Accepting that the UK govt. ought not participating in funding tar sands extraction, and that this campaign makes sense in that light, this post does give the impression that not doing so will actually change things (“government could potentially do more about global emissions through active ownership of RBS”). Won’t the oil companies simply obtain funding from elsewhere?

Accepting that the UK govt. ought not participating in funding tar sands extraction

But, and this where I suspect this Judicial Review will fall down, the Treasury have not taken up the management of RBS, merely bought a large shareholding in it. As such, the day-to-day investment decisions of the bank are explicitly, and deliberately, outside the control of the Treasury. Therefore, and given the extremely high threshold for JR cases, the Treasury has practically no case to answer.

Publicity stunt-tastic.

“this post does give the impression that not doing so will actually change things (”government could potentially do more about global emissions through active ownership of RBS”). Won’t the oil companies simply obtain funding from elsewhere?”

Or, there’s no point in us not torturing and drowning this puppy, because if we don’t, someone else will.

“Publicity stunt-tastic.”

Indeed. A superb campaign, as Tim J clearly recognises. It brings two issues to our attention: failure to take responsibility for an agency that we the people own, and the whole horrific disaster that locking ourselves into tar sands as our source of energy will be. Two massive policy issues on which this government deserves to be lambasted, and if this is best done by means of the publicity that a legal case will provide, then so be it, and well done Platform, WDM and People & Planet.

3 – It certainly should be a very effective way of publicising the point. It’s risky though. JR is an expensive process, and you can bet that the Treasury are instructing Magic Circle solicitors and senior counsel to make absolutely certain that they win this. Judges get extremely upset if they think the judicial process is being abused to make a political point in this way.

I hope that Platform, WDM and People & Planet are well-funded, as they stand to get stung for costs. Best guess, on a case like this with the potential level of importance – £150-200k. Unless it all folds very early, perhaps by a strike out, in which case more like £75-100. Still feeling lucky?

“It’s risky though – they stand to get stung for costs”

A fair point, charmingly made – any comment from Adam Ramsay?

Meanwhile, a couple of questions for Tim J, just to get a feel for how the New Labour grassroots is thinking:

Tar sands, good idea or bad idea?
A policy of doing absolutely nothing to stop RBS behaving in whatever shit way they like: good idea, or bad idea?

Strategist,

Are you suggesting that if your objective is to stop tar sands extraction, then the question of whether this will help do so, or not, is unimportant? There’s no need to give the impression it will if it won’t.

After all, there really is an important difference between a situation in which us not drowning the puppy means the puppy lives, and a situation where it still dies. I don’t know about you, but I’m more interested in saving the puppy.

Hello,

Thanks for the comments.

On costs, for the original case, we got a Protective Cost Order – in other words, the High Court recognised that this is a case being taken in the public interest, and so they limited the extent to which we will be charged the Treasury’s costs.

Our own lawyers, Leigh Day, are acting no win no fee. They are the same firm who battled Cater Ruck over the Traffigura super-injunction, and the government over the BAE inquiry, and are doing this largely coz they care about it. Which is nice.

Luis – I’m with you on ‘I’d rather save the puppy’. The point made by the guy who wrote the report – who is a Cas business school fellow, and banking expert, is that oil companies wouldn’t necessarily otherwise get this funding. RBS specialise in marginal fossil fuel projects. Often other banks, without the same expertise in how to get oil out of war zones, or from under the feet of indigenous people, etc, don’t have the capacity to assess the financial risks, etc, and so wouldn’t fund the projects. There is an argument that, in the long run, someone else would take up that market niche, but certainly in the short term, with some of these projects, RBS has been the leader in pulling together financing consotiums. Without them, there is a good chance the projects wouldn’t happen.

On the legal stuff and ‘publicity stunt-tastic’ comment, our lawyers genuinely think that we have a good chance of winning. The government failed to sufficiently carry out a process they are legally required to carry out. I’m not a lawyer, but these guys know what they are doing, and wouldn’t be involved if they didn’t think we had a ghood chance.

