I dared not say it then, but it made me feel like being in a cult. Apple mania continued this month when the phone was finally available for purchase. Standing in line for hours to get a phone? Come on, get a grip. It's only a *&*&!%^ phone! I love Fake Steve Jobs take on it. Funny man.

Don't get me wrong, I still love apple, but not iPhone. There, my loyalty lies with Blackberry. Let my 14 year old niece have all the fun with her iPhone. She better, having stood in line for hours to get one.

I'm not a fan of the ones promoting violence. I fail to understand why or how parents willingly expose, in some cases encourage, their child to violent games. No matter what the argument is, it's pure stupidity and irresponsible. And then we wonder why kids shoot their classmates. Then again, I'm not a fan of public school either. No child of mine is going to one, if I can help it.

On a totally different note, Ring of Fire is running through my head all day long. It's Johnny Cash, so I've no complaint.

I'm betting Icahn will get his way to certain extent.

But, consumers shouldn't have to pull their hairs, be on the radar of senior management before they receive their due service, in the first place. Consumers purchase services and products to ease their life style, not complicate it. Unfortunately, large corporations in the US are mismanaged, BIG time. This has a rippling effect on the community with consumers feeling the brunt. Not to mention rise in blood pressure.

Carl Icahn couldn't have put it better on his blog.

Seriously though, Microsoft and Yahoo! is back on the negotiation tables? No doubt Bill Gates departure and Carl Icahn had something to do with it. Icahn may not succeed in getting all of his recommended board at Yahoo and fire Jerry Young...yet. He wouldn't need to if a deal is reached. You've got to give it to Icahn, agitating companies. Last time he lost in his effort to control Time Warner and oust it's CEO Richard Parsons, he made $3 million.

I wouldn't mind "loosing" Icahn's way.

Though at this point I'm weary, I'll heed my mother's saying: everyone make mistakes and when they want to right a wrong, give them a chance.

In that spirit, I'm giving Comcast a chance.

What followed was a waste of an entire Sunday afternoon and evening with at least 8-9 rude reps., trying to get an answer as to how or why the tech cut off my service. Tech reps I dealt with were:

• Sharisse, ID 2MX (the first rep I contacted as soon as I realized the service was cut off)
• Jay, ID 61483
• Joe, identified himself as a supervisor but refused to give his ID when I asked for it and hung up instead. Later another rep stated there was no supervisor named Joe. (as a customer, you have the right to know who you tare speaking to; not their last name but their ID so that you may identify them if need be.)
• Derick, ID 08J
• Donovan Reid, supervisor (most hostile)
• 3 others who refused to give their ID/names and hung up

It will help to either record (best bet) or reenact incidence as did the gentleman below.

I think I'll start a separate page just for Comcast notoriety. It's amazing the response I'm getting from hundreds of disstasfied/frustrated customers. I'm done ranting; it's time to take action.

Here is his blog documenting Comcast horror story.

I had planned to have a chat with him in a more private setting over a drink or dinner, as we did last time. But, tonight's plan was to head out to Duluth for a night cap and that didn't appeal to me. I did say a quick hello but am disappointed for missing out on the conversation. Plan B worked out too since Seasons 52 always scores high with me.

The world is becoming flat and it's inevitable that businesses will invest where it's most profitable. China no doubt is leading in world economy expansion. While the US dollar is weakening, Asia is booming, according to him. I definitely agree. But, do I want to invest in China? Not an appealing thought. Maybe I'm being naiive. But, when do we draw the line between profits and ethic?

Who knows, I may feel differently tomorrow. If I hang out with this crowd, that's very likely. But, nothing is guaranteed. I'm curious to see which direction I'll follow.

Events of the weekend included the error of me getting into political conversation at couple of gatherings. Big mistake. Oh well; life goes on.

My lunch with one of my business advisor on Sunday was the highlight of the weekend. I'm often asked the secret to my strength in starting on my own. The answer is being bold and never stopping to believe in yourself. Think big and go after your dreams. My advisor and confidante stressed just that. He reminded me it's the vision and strength of one person that changes course most times. He urged me to remain relentless in my pursuits.

I would add, form an advisory board. Pick advisors wisely; leaders in their fields and people who share your vision. Surround yourself with people who make you feel good. Personally, I don't like complainers and am not a fan of can't-do attitude. I could go and on and on but for now that's my two cents.

In the words of Confucius: Wherever you go, go with your heart.

