced an agreement with German prosecutors to pay a €395 million ($569 million) fine for violating Germany’s anticorruption laws, adding to the €201 million ($285 million) that a Munich court sentenced Siemens to pay in October 2007. The $1.6 billion penalty Siemens must pay U.S. and German authorities is roughly 35 times larger than any previous anticorruption settlement. This staggering figure does not include the €850 million ($1.2 billion) Siemens has reportedly paid to attorneys, accountants, and other service providers to deal with its global bribery scandal since late 2006. Nor does it include the significant sums Siemens must pay an outside FCPA compliance monitor for the next four years as part of its settlement with the DOJ and the SEC. Wakeup Call for the Global Energy IndustryU.S. authorities estimate that Siemens paid $1.4 billion in bribes to foreign officials in Asia, Africa, Europe, the Middle East, and the Americas, and that a significant portion of this illegal activity occurred in the energy industry. Indeed, starting in 2001, Siemens’ Power Generation and Power Transmission and Distribution divisions paid at least $356.9 million in bribes to foreign officials in multiple countries. In recent years, once the DOJ and the SEC have learned of one company’s violation of the FCPA, they have increasingly expanded the scope of their investigation to include other players operating in that industry. The business of energy companies is highly dependent on the discretion of governmental agencies (including development banks, which qualify as "foreign officials" under the FCPA). Siting, permitting, environmental review and enforcement, local community support, responding to RFPs, negotiating and performing under power purchase agreements, conducting project build-out, establishing generation interconnections and transmission tie-ins, obtaining transmission services, obtaining subsidies or tax advantages, and complying with safety and antitrust requirements: all of these aspects of an international energy company’s business, as well as other operations, often involve the discretion of a foreign official. Some of these officials expect bribes from companies (or third parties engaged by companies) in exchange for favorable treatment. The DOJ’s and the SEC’s discovery of Siemens’ corrupt activities has cast a bright spotlight over the global energy industry, making it especially fertile territory for industrywide FCPA dragnets. Lessons Learned from the Siemens Case Siemens paid massive fines for violating the FCPA’s accounting and record-keeping provisions, demonstrating the importance of a robust compliance program. The Siemens settlement provides many additional lessons and reminders for energy companies, including:


	•	Vicarious Liability for Third Parties: Siemens’ foreign business consultants played a significant role in bribing foreign officials to secure business advantages in the energy industry. The FCPA can leave companies and individuals vicariously liable for the conduct of third parties, like consultants, distributors, and sales agents, even if the company lacks actual knowledge of their wrongdoing. Accordingly, the mere failure to recognize and investigate a foreign business consultant’s suspicious activities may expose a company to FCPA liability. Such vicarious liability makes it especially important for companies to (1) conduct due diligence on their potential business consultants; (2) include FCPA-specific representations, warranties, covenants, audit rights, and termination rights in all business consultant contracts; and (3) train employees on how to recognize the red flags associated with business consultants’ unsavory activities and report these red flags to management. Even compliance-conscious energy companies can become entangled in FCPA enforcement actions if they do not have robust compliance programs that are tailored to specific industries and geographic locales.

	•	Tone at the Top: The DOJ and the SEC have publicly criticized Siemens’ senior management for tacitly condoning bribery of foreign officials as a legitimate business strategy. Both agencies have also acknowledged an intention to pursue FCPA criminal penalties (which could include jail time) against Siemens executives, employees, and consultants who participated in the bribery schemes. In short, Siemens lacked the necessary "tone at the top" to foster a culture of FCPA compliance within the company. Companies can take a crucial first step toward avoiding this scenario by working with their attorneys to draft a clearly articulated policy against FCPA violations. This policy should highlight prohibited behavior, accommodate employees who blow the whistle on compliance violations, and set forth disciplinary procedures to address such violations.

	•	Internal Accounting Controls: The DOJ and the SEC based their charges against Siemens almost exclusively on the FCPA’s accounting and record-keeping provisions. Siemens’ subsidiaries attempted to cover up bribes by routing the money through slush funds or intercompany accounts and recording the illegal payments with misleading labels like "commissions." To avoid illegal accounting tactics, businesses should centralize their accounting systems to ensure corporate headquarters review all foreign financial transactions. Careful analysis of the financial records of employees and business partners abroad can enable businesses to quickly detect and eliminate conduct prohibited under the FCPA.

