When does a corporation conduct its business through fraud?

May 23, 2022 | 5:40 pm

We posit that the offense sought to be punished under Section 165 of the Revised Corporation Code (RCC), i.e., “conducting its business through fraud,” does not provide a definition or the requisites by which to determine whether a crime has been committed. For example, it is not clear whether Section 165 covers only the general manner by which the corporate business enterprise is conducted (e.g., conducts a banking business without a Bangko Sentral ng Pilipinas license), or it covers every particular transaction that is committed with fraud.

Without providing for the requisites of what would constitute “conduct of business through fraud” it would be difficult to convict a corporate offender under Section 165 since the quantum of evidence required in a criminal case is “guilt beyond reasonable doubt.” Under the norms of criminal due process which must also be accorded to an accused juridical entity, the lack of the proper definition of what constitutes “conduct of its business through fraud,” would not allow a conviction of the accused, especially a corporate offender, which essentially is incapable of committing fraud for lack of ability to act with “malice.” The element of malice that would make the corporation accused liable for the offense mala in se under Section 165 must necessarily pertain to the malicious intent of the acting director, trustee, officer or employee in conducting the corporate business enterprise with fraud.

ISSUE OF ‘PREJUDICIAL QUESTION’ UNDER SECTION 165
Since the criminal offense that a corporation can commit under Section 165 of the RCC by “conduct of business through fraud” is mala in se that can only be effected through its Board of Directors or duly authorized officers and employees, there is no way to obtain a conviction against the corporation unless and until the acting directors or trustees, or the officers and/or employees committing the offense on behalf of the corporation are first shown to have themselves been guilty of conducting the business of the corporation through fraud.

Section 165 of the RCC cannot be the basis for finding that the conduct of the acting directors or trustees, or the officers and/or employees are fraudulent since it defines an offense committed by the corporation, and Section 171 provides the specific criminal penalty for such acting directors or trustees, officers and/or employees “if the offender is a corporation.”

We posit therefore that if Section 165 of the RCC will be construed by the courts to allow criminal punishment of the corporation as the medium through which the acting directors, trustees or officers committed a fraudulent act, it can only cover specific acts which under existing criminal statutes are already defined as criminally fraudulent. For example, there are many criminal offenses defined by the Securities Regulation Code and the General Banking Law where the penalty is imposed upon the acting director, trustee, or officer.

It is only in such criminally defined fraudulent crimes that the corporation itself, used as the medium to commit such crimes, that the offense under Section 165 can be invoked to hold the corporation itself punishable.

CHILLING EFFECT OF INVESTING PUBLIC IN THE CORPORATE MEDIUM
Prior to the enactment of the RCC, the prevailing principle in Philippine Corporate Law in cases where the corporation has been employed as a means to commit fraud was to make the culprit directors, trustees, and/or officers criminally liable for the crime of fraud (as defined by law) so committed, and not the corporation itself. Aside from the policy that offending directors, trustees, or officers should not be allowed to hide behind the corporate veil to insulate themselves from their dastardly acts, it was also the policy back then to protect the investments of passive shareholders who had no participation, much less knowledge, of the fraudulent act of the offending directors, trustees, or officers.

The imposition under Section 165 of the penalty of fine on the corporation for the fraudulent acts of directors, trustees, or officers actually bears directly upon the equity interests of the many innocent shareholders. Instead of promoting the ease of doing business through the corporation medium, Section 165 induces an “unease” on both the actual and future investors, both local and foreign, in the Philippine corporate sector.

CORPORATIONS ACTING AS INTERMEDIARIES FOR FRAUD, GRAFT AND CORRUPT PRACTICES
Under Section 166 of the RCC, a “corporation used for fraud, or for committing or concealing graft and corrupt practices as defined under pertinent statutes,” shall be liable for a fine ranging from P100,000 to P5 million.

In addition, Section 166 provides that when there is a finding that any of the corporation’s directors, officers, employees agents, or representatives are engaged in graft and corrupt practices, the corporation’s failure to install: a.) safeguards for the transparent and lawful delivery of services; and, b.) policies, code of ethics, and procedures against grant and corruption shall be prima facie evidence of corporate criminal liability under Section 166.

WHEN A CORPORATION IS USED FOR FRAUD
It seems that there was an error in including in defining the offenses covered by Section 166 the crime of “a corporation used for fraud,” based on the following grounds: a.) It is not within the title of the section which only covers “Acting as Intermediaries for Graft and Corrupt Practices”; and, b.) Using the corporation to commit fraud is already defined as a separate crime of the corporation under Section 165.

Keeping in mind that every corporation is a medium of conducting business, there would be no difference in coverage between Section 165 when it refers to “a corporation that conducts its business through fraud” from that of Section 166 that refers to “a corporation used for fraud.”

Again, to obtain a conviction under Section 166 against “a corporation used for fraud,” would seem difficult because of the lack of definition or the requisites that would constitute the use of the corporation for fraud.

WHEN A CORPORATION IS USED TO COMMIT GRAFT AND CORRUPT PRACTICES
Section 166 of the RCC defines the criminal act of “A corporation used… for committing or concealing graft and corrupt practices as defined under pertinent statutes.” That can only mean that the criminal offense committed by a corporation is well-defined only when proper reference can be made to statutory provisions that define particular acts of the directors, trustees, or officers as constituting graft or corrupt practices, like the Anti-Graft and Corrupt Practices Act.

