FILE PHOTO: The logo of car manufacturer Tesla is seen at a branch office in Bern, Switzerland October 28, 2020. REUTERS/Arnd Wiegmann/File Photo/File Photo
NEW DELHI, Oct 20 (Reuters) – Tesla Inc (TSLA.O) has urged Indian Prime Minister Narendra Modi’s office to slash import taxes on electric vehicles before it enters the market, four sources told Reuters, ratcheting up demands that faced objections from some Indian automakers.
Tesla wants to begin selling imported cars in India this year but says taxes in the country are among the highest in the world. Its request for tax cuts – first reported by Reuters in July – prompted objections from several local players, who say such a move would deter investment in domestic manufacturing.
Tesla executives, including its head of policy in India, Manuj Khurana, took the company’s demands to Modi’s officials last month in a closed-door meeting, arguing that the taxes were too high, four sources familiar with the discussions said.
During the meeting at Modi’s office, Tesla said that India’s duty structure would not make its business in the country a “viable proposition”, according to one of the sources.
India levies an import duty of 60% on electric vehicles that cost $40,000 or less, and 100% duty on those priced over $40,000. Analysts have said that at these rates Tesla cars would become far too costly for buyers and could limit their sales.
Tesla has separately also put in a request for a meeting between its Chief Executive Elon Musk and Modi, three of the sources said.
Modi’s office and Tesla, as well as its executive Khurana, did not respond to a request for comment.
It is not clear what Modi’s office specifically told Tesla in response, but the four sources told Reuters government officials are divided over the U.S. automaker’s demands. Some officials want the company to commit to local manufacturing before considering any import tax breaks.
Concern about the impact on the local auto industry is also weighing on the government, the sources added.
Indian companies such as Tata Motors (TAMO.NS), which recently raised $1 billion from investors including TPG to boost EV production locally, has said giving Tesla concessions would be contrary to India’s plans to boost domestic EV manufacturing.
One of the sources, who has direct knowledge of the government’s thinking, said: “If Tesla was the only EV maker, decreasing duties would have worked. But there are others.”
The transport minister said this month Tesla should not sell made-in-China cars in India and should manufacture locally instead, but Tesla has indicated it first wants to experiment with imports.
Musk said on Twitter in July that “if Tesla is able to succeed with imported vehicles, then a factory in India is quite likely.”
The Indian market for premium EVs is still in its infancy and charging infrastructure is scarce. Just 5,000 of the 2.4 million cars sold in India last year were electric.
One government official said lowering duties for a limited period to pave the way for Tesla’s entry could “boost India’s investor friendly image and green credentials” while also attracting more investments.
Reporting by Aditi Shah; editing by Philippa Fletcher
Our Standards: The Thomson Reuters Trust Principles.
Any closure could lead to imports with higher carbon costs
‘Carbon leakage’ an issue for leaders at COP26 in Glasgow
Local green goals may be at odds with global targets
STOCKHOLM, Oct 18 (Reuters) – When a Swedish court ordered the country’s biggest cement maker to stop mining limestone by its huge factory on the windswept island of Gotland to prevent pollution, ecologists cheered.
Besides protecting wildlife and water supplies, the ruling could force the plant that makes 75% of Sweden’s cement and is the country’s second biggest carbon emitter to slash output while it finds raw materials elsewhere, or even shut altogether.
That might be good for Sweden’s emissions targets, but not such good news for the rest of the planet.
A government-commissioned report seen by Reuters said it could force Sweden to import cement from countries that pump out more emissions in the overall manufacturing process – or risk massive job losses in the construction industry at home.
“Imports from countries outside the EU would probably lead to larger environmental impacts as a result of lower standards related to CO2 emissions and lower standards in land use,” the report, obtained via a freedom of information request, said.
Sweden’s dilemma encapsulates one the challenges facing nations meeting in Glasgow for the U.N. COP26 climate talks: how to show they are not cutting emissions by simply exporting the problem elsewhere – a phenomenon known as “carbon leakage”.
A rich, stable Nordic democracy, Sweden has long topped international environmental rankings and has managed to cut back on greenhouse gases for years while preserving economic growth on a path towards its target of net zero emissions by 2045.
