Posted on

Sponsored briefing: Oman: promoting business through the lens of development

The Sultanate of Oman is proudly recognised as a nation founded on political stability with exceptional prospects for economic growth. Much like the rest of the gulf region, Oman and its business sector is far more than simply ‘developing’ and has been dedicated to the diversification of its economy away from oil production. Oman has undertaken a complete renovation of its laws, regulations and policies relative to commercial activity in the aim of creating a more accessible and fluid environment for economic development and foreign investment. Particularly within the last five years, the nation has welcomed a number of legal amendments that aim to uplift the nation’s growing economy, facilitating the introduction of new industries and opportunities. Continue reading “Sponsored briefing: Oman: promoting business through the lens of development”

Posted on

Sponsored briefing: Insight into Lebanon amid MENAT regional turmoil

Naoum Farah of LAW OFFICES of NAOUM FARAH gives an overview of the Lebanese legal market

Lebanon is renowned for its rich history, diverse culture, confessional political system and strategic location in the Middle East, North Africa and Turkey (MENAT) region. However, the country is currently grappling with many challenges. A devastating port explosion on 4 August 2020, political unrest, the Covid-19 pandemic, a banking crisis, and an ongoing economic downturn are just a few of the difficulties Lebanon has been facing recently.

Political unrest and regional turmoil

Lebanon’s political environment has been marked by internal divisions, power struggles, and the influence of regional forces. Balancing regional dynamics while addressing domestic challenges remains a complex task for Lebanese leaders. The prolonged presidential void in Lebanon, which has persisted since October 2022, and the government resignation following the parliamentary elections on May 2022, have added another layer of complexity to the country’s political landscape.

Lebanon has been significantly impacted by the Syrian refugee crisis. Since the conflict in Syria began in 2011, Lebanon has been hosting more than 1.5 million Syrian refugees (as per the official website of the European Union). Despite its small size and limited resources, Lebanon has one of the highest per capita refugee populations in the world. This influx of refugees has put considerable strain on the country’s resources, infrastructure, economy, and social fabric.

Lebanon’s banking sector, once considered the backbone of its economy, has been embroiled in a severe crisis. Years of economic mismanagement, coupled with corruption and financial irregularities, have led to a confidence crisis in the banking sector. This has resulted in informal capital controls, currency devaluation, and limited access to savings for the Lebanese population.

Lebanese retail businesses have reached a new record low as indicated by the latest update of the index measuring the quarterly evolution of their sales. The index1, which excludes the impact of inflation, has dropped below 1 for the first time (0.87 points) while the nominal value of the index, taken into consideration the inflation, has shown marginal growth. This implies that retailers’ sales have increased in nominal terms due to price increases but have decreased in real terms.

Lebanon’s economic crisis, rooted in years of mismanagement and structural flaws, has deepened in recent years. The country faces soaring inflation, rising unemployment rates, and a depletion of foreign currency reserves. The decline in purchasing power and the erosion of the middle class have further exacerbated social inequality and led to widespread protests demanding economic reforms.

Lebanon finds itself at a critical juncture, navigating a complex web of challenges that have shaken its foundations. The interplay of the port explosion, political unrest, the Covid-19 pandemic, banking crisis, and economic downturn has created a perfect storm, testing the resilience of its people and institutions.

Despite the challenges that have engulfed the nation, Lebanese people are trying to rebuild what has been broken. Lebanon has a highly educated work force, a competitive free market regime and a longstanding ‘laissez-faire’ commercial tradition.

‘Just as the Lebanese people have refused to be defeated, our firm has embraced a similar mindset. Rebuilding is not a simple task, but we are committed to standing by our clients and providing them with the legal support they need.’

Just as the Lebanese people have refused to be defeated, our firm has embraced a similar resilient mindset. We believe that rebuilding is not a simple task, but we are committed to standing by our clients and providing them with the legal support they need during this crucial time.

At our law firm, we understand the importance of staying ahead in an ever-evolving legal landscape. We continually seek out innovative strategies to address the complex challenges faced by our clients. Our team of legal professionals actively engages in ongoing research, monitoring emerging legal trends, and exploring groundbreaking approaches to provide effective solutions.

Summary of the situation in Lebanon at various fields

The legal system in Lebanon is based on a civil law or codified law system, which is distinct from the common law system and has three degrees of jurisdictions (First instance, Appeal and Court of Cassation).

In Lebanon, foreign court rulings are enforced following an exequatur’s procedure. Even in cases where a foreign judgment is recognised by the state, exequatur procedures are necessary to give the judgment an executive force in Lebanon.