THE ‘PREJUDICIAL QUESTIONS’ ISSUE UNDER SECTION 166
An important issue that arises under Section 166 of the RCC is whether the accused corporation can be held liable without a prior conviction of the acting directors, trustees, or officers for a statutorily defined graft and corrupt practice using the corporation as a means to commit or effect the same.

The last paragraph of Section 166 addresses partially that issue when it provides that “When there is a finding that any of its directors, officers, employees, agents or representatives are engaged in graft and corrupt practices, the corporation’s failure to install: a.) safeguards for the transparent and lawful delivery of services; and, b.) policies, code of ethics, and procedures against graft and corruption shall be prima facie evidence of corporate liability under this section.” In other words, the prior conviction of the directors or trustees, and/or officers or other agents is not required when the prima facie rule is present. Nevertheless, prima facie evidence is not enough to convict a corporation for a criminal offense since it is still required from the prosecution to prove that the acting directors or trustees and/or officers have engaged in graft and corrupt practices “as defined under pertinent statutes.”

When the requisite safeguards, policies, codes, and procedures against graft and corrupt practices have been installed such that the prima facie rule against the corporation does not come into effect, we are of the position that the conviction of the acting directors or trustees and/or officers would constitute a prejudicial question in determining whether the corporation itself can be held guilty under Section 166 of the RCC.

On a related issue, since Section 166 itself cannot be used as the basis to punish the directors, trustees, or officers who used the corporation as a means to commit the offense defined therein, the basis for the punishment of the guilty directors, trustees, or officers, would have to be Section 171 which provides that “if the offender is a corporation, the penalty may, at the discretion of the court, be imposed upon such corporation and/or upon its directors, trustees, stockholders, members, officers or employees responsible for the violation or indispensable to its commission.” There is no doubt that every officer acting in the transaction whereby the corporation becomes liable for an offense as “indispensable to its commission,” for a corporation being a juridical person, it can only act through its directors, trustees, or officers.

Consequently, we do not see how culprit directors, trustees, or officers can be held liable under Section 171, if the corporation itself cannot be held liable under Section 167 which can only be based on showing that the culprit directors, trustees, or officers have committed graft and corrupt practices act as defined in existing statutes other than Section 171 of the RCC.

CHILLING EFFECT ON INVESTING PUBLIC IN THE CORPORATE MEDIUM
The imposition under Section 166 of the RCC of the penalty of a fine on the corporation for the graft and corrupt practices of its directors, trustees, or officers actually bears directly upon the equity interests of the many innocent shareholders, especially in publicly held corporations.

In addition, the imposition of a criminal punishment on the corporation may undermine the share values of publicly listed corporations which may render valueless the equity holdings of many innocent public investors. At the very least, Section 166 as it provides the criminal penalty of a fine (aside from the administrative sanctions that Securities and Exchange Commission may impose under Section 170) induces a “chilling effect” on both the actual and future investors, both local and foreign, in the Philippine corporate sector. In that sense, the introduction of Section 166 into the RCC actually works against the principle of promoting the ease of doing business in our country through the corporate medium, and actually removes the protection of many innocent shareholders. n

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.

Attorney Cesar L. Villanueva is co-chair for Governance of the MAP ESG Committee, the chair of the Institute of Corporate Directors, the first chair of the Governance Commission for GOCCs, is a former dean of the Ateneo Law School, and a founding partner of Villanueva Gabionza & Dy Law Offices.

map@map.org.ph

cvillanueva@vgslaw.com

http://map.org.ph

Biden says would be willing to use force to defend Taiwan

May 23, 2022 | 5:00 pm

TOKYO — US President Joseph R. Biden said on Monday he would be willing to use force to defend Taiwan, rallying support on his first trip to Asia since taking office for US opposition to China’s growing assertiveness across the region.

Mr. Biden’s comments appeared to be a departure from existing US policy of so-called strategic ambiguity on its position on the self-governed island that China considers its territory and says is the most sensitive and important issue in its ties with the United States.

When asked by a reporter in Tokyo if the United States would defend Taiwan if it were attacked by China, the president answered: “Yes.”

“That’s the commitment we made … We agree with a one-China policy. We’ve signed on to it and all the intended agreements made from there. But the idea that, that it can be taken by force, just taken by force, is just not, is just not appropriate.”

He added that it was his expectation that such an event would not happen or be attempted.

While Washington is required by law to provide Taiwan with the means to defend itself, it has long followed a policy of “strategic ambiguity” on whether it would intervene militarily to protect Taiwan in the event of a Chinese attack.

Mr. Biden made a similar comment about defending Taiwan in October. At that time, a White House spokesperson said Mr. Biden was not announcing any change in US policy.

The comments about Taiwan are likely to overshadow the centerpiece of Mr. Biden’s visit, the launch of an Indo-Pacific Economic Framework, a broad plan providing an economic pillar for US engagement with Asia.

His visit also includes meetings with the leaders of Japan, India and Australia, in the “Quad” group of countries.