So what happens to companies that volunteer to reduce their carbon footprint? Some new research by Karin Thornburn of Dartmouth indicates that their stock prices go down:

Specifically, we studied the stock market’s reaction when companies joined Climate Leaders, a voluntary government-industry partnership in which firms commit to a long-term reduction of their greenhouse gas emissions. Importantly, when the firms announced to the public that they were joining Climate Leaders their stock prices dropped significantly. Controlling for general market movements, the average abnormal stock return was -0.9% over a three-day window and -1.5% over a five-day window around the announcements. For the 46 sample firms that joined Climate Leaders, the total loss in market value was $16 billion. The stock price decline was smaller for firms in carbon-intensive industries, where regulatory action is more likely (and thus partially anticipated in the stock price), and greater for high-growth firms, suggesting that the green investments crowd out growth-related capital expenditures.

Firms joining Climate Leaders conduct a careful inventory of their greenhouse gas emissions before they subsequently announce a reduction goal. The average firm in our sample set a goal to cut its total emissions of greenhouse gases by 17%. Interestingly, the stock price plummeted even further (on average -1.3%) when the greenhouse gas goal was announced, and the more aggressive the goal, the greater the price decline. The study also included 22 firms joining Ceres, a network addressing sustainability challenges whose principles are adopted by its members as an environmental mission statement. Stock returns were largely unaffected by the Ceres announcements, perhaps reflecting—in contrast with Climate Leaders—the lack of specific environmental investment commitments in Ceres. In addition, we looked at portfolios of industry competitors, but found little movement in stock prices when their rivals joined an environmental program.

Of course, we all knew that only coordinated, mandatory action could ever convince corporations to reduce their carbon footprint, but it's nice to have some empirical data showing that voluntary action will never work.

Since I didn't follow all the episodes, I concluded it was Piers' strength in generating revenue that left him as the last two contestant. In other words, he was efficient. Trace, on the other hand, came across as a nice guy who probably stayed in the game as the other remaining contestant because of his likability.

At the end of the tasks given to them, Piers was a winner in every category. But, his directness and no-nonsense professionalism left him as the least favorite of the two. On the other hand, Trace won over everyone by his gentle and likeable nature. However, he didn't match half of Pierce's delivery. When Trump asked former contestants to choose between Piers and Trace, most of them chose the latter, even after admitting Piers was the most effective team member.

I was blown away. Here were these celebrities, admitably choosing a less result-oriented contestant over efficiency. It was a relief when Trump overrode all those opinions and picked efficiency over likability. I guess, that's the difference between being a business leader and a follower. After all, as Piers very rightly pointed out, he was not on a popularity but on an efficiency contest.

As for me, I would definitely choose efficiency over likability without a doubt. Well, as long as confidentiality and loyalty are not compromised.

And while it's unfortunate that these jobs are (according to the WSJ) going to fund patronage jobs, surely people who live and work in Chicago know that patronage and petty corruption are as much a part of the city as the Cubs.  Municipal income taxes are by their very nature  easy to drive down by a race to the bottom. Cities' jurisdictions aren't that large and it's relatively easy to buy goods outside of a city.  So why exactly does the WSJ really care about how high municipal  taxes are?  It seems that by complaining about how desirable, populous places have high taxes, all they're saying that high tax rates aren't that bad.  After all, you can pay high taxes and live in Chicago, and Chi-town's tight!

Company cars are more at risk through employee apathy than for any lack of driver skills, reports Miriam Hechtman.

Everyone wants to reduce accidents in car fleets. The employees do not want to go to hospital or the morgue and fleet managers do not want to pay higher insurance premiums.
But reducing accidents in car fleets requires more than driver training and buying safe vehicles. Fleet managers have to start analysing the driving behaviour of employees, act on that analysis and start talking to their employees.

Tony Robinson, the chief executive of SurePlan Australia, says that when they are working to reduce fleet accidents, companies "need to adopt a proactive approach rather than one that plays catch up". Robinson's company, which provides accident management services to fleet operators, says operators should regularly examine what influences driver safety and most importantly, driver attitude. To do this, Robinson recommends companies "get down to basics". Employers need to "sit down with people and get out the white board" when analysing an employee's driving profile. "The key ingredients are to be found in the recording of collisions, traffic infringements, fuel use and distance being travelled, all of which can help in the establishment of a driver risk profile that can identify where your greatest driving risks are."

The most common causes of accidents, says Robinson, are nose-to-tail collisions, which usually involve a stationary vehicle at the lights. He also cites excessive speed and manoeuvring cars, often in places such as a car park. Robinson says employees react well to this approach and are able to transform their attitude as well as pick up on bad habits.