	•	FCPA’s Jurisdictional Scope: Siemens is a German corporation with its principal place of business in Germany, and many of the bribes it paid abroad did not implicate U.S. territory in any way. Nevertheless, Siemens is subject to the FCPA because it has listed its securities on the New York Stock Exchange since 2001 and, therefore, qualifies as an "issuer" under the FCPA. Moreover, in many instances, Siemens routed bribes through U.S.-based banks, providing the U.S. government with an additional jurisdictional basis for pursuing Siemens under the FCPA. These facts serve as a reminder of the FCPA’s sweeping jurisdictional reach. All U.S. companies with international operations—and many non-U.S. companies—have FCPA liability exposure.

	•	Cross-Border Enforcement: The cooperation exhibited in the Siemens case between the DOJ and the SEC, on the one hand, and the German enforcement agencies, on the other, is a noteworthy development in cross-border FCPA enforcement. Companies should recognize that the DOJ, the SEC, and their foreign counterparts share FCPA-related information about the non-U.S. operations of companies subject to the FCPA.

	•	Cooperation with Government Investigations: The DOJ and the SEC have indicated that Siemens’ total FCPA penalty could have been considerably larger than $800 million. Indeed, application of the Federal Sentencing Guidelines would have resulted in an FCPA criminal fine of between $1.35 and $2.7 billion. Due to Siemens’ "exceptional" cooperation with the U.S. government’s investigation and demonstrated commitment to remediating its operations, however, the DOJ and the SEC exhibited leniency. Siemens’ strategy of cooperating with authorities, rather than attempting to stonewall them, provides a model for future targets of FCPA enforcement actions. For more information, contact Ashley Henry, Energy Industry Liaison, 503-294-9506, ahenry@stoel.com

For Further Information

Cleantech VC investments hit record high in 2008

2009-01-08T11:11:00.000-08:00

Via EE Times Europe
8 Jan 2009

Clean technology venture capital (VC) investments last year in North America, Europe, China and India totaled a record $8.4 billion, up 38 percent from $6.1 billion in 2007. Three of the top five funding rounds focused on thin-film solar ventures.

The 2008 total represents the seventh consecutive year of growth in clean technology venture investing, according to the Cleantech Group which tracks the sector.

"As expected, clean technology venture investing slowed in Q4 08, but it is important not to miss the forest for the trees," said Nicholas Parker, executive chairman, Cleantech Group. "In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies. Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation."

Preliminary results for Q4 08 suggest venture investment commitments worldwide of $1.7 billion across 99 disclosed investments, the smallest quarterly total in six quarters. Q4 08 was down 35 percent from Q3 08, but only 4 percent off what was achieved in Q4 07, despite a much more difficult economy.

Solar accounted for almost 40 percent ($3.3 billion) of total clean technology investment dollars in 2008, followed by biofuels at 11 percent ($904 million) and 9.5 percent, or $795 million in ventures focusing on transportation, which includes electric vehicles, fuel cells and advanced batteries.

Regional share
The five largest VC rounds in 2008 included $300 million raised by NanoSolar, $219 million by Solyndra and $200 million by SoloPower, all U.S. companies and all for thin-film solar ventures, followed by $177 million raised by Finnish group WinWinD Oy for wind turbines and $140 million by U.S. group Solar Reserve for concentrated solar thermal.

European and Israeli companies raised $1.8 billion in 146 disclosed rounds, up 43 percent from 2007. Europe and Israel accounted for 21 percent of the global total.

The most significant country growth was seen in Germany ($383 million invested, an increase of 217 percent from 2007) and Israel ($247 million invested, an increase of 224 percent from 2007), both led by very large solar deals.

Germany overtook the United Kingdom as the country receiving the most venture capital in 2008, helped significantly by the region's largest deal of 2008, the $133.7 million investment in Berlin-based solar thin-film manufacturer Sulfurcell Solartechnik.

The United Kingdom's decline in total investment ($337.8 million, down 11 percent from 2007) left it second in the country league table, with Israel moving into third place from sixth in 2007.

In 2008, U.S. companies raised $5.8 billion in 241 disclosed rounds, up 56 percent from 2007. U.S. companies accounted for 68 percent of the global total. Canadian companies raised $159 million in 14 disclosed rounds, down 58 percent from 2007.

Chinese cleantech companies raised $430 million in 18 disclosed rounds last year, up 22 percent from 2007.

China accounted for 5 percent of the global total, and the country saw steady gains in clean technology investment, with solar accounting for 60 percent of the total, reflecting the continuing migration of solar module manufacturing from Europe and the United States to China.

- John Walko

WorldBank: Financing Energy Efficiency: Lessons from Brazil, China, India, and Beyond

2008-12-21T02:35:00.000-08:00

The World Bank has recently published a book, “Financing Energy Efficiency: Lessons from Brazil, China, India, and Beyond”. According to the book, Brazil, China and India will more than double their energy use and greenhouse gas emissions within a single generation if they fail to implement successful energy efficiency efforts.