It has the world’s highest carbon tax at $137 per tonne and is a leader in the use of renewable energy. In 2018, its carbon emissions per head stood at 3.5 tonnes, well below the European Union average of 6.4 tonnes, according to World Bank data.
But the stand-off over the Slite cement plant epitomises the growing tension between local environment goals and the 2015 Paris Agreement signed by nearly 200 countries to try to limit global warming to 1.5 Celsius.
“We have to weigh up the global focus – doing the most for the climate – but also maintain our high ambitions when it comes to our local environmental problems,” Sweden’s Minster for Environment and Climate Per Bolund told Reuters. “These two things can be balanced.”
ALTERNATIVE FUELS
Much of Europe’s imported cement comes from Turkey, Russia, Belarus and countries in North Africa.
They don’t have anything like the EU’s Emissions Trading System (ETS), the world’s largest carbon market and one that sets the price of carbon permits for energy-intensive sectors, including cement, within the 27-nation bloc.
The World Bank says only 22% of global emissions were covered by pricing mechanisms last year and the International Monetary Fund put the average global price of carbon at $3 a tonne – a tiny fraction of Sweden’s carbon tax. read more
While the Swedish court’s decision was not linked to Slite’s carbon footprint, but rather the risks its quarry poses to local groundwater, the impact from an emissions point of view depends on the efficiency and energy mix of the producers likely to supply Sweden with cement to plug any shortfalls.
Slite’s owner, Germany’s HeidelbergCement (HEIG.DE), also plans to make it the world’s first carbon neutral cement factory by 2030, but the uncertainty over its future following the court ruling may delay or even scupper the project.
“We need a decision soon on the long-term basis for these operations if that is not to be delayed,” Magnus Ohlsson, chief executive of HeidelbergCement’s Swedish subsidiary Cementa, said last month.
Koen Coppenholle, head of European cement lobby group Cembureau, said he was confident European plants were “cleaner” overall because high EU carbon charges on producers had encouraged them to invest in reducing their emissions.
“In Europe, right now, we are replacing 50% of our primary fuel needs by alternative fuels,” he said
Reuters Graphics
According to Cembureau data, however, imports of cement from outside the EU have jumped by about 160% in the last five years, even though total volumes remain relatively small.
But carbon leakage, where emissions are shifted from countries with tight environmental rules to ones with laxer and cheaper regimes, is an issue for dozens of industries and policymakers are trying to tackle it.
In July, the EU unveiled plans for the world’s first carbon border tax to protect European industries, including cement, from competitors abroad whose manufacturers produce at lower cost because they are not charged for their carbon output.
Europe’s cement industry supports the move, but warns it is fraught with difficulties, such as how to measure emissions in different countries given varying processes and fuels.
“If you impose strict requirements on CO2 and emissions, you have to make sure you do that in a way that you don’t push companies outside the EU,” said Coppenholle. “That’s the whole discussion on carbon leakage.”
For a country such as Sweden, which has cut its emissions by 29% over the last three decades, the issue of domestic action versus global impact goes beyond cement.
The country’s already low, and declining, emissions from domestic production dropped to just under 60 million tonnes of carbon equivalent in 2018.
But if you measure what Swedes consume, including goods and services produced abroad, the figure is about a third higher, according to Statistics Sweden, which put so-called consumption-based emissions at 82 million tonnes that year.
CLIMATE IS GLOBAL
The local versus global perspective also raises questions about which type of industrial policy is ultimately greener.
Sweden’s leading steel firm SSAB (SSABa.ST), state-owned miner LKAB and utility Vattenfall, for example, have invested heavily in developing a process to produce steel without using fossil fuels. read more
They say switching to so-called green hydrogen power would reduce Sweden’s emissions by about 10%, a big step towards reaching the country’s 2045 net zero emission goal.
But for researchers Magnus Henrekson at the Research Institute for Industrial Economics, Christian Sandstrom at Jonkoping International Business School and Carl Alm at the Ratio Institute, this is an example of the “environmental nationalism” that benefits one country, but not the world.
They estimate that if Sweden exported the renewable energy it would use to make hydrogen to Poland and Germany instead – so they could cut back on coal-fired power – overall CO2 emissions would fall by 10 to 12 times more than by making “green” steel.
The EU’s carbon border levy, meanwhile, is only due to be phased in from 2026, potentially too late to have a bearing on the fate of Cementa’s Slite limestone quarry.