Thanks,

Adam

Oh, and, you can join the Facebook group for the campaign here:

http://www.facebook.com/search/?q=stop+bank+climate+&init=quick#!/group.php?gid=2370015501&ref=search&sid=61008159.2700360720..1

Adam,

yes I suppose one way of looking at this is that it raises the cost of funding projects like this, even if funding is found eventually.

“It’s risky though – they stand to get stung for costs”

Well, maybe not.

Platform does a good job of concealing its principle source of revenue but as the funds they use are described as “restricted”, I think we can safely conclude that they originate from the taxpayer.

So assuming we have one taxpayer funded lobby group suing another taxpayer funded failed bank who precisely is going to get stung for the costs?

Cunt-tastic

On costs, for the original case, we got a Protective Cost Order – in other words, the High Court recognised that this is a case being taken in the public interest, and so they limited the extent to which we will be charged the Treasury’s costs.

Good move!

The fact that the court granted it should either be extremely encouraging for you, as they won’t grant them unless the application has ‘a real chance of success’, or a bit concerning, as the other reason usually given is that the case is likely to end at the preliminary stage, meaning that costs won’t be too high.

A fair point, charmingly made…

Sorry, not meaning to be overly brusque – that’s just how we refer to having a costs order made against you.

Meanwhile, a couple of questions for Tim J, just to get a feel for how the New Labour grassroots is thinking

You’re asking the wrong chap I suspect, being as far from New Labour grassroots as it’s possible to get without falling over. But to answer your points:

Tar sands: potentially at some point a valuable source of energy, but at the moment the environmental (and financial) costs just look too high.

RBS: The Government stated explicitly when they took shareholdings in RBS (and the other banks) that they would not get involved in the day-to-day management of the banks. I would be opposed to strings being attached retrospectively. If money is being given conditionally, those conditions must be spelt out at the time, or you end up in what is technically known as a Lando Calrissian dilemma.

Luis – that’s exactly how I like to look at it

Tim – on the Lango Calrissian Dilemma, the point is not just ‘strings attached’. As the report I link to points out, the government has long called on investors to be better at behaving as ‘active owners’ of companies. We are not saying they should be making day to day management decisions. But it is entirely reasonable for shareholders to comment on strategic direction – in fact, that’s what the board of directors (now Government appointed) is for. The report points out that many pension funds, for example, have polieis pertaining to embedded carbon in their investments, and will actively oversee company long term strategy taking this into account. All the govenment – or, more specifically, the UK Financial Investments wing of the Treasury, need to do is behave as the active owners that they say they want all major investors to be.

Tar sands: potentially at some point a valuable source of energy

The EROEI of tar sand extraction is poor at best (somewhere around 5 using a conservative boundary analysis and significantly less if the boundaries are widened, as compared to 100+ for early oilfield development, or 25-30 for offshore wind), and extraction rates are somewhat limited. Potentially at some some a valuable source of hydrocarbons for non-energy applications, but not really likely to be a significant net energy source unless someone repeals the Laws of Thermodynamics.

See: Unconventional Oil: Tar Sands and Shale Oil – EROI on the Web, Part 3 of 6

“Strategist, Are you suggesting that if your objective is to stop tar sands extraction, then the question of whether this will help do so, or not, is unimportant? There’s no need to give the impression it will if it won’t.”

Luis, I’m glad you care about the puppy, but your comment @1 was not particularly well-judged if you agree with the campaign in principle, but just wanted to be nit-picky about some wording in the article.

The answer to the question ‘will it help’, is that yes, it will help a bit. The objective of the exercise is to rule tar sands out as an energy source because its environmental cost is too high. And this is only going to happen through a long haul of a civic society campaign to influence governments to reach international agreement to either ban them or carbon tax them out of existence.

[Note to Tim J: its financial cost is not too high, that's why RBS is funding projects and British oil companies eg Shell & BP are piling in to this "new frontier" - and that precisely is our problem: the market price does not reflect its planet-wrecking costs, and thereby the private corporations are simply unable to stop themselves trashing the planet for fear of breaking their fiduciary duty to shareholders (in the case of RBS, us.)]