Alarming figures
China, India and Brazil are three of the world’s top 10 energy consumers. Together these countries are expected to represent 40% of the world’s population and be responsible for well over 50% of all energy demand by developing countries. By 2030, they are expected to account for 42% of growth in energy demand worldwide.

Bob Taylor, a World Bank energy economist, explains his and the other authors’ approach in writing this book, “We dissected the energy efficiency terrain through this study to find out why it’s so hard to get the right incentives in place so that more investment can happen. What we found is enormous untapped potential – especially in Brazil, China and India – but plenty of good solutions that can work as long as the financing and investment environment is in place and there’s plenty of commitment from policy makers.”

Need for action
According to the authors, energy efficiency is critical in these countries “for reasons of energy supply security, economic competitiveness, improvement in livelihoods, and environmental sustainability.” While they see gradual improvement in the three countries, “when you think about the sort of energy demand of even one of these countries in the next decade, the need for action and much faster progress is very clear,” says Taylor.

The authors conclude that implementing energy efficiency projects could - to a certain extent - be cheaper than providing new supplies. However, the development and financing of energy efficiency projects would be impeded by weak economic institutions in these developing and transitional economies. The authors analyze these difficulties, suggest a 3-part model for planning and financing energy efficiency retrofits and present thirteen case studies to illustrate the issues and principles involved.

The Book
Robert P. Taylor , Chandrasekar Govindarajalu , Jeremy Levin , Anke S. Meyer , William A. Ward, “Financing Energy Efficiency: Lessons from Brazil, China, India, and Beyond”; The World Bank (February 2008).

The book is available for a free download or as a hard copy through the World Bank’s Infoshop.

The United Nations Climate Change Conference in Poznań, 1-12 December 2008

2008-12-18T02:22:00.000-08:00

The United Nations Climate Change Conference in Poznań on Saturday 13 December with a clear commitment from governments to shift into full negotiating mode next year in order to shape an ambitious and effective international response to climate change, to be agreed in Copenhagen at the end of 2009. Parties agreed that the first draft of a concrete negotiating text would be available at a UNFCCC gathering in Bonn in June of 2009.

At Poznań, the finishing touches were put to the Kyoto Protocol’s Adaptation Fund, with Parties agreeing that the Fund would be a legal entity granting direct access to developing countries. Progress was also made on a number of important ongoing issues that are particularly important for developing countries, including: adaptation; finance; technology; reducing emissions from deforestation and forest degradation (REDD); and disaster management.

A key event at the Conference was a ministerial round table on a shared vision on long-term cooperative action on climate change. Ministers gave a resounding commitment to achieving an ambitious and comprehensive deal in Copenhagen that can be ratified by all. The next major UNFCCC gathering will take place next from 29 March to 8 April next year in Bonn, Germany.

Archive from all days including summaries of the daily press briefings

Hemlock Semiconductor raises US$3 billion to build chip and solar cell materials

2008-12-16T11:13:00.000-08:00

Via Venture Beat, CleanTech:

Dean Takahashi | 15 December 2008

Ever since solar cells took off a few years ago, there has been a shortage of silicon in its purest form. That’s because polycrystalline silicon is used to make both semiconductor chips and most solar cells.

Because of that, the Hemlock Semiconductor Group has been able to raise $3 billion to expand the production of polysilicon at two major manufacturing sites. The group will invest that money to build a new factory in Clarksville, Tenn., and to add to another one in Hemlock, Mich.

About $1.2 billion will go toward the new site in Clarksville, and another $1 billion to the Hemlock plant. The rest of the money will fund further expansions. Together, those factories will be able to produce 34,000 metric tons of polysilicon per year. Construction will begin immediately.

The numbers involved give you a sense of the scale of the business and a sense for how much polysilicon is needed to fuel the world’s growing appetite for solar power. Altogether, the Hemlock Semiconductor Group has announced investments of $4.5 billion in the past five years. From 2005 to 2015, the company will have increased its production capacity ten-fold.

The shortage of polysilicon has driven up prices for various kinds of chips and driven a lot of solar start-ups to focus on thin-film technology that doesn’t use polysilicon. The Michigan expansion will add 13,000 tons of capacity to the site, creating 300 permanent jobs and 8u0 construction jobs. The expanded plant is expected to begin production in 2011. In Clarksville, the factory will initially produce 10,000 tons of polysilicon. The site is expected to employ 500 people at first and then 800 at full production of 21,000 tons a year. The construction will create 1,000 jobs.

Most of the production will go toward solar cell production, but both factories will be able to make polysilicon for electronics as well.