Lebanon is an arbitration-friendly jurisdiction. It is a member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The enforcement of international arbitral awards is granted by the president of the first instance competent court.

Since the financial meltdown in the fall of 2019, Lebanon faces judicial paralysis due to judges and courts staff’s intermittent strikes calling for a radical solution to their salary increase and to the lack of electricity and water and non-functioning elevators in Justice palaces and the absence of basic stationery…!

Overview of different company structures in the business world

The Lebanese law allows the establishment of limited liability company (LLC), joint-stock companies (JSC or SAL), holding companies and offshore companies.

The LLC allows the incorporation of a company by a single person.

JSCs can be used in various sectors such as banking and insurance exclusively operating as JSCs. Foreign participation in JSCs is subject to specific requirements, including the composition of the board of directors. The roles of the general director and the chairperson of the board of directors are separate. Board members can be shareholders or non-shareholders. Electronic means, such as audio-visual technology, can be used for board meetings.

Holding companies and offshore companies are joint-stock structures regulated by specific legislative decrees. The ‘New Offshore Law’ amended the regulations for offshore companies, allowing for the incorporation of a company with just one shareholder and allowing all board members to be foreigners. Foreign non-resident chairpersons/general managers are exempt from work and residency permit requirements.

Moreover, Lebanon is ranked 75th in the world for having a favourable ecosystem for startups in the Global Startup Ecosystem Index by StartupBlink research centre’s, 2023 edition.

Foreign Investments in Lebanon

Foreign investments in Lebanon are regulated by Law No. 360/2001 on Investment. The Investment Development Authority of Lebanon (IDAL) is responsible for promoting Lebanon as an attractive investment destination and facilitating investments in the country. The law divides the country into three investment zones (A, B, and C), each with different incentives and tax exemptions based on criteria such as investment size, sector of operation, job creation, and geographical location. Eight sectors, including industry, media, technology, telecommunications, tourism, agriculture, agro-industry and informatics are covered by the law.

Foreign investors generally receive national treatment, meaning they are treated similarly to local investors. However, certain sectors may have restrictions or limitations on foreign ownership or participation. Lebanese nationals have exclusive rights in the manufacture and trade of weapons and the ownership of political newspapers and broadcast media. State-owned enterprises (SOEs) operate the landline phone networks and energy transmission, which are restricted to national and foreign investments. Companies providing public utility services are required by law to have one-third of their capital shares held by Lebanese individuals.

Bilateral Investment Treaties

Lebanon has signed so far 54 bilateral investment treaties (BITs) for the promotion and protection of investments with 50 countries.

These treaties are designed to encourage and safeguard foreign investments by providing legal protections and guarantees to investors from the signatory countries. BITs grant investors from a contracting state certain guarantees, including fair and equitable treatment, protection from expropriation, and the free transfer of funds. In addition, they provide investors recourse to arbitration, often under the auspices of ICSID, to resolve disputes with the host state.

Furthermore, foreign investors must comply with labour and employment laws in Lebanon. This includes obtaining work permits for foreign employees, adhering to minimum wage and working hour regulations, and fulfilling obligations related to social security and labour rights.

The energy sector in Lebanon:

The energy sector in Lebanon is currently reliant on the importation of petroleum products as the country lacks domestic oil and gas production. However, the sector is seen as promising, with potential for Lebanon to become an energy exporter. The Arab Gas Pipeline presents an opportunity for Lebanon to supply gas to Syria, Jordan, and Egypt, and potentially export to European markets through Turkey.

The legal framework for petroleum exploration and production in Lebanon is governed by several laws, including the Offshore Petroleum Resource Law, the Petroleum Tax Law, and the Transparency Law. Decrees, such as those establishing the Lebanese Petroleum Administration and regulating petroleum activities, also apply.

Under the Offshore Petroleum Resource Law, earnings from oil and gas exploration are required to go into a sovereign wealth fund, which is yet to be established. Disputes in the sector may be resolved through arbitration, following the Rules of Arbitration of the International Chamber of Commerce (ICC), with Lebanese law being applied. The law also outlines a procedure for resolving technical disputes through a sole expert, who must be mutually agreed upon by the parties.

The recent demarcation of Lebanon’s maritime borders with Israel on 27 October 2022, has reassured investors and created a more stable operating environment. A consortium consisting of Total, Eni, and Novatek (later replaced by QatarEnergy) has been awarded a licence for drilling operations in blocks four and nine of Lebanon’s waters. The exploration efforts in Lebanon’s offshore areas, particularly regarding gas, hold potential for addressing electricity outages and government budget deficits in the country and implications for Lebanon’s energy sector.