@11, @13

Adam corrects Tim J’s “If money is being given conditionally, those conditions must be spelt out at the time…I would be opposed to strings being attached retrospectively” in an admirably gentle way.

Surely, another way of putting it would be to say that if you own the majority of a company, you can do what the fuck you like with it. So if the taxpayer wakes up in the morning, and thinks “I going to fire the board of RBS today”, that’s precisely what it can do.

“Surely, another way of putting it would be to say that if you own the majority of a company, you can do what the fuck you like with it. So if the taxpayer wakes up in the morning, and thinks “I going to fire the board of RBS today”, that’s precisely what it can do.”

Well, sorta.

But the board of the company is not allowed to favour the interests of one shareholder (however major) over the interests of others. That’s one of the bits of that “fiduciary duty”.

Can’t remember how much Govt owns of RBS now: 80%? Whoever they put in as the board have a legal duty (and one which is taken seriously) not to fuck over the owners of the other 20%.

Yes, in company law “we’re going to do what our largest shareholder wants us to do even if it loses the company money and thus loses you minority shareholders money” is included in the phrase “not fuck over”.

But it is entirely reasonable for shareholders to comment on strategic direction…

…

Surely, another way of putting it would be to say that if you own the majority of a company, you can do what the fuck you like with it.

Up to a point… The Government has purchased preference shares (and, in its second investment ‘B’ shares) in RBS. This means that they will take priority in any wind-up (God forbid…) or dividend payments made by RBS. However, (and this is important) preference shares are non-voting shares. The Government, albeit the majority shareholder, does not get to vote on Ordinary or Special Resolutions, cannot appoint directors, cannot advance motions to shareholder meetings…

The Government did exactly what it said it was going to – gave money to RBS, with some strings attached, but explicitly and deliberately did not seek to impact on the management decisions of the bank.

That, at least, is how I understand it. I may be wrong, but I don’t think it’s as simple as ‘the Government owns RBS, therefore can control its lending’.

Incidentally, having gone and checked this, there was a piece in the Guardian back from last year:

http://www.guardian.co.uk/business/2009/feb/26/royalbankofscotlandgroup-banking

RBS is creating a new class of shares – B shares. They are quite similar to the preference shares the government already owns after its partial nationalisation of RBS last autumn.

Like preference shares, these B shares will have priority over dividends. They will receive 250% of the dividend paid to ordinary shares, which will cut the potential payout to other shareholders – who will receive nothing if the B-share dividend is suspended. These B shares will not grant voting rights at a shareholder meeting, unless the motion is to wind up RBS.

Which would seem to back me up…

Tim J: thanks for this. On a quick reading of what you saying it appears that the Government has deliberately created a situation where it is not choosing not to, but is unable to direct the policy of RBS, despite owning 80% of the company.

Which is interesting – and a prima facie case for the resignation of the Chancellor who authorised such a scandalous decision.

On Tim Worstall’s point (which I think is superseded by Tim J’s, that the givernment owns non-voting shares), isn’t it the case that the minority shareholders are mostly protected by the right to be bought out by the majority shareholder, if the latter should actively seek to start doing “whatever the fuck they like”? (A genuine question – I know zilch of plc law)

20 – Minority shareholders do have some protection. In fact, on the face of it, it looks like quite serious protection:

Minority shareholders have a right to complain to the court if the majority shareholder(s) run the Company in a manner that damages their position and the worth of their shareholding, often by misapplying or misusing Company assets. But the complaint cannot be vague or trivial (e.g. “they’re managing the business badly”) and must stand up to some objective analysis. Examples of “unfairly prejudicial” conduct might be using company assets or money for the personal benefit of a shareholder or the majority shareholder(s) paying themselves far more than people in their position could objectively justify.

The problem is that courts are extremely reluctant to accept arguments on these lines, as they are desperate to avoid being seen to make judgements on how well a company is being run.