Donna Robertson, Johnson & Johnson's group fleet controller for Australia and New Zealand, says the most common reason for car accidents in fleets is apathy. "It's a company car, it's not really going to cost me anything, so why should I care." "Fleet safety is a huge thing within the company, within the whole area, and it's No. 1 on our priority list of occupational health and safety.
"We're working very hard to try and resolve the problems. We're putting in a lot of training," says Robertson. It is compulsory for every company driver to do driver training. "Every accident against every person and any fine infringement goes against that person as well," says Robertson. "Each driver has another file attached to it that will have all their information regarding their driving record."

The safety committee at Johnson & Johnson has systems in place to reduce accidents, including recording all accidents and working out the high risk factors. Promotions and incentive-based schemes are also used and generally have a good response rate by employees. The number of accidents has dropped. In 2003 Johnson & Johnson in Australia had a rate of 12 accidents per million miles driven. Last year, the rate went down to nine and by 2009 the company hopes to have an accident rate of three per million miles or less. But accident rates are difficult to gauge, says Robertson. As Johnson & Johnson have tried to encourage honest reporting, the rate tends to go up because people now give an honest account. Ultimately, "you must get through to the mindset of the drivers", says Robertson. "You've got to aim it at the employees because they're the ones that are the stakeholders."

Cheetham Consulting Group offers corporate psychological services and counselling and advises on how to change behaviour and attitudes of drivers. John Cheetham, consulting psychologist and director of the company, says there are two sides to the coin. "Employers need to ask whether their policies are inadvertently promoting inappropriate driving." For example, the driver is under pressure to get things done, such as sales for the company, rather than to focus on driving. There is also the issue of driver attitudes. "Research indicates males tend to overestimate their capacity as drivers more than females. Male drivers tend to be more comfortable and more prone to take risks," says Cheetham.

Risk is a significant factor even in driver training programs and can increase accidents rather than prevent them. "Humans tend to operate at the highest level of risk that they think they can manage safely. And with driving we tend to be over-optimistic," says Lori Mooren, a consultant on fleet safety for Safety and Communication. "As people gain more skill, they simply adjust their targeted level of risk upward." Drivers need to become more aware of their own life in the car, says Cheetham, rather than who owns the car. "The most important thing from the occupational health and safety viewpoint is the most important thing from a personal viewpoint to be safe."

Safety first
* Companies need a proactive approach on fleet safety.
* The most common accidents are nose-to-tail collisions and those caused by speed.
* Men tend to overestimate their capacity as drivers.

its-not-easy-being-green-10-12-cd.pdf

Two companies have cornered the Australian credit market, reports Miriam Hechtman. 

Coca Cola and Pepsi; Qantas and Virgin − these companies know about competition. In the lesser known area of credit reporting services, two major players are fighting a similar competitive battle. With company information changing by the minute, providing accurate and up−to−date data is paramount. This competitive battle affects factoring and discounting, as credit assessment of clients is a key part of the industry.

"Credit reporting in Australia is in a healthy state with good competition between two large major players, Veda Advantage and Dun & Bradstreet," says chief executive Terry Collins at industry body, the Australian Institute of Credit Management (AICM). Historically Dun & Bradstreet (D&B) has a commercial or business to business background and Veda Advantage, formerly Baycorp, traditionally has covered the consumer or personal market. But Collins says both have expanded to cover both services. "They have done this by developing their own resources but also by purchasing in other organisations that provide this resource to them." 

D&B's recent purchase of 47 per cent of FCS OnLine "has strengthened their ability to report in the consumer area," says Collins. Veda's purchase of Australian Business Research in September last year "has also provided extra resources and expertise into Veda Advantage". Collins says this type of two−team playing field is not a bad thing. "We haven't necessarily lost two smaller organisations but rather those organisations and their resources have been absorbed into larger and potentially more efficient organisations that can better utilise their expertise. They are both well resourced and well run and I think the industry is better for it." 

A commercial credit report provides information on a company's credit history and status. "It's understanding and really having some quantitative measures in place about who you want to do business with and then, during the ongoing term of the relationship, keeping yourself well informed about the performance of your customer in their relationship with other businesses," says Veda's commercial division's general manager Russell Evans. "The small business segment, which is now increasingly concerned about preserving its cash flow, is the fastest growing user group of credit reports," says D&B's chief executive, Christine Christian. With the economic landscape changing so much, mitigating risk in the current economic climate is very important, says Christian. "There is a new level of sophistication emerging in this country where risk managers and credit managers are now looking for more information." 

According to Evans, Veda has approximately three million individual commercial entities on its database, about 2,500 directors and about 1.1 million proprietors and partnerships. As a domestic company (including New Zealand) Veda provides access to overseas reports for customers looking at export opportunities. Fees to purchase a credit report range from $10 − $100. Says Evans: "Fees really depend on the level of the risk involved and the complexity of data that's required in that decision." 

