International Business

Global stock market accounting deal agreed

The decision by IOSCO (International Organisation of Securities Commission), the club of stock market regulators, will help allay fears that the US is trying to derail the push for world standards in an attempt to introduce its rules as the de facto global benchmark. 

IOSCO agreed at its annual meeting in Sydney this week to back a set of proposed international standards. "This is a big bang," said one regulator close to the issue. "It's pretty exciting." 

The standards have been produced by the International Accounting Standards Committee (IASC), the body set up in 1973 to mount the drive for a set of global rules. 

IOSCO, which has no authority to impose its views on its members, praised the IASC for making "significant improvements" in the quality of its standards. The regulatory group said it would survey the performance of its members over the next 18 months in allowing multinationals to use the standards for cross-border offerings and listings. 

The agreement is a boost for the IASC, which had until late last year been struggling to make headway against a background of disputes between the US and the European Union. 

Relations with the US have improved since the IASC last year announced a plan for reform that addressed many criticisms made by the Americans. The principal change, to be voted on by IASC members this month, is a plan to appoint the standard-setting board on the basis of technical expertise rather than nationality. 

The US Securities and Exchange Commission (SEC), the main market regulator, said the Sydney agreement complemented the efforts made by the IASC. It said: "The IOSCO resolution, combined with the expected restructuring of the IASC, are positive steps towards enhancing the quality of financial reporting worldwide." 

The SEC is understood to be pleased by IOSCO's proposals to allow domestic regulators a limited degree of freedom. This would include the ability to require additional disclosure or the reconciliation of items to domestic standards. 

The SEC has yet to publish the results of a wide-ranging consultation announced earlier this year on the quality of international standards relative to US practices. 

Another potential obstacle in the way of global rules is the European Commission. The Commission intends soon to produce an outline of its views on the future of international accounting rules. 

Some enthusiasts for global rules are concerned about the Commissions plan to introduce an endorsement mechanism for the proposed standards. 

They fear this could allow the Commission an effective veto on accounting standards that might prove politically difficult to apply. 

Victoria's Secret revealed 

Some viewers of the Victoria's Secret Fashion Show complained about the choppy quality of the images of the models sauntering across their computer screens clad only in bras, bustiers, panties and see-through tops.

Technology experts conceded the images were not television quality, but said the show, which cost $10 million to produce, delivered surprisingly clear transmissions, considering the number of eyeballs ogling the show.

Exactly many computers were turned on? Had the show been on television, the 25-minute programme would have been the most watched daytime programme, said Ed Razek, chief marketing officer for Intimate Brands.

"This was the most watched Webcast in history. This was the most watched fashion show in history. This was the most expensive fashion show in history," Razek said.

"Can the Web be a viable form of entertainment?" he asked.

"Absolutely."

Keynote Systems Inc., which measures Internet performance, Keynote said the show was very accessible considering the heavy demand. Based on users in 50 cities worldwide, it took only 3.5 to 4 seconds to log on before the 3 p.m. EDT (1900 GMT) show and 6.5 to 7 second during the peak of the show.

"Overall, considering the load they were probably under,they did remarkably well," said Matthew Parks, Keynote product marketing manager.

Last year, the company was exposed to a hoard of viewers, and its servers could not support the overload. Only about one in 50 potential viewers was able to see that show, broadcast at night from New York; the rest were shut out. Even so, the company said the 1.5 million who saw last year's show made it the largest Webcast viewing audience of 1999. This year, Victoria's Secret and the Limited Inc., which owns 85 percent of Intimate Brands Inc., said a number of factors allowed more efficient transmission. The company boosted capacity tenfold. It also benefited from the nearly 65 U.S. Internet service providers that use multicasting technology, allowing more people to pick up the same stream of audio and video.

It also hired Akamai Technologies Inc. to provide a service that sent the overflow of users to another site where viewers saw behind-the-scene videos and interviews with the models. Lastly, the increase in the use of high-speed Internet access in many work and home environments also allowed more people to watch the show. This year Keynote also measured the quality and availability of the video and audio during the fashion show as it was watched in 10 U.S. cities.

"They seemed to do pretty well," Parks said. However the audio and video results were preliminary and did not reflect technical glitches, such as picture freezes and audio that was out of synch with the video images.

Some viewers were not salivating about either the show or the statistical data.

"It was awful," said David Smith, corporate bond broker at Garban-Intercapital in New York. "They only let you watch it for a minute before they kicked you off."

Biz broadsides by Rajpal A.

No, we haven't become fascist, not just yet

There was as good degree of dissent among the political activist groups in the region when this factory was being established. But some leftists who were opposed to the factory were subsequently killed by the JVP, which had at that times aimed their guns at the more moderate left.

This country's Bhopal may still be in the making, but small scale environmental disasters keep happening. But, more serious are the general conditions created by some multi national corporations. For example, some MNC's have worked hard for a strike-less work ethic. 

Sri Lanka's labour laws may be double edged, and may sometimes place a rather heavy burden on some employers. But, that's entirely different to seeking to create a strike-less culture. A no strikes work ethic has of course already been created within the so called free trade zones.

All these are symptomatic of states not being able to provide political sustainability in which political systems can guarantee democratic participation . Marginal populations are the worst hit; and the sugar factory example or the free trade zone example in Sri lanka are fairly good examples. There is subtle agitation (sometimes not so subtle) by the enforcers of neo-liberal globalization to tighten the act at home. In Sri Lanka, this agitation is a lot of the time about labour practices, holidays etc.,

For instance, there has been a silly hue and cry about holidays. 