Environmental protection

Lebanon has been grappling with a waste management crisis since the closure of the Naameh landfill in 2015, with temporary measures implemented instead of addressing the root causes. The Syrian conflict has also had a detrimental impact on Lebanon’s air quality, leading to increased pollution.

Finding a long-term solution to the waste management crisis has been challenging due to political disagreements, funding difficulties, and the lack of a waste management authority. Sustainable waste management practices, including waste reduction, recycling, and modern landfill facilities, are crucial to addressing this crisis. On a positive note, there has been a growing demand for solar installations in Lebanon, driven by the need for reliable and affordable power supply. This shift to solar energy not only enhances energy security but also reduces greenhouse gas emissions, contributing to environmental protection.

Real estate

The Lebanese constitution guarantees the protection of private property and ownership. Individuals have the right to own, use, and dispose of property as they see fit, within the boundaries of the law. Foreigners are allowed to acquire up to 3,000sq m2 of real estate without a permit, and acquisitions larger than this require Cabinet’s approval. The Real Estate law stipulates that the cumulative real estate acquisition by foreigners cannot exceed 3% of the total land in any district. Additionally, in the Beirut region, the cumulative real estate acquisition by foreigners is limited to 10% of the total land area. Furthermore, Lebanese law prohibits individuals without internationally recognised nationality (Palestinian refugees) from purchasing property in Lebanon.

Banking sector

Lebanon’s banking industry has historically played a key role in the nation’s economy. Lebanese banks have been essential in attracting deposits thanks, inter alia, to the provisions related to bank secrecy and the absence of any legal restriction on a foreigner or a non-resident to open a bank account in local or foreign currency.

Commercial banks and investment banks operate in Lebanon. They cover the whole territory, and there are about 60 banks (available online at www.bdl.gov.lb) with branches covering the entire country.

‘Lebanon is ranked 75th in the world for having a favourable ecosystem for startups in the Global Startup Ecosystem Index by StartupBlink research centre’s, 2023 edition.’

In recent years, namely starting from 2016, the Lebanese financial crisis began to show its features when the Central Bank (BDL) implemented what it called ‘financial engineering’ in exchange for very high interest rates. In September 2019, the first signs of a currency shortage appeared. In October 2019, demonstrations took place for several weeks across the country to protest against corruption. Banks introduced restrictions on withdrawals and transfers of money abroad, restrictions on accounts in Lebanese pounds, created the ‘Lollar’2 currency – by virtue of a BDL Circular no. 151 – to oblige depositors to withdraw their US deposits in Lebanese pounds at a rate lower than that of the black market. On 7 March 2020, Lebanon announced that it would default on its nearly $31bn debt. Alongside, there has been a rapid deterioration of the Lebanese currency value (Lebanon had several exchange rates) as well as a significant increase in inflation.

Inflation rose by 81.4% between the fourth quarter of 2022 and the first quarter of 2023. Depositors, investors, and the public have lost confidence in the banking system and its ability to safeguard their funds.

Amid these challenges, remittance inflows from immigrants have emerged as a crucial lifeline, (between US$6bn and $7bn over the past decade).3 According to a report from the UNDP, remittance inflows from immigrants to Lebanon represent 37.8% of the GDP in 2022, placing Lebanon at top countries in the MENA region ‘having the highest remittances to GDP ratio’.4

In March 2023, an International Monetary Fund (IMF) mission visited Beirut, to assess the economic situation, and discuss policy priorities. Stuff Level Agreement was signed by the Lebanese government and IMF5 which is facing strong opposition. The mission emphasises the urgent need for comprehensive reforms in Lebanon to achieve stability and economic growth. The proposed package of reforms includes adopting a unified market exchange rate, adjusting taxes to inflation, and initiating public sector reforms. Additionally, a credible restructuring of the financial system, including capital control, acknowledging losses, reducing the number of banks, protecting small depositors, and modernising the legal and institutional framework, is essential.

It is crucial to rebuild trust in the financial industry as it plays a vital role in restoring stability and attracting investments to the country. By implementing the necessary governance and economic reforms, stabilising the currency rate, and recapitalising the financial system, Lebanon can attract foreign investments and pave the way for sustainable growth. These measures will not only address immediate challenges but also lay the foundation for long-term stability and prosperity.