Worries about China’s growing might and the possibility that it could invade Taiwan have emboldened Japanese Prime Minister Fumio Kishida and his ruling Liberal Democratic Party on defense, eroding some of the traditional wariness among many Japanese about taking a more robust defense posture.

Mr. Kishida said that he told Mr. Biden that Japan would consider various options to boost its defense capabilities, including the ability to retaliate, signalling a potential shift in Japan’s defense policy.

“A strong Japan, and a strong US-Japan alliance, is a force for good in the region,” Biden said in a news conference following their discussions.

Mr. Kishida said that he had gained support from Mr. Biden on Japan’s becoming a permanent member of the U.N. Security Council amid growing calls for reform of the council. China and Russia are permanent members.

“President Biden expressed the necessity of reforming and strengthening the United Nations, including the Security Council, which bears a major responsibility for the peace and security of the international community,” Mr. Kishida said.

“President Biden expressed his support for Japan to become a permanent member of the reformed Security Council.”

Worries are growing in Asia about an increasingly assertive China, particularly in light of its close ties to Russia, and tension has risen over self-ruled Taiwan, which China considers a renegade province. — Reuters

IMF warns against global economic fragmentation from Russia-Ukraine war

May 23, 2022 | 4:59 pm

Ukraine-Russia-flag-toy soldiers — Army soldier figurines are displayed in front of the Ukrainian and Russian flag colors background in this illustration taken, Feb. 13, 2022. — REUTERS/DADO RUVIC/ILLUSTRATION

THE INTERNATIONAL Monetary Fund (IMF) warned against global economic fragmentation as a consequence of Russia’s invasion of Ukraine, saying that undoing decades of integration will make the world poorer and more dangerous.

Nations should lower trade barriers to alleviate shortages and lower prices, after more than 30 countries restricted trade in food, energy and other key commodities, IMF Managing Director Kristalina Georgieva said.

Ms. Georgieva made the comments in a blog post with Gita Gopinath, the fund’s first deputy managing director, and Ceyla Pazarbasioglu, the head of the strategy, policy and review department, ahead of the World Economic Forum in Davos, Switzerland this week.

Countries should diversify imports to secure supply chains and reduce output losses from interruptions, they said. The Group of 20 (G20) biggest economies also should improve its common framework for dealing with debt restructuring to help deal with vulnerabilities, the officials wrote.

“The costs of further disintegration would be enormous across countries,” they said. “And people at every income level would be hurt — from highly paid professionals and middle-income factory workers who export, to low-paid workers who depend on food imports to survive. More people will embark on perilous journeys to seek opportunity elsewhere.”

Bloomberg Economics last week released the results of a simulation of what an accelerated reversal of globalization might look like in the longer term. It points to a significantly poorer and less productive planet, with trade back at levels before China joined the World Trade Organization. An additional blow: inflation would likely be higher and more volatile.

Cross-border payment systems should be modernized, with countries working together to create a public digital platform for handling remittances to reduce cost and improve safety, the IMF officials wrote. And nations must collaborate to confront climate change, they said. — Bloomberg

Sri Lankan medicine shortage a death sentence for some, doctors say

May 23, 2022 | 4:58 pm

medicines-pills — TOWFIQU BARBHUIYA-UNSPLASH

COLOMBO — A shortage of medicine caused by an economic crisis in Sri Lanka could soon cause deaths, doctors said, as hospitals are forced to postpone life-saving procedures for their patients because they do not have the necessary drugs.

Sri Lanka imports more than 80% of its medical supplies but with foreign currency reserves running out because of the crisis, essential medications are disappearing from shelves and the healthcare system is close to collapse.

At the 950-bed Apeksha cancer hospital on the outskirts of the commercial capital, Colombo, patients, their loved ones and doctors feel increasingly helpless in the face of the shortages which are forcing the suspension of tests and postponement of procedures including critical surgery.

“It is very bad for cancer patients,” said Dr. Roshan Amaratunga.

“Sometimes, in the morning we plan for some surgeries (but) we may not be able to do on that particular day … as (supplies) are not there.”

If the situation does not improve quickly, several patients would be facing a virtual death sentence, he said.

Sri Lanka is grappling with its most devastating economic crisis since independence in 1948, brought about by COVID-19 battering the tourism-reliant economy, rising oil prices, populist tax cuts and a ban on the import of chemical fertilizers, which devastated agriculture.

A government official working on procuring medical supplies, said about 180 items were running out, including injections for dialysis patients, medicine for patients who have undergone transplants and certain cancer drugs.

The official, Saman Rathnayake, told Reuters that India, Japan and multilateral donors were helping to provide supplies, but it could take up to four months for items to arrive.

In the meantime, Sri Lanka has called on private donors, both at home and abroad, for help, he said.

‘TREMENDOUS FEAR’
Doctors say they are more worried than the patients or their relatives, as they are aware of the gravity of the situation and the consequences.

Referring to the ubiquitous queues for petrol and cooking gas, Dr. Vasan Ratnasingam, a spokesman for the Government Medical Officers’ Association, said the consequences for people awaiting treatment were so much more dire.

“If patients are in a queue for drugs, they will lose their lives,” said Ratnasingam.