Sweden’s parliament has agreed to a government proposal to tweak the country’s environmental laws to give Cementa a stay of execution, but no long-term solution is in sight.
Environmentalists such as David Kihlberg, climate head at the Swedish Society for Nature Conservation, say easing regulations gives industries an excuse to put off changes that need to happen now.
“It would be incredibly destructive for climate diplomacy if Sweden came to the top climate meeting in Glasgow and said our climate policy is to increase emissions and the local environmental impact in order to pull the rug from under Chinese cement producers,” he said, referring to a hypothetical scenario that is not Swedish policy.
“The climate question is global and has to be solved by cooperation between countries.”
Editing by Mark John and David Clarke
Our Standards: The Thomson Reuters Trust Principles.
SHENYANG, China, Sept 30 (Reuters) – Small firms caught in China’s prolonged energy crunch are turning to diesel generators, or simply shutting shop, as coal industry officials voiced fears about stockpiles ahead of winter and manufacturing shrank in the world’s no. 2 economy.
Beijing is scrambling to deliver more coal to utilities to restore supply as the northeast grapples with its worst power outages in years, particularly the three provinces of Liaoning, Heilongjiang and Jilin, home to nearly 100 million people.
Gao Lai, who runs an industrial laundry service in Shenyang, the capital of Liaoning, said he was losing money after the power crunch forced him to hire a diesel generator.
“We can afford it for just four days, but if it’s for longer, then the costs are too much, so we can’t survive,” he told Reuters.
“We are willing to make it work because the country needs it, but if (power curbs continue) in the long run, we have to think of a way out.”
The curbs were triggered by shortages of coal, which fuels about two-thirds of China’s power generation.
Thermal coal futures closed Thursday up 4.2% on the Zhengzhou Commodity Exchange after hitting an all-time high of 1,408 yuan ($218) per tonne.
The contract surged 96% in the July to September period on tight supplies and strong demand, its biggest quarterly jump since the first quarter of 2017, spurring the exchange to adopt trading limits.
Official data separately showed China’s factory activity contracted in September for the first time since February 2020. read more
Since last week, more than 100 companies from electronic component manufacturers to gold miners have notified stock markets of production suspensions. Some have said they resumed production in the last two days, however.
The strain comes as the China Coal Industry Association warned it was “not optimistic” about supplies ahead of winter, the peak season for demand, and added that power plant inventories were now “obviously low”.
It urged companies to “spare no effort” to boost supply and focus on sales to smaller, high-energy consumers who have not signed long-term supply contracts.
Although coal production hit a record in August, analysts with Chinese investment bank CICC said a recent spate of mine accidents had made regulators more cautious about approving expansions in output.
They said imports, down 10.3% on the year in the January to August period, were unlikely to rise significantly over the rest of 2021 and more local production had to be “freed”.
SWITCH TO DIESEL
In Shenyang, staff at a steel parts factory that has been shut for the last few days said they had not yet rented a generator but might do so if rationing continued.
Zhai Junwang, manager of a company that rents standalone diesel-fired generators, said brisk business in recent days had led to a doubling in rates.
“There’s very limited stock,” he said, but added that he did not expect the situation to last, as most small factories using his generators were losing money.
The government has said its priority will be to guarantee household power and heating supplies over the winter, as state-run energy firm Sinopec pledged to boost imports of liquefied natural gas. read more
But Citi analysts said in a note they expected power shortages to persist in the peak winter season for heating, most of it coal-fired.
Experts are pressing for fundamental reforms to China’s energy system.
The crisis was caused not by supply shortages but an inflexible grid system, said Zhang Boting of industry research group the China Society for Hydropower Engineering.
“The solution … isn’t simply relying on increasing power generating capacity, but boosting the ability of the grid to adjust peaks and solve the serious mismatches between energy loads and energy supplies,” he said on the group’s website.
($1=6.46107 Chinese yuan renminbi)
Reporting by Gabriel Crossley in Shenyang and Shivani Singh in Beijing; Additional reporting by Min Zhang in Beijing, Brenda Goh and David Stanway in Shanghai, Aizhu Chen in Singapore and Tom Daly; Editing by Clarence Fernandez
Our Standards: The Thomson Reuters Trust Principles.