Anti-corruption

Lebanon enacted an Anti-Money Laundering and Terrorism Law in 2015 and Illicit Enrichment Law in 2020. Nevertheless, corruption remains a significant challenge in Lebanon. It often arises within the scope of the tenders and the ministries that issue them. Despite having laws in place to address officials’ corruption and illicit wealth (the Illicit Wealth Law; Legislative Decree No. 38/1953), enforcement is often ineffective as the law does not extend to political parties but is limited to state employees and municipality members. Anti-corruption measures, including lifting bank secrecy for top government officials, is key to fighting corruption. However, it is not effectively implemented.

Lebanese criminal law provides penalties for officials’ corruption. The fight against corruption in Lebanon requires sustained efforts to ensure effective implementation of anti-corruption laws and the promotion of transparency and accountability.

Competition law

In March 2022, Lebanon’s Parliament enacted its first competition law aimed at addressing monopolies and encouraging foreign investment.

The law invalidates exclusive licences granted to domestic companies in specific sectors and requires the creation of a National Competition Authority (NCA) responsible for regulating competition.

The effective implementation of this law will determine its effectiveness in limiting monopolies and attracting foreign investment.

Focus on LAW OFFICES of NAOUM FARAH

The Law Offices of Naoum Farah, founded in 1975 by Mr Naoum Farah, is a well-established legal firm in Beirut, Lebanon. Known for its professionalism and excellent service quality, the firm is regarded as one of the leading multidisciplinary law firms in the country.

The firm specialises mainly in the following areas: commercial and corporate matters, litigation and dispute resolution, media, advertising, intellectual property, hospitality, mergers and acquisitions, commercial distribution, real estate, financial crimes and labour law. It represents the interests of both national and international clients and has extensive experience in terrestrial and satellite TV broadcasting, satellite law, new technologies, film and television production and distribution, media entertainment, and sports.

Several of its largest clients include prominent companies covering several areas of law. It regularly represents and succeeds in criminal complaints, civil and commercial disputes and personal injury. It recently restructured two local family groups following the passing away of their founding members, which included the implementation of a new corporate governance structure for all subsidiaries.

Notable cases handled by the firm include representing prominent individuals such as a Lebanese businessman and former members of the Parliament and former ministers. It is representing as well other individuals involved in wide-ranging legally significant cases, including:

  • a well-known media broadcasting company’s ownership and then with one of the most powerful political parties in Lebanon;
  • Mr Michael and Peter Taylor, Mr G. Zayek, the team involved in Mr Carlos Ghosn’s exit from Japan to Beirut in December 2019;
  • 2020 Beirut Port’s blast investigations before the investigating judge;
  • the assassination of former president of the republic Mr Bashir Gemayel’s trial before the Court of Justice; and
  • public sector corruption and squandering of public funds prosecutions against ministers, directors-general of public institutions, and public officials.

Overall, the Law Offices of Naoum Farah has a strong reputation for its expertise, professionalism, and successful representation in a wide range of legal matters, both domestically and internationally.

The Founder and Head of arbitration:

Mr Naoum Farah

The senior lawyers:

Mrs Roula El Hajj
Mr Weygand Farhat
Mrs Nada Farhat
Mrs Mirna Hneiny
Ms Roula Tayar

Footnotes

1. Index developed by Beirut Traders Association and Fransabank (June 2023)
2. It is a Lebanese dollar, a contraction of Lebanese pounds and dollars, as opposed to ‘fresh dollars’ which retain the value of the American currency.
3. L’Orient-Le jour (09/06/2023) ‘Envoi de fonds vers le Liban: de plus en plus informels et de plus en plus conséquents’
4. www.undp.org/sites/g/files/zskgke326/files/2023-06/remittances_report_june_2023_0.pdf
5. The Capital Control Law remains a draft law.

Posted on

Sponsored briefing: Doing business in Iraq

When considering business opportunities in Iraq, it’s important to acknowledge the potential for economic growth and the favourable investment environment. Iraq stands out as the fastest-growing Arab country, attracting the attention of global investors.

An indication of Iraq’s progress is its successful hosting of the Khaleeji 25, a prominent international event. This achievement has directly contributed to the country’s economic advancement, enticing a significant influx of foreign investors who recognise the vast array of opportunities across various sectors. Furthermore, Iraq has fostered collaborative partnerships by concluding multiple contracts with foreign investors and countries, emphasising its commitment to attracting external capital and stimulating economic expansion. Continue reading “Sponsored briefing: Doing business in Iraq”

Posted on

Pride Month 2023: ‘I was told that I needed to tone my “gayness” down in order to be successful’

Allen & Overy DE&I ambassador Justin Farrance on the challenges still facing the City law LGBTQ+ community and how social media can drive change.