The mother of Binuli Bimsara, a four-year-old girl being treated for leukemia, said she and her husband were terrified.

“Earlier, we had at least some hope because we had the medication but now we are living under tremendous fear,” the mother said.

“We are really helpless; our future is really dark when we hear about a shortage of medicines. We don’t have money to take our child abroad for treatment.”

Indian authorities delivered 25 tons of medical supplies, along with other aid, on Sunday, officials said.

“At no time has India assisted any other country to this extent … This is something for which we are deeply grateful,” Sri Lanka’s foreign minister, G.L. Peiris, said at Colombo’s port as he stood by a vessel bringing in thousands of sacks of supplies.

“This is probably the most difficult period that Sri Lanka has had to face since independence.” — Reuters

Beijing urges millions to keep working from home amid COVID outbreak menace

May 23, 2022 | 4:56 pm

China-Beijing-skyline — A GENERAL VIEW shows Beijing’s skyline on a sunny day in this file photo. — REUTERS

BEIJING/SHANGHAI — Beijing authorities extended work-from-home guidance for many of its 22 million residents to stem a persistent coronavirus disease 2019 (COVID-19) outbreak, while Shanghai deployed more testing and curbs to hold on to its hard-won ‘zero COVID’ status after two months of lockdown.

On Monday, the Chinese capital reported 99 new cases were detected on May 22, up from 61 the previous day — the largest daily tally so far during a month-old outbreak that has consistently seen dozens of new infections every day.

In Shanghai fewer than 600 daily cases were reported for May 22, with none outside quarantined areas, as there has been the case for much of the past week.

Analysts at Gavekal Dragonomics estimated last week that fewer than 5% of Chinese cities were reporting infections, down from a quarter in late March, in a COVID outbreak that has cast a pall over growth in the world’s no. 2 economy. But vigilance, and concern, remains acute in Shanghai and the capital.

While there were no new announcements of areas being closed in Beijing, five of the city’s 16 districts advised residents to work from home and avoid gatherings. Those who have to go to work should have a negative result on a PCR test taken within 48 hours, and must not deviate from their home-to-work commute.

“The city’s epidemic prevention and control is at a critical moment,” Beijing’s Tongzhou district posted on its WeChat account late on Sunday, asking residents who work in five other districts to do their jobs from home this week.

“One step forward and victory is in sight. One step back, and previous efforts would be wasted.”

‘MASSIVELY HIT’
Beijing had already curtailed public transport, asked some shopping malls and other stores and venues to close and sealed buildings where new cases were detected.

In one large residential compound not under isolation orders, shelves have been set up for deliveries at the entrance, according to residents, fueling concern that preparation was in place for tougher controls on movement.

The curbs in Beijing, Shanghai and elsewhere in China are leaving behind significant economic damage and disruption to global supply chains and international trade.

The highly-transmissible Omicron variant of the virus first discovered in the city of Wuhan in late 2019 has proven hard to defeat even with strict measures that starkly contrast the resumption of normal life elsewhere in the world.

“We’ve been massively hit,” said a convenience store owner surnamed Sun, whose shop in Beijing has only been allowed to operate during daytime rather than its usual 24/7 hours.

“Even during the Wuhan outbreak we could stay open the whole time.”

In Shanghai, which reopened more than 250 bus routes and a small part of its sprawling subway system on Sunday, many towns and districts announced more mass testing for the coming days and asked residents not to leave their compounds.

The commercial hub of 25 million has allowed more people to leave their homes for brief periods over the past week, but it generally plans to keep most restrictions in place this month, before a lifting its two-month-old lockdown from June 1.

However, while more people are being allowed outside, several residents in various areas of Shanghai said they had been told of new infections in their vicinity that required new curbs on movement.

One resident in Hongkou district, which has not reported any new community-level cases since May 7, said he was told last week not to leave his flat, having been allowed to move within his compound previously.

Hongkou was among six districts which have announced some tightening of curbs in recent days to “consolidate” the results of their efforts so far.

But such moves made some people fear the virus was making a comeback.

The top comment on a post by state agency Xinhua on China’s Twitter-like Weibo post on Shanghai’s latest numbers read: “This can’t be accurate, zero COVID cases at community level? Our compound had one new case yesterday.”

Asked to comment, the Shanghai government said that all cases found in recent days were in “sealed” high-risk areas or quarantine centers, and that any community transmission cases would be announced on official channels. — Reuters

Smart is ‘operator to beat’ in the Philippines – Opensignal

May 23, 2022 | 4:40 pm

Leading mobile services provider Smart Communications, Inc. (Smart) has won the most number of citations in the latest Mobile Network Experience Awards by Opensignal, underscoring Smart’s superiority as the operator to beat with the widest 5G reach and best 4G coverage experience.

Opensignal’s April 2022 report, which covered the period Jan. 1 to Mar. 31, 2022, showed that Smart won a total of 11 awards, covering the essential aspects of service, especially speed and experience.

These awards include Best Overall Video Experience, Games Experience, Voice App Experience and Download Speed Experience across all technologies; Best 5G Games Experience, 5G Voice App Experience, 5G Download Speed and 5G Upload Speed Experience; Best 5G Availability, 5G Reach, and 4G Coverage Experience.