CONAKRY, Sept 17 (Reuters) – Guinea’s military junta said on Friday it would not bow to regional pressure and allow President Alpha Conde, detained since his overthrow on Sept. 5, to leave the country.
On Friday Ivory Coast’s President Alassane Ouattara and Ghana’s President Nana Akufo-Addo paid a one-day visit to Conakry to ask coup leader Mamady Doumbouya, a special forces commander and former French Legionnaire, for Conde’s release.
Outtara had been hoping to leave Guinea with Conde, a senior regional government official told Reuters.
“The former president is and remains in Guinea. We will not yield to any pressure,” the junta said in a statement read on state TV.
Ouattara and Akufo-Addo, representing the 15-member Economic Community of West African States (ECOWAS), held a separate meeting with Conde at the Mohamed VI Palace in Conakry, but flew out the country on Friday evening empty-handed.
Ouattara told Radio-Télévision Guinéenne (RTG) at Conakry airport before leaving: “I met my brother Alpha Conde, who is doing well. We will remain in contact.”
Akufo-Addo told RTG: “We’ve had a very frank and fraternal meeting with Doumbouya and his collaborators. I think that ECOWAS and Guinea are going to find the best way to move forward together.”
ECOWAS has demanded a return to constitutional rule since the special forces unit seized control of the presidential palace, detained Conde and declared itself in charge.
Ghanaian President Nana Akufo-Addo, new chairman of the Economic Community of West African States (ECOWAS), speaks to journalists after a consultative meeting in Accra, Ghana September 15, 2020. REUTERS/Francis Kokoroko/File Photo
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The bloc agreed on Thursday to freeze financial assets of the junta and their relatives and bar them from travelling. The junta has not responded.
‘COUP-BELT’
Events in Guinea followed coups in Mali and Chad earlier this year that have raised fears of a democratic backslide in a region only just shedding its “coup-belt” reputation.
Guinea’s coup leaders have held a week of consultations with public figures and business leaders to map out a framework for a transitional government.
ECOWAS’s credibility in Guinea has been strained since 2018, when the bloc failed to condemn Conde for running for a third term in office last year, despite a law declaring that presidents must step down after two and widespread protests.
Ouattara himself used a constitutional change as an excuse to run for a third term last year, a move critics decried as illegal.
Following Thursday’s summit, during which ECOWAS also pressured Mali’s transitional government to hold elections by February 2022, the regional body said it would be reviewing protocols on democracy and good governance.
On departing the airport in Conakry, the ECOWAS motorcade passed dozens of pro-junta demonstrators brandishing signs.
One read: “ECOWAS does not decide for us.”
Reporting by Saliou Samb and Christian Akorlie; Additional reporting by Ange Aboa; Writing by Hereward Holland; Editing by Edward McAllister, Philippa Fletcher, Andrew Cawthorne, William Maclean and David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
ACCRA, Sept 16 (Reuters) – West Africa’s main regional bloc on Thursday imposed sanctions against the junta in Guinea and those slowing Mali’s post-coup transition – its toughest response yet to a run of military takeovers.
The move was agreed at an emergency summit of the Economic Community of West African States (ECOWAS) in Accra to respond to last week’s putsch in Guinea and perceived slow progress towards constitutional rule in Mali following a coup last year. read more
Regional heads of state decided to freeze the financial assets and impose travel bans on Guinea’s junta members and their relatives, insisting on the release of President Alpha Conde and a short transition.
“In six months elections should be held,” said ECOWAS Commission President Jean-Claude Kassi Brou at a briefing.
The bloc also piled more pressure on Mali’s transitional government, demanding they stick to an agreement to organise elections for February 2022 and present an electoral roadmap by next month, according to the post-summit communique.
Anyone in Mali hindering preparations for the elections faces the same sanctions as those imposed in Guinea, it said.
Leaders who took part in the summit hailed this more hardline stance. West and Central Africa has seen four coups since last year – political upheaval that has intensified concerns about a backslide towards military rule in a resource-rich but poverty-stricken region.
Special forces commander Mamady Doumbouya, who ousted President Alpha Conde, walks out after meeting the envoys from the Economic Community of West African States (ECOWAS) to discuss ways to steer Guinea back toward a constitutional regime, in Conakry, Guinea September 10, 2021. REUTERS/Saliou Samb
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“I welcome the strong actions of the summit to safeguard democracy, peace, security and stability in the subregion,” Senegalese President Macky Sall tweeted.