You use social media as a key platform for advocating for LGBTQ+ representation – what led you to start doing this? Continue reading “Pride Month 2023: ‘I was told that I needed to tone my “gayness” down in order to be successful’”

Posted on

Pride Month 2023: ‘Most clients don’t care whether you’re black, pink, green, red with blue spots, LGBTQ+ or not – they just want someone to win the case’

Old Square Chambers’ employment and discrimination barrister Robin White talks to Amy Ulliott about transitioning at the Bar, the need for visible role models and why the official gender recognition process needs to change

Did you find it easy to come out at work, and were there any particular barriers that you faced? Continue reading “Pride Month 2023: ‘Most clients don’t care whether you’re black, pink, green, red with blue spots, LGBTQ+ or not – they just want someone to win the case’”

Posted on

Revolving Doors: Global 100 firms lead on international hires

There was a strong international slant to last week’s round of lateral partner appointments, with firms making key hires in the US, UAE, Australia, and Hong Kong.

In the US, Bryan Cave Leighton Paisner (BCLP) has hired a six-partner team of IP lawyers, led by Song Jung, alongside corporate partner Jeffrey Haidet from Dentons. Jung joins as global chair of patents, having previously founded the global intellectual property and technology group at Dentons. Standout matters for Jung include advising on the G Chem v SKI trade secrets case, which was settled for $1.8bn. Haidet was Dentons’ US chair, and advises national and multinational companies on financial structuring, joint ventures, mergers and acquisitions, transactions, strategic alliances, and industry consolidation. Continue reading “Revolving Doors: Global 100 firms lead on international hires”

Posted on

Dealwatch: ‘Heading back in the right direction’ – positive mood continues for public M&A as UK elite line up on big-ticket deals

Briefcase

In the first half of June, the UK economy suffered another blow. Global soda ash producer, WeSoda, made the decision to pull out of its $7.5bn London IPO, citing a lack of investor demand, leading to criticism of UK investors for being unduly conservative and tight-fisted with their cash.

However, there is a glimmer of hope on the horizon in the public M&A arena, in the form of some recent promising, high-value transactions. Continue reading “Dealwatch: ‘Heading back in the right direction’ – positive mood continues for public M&A as UK elite line up on big-ticket deals”

Posted on

‘An excellent foundation from which to build’: Clifford Chance appoints new office managing partner in New York

Less than two weeks after Clifford Chance revealed the opening of a new office in Houston, the firm has announced the appointment of long-time CC real estate lawyer Ness Cohen as managing partner for its New York office, while also continuing to serve as real estate practice leader of the Americas.

Speaking to Legal Business, Cohen said: ‘The firm decided that it would make sense to have a New York office manager generally, especially with New York being one of our largest offices and also with our growth ambitions in the US.’ Continue reading “‘An excellent foundation from which to build’: Clifford Chance appoints new office managing partner in New York”

Posted on

‘Our strategy is targeted and curated, and 100% client-centric’: Freshfields continues US hiring spree

Freshfields Bruckhaus Deringer

Following the recent hires of David Sewell and Damian Ridealgh to its New York office, Freshfields has announced six new partner hires across the US.

Heather Lamberg and Tina Sessions have joined the firm’s antitrust team in Washington DC and Silicon Valley. Lamberg, who previously worked at Winston & Strawn and Shearman & Sterling, advises on a range of antitrust cases, from class actions to criminal cartel investigations. Sessions, meanwhile, moves from Wilson Sonsini and advises on business-critical disputes with competitors and enforcement authorities, focusing on the technology sector. Continue reading “‘Our strategy is targeted and curated, and 100% client-centric’: Freshfields continues US hiring spree”

Posted on

‘I want the firm to be more ambitious and more confident’: Stephenson Harwood rebounds with double-digit revenue growth

Eifion Morris

Stephenson Harwood has reported an 11% rise in turnover to £228m from £206m for 2022/23, the firm’s highest-ever revenue. It comes after the firm reported largely flat financials for the year 2021/22.

This time around, profit per equity partner (PEP) is up 6% to £725,000 from £685,000 in 2021/22. The firm has added 22 equity partners, with 11 lateral hires and 11 internal promotions over the last year, while four partners have retired from the partnership. Continue reading “‘I want the firm to be more ambitious and more confident’: Stephenson Harwood rebounds with double-digit revenue growth”

Posted on

GC Summit Singapore 2023 Keynote Speech: Lily Tsen

Thank you, Joe, Ben, and The Legal 500 team for inviting me to give this keynote address to the 2023 Legal 500 GC Summit, here in beautiful Singapore.  