@21 Hmm. To me that doesn’t look like protection against a properly constituted & sensible Corporate Social Responsibility policy. (like, er, Don’t destroy the planet)

But this doesn’t apply if the import of what you say @18 is that the government doesn’t actually have any voting rights at a General Meeting of the company.

(by the way, what a scandal that there are any non-government shareholders left in RBS. They should all have been utterly wiped out in the original rescue – a richly deserved fate for their disastrous choice of board.)

21: True, but there are some obvious ones. Assuming that everyone has the same class of shares (not the case with RBS) then any dividend must be paid to all shareholders equally (well, weighted by the number of shares they have, obviously).

This fiduciary duty thing came up again recently with RBS. The board’s duty is to all shareholders.

The govt obviously wanted low or no bonuses to be paid at RBS. Whether you think this is merely political or a good systemic idea matters not just for this argument.

In a system where every other bank was paying bonsuses though….the board would find it very difficult indeed to say that they’ll pay no bonuses because that is the wish of the major shareholder. Because if the other banks are paying them then the best and brightest will leave. And this will reduce the value of the bank to hte minority shareholders.

When the govt started putting pressure on the board not to pay bonuses it was a common analysis around the City. Any board, not just the current one, would have to tell the govt to bugger off. Because not paying them would materially diminish the value of those minority shareholdings at the bequest of the majority shareholder (the different classes here don’t matter all that much for this particular point).

The being bought out thing….we have a limit, yes. Say you try a takeover and you win more than 50%. Great. But the last 10% say they’ll not sell to you whatever happens. You are assumed to have 100% control (and thus can screw the minority) if you’ve got 90% (for however hard you try there’ll always be someone who has lost their share certificate, or their marbles and doesn’t realise there’s been a takeover etc and you will thus never get 100%). But if you’ve 89.99% then you’re restricted by all the normal rules.

If you do own 100% then the company’s yours of course and you can screw the other stakeholders as much as you like. But less than 89.99% and you’re only ther majority owner, not total. So you have to respect others ownership rights as well.

by the way, what a scandal that there are any non-government shareholders left in RBS. They should all have been utterly wiped out in the original rescue – a richly deserved fate for their disastrous choice of board

They were – the value of their shares dropped from over £7 a share in Q1 2007 to 35p today. RBS fell off a cliff, and the original shareholders were smashed to bits.

“by the way, what a scandal that there are any non-government shareholders left in RBS. They should all have been utterly wiped out in the original rescue – a richly deserved fate for their disastrous choice of board.”

Some controversy over this. If the govt took 100% of the equity then some say that all of RBS’ liabilities (ie, everything it owed to everyone, all hundreds of billions of it) would have to be counted as part of the national debt. And it would be the gross number, not the nett, which would be added.

By taking not 100% (and not pure equity but preference shares etc) this was avoided.

Not 100% sure whether this is true but I’d say off the top of my head that it sounds about 99% likely.

Thanks Tim (Worstall).

You sound to be right about the bonuses (whilst not conceding the point that Darling should be flayed for ever getting us into that position)

What about the matter of a properly constituted Corporate Social Responsibility policy that says “we look at the projects we are funding, and if they create a strong chance that they will make Earth largely uninhabitable within 100 years, we reject them”. Can the minority shareholders stop that?

NB @26 is a response to @23. Give me a tick, and I’ll read 24 & 25

@24 Clearly they were damaged, but equally clearly they cannot have been utterly wiped out, as they still appear to retain a lot of votes and rights in the company – enough to assert their right to ensure the destruction of the planet by funding tar sands extraction, for example.

@25 What were the arguments against setting up some new entity to rescue all the deposit-holders (and purchase the “assets” – ie the loan books, as I understand banks assets to be), and simply consigning RBS plc to the dustbin?

And why wasn’t an Act of Parliament passed to mount one of Fred Goodwin’s bollocks on a spike at John O’Groats and the other at Gretna Green?

It’s not so much whether the minority shareholders can stop such a CSR. It’s whether the board has the right to consider it.

I think the board probably does have such a right for there are CSR declarations which are just as silly/restrictive (to taste).