Coup leaders in Guinea are holding consultations this week with various public figures, groups and business leaders in the country to map a framework for the transition.
Late on Thursday they said they were also expecting a delegation of regional heads of state to visit Conakry for talks on Friday.
Soldiers behind the Sept. 5 coup have said they ousted Conde because of concerns about poverty and corruption, and because he was serving a third term only after altering the constitution to permit it.
Meanwhile the putsch in Mali was largely precipitated by a security crisis, which has seen militants linked to al Qaeda and Islamic State extend their influence across the north and centre of the country.
The new Malian authorities’ pledge to hold presidential and legislative elections early next year has been undermined by their failure to meet various deadlines, including the start of voter roll updates and the presentation of a new constitution.
The transition was dealt a further setback in May when the colonel who led the initial coup, Assimi Goita, ordered the arrest of the interim president and then took over the role himself. read more
Additional reporting by Saliou Samb in Conakry and Bate Felix in Dakar; Writing by Cooper Inveen, Bate Felix and Alessandra Prentice; Editing by Andrew Cawthorne, Marguerita Choy and Grant McCool
Our Standards: The Thomson Reuters Trust Principles.
CONAKRY, Sept 8 (Reuters) – West Africa’s main political and economic bloc suspended Guinea’s membership on Wednesday following a weekend military coup that ousted President Alpha Conde and dealt the latest in a flurry of setbacks to democracy in the region.
During a virtual summit, leaders from the 15-member Economic Community of West African States (ECOWAS) demanded a return to the constitutional order and Conde’s immediate release, and also agreed to send a high-level mission to Guinea as soon as Thursday, said Burkina Faso’s Foreign Minister Alpha Barry.
“At the end of that mission, ECOWAS should be able to re-examine its position,” Barry told reporters.
He did not announce any immediate economic sanctions against Guinea, as ECOWAS imposed against Mali following a coup there in August 2020.
Some experts say ECOWAS’s leverage with Guinea could be limited, in part because the country is not a member of the West African currency union and not landlocked like Mali.
The economic bloc’s response is being closely watched amid criticism from pro-democracy advocates that it has not stood up robustly enough in recent months against democratic backsliding in West Africa.
ECOWAS remained silent last year as Conde and Ivory Coast President Alassane Ouattara sought third terms after changing constitutions that would have forced them to step down, moves denounced as illegal by their opponents.
Activists say this has contributed to West Africans’ loss of faith in democracy and made military coups more likely.
Mali’s military staged a second coup in May this year. ECOWAS said on Tuesday it was concerned transitional authorities there had not made sufficient progress toward organising elections next February as promised. read more
Special forces members take position during an uprising that led to the toppling of president Alpha Conde in Kaloum neighbourhood of Conakry, Guinea September 5, 2021. REUTERS/Saliou Samb
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PRISONER RELEASES
Guinea’s coup leader, Mamady Doumbouya, a former French legionnaire, has pledged to install a unified, transitional government but has not said when or how that will happen.
In an apparent gesture to Conde’s civilian opponents, at least 80 political prisoners detained by the president were released on Tuesday evening, many of whom had campaigned against his constitutional change.
Doumbouya also met the heads of Guinea’s various military branches for the first time on Tuesday, hoping to unify the country’s armed forces under the junta’s command.
Guinea’s main opposition leader, Cellou Dalein Diallo, who finished runner-up to Conde in three successive elections, told Reuters on Tuesday he would be open to participating in a transition back to constitutional governance.
In a statement on Tuesday evening, Conde’s party said it “noted the advent of new authorities at the head of the country” and called for the president’s swift and unconditional release.
Since the putsch, life in the streets of Conakry appears to have returned to normal, with some military checkpoints removed.
Fears that the power struggle could hinder Guinea’s production of bauxite, a mineral used to make aluminium, have begun to ease. The country’s largest foreign operators say they have continued to operate without interruption.
Aluminium hit a fresh 10-year high on Monday after news broke of unrest in Guinea, which holds the world’s largest bauxite reserves. Doumbouya has pledged that mining will continue unhindered.