“These citations are a testament to our sustained investments in our network, and our combined efforts to continuously improve our customers’ experience,” said Al S. Panlilio, PLDT Inc. and Smart Communications President and CEO.

“As the economy reopens, our customers’ shifting needs will entail higher mobile usage. Opensignal’s report validates that we are best positioned to enable hybrid workplaces and online learning, the use of e-commerce and digital payments, and empower businesses to thrive in the post-pandemic next normal,” Panlilio added.

According to Opensignal, their users had their best experience when streaming video over mobile connections on Smart’s network, making Smart the outright winner of the Video Experience award.

The Opensignal study also showed that Smart users observed the fastest average 5G download speeds — 149.9 Mbps, making Smart the winner of the 5G Download Speed award and giving it a lead of 38.8 Mbps (35%) over its nearest competitor.

Smart has also continued its dominance in terms of 4G Coverage Experience. Opensignal said that Smart users were able to find a 4G signal in the most locations out of all the locations visited by their Filipino users and that as a result, Smart is the outright winner of the 4G Coverage Experience award.

“For the first time, we have directly compared the mobile network experience and the 5G experience of our Filipino users in the same report and in another first we have also analyzed the consistency of our users’ experience. Smart is once again the operator to beat in the Philippines,” said Sam Fenwick, Opensignal senior analyst and author of the report.

To support growing mobile data traffic, Smart has deployed base stations nationwide as of end-December 2021, supporting its 4G/LTE and 5G subscribers from Batanes to Tawi-Tawi. This includes around 16,900 3G base stations, 38,600 4G/LTE base stations and 7,200 5G base stations.

Opensignal Awards – Philippines: Mobile Network Experience Report April 2022, based on independent analysis of mobile measurements recorded during the period January 1 – March 31, 2022 © 2022 Opensignal Limited.

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With US help, Japan aims to go from player to power in space

May 23, 2022 | 2:32 pm

GMT189_17_28_For ESA_Thomas Pesquet_SpX-22 departure - 17-35mm — The International Space Station. Image via nasa.gov

TOKYO — Space is a key area of cooperation for Japan with the United States, its closest ally, amid heightened tensions with an increasingly assertive China, which itself aims to become a space power.

Tokyo has said it hopes to put one of its astronauts on the lunar surface — the first non-American — in the latter half of the 2020s as part of NASA’s Artemis program to return humans to the moon.

Japan has an extensive space program, mainly focused on developing launchers and space probes. But it doesn’t have a human flight program and has relied on the United States and Russia to carry its astronauts into space. More Japanese have visited the International Space Station other than citizens of the United States and Russia.

Space cooperation is likely to come up during US President Joseph R. Biden, Jr.’s meeting with Japanese Prime Minister Fumio Kishida, Kyodo news has reported. Mr. Biden is visiting Tokyo this week as part of his first Asian trip since taking office.

Japan’s space ambitions, and investment, are welcome by the United States as it tries to stay ahead of China in a potential new space race. Beijing plans to complete its first space station by the end of this year.

Japan’s space agency, JAXA, last year reopened astronaut recruitment for the first time in more than a decade to revive its pool of aging astronauts.

Japan is due to help the European Space Agency (ESA) build the main habitat module of the US-planned orbiting lunar outpost, Gateway, that will be used in moon landings.

Japan also built the Kibo experiment module on the International Space Station and resupply missions have been lifted into space by its heavy launch rockets.

Japan’s aerospace industry was dismantled at the end of World War Two but it has fostered its space industry through industrial heavyweights such as Mitsubishi Heavy Industries and Mitsubishi Electric.

MHI rockets launching from the Tanegashima Space Centre off the southwestern island of Kyushu have delivered payloads including the Michibiki satellites that have bolstered the US global positioning system (GPS) in Asia.

The launch of the new H3 rocket being developed by MHI and JAXA was delayed earlier this year due to engine problems.

The growth of the US private space industry centered on companies such as Elon Musk’s SpaceX has transformed the market for launch services.

Japan also aims to cultivate its space startup scene with businesses including space debris removal company Astroscale and Ispace, which is developing landers and rovers for lunar exploration.

Billionaire Yusaku Maezawa became the first private passenger to visit the ISS in more than a decade after launching on a Soyuz rocket in December. — Reuters

Australia’s new PM Albanese sworn in, ahead of Quad meet

May 23, 2022 | 2:03 pm

Anthony Albanese, leader of Australia’s Labor Party, addresses supporters after incumbent Prime Minister and Liberal Party leader Scott Morrison conceded defeat in the country’s general election, in Sydney, Australia May 21, 2022. — REUTERS

SYDNEY — Australia’s Labor Party leader, Anthony Albanese, was sworn in as the country’s 31st prime minister on Monday, promising to bring the country together after a fractious election campaign as he vowed to tackle climate change and inequality.

Labor returned to power after nine years in opposition as a wave of unprecedented support for the Greens and climate-focused independents, mostly women, helped end nearly a decade of rule by the conservative coalition in Saturday’s general election.

“I look forward to leading a government that makes Australians proud, a government that doesn’t seek to divide, that doesn’t seek to have wedges but seeks to bring people together,” Mr. Albanese said during his first media briefing after taking charge as the prime minister.