And if such a CSR came to the vote of all the shareholders then no, the minority couldn’t stop it (at least I doubt it).

However, here, we’re asking whether the courts will insist upon a board upholding a CSR which the board has not adopted: only the majority shareholder has.

I very much doubt that will work.

Guessing (I’m not an expert on company law in any manner) I could see that the court might say that the Green Book creates a reasonable expectation of how Treasury should instruct UKFP……but that’s a real stretch. Don’t forget, manifesto promises are not justiciable as we found out recently…..

“@25 What were the arguments against setting up some new entity to rescue all the deposit-holders (and purchase the “assets” – ie the loan books, as I understand banks assets to be), and simply consigning RBS plc to the dustbin?”

Two things.

1) Speed. It absolutely certainly would not have been possible to do this in hte time available. Complex legal structures banks.

2) We’d have lost even more money. The only way I think you could do this would be to declare bankruptcy. That means that all the liabilities come due I think. So we’d have had to pay out on everything. Sure, the assets would get a lot of it back over time but, ermm, not a nice process. Also, bankruptcy was the very thing we were trying to avoid of course.

@29 Cheers. Tell you what, I’m glad somebody’s doing it, but I’m equally glad it’s not me in the High Court ploughing through all this crap.

Sorry to hassle you, but genuinely interested in your reply to my second question @28 about the govt setting up a fresh company to rescue the bits of RBS essential to the good health of the UK economy, rather than the actual RBS, with all its shit & timebombs hidden away under various floorboards and in various cupboards. .

@25 What were the arguments against setting up some new entity to rescue all the deposit-holders (and purchase the “assets” – ie the loan books, as I understand banks assets to be), and simply consigning RBS plc to the dustbin?

Letting RBS go bankrupt – which is what you’re describing – and then cherry picking out the productive bits is what happened to Lehman Brothers. It was decided that a large UK commercial bank actually failing would have had disastrous effects on the economy. There are people who advocated precisely that – let it go under, and then rescue depositors and spin off whatever can be saved – but I’m not sure you’d be too popular here if you agreed with them. The most prominent one was Dan Hannan after all.

@31 Apols, you were already there.

I can’t argue against you. But it’s clear to me that going forward “too big to fail” should become “too big to be allowed to trade as a private sector company”. Whether that means smaller private banks or nationalised banks is a debate for another day. And looking backwards, the taxpayer I think is entitled to some recompense for this debacle and I’m sticking with my spike/bollock idea. Whilst he’s still alive with his tackle in place, it’s not too late to implement it.

31 and 32. This is really the “too big to fail” argument. RBS was, in the eyes of most at least, simply too big to do this too. Just too many hundreds of billions and too many millions of companies and people.

As an example, all bank accounts would have been frozen immediately. ATMs not working and all the rest. Would have been a few months (at least) before they could be got working again.

That’s why failing abnks are almost always taken over rather than allowed to go bankrupt.

“ATMs not working and all the rest. Would have been a few months (at least) before they could be got working again.”

I simply don’t buy this. The existing staff including computer boffins and the counter staff who put the notes in the machine could have all come into work the next day, working for some new entity or other. If necessary, with a bobby posted on the door of the bank to ensure good order all round. A run on the new entity could have easily been avoided. In fact, all the real people, operating n the real economy, could have been a lot happier?

@34, 35

Railtrack went bust (or was forced bust, if you like).
Sorting that shit out took ages.
But the trains ran the next day – and in fact, they ran better. Staff, customers and the Great British public were all much happier.

I simply don’t buy this. The existing staff including computer boffins and the counter staff who put the notes in the machine could have all come into work the next day, working for some new entity or other.

If RBS had gone bankrupt then the money in the ATMs, the offices, the deposits themselves would all have belonged to RBS’s creditors. Bankruptcies and restructurings take ages and are helluva complicated.

it might have been possible to avoid all this, but only I think through driving a coach and horses through Insolvency Law. And on balance it’s better that this didn’t happen.