Additional reporting by Christian Akorlie in Accra; Writing by Cooper Inveen and Aaron Ross, Editing by Hereward Holland, Timothy Heritage and Gareth Jones
Our Standards: The Thomson Reuters Trust Principles.
CONAKRY, Sept 7 (Reuters) – Guinea’s main opposition leader said on Tuesday he was open to participating in a transition following a military coup over the weekend, as the soldiers who seized power consolidated their takeover.
West African countries have threatened sanctions following the overthrow of President Alpha Conde, who was serving a third term after altering the constitution to permit it.
His opponents said the change was illegal and frustration boiled over into deadly protests last year. Eighty political prisoners detained by Conde’s government, including a number who had campaigned against his third term, were released on Tuesday evening, said Hamidou Barry of the Guinean Organisation of Human Rights.
Regional leaders will meet to discuss Guinea on Wednesday – not Thursday, as suggested in a previous staff memo.
Coup leader Mamady Doumbouya, a former officer in the French Foreign Legion, has promised a transitional government of national unity and a “new era for governance and economic development”. But he has not yet explained exactly what this will entail, or given a timeframe.
Guinea’s main opposition leader, Cellou Dalein Diallo, told Reuters on Tuesday he had not yet been consulted about the transition but was ready to participate.
“We would send representatives, why not, to participate in the process to bring the country back to constitutional order,” said Diallo, a former prime minister who finished runner-up to Conde in three successive elections, most recently last October.
Sunday’s uprising, in which Conde and other top politicians were detained or barred from travelling, is the third since April in West and Central Africa, raising concerns about a slide back to military rule in a region that had made strides towards multi-party democracy since the 1990s.
Conakry was calm for a second day after the putsch, with some military checkpoints removed. Traffic was normal on Tuesday in the capital’s administrative centre, the Kaloum peninsula.
Special forces members take position during an uprising that led to the toppling of president Alpha Conde in Kaloum neighbourhood of Conakry, Guinea September 5, 2021. REUTERS/Saliou Samb/File Photo
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Moving to consolidate their power, the soldiers that led the coup have installed army officers at the top of Guinea’s eight regions and various administrative districts.
BAUXITE
The coup raised concerns about supplies of bauxite, the main aluminium ore, from Guinea, a leading producer.
The benchmark aluminium contract on the London Metal Exchange remained near a 10-year high on Monday.
However, mines have not reported any disruption. State-run Chinese aluminium producer Chalco’s (601600.SS), bauxite project in Guinea said it was operating normally.
The Australian-listed bauxite and gold exploration firms Lindian Resources (LIN.AX) and Polymetals Resources (POL.AX) also said on Tuesday that their activities were unaffected.
The Kremlin said it was closely following the political situation and that it hoped Russian business interests, which include three major bauxite mines and one alumina refinery, would not suffer.
During his decade in power, Conde steered Guinea through economic growth, but unemployment remained high.
Surveys by Afrobarometer suggest the majority of Guineans think the level of corruption has increased, while dissatisfaction with the economy and personal living conditions has also risen.
Diallo said corruption became endemic under Conde.
“An elite that enriched themselves in an insolent way, while poverty was rising and the country’s infrastructure was crumbling. There was also a general malaise in the country,” he said.
Additional reporting by Hereward Holland and Bate Felix
Editing by Kevin Liffey and Grant McCool
Our Standards: The Thomson Reuters Trust Principles.
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Aug 26 (Reuters) – A U.S. judge declined to stop Johnson & Johnson (JNJ.N) from taking steps to offload widespread Baby Powder liabilities from the rest of its business, preserving the option for the healthcare company to move thousands of claims from people who used its talc products to a unit that would file for bankruptcy.
U.S. Bankruptcy Judge Laurie Selber Silverstein denied a request from plaintiffs’ lawyers to block the move late Thursday. Lawyers for cancer victims wanted her to issue a restraining order against J&J as part of her role overseeing the bankruptcy proceedings of one of the company’s former talc suppliers.
J&J is exploring a plan to move its liabilities from widespread Baby Powder and other talc-related litigation into a newly created business that would later seek bankruptcy protection, Reuters previously reported. The company’s talc products are currently housed in a subsidiary called Johnson & Johnson Consumer Inc. read more
“The court rightly denied the plaintiffs’ motion aimed at preventing J&J from engaging in legitimate business transactions, in the event that it chooses to do so,” said Diane Sullivan, a Weil, Gotshal & Manges LLP lawyer representing J&J, in a statement.