"We've been enjoying pretty strong double−digit growth over the last three to four years and we see that continuing," says Evans. "A lot of organisations are feeding off the growth in the resources boom so the whole eco−system around that is creating a lot of growth. We're projecting similar growth, if not increased levels of growth, over the next 2−3 years." 

D&B's global commercial database contains more than 130 million business records or profiles, and according to Christian, "is the largest commercial database in Australia comprising a credit risk profile on all 2.8 million commercially active businesses in Australia." Since expanding into consumer credit reporting in 2001, D&B has tripled in growth, says Christian. "The last eight years have been very positive for us. We have enjoyed significant growth on the back of what has been a very active credit environment in this country." 

Today's fast moving economy, coupled with customers having a lot of choice, means organisations need to make decisions quickly, says Evans. "Gone are the days when a credit manager could sit around for two or three days and contemplate whether they wanted to do business. It's really getting the balance about being proactive in the marketplace with growing revenue, but ensuring that you're partnering with the right sort of entities so cash flow is protected." 

As data decays very quickly, matching data accurately is crucial, says Christian. "Because our customers have to make real−time credit decisions, our absolute competitive advantage needs to be the accuracy of our database." D&B's global database is updated a million times a day. She says competition is good, noting the impact that technologies, such as the internet, are having on access to business information. "We are an industry which is subject to highly competitive conditions in all aspects of our business." 

Pace of change·

A new business forms every 54 seconds·

A business files for bankruptcy every 29 minutes.·

A company address changes every five minutes.·

A company enters external administration every 15 minutes.· A company name changes every 22 minutes.

Source: Christine Christian, Dun & Bradstreet

Certain small well-run businesses have much to gain by procuring early-stage inventory finance, writes Miriam Hechtman. 

Invoice discounting helps bring cash flow forward for the last phase of the cash-flow process: after the invoice has been sent to the client and the business is awaiting payment. Another form of finance, relatively new and increasingly popular in Australia, is for lenders to advance money for inventory - that is, for stock that has yet to go out the company door. 

Used in various hybrids with varying practices, inventory finance is designed for small businesses that are successful, profitable and growing, says Matthew Nolan, managing director at Provident Cashflow. These businesses have a clear credit history, good management and have generally been in business between three to five years. "They're companies that have reached as much growth as they can afford to by themselves, they have traditionally used everything that's in their real estate and they're looking where they can get the extra layer of growth," he says. "One option is us." 

Provident provides cash upfront for a range of business types, including for raw materials, boats, stationery, fresh fruit, works in progress, such as partially completed garments, and finished goods, such as electrical products. Unlike other financing facilities, such as discounting and factoring, which cater for the last phase of cash flow, inventory finance is suitable for businesses that need the money immediately in the first phase of the selling process. "We finance [the stock] right when the person actually buys it," Nolan says. "We make the payment for them to their supplier." After the client has paid for the stock, Provident is paid from those proceeds.

Companies that are in trouble are not suitable for this type of financing, says Nolan. Provident looks at the company's gross profit margin, which as a rough rule of thumb, must be 20 per cent. "Our average is much higher, 49 to 50 per cent and that means that they're making enough out of it, even after our fee taking a modest proportion of that, to make sure that it's still worthwhile," Nolan says.As opposed to interest, Provident takes a flat fee and clients determine the term of their fee, which can range from 30 to 120 days with 30 days equalling 3 per cent. Says Nolan: "For our customers, it's the equivalent of saying, 'here's some additional turnover that you couldn't have done through traditional lending or with your own capital. Instead of making 50 per cent gross profit margin you will make 45.' Naturally enough, they all say yes." 

Employers ignore environmental awareness among potential recruits at their peril, writes Miriam Hechtman. 

How green is your employer, and do you really care? In a candidate−short market, potential workers in the banking and legal sectors may have a list of questions they would like to put to employers. With climate change and the environment hot topics, increasingly candidates are asking the green questions when applying for jobs.Will it override salary and job satisfaction? Not likely. But it is still a factor to consider. 

"Today's candidates are business savvy and well aware of the sustainability issues in the world today. Candidates understand that corporate activity will often have a demonstrable impact on the environment, and want to know how they [employers] are addressing this," says Alison Sherry, general manager at Hamilton James & Bruce (HJB) recruitment agency. "Therefore, the trend towards monitoring environmental track records of organisations has become a key aspect in their search for attractive organisations to work for." 