Strategist – I doubt it. Remember the UK is a particularly childish country, prone to panics. It only takes rumours of a fuel protest to send parts of the country into panic buying petrol. Similarly once ATMS stopped working (and chip and pin devices as well presumably) and everyone called their friends/families to get cash asap it would have been merely hours before mass panic. In some areas of the UK I suspect a high probability of riots as well.

In the climate of sept 2008, with nobody knowing how far and widespread the likely collapse would go, I cannot honestly see how any policy maker of any political party would have decided to just let things happen and atms stop working. The failure is not the rescue of the banks, but the subsequent failure to ensure consequences for those who always collapsed the system and the failure to implement changes aimed at preventing the need for further bailouts in the future.

Tim W (comment 17 – I haven’t got time right now to catch up on all these)

well, sort of, and that is their argument. But the the companies act makes it pretty clear that short term profit is just one of the things a board of directors has to take into account. They must also consider community impacts, environmental impacts, and other things – I don’t have the time to digout the text now, but shareholder return is just one of a long list of bullet points of things they must take into account. The weight given to these is up to the board, who are appointed by the shareholders.

36 – Railtrack was put into administration and then bought as a going concern by Network Rail – it was a fairly orderly transfer of responsibilities. The real struggle there came over the level of compensation paid to shareholders.

If RBS had been bought as a going concern that would have lead to the problems identified by Tim W above. If it had been allowed to go properly bust you end up with the associated shenanigans of bankruptcy.

The weight given to these is up to the board, who are appointed by the shareholders.

The ‘A’ shareholders…

yup, the A shareholders. and yes, there is a question about damaging the rights of B shareholders. The point though is that the law recognises shareholders inerests, both A and B, are broader than just short term returns – focussing on fidutiery duty ignores this.

@37 “it might have been possible to avoid all this, but only I think through driving a coach and horses through Insolvency Law. And on balance it’s better that this didn’t happen.”

I’m not buying that balance. It would have been possible to avoid it, and it would have been worth it. Anybody could have seen they were exceptional circumstances, and it wouldn’t have had much impact on people’s confidence in all the rest of insolvency law.

@38 You’ve missed my point. My point was that the ATMs wouldn’t have stopped working.

@40 I disagree. Like the railways, you let the dog of the real needs wag the tail of the structure to deliver it. You find one way or another to allow the retail business open the next morning just as it was, but in the warm bosom of the crown, and with the assholes who owned and ran RBS bereft of their shirts.

Err, no:

“The point though is that the law recognises shareholders inerests, both A and B, are broader than just short term returns – focussing on fidutiery duty ignores this.”

Fiduciary duty *itself* is much broader than just short term reforms. Take the bonuses example I give above. If RBS didn’t pay out £5 billion in bonuses (or whatever) this is in shreholders’ short term interests. Profits go up by £5 billion.

But it damages their long term interests. Thus it is against the fiduciary duty of the board to recommend it.

You can add all sorts of things to this as well: employing slave labour (rather than lowly paid like sweatshop labour) would be so repugnant to most consumers that any company which employed it would lose a fortune once people found out. So while slave labour might be cheap in the short term it would damage interests in the long. It would thus be (at least arguably) a breach of fiduciary duty by hte board to employ slave labour. As I say you can add all sorts of things to such a list.

43 – You could be right, but there are a couple of problems that are, basically, irresolvable. The first was Tim W’s above

If the govt took 100% of the equity then some say that all of RBS’ liabilities (ie, everything it owed to everyone, all hundreds of billions of it) would have to be counted as part of the national debt. And it would be the gross number, not the nett, which would be added.

And the second was also Tim W’s…

Speed. It absolutely certainly would not have been possible to do this in hte time available. Complex legal structures banks.

I used to be an M&A lawyer (well, I worked in an M&A department…) and the level of complexity involved in restructuring RBS in its entirety would have been out of this world. By way of comparison, when I was there I was working on an attempted spin-off transaction of a section of (as it happens) RBS. It took a team of 20 or so 4 months to get the transaction to a place where the buyer could have made a bid. The idea that RBS could have been entirely restructured (rather than just sold as a going concern) overnight is just not realistic. Won’t someone please think of the lawyers!