The legal skirmish was unusual in that plaintiffs’ lawyers were asking the judge to forbid J&J from taking steps the company’s lawyers said it had not yet decided whether to pursue. Johnson & Johnson Consumer Inc has previously said it has “not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate.”
The judge is overseeing the bankruptcy case of Imerys Talc America, which once supplied talc to J&J and filed for Chapter 11 court protection amid mounting litigation. Imerys and J&J have since been battling one another over whether J&J is required to cover the former supplier’s legal costs under indemnification agreements. Plaintiffs’ lawyers argued that allowing J&J to offload its talc liabilities to a unit that would file for bankruptcy would harm Imerys’ reorganization.
The judge decided it would be improper as part of Imerys’ bankruptcy case for her to legally bar J&J from undertaking a hypothetical future restructuring that might result in separating the talc liabilities. She said Imerys could take legal action against J&J should J&J decide to separate its talc liabilities in a way Imerys deems harmful or unlawful.
TEXAS TWO-STEP BANKRUPTCY
J&J faces legal actions from tens of thousands of plaintiffs alleging its Baby Powder and other talc products contained asbestos and caused cancer. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.
J&J is considering using Texas’ “divisive merger” law, which allows a company to split into at least two entities, Reuters previously reported. For J&J, that could create a new entity housing talc liabilities that would then file for bankruptcy to halt litigation.
The maneuver is known among legal experts as a Texas two-step bankruptcy, a strategy other companies facing asbestos litigation have used in recent years.
Should J&J proceed, plaintiffs who have not settled could find themselves in protracted bankruptcy proceedings with a likely much smaller company. Future payouts to plaintiffs would be dependent on how J&J decides to fund the entity housing its talc liabilities.
A 2018 Reuters investigation found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. The company stopped selling Baby Powder in the U.S. and Canada in May 2020, in part due to what it called “misinformation” and “unfounded allegations” about the talc-based product. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.
The blue-chip company, which boasts a market value exceeding $450 billion, faces legal actions from more than 30,000 plaintiffs alleging its talc products were unsafe. In June, the U.S. Supreme Court declined to hear J&J’s appeal of a Missouri court ruling that resulted in $2 billion of damages awarded to women alleging the company’s talc caused their ovarian cancer. read more
Separately, plaintiffs lawyers are seeking a similar restraining order against J&J in a Missouri court. One of those lawyers, Andy Birchfield, said in a statement that he and other lawyers would study the Imerys ruling and continue attempts to prevent J&J from using the Texas law to separate its talc liabilities and steer them toward bankruptcy.
Reporting by Mike Spector, Maria Chutchian and Jonathan Stempel in New York; Editing by Chris Reese, Marguerita Choy and Karishma Singh
Maria Chutchian
Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.
HOUSTON, Aug 10 (Reuters) – Exxon Mobil Corp (XOM.N) has begun marketing U.S. shale gas properties as it ramps up a long-stalled program that aims to raise billions of dollars to shed unwanted assets and reduce debt taken on last year.
Three years ago, the top U.S. oil producer set a goal of raising $15 billion from sales by December 2021. More recently, it promised to accelerate lagging sales to whittle a record $70 billion debt pile.
The company’s XTO Energy shale unit is seeking buyers for almost 5,000 natural gas wells in the Fayetteville Shale in Arkansas, spokeswoman Julie King confirmed.
The assets are among gas projects with declining production and market value Exxon is selling as it focus on newer ventures in Guyana, offshore Brazil and Texas’s Permian Basin.
Exxon is marketing the properties itself and aims to receive bids by Sept. 16 and close any sale by year-end.
“We are providing information to third parties that may have an interest in the assets,” King said. No buyers have been identified, she said, declining to confirm the due date for bids or the company’s anticipated value on the wells.