The process of indoctrination goes something like this : there is a holiday in Sri Lanka at the drop of a hat, and the country cannot progress. 

But, considering that a country such as Germany enforces holidays, sometimes two month long vacations for employees, it's questionable as to why anybody has to get themselves in a twist over this country's holidays. 

Germany's brand of vacations are not available to the employees here; to compensate at last they have the sporadic and intermittent holidays that are granted by way of public holidays such as the Poyas etc., 

Some big guns in corporate Sri Lanka now want to get rid of these small mercies. At most, Sri Lanka's holiday public holiday calendar has to be restructured and rationalized. But, the corporate hue and cry is to shut out the holidays altogether, which is bizarre considering that most of the MNC corporate heads come from the developed world where vacations are enforced. (How do the Southern Hotels in Bentota enjoy a tourist clientele? These people are not taking French leave; they are taking good healthy German vacations…right? ) Perhaps, a more substantial analysis of the holiday structures are called for in these columns. 

The problem is that pressure cooker systems that are created by neo-liberal demands, cause counter tendencies among social groups such as workers who rapidly become disadvantaged. There is a whole "new constitutionalism'' of neo-liberal economics that reorganizes "legal and constitutional practices '' in countries. 

Such reorganization of legal practices, for instance, creates a lack of accountability for citizens, at the same time creating special rights for corporations. (Gill in his 1992 book, "gill and law.") 

Lacking resources to smooth over developing conflicts, the state often responds through increased surveillance and social control over marginalized populations. (Cohen 1997.) Cohen writes that the possibility of neo-fascism emerges in some countries. 

The new constitutionalism that places restrictions on local populations is enshrined in agreements such as NAFTA, the proposed MAI and institutions like the WTO.

In return for acceptance of international finance, the state enforces neo-liberalism at home, in often not so beautiful ways. 

In some places, its so extreme that the dicta is : they become rich, we become fascist.

Ceylinco Life records growth

According to figures released by the company last week this performance represents a growth of 33 percent over the corresponding period in 1999, which is satisfactory in the context of the prevailing economic environment in the country. Ceylinco Insurance's Life Division sold over 11,530 individual life policies during the first quarter of 2000. 

"Our performance in the first quarter has been satisfactory," says R. Renganathan, Ceylinco Insurance's Director/General Manager (Life). "With the insurance industry becoming increasingly competitive, it is obvious that our sales team will have to work harder to achieve targets and ensure Ceylinco remains the market leader." 

He said that the continued success of the company is due to the effective selling and the after sales service provided by the frontline staff. Ceylinco life has also refurbished its life Centre in Colombo 3 to offer a much more conducive and efficient environment to conduct business he said.

Communications

LISL goes to Human Rights Commission

"We are filing action against the government for violating our rights to conduct our business," LISL Director, Kalinga de Alwis said.

LISL's nightmares started when the company began providing enhanced voice services last year. LISL, Electrotecks (Pvt) Ltd and Lanka Communications Services were given a licence in 1994 to provide such services. However, with the privatisation of Sri Lanka Telecom (SLT) in 1997, the government amended SLT's licence saying that 'no other international voice licences will be issued until August 5, 2002'. LISL says that the amendment excludes licences granted before 1997, while SLT interprets it as they have been given an international voice monopoly till 2002.

While LISL began to import equipment to provide enhanced voice services with the Telecommunication Regulatory Commission's (TRC) approval, approvals to import subsequent equipment was withheld by the TRC, LISL says.

SLT began blocking calls coming via interconnections LISL had with Suntel and Lanka Bell. Suntel and Lanka Bell subsequently, obtained enjoining orders against SLT for blocking calls.

Meanwhile, on a complaint made by SLT, the CID began investigations into LISL's operations. SLT had complained that LISL's enhanced voice operations are depriving SLT of international revenue. LISL was further implicated in a conspiracy of having links with the LTTE through 'Gnanam Telecom'. A LISL engineer was arrested under the Prevention of Terrorism Act and is presently on bail, LISL's directors were questioned, the offices searched and guards were placed outside LISL premises. 

LISL then instituted legal action against the state authorities and the cases are pending in the Appeal Courts.

Last week, LISL's American partners International Internet Services filed action against the Sri Lankan government with the International Centre for Settlement of Investment Disputes in Washington.

International Internet Services are claiming US$ 200 mn in damages.

Arbitration proceeds were initiated against the government, for contravening/violating the Investment Protection Agreement entered into between the governments of Sri Lanka and the USA. 

Under the agreement, both governments undertake to equally treat investments by nationals/companies. If either government fails to adhere to the agreement, the grieved party/company is entitled to invoke the provisions of the agreement.

LISL is owned by Central Finance (20%), Lanka Ventures (32%), Esjay Electronics (24%), and International Internet Services (24%).

Aviation & Shipping

CO2 detectors installed at HK Port to prevent human smuggling

Rules to stop tonnage tax abuse

IMO and Hong Kong agree

Hanjin signs letter of intent

Shipping industry split on Internet trading

Possible changes

Barnehama is currently talking to existing companies in Europe, with a view to setting up strategic alliances in time for a UK launch this year.

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