As a cautionary tale, when Bear Stearns went under, the legal team at a US law firm (no names, no pack drill) worked flat out over the weekend to put together a deal whereby JP Morgan could buy it out. After the deal was signed, someone realised that JP Morgan were committed on signing to paying $236m ($2 per share), but that all Bear Stearns were obliged to do was consult their shareholders. Shareholders said no deal. JP Morgan still, under the Agreement had to pay out. Red faces all round. An amended agreement was passed a fortnight later, with JP Morgan paying $10 per share.

Rushed jobs are dangerous.

@45 Cheers. A fun digression into the what might have beens.
Logging out now.

Meanwhile – congrats to Platform, WDM etc, and good luck in court.

@34

This is really the “too big to fail” argument. RBS was, in the eyes of most at least, simply too big to do this too. Just too many hundreds of billions and too many millions of companies and people.

But the point is that RBS and the rest should never have been allowed to become “too big to fail”. That they were was due to the abject failure over many years of the Competition Authority (and before that the MMC) to properly regulate the market in banking and financial services.

When RBS failed, an opportunity should have been taken to fragment the retail assets on a regional basis and sell them off or franchise them out. The same solution should be applied to the assets of Lloyds Group. The banks outwith public control should also be made to separate the retail from the investment arms, as Obama has proposed in the USA.

A genuine market in financial services would prevent a recurrence of the government being compelled to intervene to prevent meltdown.

Incidentally, reference my comment @10, could Adam please tell us how Platform is funded?

#47

Why is it a problem if it’s funded by public money? I can’t see a reason not to use public money to fund a suit which aims to stop the misallocation of public assets. If nothing else, it proves that the state isn’t some unified automaton like some libertarians seem to suggest at times.

“employing slave labour (rather than lowly paid like sweatshop labour) would be so repugnant to most consumers that any company which employed it would lose a fortune once people found out.”

Probably not.

At first it would just ignore the allegations, and if pressed use its PR muscle to portray those making the allegations as communists and extremists with an axe to grind.

Then if the allegations continued and grew it would move into agressive denial of the allegations, using its PR and legal muscle to keep the story out of the mainstream media. Possibly using security companies to agressively target the activist groups campaigning. At the same time the sub-contractors involved would start the cover up process by eliminating witnesses etc.

If this failed eventually a few newspapers may get brave enough to print the allegations and the calls for a boycott. the company would then get concerned enough to use its PR tactics. They’d issue statements about “sub contractors of subcontractors failing to meet the ethical standards of the company” and promise to evaluate internal policies.

After sufficent time had passed continued use of the allegations would merely elicit a response of “that happened under previous management”.

Then no doubt a few amateur economists would start appearing on message boards explaining that whilst they disaproved of slavery, it may be a necessary part of the development process – and boycotts would only hurt the slaves as they would be left with far worse conditions elsewhere.

After all – how badly has Coke suffered from the allegations of collusion with the murder of trade unionists? Or how damaged were comapanies that invested in Burma and thus directly benefited from infrastructure made by slaves?

employing slave labour (rather than lowly paid like sweatshop labour) would be so repugnant to most consumers that any company which employed it would lose a fortune once people found out.

Can I come and live in whichever fantasy world you’re currently residing in? It sounds lovely.

@47, @48

Got to come back in on this one, as I was going to come back on @10 but forgot to do so.

I have no idea if Platform is taxpayer funded (my guess is it isn’t), but even if it was, if they succeed in slowing and stopping the exploitation of tar sands, and thereby save the planet as an inhabitable environment for our children and grandchildren, wouldn’t that probably be the best value the British taxpayer ever got?

Even with a less successful outcome, some scrutiny and light shone into the policy thinking and working of multi-trillion dollar enterprises such as HM Treasury and RBS plc can only be a good investment of a few pennies of taxpayer funding.

We need active civil society organisations. As a taxpayer, I’d like to see more invested in them.

There is great ignorance of the extent to which tar sands are fucking bad news, and pagar is an arch ignoramus, I’ll be bound.