Although votes are still being counted and the makeup of government has yet to be finalized, Mr. Albanese was sworn in by Governor-General David Hurley at a ceremony in the national capital, Canberra so he could attend a key meeting of the “Quad” security grouping in Tokyo on Tuesday.

India, the United States, Japan, and Australia are members of the Quad, an informal group that Washington has been promoting to work as a potential bulwark against China’s increasing political, commercial and military activity in the Indo-Pacific.

Mr. Albanese said the country’s relationship with China would remain “a difficult one” ahead of the summit with US President Joseph R. Biden, Jr., and the prime ministers of Japan and India.

Deputy Labor leader Richard Marles and three key ministers — Penny Wong in foreign affairs, Jim Chalmers as treasurer and Katy Gallagher in finance — were also sworn in, with Wong to join Albanese on the Quad trip.

WORKING CLASS CARD
Labor’s campaign heavily spotlighted Mr. Albanese’s working-class credentials — a boy raised in public housing by a single mother on a disability pension — and his image as a pragmatic unifier.

Center-left Labor still remains four seats short of a majority of 76 in the 151 seat lower house, with about a dozen races too close to call, according to television channels.

Independents or Green party looked set to win at least 15 seats, ABC election analysts projected.

So-called “teal independents” campaigning in affluent, Liberal-held seats on a platform of climate, integrity and equality, could hold significant sway.

Monique Ryan, an independent who looked to have unseated outgoing Treasurer Josh Frydenberg, said climate was the most important issue to constituents in her seat.

“We listened to what people wanted, we listened to their values and their desires, and we put together a platform that reflected those.”

Mr. Albanese said he hoped Labor would get enough seats to govern on their own but added he had struck deals with some independents in which they would not support no-confidence motions against his government. The swearing-in of the full ministry will happen on June 1, he said.

Official results could be several days away, with the counting of a record 2.7 million postal votes under way.

Australian financial markets offered a muted reaction to the election verdict on Monday, with the outcome already priced in and no radical change in economic course expected.

“Our economic forecasts and call on the (Reserve Bank of Australia) are unchanged despite the change of national leadership,” economists at Commonwealth Bank of Australia said. — Renju Jose/Reuters

Millions at risk as India’s severe heatwave exposes cooling gaps

May 23, 2022 | 1:35 pm

NOIDA, India — As the scorching sun beat down on his fruit cart, Mohammad Ikrar dreaded another day of tossing out dozens of rotting mangoes and melons — a regular practice now as India grapples with an unprecedented heatwave.

The 38-year-old does not own a refrigerator, meaning his fruit quickly spoils. By the end of the day, any leftover produce is usually only good to be fed to passing stray cows.

Since April, Mr. Ikrar said he has lost up to 3,000 rupees ($39) a week — nearly half of his average weekly earnings.

“This heat is torturous. But if I want to buy an AC (air conditioner) or fridge one day, I have to do this,” said Mr. Ikrar, wearing a full sleeve shirt and white headwrap to keep cool in the 44 degrees Celsius (111.2F) heat.

At home, Mr. Ikrar and his family suffer hours-long power cuts day and night, rendering the ceiling fan useless in their one-room house in Noida, a satellite city of New Delhi.

He sends all three of his children to a school fitted with air coolers for “respite” from the heat.

“I sweat all day, then sweat all night. There is no way to properly cool off. I haven’t experienced anything like this since I moved here eight years ago,” he said.

Mr. Ikrar provides a snapshot of the threat Indians face from a lack of access to cooling amid widespread blackouts.

Almost 323 million people across the country are at high risk from extreme heat and a lack of cooling mechanisms such as fans and refrigerators, found a report released on Tuesday by Sustainable Energy for All (SE4ALL), a UN-backed organization.

India topped a list of “critical” countries, also including China, Indonesia, and Pakistan, which have the largest populations facing heat-related dangers ranging from immediate overheating deaths to impacts on food security and livelihoods.

Temperatures in the New Delhi area soared above 49C (120F) in some regions last week after India recorded its hottest March in 122 years and an unusually hot April.

Temperatures are expected to cool as monsoon rains arrive in June.

‘WORRYING URBAN TRENDS’

India’s electricity demand has hit a record high with a surge in the use of air conditioning triggering the worst power crisis in more than six years.

But, like Mr. Ikrar, not everyone can beat the heat.

Although nearly all households in India have access to electricity, only a fraction of its 1.4 billion population owns any cooling appliances, found SE4ALL.

As demand for cooling appliances will soar in coming years, it will also add pressure to India’s overstretched electricity systems and lead to a potential increase in emissions, said Brian Dean, head of energy efficiency and cooling at SE4ALL.

“(This) in turn further exacerbates the risk of longer and more extreme heatwaves,” he told the Thomson Reuters Foundation.

He urged authorities to quickly implement the India Cooling Action Plan, launched in 2019, which aims to cut cooling demands by up to 25% by 2038 through measures including developing new cooling technology and designing buildings with natural airflow.

Scientists have linked the early onset of an intense summer to climate change, and say more than a billion people in India and neighboring Pakistan are in some way at risk from the extreme heat.