Hemlock Semiconductor and Hemlock Semiconductor LLC are joint ventures of Dow Corning and two Japanese firms, Shin-Etsu Handotai Co. and Mitsubishi Materials Corp.

Green-tech Startups

2008-12-12T00:58:00.000-08:00

Via EE Times Asia:

11 December 2008
Small is beautiful for green-tech newbies

Green Tech

Les Fritzemeier heads up a tiny solar-energy start-up that most people have never heard of, Wakonda Technologies. But rather than worry about being steamrolled by the sliding economy, he feels like he's in a great spot.

"In a lot of respects, the best time to start a company is in the middle of a recession, assuming you've got money," he said. "Our target is to go to market when most people expect the economy to turn around."

Without a doubt, the recession and lower oil prices are hurting many companies in clean tech, a situation likely to slow what has been a frenzied pace of innovation.

But investors and entrepreneurs say that so far, smaller green-tech firms appear to weathering the storm the best, allowing them to continue developing new energy technologies.

To a large degree, that's simply because younger firms, in general, demand less capital to operate. Those green ventures most vulnerable are the ones that need late-stage funding--the tens or hundreds of millions of dollars to build a biofuel plant or solar-manufacturing line, they said.

Across the board, though, investors and entrepreneurs report that the valuations of green-tech start-ups—once considered in bubble territory—are going down, and there is a growing emphasis on having cash.

"What's out there is a level of nervousness in every business," said Mitch Tyson, CEO of Advanced Electron Beams, which makes equipment to make industrial processes more energy- and water-efficient. "People still don't have a good sense of where the bottom is."

Seeking new sources

As a result, green-tech entrepreneurs—after being lavished with money and attention for the last three years--need to get creative with how they fund their ideas.

Consider Qteros, a young firm with a potential breakthrough process for making ethanol from agricultural waste, such as corn stover. One of its initial investors, ethanol maker VeraSun Energy, declared bankruptcy, shutting it out of any follow-on round.

Other sources of money, including BP and George Soros' fund, filled the void. But the added work—compounded by cautious lenders—strung the process out from six months to nine.

"This Wall Street meltdown is having effects on early-stage green-tech companies getting the money they need to grow," said Jonathan Gorman, the manager of business development at Qteros. "There was a huge due diligence process, with outside scientists, as we looked for money, which they probably wouldn't have done before."

In another case of Wall Street colliding with green-tech garage start-ups, one newly formed firm nearly lost an investor when he lost half a million dollars on the stock market.

Late last month, SunRun, which installs and finances consumer solar-panel purchases, secured a $105 million commitment from U.S. Bank, but it wasn't as easy as it would have been a few months ago: one investor said getting a bank to sign on to a tax equity fund was like getting on "the last helicopter leaving Saigon."

Fritzemeier of Wakonda Technologies seems have gotten the timing right too: he was fortunate enough to raise money in July, before the financial markets' meltdown.

He's optimistic about the future because demand for technology that reduces the cost of solar electricity will remain strong, even in a down economy. The company is trying to develop disruptive solar-cell technology by combining low-cost, thin-film manufacturing techniques with very efficient cells.

Like most people in clean tech, he's eager to see the shape of the Obama administration's energy and green-job initiatives.

"The continued emphasis on renewable energy and economic development from the incoming (Bush) administration may put additional support in place to accelerate our efforts," Fritzemeier said.

Flight to quality
Certainly, being in the right industry helps a small company's chances. While biofuels are closely tied to falling commodity and gasoline prices, products that save energy can appeal to cost-cutting businesses or utilities looking to make the electricity grid more efficient.

"We feel better that we're in the efficiency business selling to businesses," said Robert LeFort, the CEO of Ember, a wireless-networking firm that has shifted its focus to smart-grid products. "That's better than putting something on the shelf at Wal-Mart, and hoping the consumer picks it up. It's the lesser of two evils."

As more bad economic news comes out seemingly every day, many predict that the best companies—with paying customers —are the ones that have the best chance of thriving. A number of successful companies, including Google and Cisco Systems, were founded during an economic downturn.

Nicholas Parker, executive chairman of the Cleantech Group research firm, said the difficulty in getting financing in the coming year will thin the ranks of clean-tech start-ups and, from an investment point of view, result in a "flight to quality."

Advanced Electron Beams' Tyson is out, trying to raise another $20 million to $25 million Series C round, and he's gotten a commitment from existing investors and a good reception from others. The interest could well stem from the fact that the company already has customers using its product.

"I say to potential investors, 'We have a product in the field now and look at the customer base—the market risk is low,'" he said. "Knock on wood. So far, my experience, has been typical of normal times."

- Martin LaMonica is a senior writer for CNET's Green Tech blog.