Good morning to every one of you. I am Lily Tsen, the regional general counsel for the Asia Pacific region of Amcor Flexibles – a global leader in developing and delivering responsible packaging solutions. 

 It is an absolute honour and privilege to be amongst such esteemed and brilliant legal minds. I am fortunate and humbled to have been recognised in the 2019 and 2022 GC Powerlists for Southeast Asia, and more recently in the inaugural Green Southeast Asia Legal 500 GC Powerlist for 2023. 

When I was asked to give this keynote address, my immediate reaction was why me?  And what do I talk about?  I can assure you that this address is certainly not focused on me; rather, it is focused on you, your power, and your potential.   

 I want to start by showing you this picture produced by The Myers-Briggs Company.  Some of you may have seen it before in a different context. What do you see?  I will give you a few moments.   

I can probably guess what you see – a strange land mass floating in the sky; to the right, you see a boy fishing; to the left, you see a romantic couple; you see birds, clouds, butterflies, and a hot air balloon. You also see some mountains and trees. You see all these things – so what? 

 As lawyers, we tend to state what is in the picture, focusing on objective details, the reality, and the specifics; what is here, what is now, and what is realistic. This perspective is largely as a result of both the traditional schools under which we have been trained, and traditional expectations. 

 As in-house lawyers, leaders, influencers, and team members, how do we see, inspire, and engage – not only ourselves – but our teams, organisations, and broader communities, with imagination?  To see the big picture and anticipate the future?  This is the challenge and the opportunity for evolution, that we all need to embrace.  And I have no doubt that we have all been on that journey.   

Who amongst us can remember our principals telling us to “stay within the guardrails of what you have been asked to deliver”; we have been conditioned to give the client what they request because they are always right. “Don’t be too creative because creative lawyering won’t win in court”, and “keep working on your attention to detail” are very familiar statements that governed our training years. 

This is all well and good if we continue to live by the traditional belief that our role as lawyers is to advocate for our clients, and zealously represent their instructions.  But that is not who we are, nor is that who we want to be. To continue to be this would be to impair what I truly believe is a vital community organ. 

Whether we like it or not, as general counsel and in-house lawyers, we as the connective tissues across our organisations.  We hear about issues at various points in the evolution of a matter – be it a change in regulation, litigation, M&A deal, or employee dispute – and work with stakeholders (each of whom bring their unique perspectives) to create solutions. That is not all. We are also entrusted, in confidence with what I would call “special” information.  But again, you’re probably asking – so what? 

I remind you of the saying, “With knowledge comes power, and with power comes great responsibility”. This, my friends, is who we are.  As general counsel and in-house lawyers, we are all charged with the responsibility to hold firmly onto our moral compass, and ensure it continues to work, so that it can always display the “True North”.  This is, of course, in addition to being an enabler and strategic business partner, aligned with core business activities and goals. This responsibility must also be carried out while providing clear, concise, pragmatic, and commercially astute legal advice which aligns with our stakeholders’ appetites and tolerances for risk in a language which non-legal eagles, across cultures, can understand.   

Communicating with these non-legal eagles can be challenging, and at times it can feel like they are pecking right at the glass of our compass to the extent that it might break. However, I implore you to stand firm, and remain true to the values that are important to you and your team.   

Whether it is — 

  • Striving to achieve more with less -which we are all constantly challenged to do – through the introduction of alternative sourcing solutions. 
  • Giving yourself and your team the much-deserved space needed to rest, develop and grow.  
  • Advocating for the adoption of meeting norms to help set the boundaries as to who should attend meetings, and when.
  • Fighting for a rewards and recognition program which would give your teams the meaningful recognition which they want and deserve – this could simply be by insisting on time during senior management meetings to highlight the great work your team is doing. 
  • Championing investment in diversity, equity and inclusion initiatives that would benefit your organisation and the community as a whole – such as a women’s leadership development program.   

— You play an instrumental role in connecting the dots, not only legally, but from the perspective of an entire enterprise.  I implore you to use your knowledge, power, and spheres of influence to help others to see – and imagine – beyond the immediate picture; to be the agents of the change you want to see. 

Thank you for listening.  I look forward to meeting you through the course of this summit. 