DECLINING PRODUCTION
The company has achieved about a third of its three-year, $15 billion sales target.This year, it has received sales proceeds of $557 million through June, and has deals pending valued at more than $2.15 billion. read more
Exxon acquired the Fayetteville assets in 2010 for $650 million during a shale boom that would change the U.S. energy landscape, leading to an oversupply of gas that pushed prices to record lows and last year. This led Exxon to reduce the value of its U.S. oil and gas holdings by $17.1 billion. read more
Output in the assets on offer fell by more than half since 2016 to about 160 million cubic feet per day last year, according to Exxon marketing materials seen by Reuters.
The Arkansas properties cover some 416,000 net acres (1,680 square kilometers) and are some of the North American natural gas resources cut last year from Exxon’s development plan. The sale includes 844 operated and 4,104 non-operated wells, King said.
Dallas-based Merit Energy is evaluating the properties, one person familiar with the matter said. Merit in 2018 purchased about 258,000 acres in the same area from BHP for $300 million.
Merit did not reply to requests for comment by phone, e-mail and LinkedIn. Exxon declined to comment on potential bidders.
WORLDWIDE DIVESTMENTS
Exxon, which suffered a historic $22.4 billion loss in 2020, is selling dozens of properties in Asia, Africa, the United States and Europe.
The company is prioritizing debt reduction and its shareholder dividend, officials said last month. After total debt last year doubled to almost $70 billion since 2018, Exxon paid off more than $7 billion this year, to reduce its burden to $60.6 billion.
This year, it has held talks with Britain’s Savannah Energy (SAVES.L) over properties in Chad and Cameroon and sold stakes in two deep water oilfields to Occidental Petroleum (OXY.N) and others. read more
Exxon is seeing new interest in its properties with this year’s rebound in oil and gas prices, said Exxon Senior Vice President Jack Williams on July 30.
“That whole divestment discussion that we’ve had in the past continues,” Williams said.
By Sabrina Valle in Houston, Liz Hampton in Denver and Shariq Khan in Bengaluru; editing by Gary McWilliams, Marguerita Choy and David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
U.S. President Joe Biden delivers remarks at the White House in Washington, U.S. August 3, 2021. REUTERS/Jonathan Ernst
WASHINGTON, Aug 5 (Reuters) – President Joe Biden on Thursday offered temporary “safe haven” to Hong Kong residents in the United States, allowing potentially thousands of people to extend their stay in the country in response to Beijing’s crackdown on democracy in the Chinese territory.
In a signed memo, Biden directed the Department of Homeland Security to implement a “deferral of removal” for up to 18 months for Hong Kong residents currently in the United States, citing “compelling foreign policy reasons”.
“Over the last year, the PRC has continued its assault on Hong Kong’s autonomy, undermining its remaining democratic processes and institutions, imposing limits on academic freedom, and cracking down on freedom of the press,” Biden said in the memo, using the acronym for the People’s Republic of China.
“Offering safe haven for Hong Kong residents who have been deprived of their guaranteed freedoms in Hong Kong furthers United States interests in the region. The United States will not waver in our support of people in Hong Kong,” Biden said.
The vast majority of Hong Kong residents currently in the United States are expected to be eligible for the program, according to a senior administration official, but some legal conditions apply, such as individuals not having been convicted of felonies.
The White House said in a statement that the move made clear the United States “will not stand idly by as the PRC breaks its promises to Hong Kong and to the international community.”
Those eligible may also seek employment authorization in the United States, Secretary of Homeland Security Alejandro Mayorkas said in a statement.
The measure is the latest in a series of actions Biden has taken to address what his administration says is the erosion of rule of law in the former British colony, which returned to Beijing’s control in 1997.
The U.S. government in July applied more sanctions on Chinese officials in Hong Kong, and issued an updated business advisory warning companies of risks of operating under the national security law, which China implemented last year to criminalize what it considers subversion, secessionism, terrorism or collusion with foreign forces. read more
Critics say the law facilitates a crackdown on pro-democracy activists and a free press in the territory, which Beijing had agreed to allow to operate under considerable political autonomy for 50 years after it regained control.
China retaliated against the U.S. actions last month with its own sanctions on American individuals, including former U.S. commerce secretary Wilbur Ross. read more
U.S. lawmakers have sought legislation that would make it easier for people from Hong Kong fearing persecution after joining protests against China to obtain U.S. refugee status, and Secretary of State Antony Blinken has said the United States should accept people fleeing the Hong Kong crackdown. read more
Reporting by Michael Martina; editing by Gerry Doyle and Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.