St George Bank general manager of human resources Robert Marriott says the whole approach to recruitment is changing quite dramatically due to a range of complex factors, including the environment and community responsibility. "So how that changes recruitment for us is . . . we need to be very clear about what our employment proposition is, and then be sure that we actually live up to what we say." Marriott says the bank has done "a lot of research, both internally and externally, about what people value as important, as part of the employment proposition, and that's where the environment has popped up".

Additionally, feedback from St George staff on a "staff benefits blog" is often related to environmental issues. For example, the suggestion of interest−free loans for staff members who purchase green items such as solar panels, waste management systems and rainwater tanks. The way in which recruits are approached needs to be innovative, says Marriott, including the types of things that are spoken about and the opportunities that are offered. "When people click on to our careers page there's a whole lot of stuff [about] the different benefits that you can get, so things like Greener Dragon [interest−free loans] are highlighted there." 

Though climate change and the environment are often categorised as issues being driven by generation Y, the generation gap could now be lessening. HJB's Sherry says there is a huge awareness about the environment, given the daily issues the state is facing, such as water restrictions and global warming. "It's not just Gen Y now; they were probably aware of it earlier but now it's across the board." Associate director Lyndsay Steadman, at Michael Page Financial Services, agrees.Steadman says carbon trading, in particular, is "becoming a key focus area that candidates within that front office are asking about". 

As much as 40−50 per cent of candidates at HJB rate the environment and sustainability as important features in their job search, says Sherry. Being environmentally conscious can often be an indication to candidates that a company is thinking ahead, which in turn reflects economic sustainability. "Candidates also understand that businesses that adopt strong positions on environmental issues and encourage cultures of environmentally responsible behaviour and continuous improvement in managing their environmental footprint generally better address their risks and create more business opportunities," says Sherry. From the employer's perspective, being environmentally aware also makes economic sense, says Steadman. "For businesses at the moment the key thing that we hear is, 'What's going to limit your growth over the next 12 months?'. And a lot of it will be having the right people driving the business." The right people may include candidates whose key driver is environmental policies and if a company is not in line with this "they're at risk of not being able to retain good people". 

Yet, despite its more recent gain in interest and priority, Steadman notes the more common drivers are still ahead on the list. "Has it taken over from job satisfaction, career progression, salary, culture, training? No. But it's definitely one of those that has been added to the list," she says.

If you want your super to go into a fund that invests in things you care about, help is at hand, says Miriam Hechtman. 

"The earth is the Lord's and everything in it, the world, and all who live in it." Psalms 24:1Investing your money according to a psalm from the Bible may seem strange to some but "Putting your money where your faith is", is a growing industry. Combining your personal values with investment options can be tricky but there is advice on offer.

The term SRI refers to sustainable responsible investment or more broadly, ethical investment. This approach to investing considers the investment's social and environmental repercussions, as well as the likelihood of it making a profit. In response to the growing request for assistance in investing ethically, in September last year the Ethical Investments Association introduced the SRI industry certification program, in partnership with the NSW Department of Environment and Conservation and the Victorian Government.

EIA executive director Louise O'Halloran says the purpose of the certification was "to make a place where people can go and find lots of information". The SRI Superannuation Centre (located on the EIA website) gives people access to information on each fund, including the methodology of a particular ethical investment option and what makes that ethical investment option worthwhile. Similar to the Heart Foundation's "tick" symbol, licensees of the SRI certification are able to display the SRI symbol. Since its launch, the number of licensees using the symbol is rising.

"Each category has different criteria and that's what makes it such a robust system. We tried to find the kind of behaviours that we wanted to see happening that would make it easier at the end of the day for people to make informed choices about investing ethically, says O'Halloran. A good way to get into SRI is via an industry fund, says O'Halloran, because you get a good combination and somebody has put together a mix for you. "Above all I would really advise people to go to see an adviser that specialised in giving SRI advice because of the amounts of money involved. It's a significant amount of money and it should warrant having a proper adviser helping you."

One industry fund that has received the SRI tick of approval is Christian Super, which "aims to invest in accordance with biblical principles to ensure that member funds are managed responsibly while growing for their future needs." The industry and multi−employer fund was set up in 1984 (as Christian Schools Superannuation Fund) to serve the staff of Christian schools around Australia. It later became open to any Christian ministry organisation, and introduced ethical investment as an option in 2001. "We did that because we progressively wanted to start to take ethics into consideration," says chief executive Paul Beckmann.

The fund did not go in "boots and all" as it did not think either the market or the regulator were ready for such a step. But it made its default option an ethical option, thereby increasing the chances of members remaining with the ethical option. The fund has undergone various changes in reviewing its investment options, especially in the past year. The most fundamental change is moving to a fully ethical investment structure from February 1 this year. Prior to this move the fund had ethical investments as options. "We built up over the period to have over 50 per cent of our members in the ethical options and so from February 1 took the position that we'd go completely ethical and so that has effectively happened with one or two small exceptions."