SE4ALL found Pakistan’s largest city of Karachi — along with many others including Mumbai and Dhaka in South Asia — are among those most at risk from inadequate cooling.

Farhan Anwar, a Karachi-based urban planning consultant, said the city’s poor were the main victims of extreme heat, likely caused by the so-called “urban heat island effect” in which concrete-heavy landscapes push up temperatures.

“Unplanned densification, automobile intensive mobility choices and rapidly reducing green cover are worrying urban trends,” Mr. Anwar said, calling for action to boost green spaces.

ACTION NEEDED

In India, government data shows at least 25 people have died from heat stroke since late March, the highest toll in the past five years.

The official number is just “the tip of the iceberg”, said Dileep Mavalankar, head of the Indian Institute of Public Health, a private university in Gandhinagar in the western state of Gujarat.

Heat is a largely invisible killer which can be hard to pinpoint as a cause of death, he said, especially as it often affects elderly and unwell people and can be caused by indirect exposure such as being trapped in small, poorly ventilated homes.

Such indirect exposure cases make up about nine in 10 heat deaths, he said, with India likely counting only about 10% of the true total.

Mr. Mavalankar helped implement South Asia’s first Heat Action Plan (HAP) in Ahmedabad in Gujarat in 2013, after the city saw more than 1,300 deaths in a 2010 heatwave. He credited the HAP for saving up to 1,200 deaths every summer.

The HAP, which includes early warning text messages to mobile phones, has expanded to nearly two dozen heatwave-prone states and more than 130 cities and districts.

The plan also directs people to seek respite from heatwaves in “cooling centers” such as air-conditioned public buildings, shops and malls, temples, and parks. For some, they can be life-saving.

Mr. Mavalankar and SE4ALL’s Mr. Dean both called for the broader use of “cool roofs” with reflective surfaces or coatings to reduce temperatures in low-income and informal housing.

From building heat-resistant homes to creating more green spaces, Mr. Mavalankar said prompt action is needed to help the poor and vulnerable survive a hotter world.

“Temperatures may increase by three to five degrees in coming summers,” he warned.

“We have to prepare right now.” ($1 = 77.6850 Indian rupees) — Annie Banerji/Thomson Reuters Foundation

What is on (and off) the agenda of the WHO Assembly?

May 23, 2022 | 1:02 pm

GENEVA — More than 100 world health ministers will meet in Geneva next week for the first in-person assembly of the World Health Organization (WHO) in three years as the United Nations agency seeks to define its future role in global health policy.

The agenda of the World Health Assembly (WHA) is the most packed in the WHO’s 75-year history and is seen as an historic opportunity to move on from the coronavirus disease 2019 (COVID-19) pandemic, which has led to 15 million deaths, and prepare for the next global outbreak.

However, many of the most pressing topics, such as reforms of the rules around disease outbreaks, will be postponed for later or discussed only in the corridors.

Here’s a summary of what will and won’t be discussed:

ON THE AGENDA

WHO FUNDING BOOST

Donors agreed on a “pivotal” deal last month to gradually raise their mandatory contributions to the WHO budget to reach 50% of the budget by 2028–2029 or 2030–31. In return, the WHO agreed to study their reform proposals.

Currently, their set fees represent just a fraction (16%) of the WHO’s total budget, which means it cannot fund some programs since the money is earmarked for donors’ pet projects. The assembly is expected to approve the deal on Tuesday.

RE-ELECTION OF TEDROS

WHO’s Ethiopian Director-General Tedros Adhanom Ghebreyesus is all but certain to be re-elected via a secret ballot on Tuesday, having overcome criticism from his own government and a crisis last year following sexual abuse reports against WHO staff in Congo.

During the assembly, Mr. Tedros is also set to renew the global health agency’s main “triple billion” goals that aim to boost universal health coverage, improve health and well-being and protect people better in health emergencies.

UKRAINE

The WHO’s Europe region passed a resolution against Russia this month and asked Mr. Tedros to prepare a report on Ukraine’s health emergency.

Members are also preparing a resolution to be submitted to the assembly, although diplomats say it will stop short of suspending Russia’s voting rights, as some initially sought.

IHR REFORMS

Reforms to the legally-binding rules that govern countries’ obligations on public health emergencies, the International Health Regulations (IHR), will be raised.

However, the focus will be on a US-led effort to expedite the application of future reforms from 24 months to 12 months, WHO principal legal officer Steve Solomon said.

Negotiations on other proposed changes will take place later amid initial opposition from some members, diplomats said.

OFF THE AGENDA

COVID ORIGINS

The WHO tasked a scientific advisory panel with probing the origins of the SARS-CoV-2 virus after a preliminary investigation into early COVID-19 cases in China last year left some questions unanswered. A WHO spokesperson said the panel’s report was expected soon but would not be released as part of the assembly.

REFORM OF RULES

Most of the IHR reform negotiations will take place in the two years following the meeting, diplomats say.

These include sensitive items proposed by Washington like the deployment of expert teams to outbreak sites and a new compliance committee to monitor implementation of the rules, a WHO document showed.

Russia has also submitted reforms, diplomats say.

PANDEMIC TREATY

The IHR are widely seen as insufficient for dealing with a global pandemic and Mr. Tedros is seeking a new pandemic treaty. Proposals for the new pact might include rules on vaccine-sharing and a proposed ban on wildlife markets.