Posted on

‘Carveouts are here to stay’: green energy deals dominate as major players see signs of a bounceback

Briefcase

Early 2023 has been a rough time for deals. In our 2023 Deals Yearbook, for instance, citing Dealogic, we noted a decline in both the volume and value of deals. Q1 2023 saw just 601 deals totaling $19.6bn in the UK, while globally there were 9,400 deals worth a little under $591bn. This marks the lowest UK Q1 since 2009, and the lowest global Q1 since 2012.

Recent weeks, though, have seen an uptick in multibillion-dollar activity. And, while it is certainly too early to declare that we are out of the woods, the mood among corporate lawyers has lifted: more ‘cautious optimism’ than ‘doom and gloom’. Continue reading “‘Carveouts are here to stay’: green energy deals dominate as major players see signs of a bounceback”

Posted on

Sustainable finance hub Singapore

David Koehne (DK): What climate commitments has the government of Singapore made to date and which interventions is it implementing?

Lee Kee Yeng | Co-Head of ESG & Public Policy Practice | Allen & Gledhill

Allen & Gledhill (AG): The Singaporean government recognises that climate change is an existential challenge for Singapore. There is a need to protect Singapore against the impact of climate change and contribute to global efforts to mitigate carbon emissions.

Singapore’s efforts towards mitigating climate change have seen steady progress over the years. With respect to emissions, Singapore pledged to reduce its emissions intensity by 36 per cent, in line with the Paris Agreement. In 2020, the government further committed to peak emissions goals by 2030 and 2050; while in 2022, it announced its ambition to achieve net zero emissions by or around mid-century. Overall, Singapore aims to halve its 2030 peak greenhouse gas emissions by 2050, with the aim of achieving net-zero emissions “as soon as viable in the second half of the century”.

To achieve this goal, there has been a whole-of-nation and whole-of-government push towards climate change and sustainability, which has intensified in the last two years. Notably, the government launched a whole-of-nation initiative under the Singapore Green Plan 2030, advancing the agenda on sustainable development. New initiatives under the plan include requiring all new car registrations to be cleaner-energy models from 2030, and aiming for at least 20 per cent of schools to be carbon neutral by 2030 “for a start”, with the rest of the schools to follow.

Another focus of Singapore’s climate mitigation efforts is using less carbon-intensive fuel and improving energy efficiency through transformations across society. The government has implemented several initiatives, such as a carbon tax; the Energy Conversation Act, requiring energy-intensive companies to implement mandatory energy management practices; a green building rating system for evaluating a building’s environmental impact and performance; and an initiative by the Land Transport Authority that aims for 100% clean-energy public transport.

Singapore also takes a whole-of-government approach towards mitigating climate change. Apart from various ministries and government agencies introducing policies, across sectors, which work hand-in-hand to mitigate climate change, in 2021, the government launched its GreenGov.SG initiative, under which the public sector itself would strive to attain ambitious sustainability targets in carbon abatement and resource efficiency and be a positive influence and enabler of green efforts.

DK: What is the role of green finance in achieving the government’s domestic climate goals?

Elsa Chen | Regional Co-Head of Competition & Antitrust Practice and  Co-Head of ESG & Public Policy Practice | Allen & Gledhill

AG: The Singapore government sees green finance to be critical in accelerating the greening of the economy, which is imperative for the net zero transition.

The Monetary Authority of Singapore (MAS) launched its Green Finance Action Plan in 2019 on becoming a leading global centre for green finance. The intention is also to develop a green finance ecosystem in Singapore to serve Asia, with four key priorities:

  1. Strengthening the financial sector’s resilience to environmental risks;
  2. Developing green financial solutions and markets for a sustainable economy;
  3. Harnessing technology to enable trusted and efficient sustainable finance flows; and
  4. Building knowledge and capabilities in sustainable finance.

The Singapore government also announced in the Budget 2022 that the public sector will issue up to $35 billion of green bonds by 2030. Related to this, MAS introduced in June 2022 the Singapore Green Bond Framework, which sets out guidelines for public sector green bond issuances that are aligned with internationally recognised market principles and standards. This Framework comes ahead of the issuance of Singapore’s first green bond to fund infrastructure projects that meet the new framework criteria.

MAS also launched the Green and Sustainability Linked Loan Subsidy Scheme, which aims to support corporates of all sizes, based onshore or offshore, to obtain green and sustainable financing. This includes subsidising the cost of engaging independent service providers to validate sustainability-linked loans, among other green finance products. The grant also encourages banks to make green finance products more accessible to small and medium-sized enterprises.