As of April 1, Christian Super obtained its public offer licence. This means that the fund will shortly be open to anyone who wishes to join and have their super invested with ethical focus. "We looked at what value we can add and we saw ourselves having a unique opportunity to provide ethical investment into the Christian sector and we felt that public offer will allow us to reach that Christian community in a total sense rather than just through Christian ministry organisations. So we actually see public offer as an opportunity to grow quite strongly on the back of our approach to ethical investment." Christian Super has only had the certification for a short time but Beckmann hopes it will guide people and ultimately help them make a decision. "For us the value of the symbol is an endorsement from a reputable organisation that we are very much going down the ethical investments route."

Trading allows water to flow to its most efficient uses, but there are concerns, says Miriam Hechtman.

Water is an important commodity, particularly in the Murray−Darling Basin, and increasingly governments are turning to market mechanisms to ensure proper allocation of this resource. But while the parties involved broadly agree that water trading is the way to go, they are still finding their way around the water market's peculiar characteristics. These include the social problems that may arise in selling water rights permanently, transferring water out of certain areas, and the fixed costs involved in distribution.Sorting out these problems in the Murray−Darling Basin is vital.

According to the Murray−Darling Basin Commission, this catchment area generates about 40 per cent of the nation's agriculture and grazing production.Increasing quantities of water diverted for irrigation in the basin, coupled with the effects of drought, have altered flows, triggering concern for the rivers' health, the surrounding environment and the sustainability of the communities dependent on the resource. MDBC director of water policy co−ordination Bob Douglas says average annual use of surface water across the basin is about 11,600 gigalitres a year, while there is an additional 1200 gigalitres of ground water use."Ninety−five per cent of it goes to agriculture, the other 5 per cent of the basin goes to urban water use or domestic water use."

To improve conditions, water diversions have been capped and government funds injected into the Living Murray Initiative, which aims to restore 500 gigalitres of water to the river each year until 2009, as part of its "first step" decision. Allocation and buying and selling of water in the region have been contentious issues. "When anything is scarce, the best allocation mechanism is through the market," says Ken Matthews, chairman of the National Water Commission. As part of its role to drive national reform, the NWC is responsible for implementing the National Water Initiative, a blueprint signed by all governments.Water trading is central to the initiative, Matthews says, and will encourage water to flow to its best and most efficient use. It will also make the system automatic. So instead of long administrative processes, there will be short, customary market processes between buyers and sellers.

He also notes the opportunities for investment in new agriculture, horticulture and irrigation systems if trading opens up. "A really important advantage of water trading is that it sets a price because the market will determine the price and governments don't have to guess at it."It makes automatic the setting of prices to reflect what economists call scarcity value."

The Australian Conservation Foundation's healthy rivers campaigner, Arlene Buchan, says "governments should buy water to redress the balance". "Using the market is the most efficient and cost−effective way of recovering water for the environment, and it's fair to farmers, who can choose whether or not they want to sell their water."

Parliamentary secretary to the Prime Minister, Malcolm Turnbull, who has responsibility for water policy, says the main benefit of trade is that it allows water to be allocated to its most efficient uses. "An open, well−functioning water market provides greater flexibility for water users to adjust to changes in water availability and changes in product markets."

Water trading occurs in two ways: the trading of water entitlements, similar to the sale of land; and the sale of the annual right to the entitlement, similar to leasing land. Murray Irrigation holds Australia's largest private water licence and diverts up to 1.6 million megalitres from the Murray River on behalf of about 2500 farmers in southern NSW. General manager George Warne says farmers have recently started trading their water entitlements, selling them forever because they're running out of money. "Typically, most farmers have realised that water entitlements are going up in value much faster than their other assets, but they're very liquid, in every sense."

Stranded assets are among the fears surrounding the water trading market. "We'll get left with assets that no longer deliver the full quantity of water. They'll deliver, say, half the water," Warne says. "And while it would be okay if all the water disappeared, theoretically − because you wouldn't have any costs − when you're delivering half the water, it's not half the cost. It costs you about 7/8 of the money to run the water in the channel as it did when it was running at full capacity, but you've lost your revenue base."

The loss of irrigation potential for the region once a water entitlement has been sold is also of concern, as when assets such as rural roads, bridges and schools are sold. While Warne agrees markets can be successful, opening one up is not simple. "Purist economists and others need to understand the physical constraints of transferring water, and they need to understand some of the implications, social and economic, of a free and open market."