I have no idea if Platform is taxpayer funded (my guess is it isn’t)

Maybe your right, but as the donations they received would barely cover the salary of one of their employees I’m guessing otherwise. Anyway, I’m sure Adam can clear it up.

if they succeed in slowing and stopping the exploitation of tar sands, and thereby save the planet

But this action, which is admitted to be stunt publicity, will not do that.

We need active civil society organisations. As a taxpayer, I’d like to see more invested in them.

If you are happy to pay for the government to fund an organisation to take another government controlled organisation to court to publicise their disagreeable policies in the forlorn hope that they will amend them, well fine. Just seems to me that it might be simpler (and more efficient) for the government to instruct their delegates sitting on the RBS board to have the disagreeable policies changed.

pagar is an arch ignoramus

No argument there, mate……..

@52 “this action, which is admitted to be stunt publicity, will not do that”

Au contraire. It may, just may, slow it a little.

The objective of the exercise is to rule tar sands out as an energy source because its environmental cost is too high. And this is only going to happen through a long haul of a civil society campaign to influence governments to reach international agreement to either ban them or carbon tax them out of existence.

If the judgement of these admirable and shit-hot activists is that the best way to get this long haul off to a flying start is to do a court case (already de-risked to be of minimum cost to them), then I’m not going to gainsay that. The effort it will provoke in the Treasury to get thinking and paperwork in good order in order to fight the suit, will likely be good value for the taxpayer as well, whatever the verdict.

“it might be simpler (and more efficient) for the government to instruct their delegates sitting on the RBS board to have the disagreeable policies changed”

quite a lot of kilobytes have gone down on this thread with people demonstrating that government has deliberately avoided gaining any control over the company it owns.

Hello,

I’ve just skimmed the comments, so sorry if I’ve missed some questions.

@Pagar:

I’m afraid I can’t answer the one question I’ve seen put directly to me – is PLATFORM publicly funded? The answer, I’m afraid, is that I don’t know. They are partners in our campaign, but I don’t work for them, I work for People & Planet. I have never inquired as to where they are funded from.

However, I think you are barking up the wrong tree. As I said above, our lawyers are not charging us. The court has ruled, so far, that our case is in the public interest and so that we will not be charged more than a relatively small amount of the Treasury’s costs. This case is not costing us much – which is good, because we don’t have much.

If you are concerned that it is costing the taxpayer, then I’d revert to one of the basic arguments of the Chartists. If some people are allowed to claim in a court of law that an Executive has acted ultra vires, which I suppose is what we are doing, then it is a basic principle of democracy that the ability to do this shouldn’t be solely based on wealth. The process whereby the judiciary can hold to account the executive based on laws set by the legislature is an important principle to anyone who believes in some kind of separation of powers. Unless you are advocating either a) that only the rich can legally challenge the government, or b) that the government should not have to be accountable to Parliament, I really don’t see your point.

Another interesting question that people haven’t been discussing – what will the Tories do with RBS?

Adam

“If you are happy to pay for the government to fund an organisation to take another government controlled organisation to court”

Heard of legal aid?

When Brown gave indpendence to the B of E , he stripped of theor obligation to monitor banks. RBS is Scottish and if one looks at the performace of the HBOS , Northern Rock and Bradford Bingley, they were al based in Labour strongholds. Labour and Brown did not want any regulator to assess these organisations and find fault- all were passed by the FSA. If the B of E had found fault with HBOS or RBS , The Scots Nats and Brown would have accused it of bias. Salmond was a former economist with RBS. The massive increase in the size of the RBS over the last 15 yrs has received no criticism from Brown or Salmond.

good points Adam – hope this action forces the govt to do something about RBS’s investments.

Another interesting question that people haven’t been discussing – what will the Tories do with RBS?

Hopefully as little as possible, allowing it to recover some degree of stability – through streamlining products, rationalising lending etc. And then, when the share price recovers, incrementally sell down the Govt shareholding. If commercial banking profits return even remotely to where they were prior to the crash RBS could be a useful little money-spinner…