More broadly, Singapore is building a comprehensive ecosystem for green and transition finance to facilitate Asia’s net zero journey, which includes initiatives to build capabilities in environmental risk management in the financial sector through climate stress tests; provide grants to defray the costs of issuing green and sustainability-linked loans and bonds; support industry efforts to build the infrastructure for a liquid and transparent voluntary carbon credit market in Asia; and deploy technology to address data challenges, such as through an ESG registry to maintain provenance of green certifications and an ESG disclosure platform to allow listed companies to upload corporate sustainability data in a structured and efficient manner.

DK: What sorts of accountability and reporting mechanisms has the government introduced for green products? Are they effective?

Adrian Ang | Partner in the Financial Services Department and co-head of both the firm’s FinTech Practice and  ESG & Public Policy Practice I Allen & Gledhill

AG: On accountability, the Green Finance Industry Taskforce (GFIT) issued a detailed implementation guide for climate-related disclosures by financial institutions, which sets out best practices. The guide focuses on board/management oversight, policies and procedures crucial to managing environmental risk in a systematic and consistent manner, risk identification and assessment criteria, and monitoring. It also considers different approaches for individual sectors.

MAS also published the environmental risk management guidelines in 2020 for banks, insurers and asset management companies to promote the transition to an environmentally sustainable economy. It additionally published information papers in 2022 on a thematic review conducted by MAS in 2021 on selected banks, insurers and asset managers, and highlights emerging and good practices, identifying areas where further work is needed. MAS recognised that institutions are at varying stages of putting in place the relevant risk management processes, and stressed that they must push ahead to set tangible targets to address environmental risk with urgency and ambition.

The banking industry in Singapore has also undertaken its own initiatives to enhance the implementation of responsible financing across the banking sector in Singapore. The Association of Banks in Singapore published guidelines for green financing in the country. They require companies to strictly comply with ESG disclosures when they finance, and provide the principles of financing for issuing green bonds.

DK: How has Singapore developed as a regional green finance hub?

Sophie Lim | Co-Head of ESG & Public Policy Practice | Allen & Gledhill

AG: As a regional finance hub, Singapore has sought to leverage its existing professional services infrastructure to develop further opportunities in green finance. According to MAS, there will be approximately US$200 billion in green investment opportunities in ASEAN by 2030. Over recent years, the government has actively cemented the position of Singapore as a regional green finance hub, developing capabilities in environmental risk management and assessment, strengthening sustainability disclosure practices among both listed and unlisted companies, promoting the issuance of green bonds, and creating a carbon exchange.

MAS introduced the Sustainability Bond Grant Scheme in 2017, which has now been expanded to include social and sustainability-linked bonds. Reflecting Singapore’s status as a hub for foreign financial institutions in developing green finance capabilities, there have been green, social and sustainability bonds issued in Singapore by foreign issuers.

DK: And are there any interesting examples where the jurisdiction has managed to make a tangible impact regionally?

AG: Yes, both in connection with thought leadership and in carbon services and trading.

A well-functioning market for carbon credits is important to support carbonisation efforts. Today, more than 70 carbon services and trading firms use Singapore as a base to serve the region and engage in carbon market activities. The Singapore government is working to develop Singapore as an international carbon trading and services hub with Singapore-based global carbon exchanges such as Climate Impact X and AirCarbon Exchange, and to develop the larger ecosystem by anchoring key activities such as project development, financing and certification in Singapore.

In terms of thought leadership, various public and private players in Singapore are active in conducting research on the development of green finance in Singapore and the region, which positions Singapore as a leader in the region on green finance efforts. The Collaborative Initiative for Green Finance in Singapore has published reports to establish baseline standards for green finance in Singapore, outlining opportunities for green finance, and proposing various recommendations.

DK: What does the future hold for green finance in Singapore? Are there any obstacles, and what would you like to see the government doing that it isn’t currently?

AG: Singapore is an established financial hub in Asia and has tremendous potential to become a hub for green financing in Asia. It has the infrastructure, commitment and thought leadership to do so. This is particularly so with the strong government commitment behind green financing, which is one of the pillars of the Green Plan 2030.

Potential challenges which apply to green financing globally would also be expected in Singapore, such as: transparency of the quality of projects or financial instruments for green investments; burden of reporting in the green bond market; and lack of access for SMEs to the process of issuing green bonds.

However, the Singapore government is already taking steps to address these challenges. In terms of transparency and reducing the reporting burden, and to combat greenwashing, the government is developing analytical tools and providing expertise in identification and assessment of green projects’ risks.