Who will trade water in future is also an issue. "There has been rising interest from corporate investors, trusts and diverse fund managers looking for something that's a new asset class − and clearly water has become a new asset class," Warne says."It's much more bankable and predictable than it was, say, 10 years ago. And that makes us a bit nervous." 

Liquidity issues

* Allocation and buying and selling of water have been contentious issues.

* Stranded assets are among the fears surrounding trading.

* The loss of irrigation potential once an entitlement has been sold is also of concern.

A visit to a salt lake became a business opportunity for one British couple, writes Miriam Hechtman.

Shaun and Deborah O'Toole discovered the product on which they are now building an export business while on holiday in Western Australia. Living in Britain at the time, investment banker Shaun and food professional Deborah, were travelling around WA when they found Lake Deborah and its 5 million-year-old rock salt. Where others saw a geological oddity, the O'Tooles saw a business opportunity in supplying prestigious fine-food salt. "You cannot expect to succeed in export markets just by sitting in your office in Australia. There is absolutely no substitute for going to the markets where you've decided you are going to make an effort," says Shaun, now managing director of Lake Crystal Salt.

After discovering the salt, the couple initially returned to Britain to "get on with their lives". "We intended to move to Australia at some stage in the future. Then 9/11 [the September 11, 2001 terrorist attacks in the United States] occurred and impacted my area of business, and we decided that it would be an opportunity to act upon our business idea. I applied and was granted a business skills visa and moved to Australia at the beginning of 2002."

The O'Tooles knew there was a market for fine-food salt and had some idea about targeting the product when they got started. "We believed that the unique qualities of the lake salt would be a competitor to any fine-food salt in the world," says Shaun. One of the first misjudgements the couple made, however, was the assumption that Australians would welcome a home-grown product. "The appetite [for the salt] wasn't as large as we assumed, and we realised that it was going to take some time of educating, attending food shows, whatever, to gain the interests and confidence of Australian consumers and retailers to list our products."

Having invested in a start-up company that lived and died on sales, the O'Tooles quickly paid more attention to export markets. They registered with Austrade and were assigned a mentor through the New Exporter Development Program, with whom they were able to discuss what the product was all about, the segment of market it was best for, and the countries to focus on.
"I think the thing that impressed me the most was the speed of reply, and how you weren't waiting months to get some feedback. The interaction was pretty informal with your mentor, and pretty immediate."

Shaun also received financial assistance through the Export Market Development Grant scheme. Having the funds to travel to the markets, as well as developing a website and marketing brochures, was invaluable, he says. "I knew I had to do it, but it made finding the funds to do it a lot easier." With a fine-food product with a price point there are only certain markets that you can go to. "And by degrees, and by trial and error, and by most importantly visiting those countries and finding out and trying to sell your product, you find out where you should concentrate your resources," Shaun says.

There was more interest overseas than in Australia. One-third of Lake Crystal's sales are in Australia, the rest are in offshore markets like Japan, Taiwan, Singapore, Hong Kong, Britain and the US. Shaun says the attitude of buyers in Australia is now changing. "I think we're seeing a sea change over the last few years. It's been gathering momentum with the appetite for wholefoods trends in the marketplace, and I'm proud to say that now we're listed nationwide, with Coles, and in a good many Woolworths stores as well." Shaun says potential exporters should be prepared to work hard and have the marketing expenditure within their budget before selling any of the product. The success of a product depends on the amount of unique selling points it has, he says: the more unique selling points the easier it is to sell your product. However, he warns, being cheap compared with overseas competitors is not a unique selling point.

After three years, Lake Crystal salt posted a small profit at the end of the past financial year. Based on current trends, the company expects annual sales in 2005 of between $750,000 and $1 million. "Sales have doubled over the last 12 months and we expect sales to double again over the next 18 months." The company is now at the point of consolidating, says Shaun, "because we've more or less reached our capacity with our packaging facility, and the next step is considering further investment which will go towards increasing the amount of our production capacity".

Low-cost advice may mean low-quality advice and advisers tend to encourage a 'holistic approach' which never comes cheap, writes Miriam Hechtman.

With Australians spending more, using greater credit and saving less, the need for financial advice is paramount. But very few are willing or able to pay the hefty amount needed to have a planner reorganise their finances. Some form of low-cost advice, which uses only the basics of financial planning is sorely needed.

"In terms of low-cost planning, the main issues facing individuals tend to be debt, budgeting and cash flow and always being on the back foot so not able to get ahead meaning purchasing now and paying off later rather than saving first and then purchasing," says the CPA's financial planning policy adviser, Kath Bowler. Bowler accepts the need for sponsored activities, government-sponsored initiatives and corporate social responsibility programs to overcome the problem.