Negotiations are set to continue in June and a final treaty, whose legal status is yet to be determined, would not be ready until 2024.

PANDEMIC FUND

The Group of 20 (G20) has agreed to set up a multi-billion-dollar global fund for pandemic preparedness that will be set up outside of the WHO, probably at the World Bank. WHO’s role in the fund is still being decided and it is not on the agenda for the assembly. — Emma Farge and Jennifer Rigby/Reuters

Ukraine top of the agenda in Davos as business leaders gather

May 23, 2022 | 12:35 pm

DAVOS, Switzerland — Russia would normally have its own “house” at the World Economic Forum (WEF) as a showcase for business leaders and investors.

This year the space on the dressed-up main street in Davos has been transformed by Ukrainian artists into a “Russian War Crimes House,” portraying images of misery and devastation.

Russia has denied allegations of war crimes in the conflict.

Ukraine is top of the agenda for the four-day meeting of global business leaders, which kicks off in earnest on Monday with a video address by Ukrainian President Volodymyr Zelenskyy.

“This is the world’s most influential economic platform, where Ukraine has something to say,” Mr. Zelenskyy said in his daily video address on Sunday night.

As the WEF meeting emerges from a coronavirus pandemic hiatus of more than two years, a deferral from January to May means that attendees are surrounded by spring flowers and verdant slopes rather than navigating icy streets.

But not only the weather is different in 2022, with Russian politicians, executives and academics entirely absent.

Russian institutions such as its sovereign wealth fund, state banks and private companies have in previous years thrown some of the most glitzy parties, serving black caviar, vintage champagne and foie gras.

They even hired Russia’s most prominent musicians and pop stars to perform for top chief executives.

MARKET MELTDOWN

Aside from the Ukraine crisis, the post-pandemic recovery, tackling climate change, the future of work, accelerating stakeholder capitalism and harnessing new technologies are among the topics scheduled for discussion at Davos.

European Commission President Ursula von der Leyen, German Chancellor Olaf Scholz and NATO Secretary-General Jens Stoltenberg are among the leaders due to address the meeting.

On the business agenda, discussions are likely to focus on the souring state of financial markets and the global economy.

After a sharp bounceback from the downturn triggered two years ago by the onset of the pandemic, there are now myriad threats to that recovery, leading the International Monetary Fund to downgrade its global growth forecast for the second time since the year began.

Inflation due to hobbled supply chains emerged as a problem last year, particularly in the U.S. economy.

That has been compounded since the beginning of 2022 by events including Russia’s invasion of Ukraine and waves of coronavirus disease 2019 (COVID-19) lockdowns across China that have stalled a recovery.

‘DEFINE TOMORROW’

The Ukrainian artists are hoping to get their message of fighting for a better future to world leaders in Davos.

Visitors are confronted by images such as a badly burned man in Kharkiv after Russian shelling and a film made up of thousands of pictures of dead civilians and bombed houses.

“This is a place where all influencers and all decision-makers of the world come together,” the artistic director of the PinchukArtCentre in Kyiv, Bjorn Geldhof, told Reuters TV.

“What is happening in Ukraine will define tomorrow.”

Russian President Vladimir Putin calls the invasion of Ukraine a “special military operation” to disarm the country and rid it of radical anti-Russian nationalists.

Ukraine and its allies have dismissed that as a baseless pretext for the nearly three-month war, which has killed thousands of people, displaced millions and shattered cities

While the WEF meeting may not be back to pre-pandemic levels, with Zurich’s airport expecting the number of flights to be about two-thirds of previous levels, its return comes as a welcome relief to the ski resort’s hotels and restaurants.

“It is another step back to normality,” Samuel Rosenast, spokesperson for the local tourism board, said last week. — Sabine Siebold/Reuters

At least seven dead after blaze on Philippine passenger ferry

May 23, 2022 | 12:04 pm

The remains of the MV MERCRAFT 2 is seen at Baluti Island, Brgy. Cawayan, Real, Quezon, May 23. -- Courtesy of Philippine Coast Guard Facebook page

MANILA – Seven people have died after a high-speed Philippine ferry carrying 134 people caught fire on Monday, with seven passengers still missing, the coast guard said.The ship caught fire just before reaching the port of Real in Quezon province, about 60 km (37.28 miles) east of the capital Manila. It had left Polilio Island at 5:00 a.m. local time (2100 GMT Sunday) and made a distress call at 6:30 a.m.Five women and two men had died, while 120 passengers had been rescued, with 23 of them treated for injuries, the coast guard said in a statement.Pictures shared by the coast guard showed people in life vests floating at sea awaiting rescue, while some were taken to safety by a cargo ship in the area. Fire and thick smoke engulfed the two-storey passenger vessel.It was not immediately clear the cause of the fire, but the Philippines, an archipelago of more than 7,600 islands, has a poor record for maritime safety, with vessels often overcrowded and many vessels ageing.In 1987, around 5,000 people died in the world’s worst peacetime shipping disaster, when an overloaded passenger ferry Dona Paz collided with an oil tanker off Mindoro island south of the capital, Manila. — Reuters

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