One such initiative is the government-sponsored Financial Literacy Foundation, to be launched in February 2006. The foundation aims to raise community awareness of financial literacy and enable Australians to better manage their money. Foundation chairman and financial adviser Paul Clitheroe says issues such as the ageing population, the high material standard of living in our society and people looking to retire earlier all contribute to a growing conversation on financial planning. "This sort of issue is not going to go away," says Clitheroe. "Why is it that we've got over half of Australian adults now spending more than they're earning? Why is it that our savings ratio is now negative?

"The cheapest form of financial planning is to motivate Australians to do the basic work themselves." Clitheroe says a good financial planner will not talk to you about money but about attitude. He says that having a set of goals is a conversation that can be had with yourself or your partner and does not initially require a financial planner. "Our program is about the fundamental building blocks of financial planning," he says. "With the right financial knowledge, the basics can be accomplished by yourself."One of the lowest cost forms of financial planning is when you sit down at your dining room table, preferably with a large glass of red wine and have a decent go at your budget.

"Low cost for me is how much does the client pay for the service directly versus how much the value is that they get for that service," says Chris Craggs, a director at the Financial Planning Association. Craggs says that what planners need to do is "be holistic" and look after a client's full financial needs including super, insurance, expenses and debt." "By looking after all of those affairs the client can then afford to service you," he says.

Craggs says the workplace is a great model for introducing very low-cost planning and Joel Goldman of Goldman Financial Services agrees. "One way of getting around the high cost of planning is by providing advice to employees through their corporate super plan," he says. He says it is a growing area which few planners cater to because it is difficult to get up and running. "Because I am looking at them as a group I can then provide the level of service that they would otherwise not be able to afford on a personal level." Goldman says he can justify his time because he looks at it from a group perspective. In addition, he says, though he is exclusively looking at their super, he is more easily able to identify those needing a personal financial plan.

However, Craggs does warn of the possible backlash if a workplace model is introduced whereby there is no cost to the employees and the fee comes out of the corporate superannuation fund.
"The problem with that of course is that we've got the industry funds saying that you're ripping people off," he says. "So how do we manage that? The adviser has to get paid. It is an unsustainable model to expect people to do work for free."

In terms of the industry, the current climate of compliance makes it difficult for financial planners to provide good advice at a low cost, says Goldman. "Over time, as the compliance requirements become more diluted there may be additional room for servicing those [lower paying] clients," he says.

Wedgetail Communications began in 2000 as a spin-off from a link between academia and industry, and was sold for $100 million earlier this year, writes Miriam Hechtman.

When Quest Software, a Nasdaq-listed global software house, recently acquired the company Vintela, it was the end of a short but very successful journey for Vintela's primary investors Uniseed and Allen & Buckeridge. The development, then sale of Vintela, a company involved in new security software products, is also typical of the life cycle of a private equity investment. The Australian Financial Review spoke to Uniseed's chief executive, Gareth Dando, about the events that led to the company's successful $100 million sale earlier this year.
In 2000, the company was founded as Wedgetail Communications, as a spin-off from the security division of the Co-operative Research Centre (CRC) for Enterprise Distributed Systems Technology one of the many CRCs now operating as links between academia (usually the universities) and industry. Uniseed, a commercialisation fund operating at the Universities of Melbourne and Queensland and Allen & Buckeridge, a venture capital firm, jointly invested $3.3 million dollars in the company in early 2001. "We do the early stages of the work," says Uniseed's Dando, "getting the technology out of the university, getting it into a real business format and getting it ready to be picked up by investors."The next step, he says, is looking to partner with investors who will add value to the next stage. "In this case, Allen & Buckeridge were particularly good at getting the links with the US that were vital for this company." The IT market was particularly difficult in 2002, but the company continued to look for new customers. Wedgetail had a range of security-related products, some of which were security products for enterprise systems. "They had a range of products, a bunch of different customers, and they set out to go and start selling those products and try and build up a customer base. "They ran independently for a couple of years and they sort of evolved that strategy over that time and I think that was one of the keys to their success."

The adaptability of the underlying technology coupled with the group's skills and capabilities meant they were able to meet whatever needs they could identify in the market. In 2003, the company hired chief executive Jennifer Zanich, who came from a background with Microsoft. "She was really good for marketing and again helping them redefine their strategy and exactly what the core of the company is," says Dando. Along with Allen & Buckeridge's Bob Christiansen and John Scull (US-based), Zanich assisted in the process of finding the product that gave the company a real advantage, which involved building relationships. Says Dando: "They engaged a couple of consultants and advisers in the US who were security experts and really helped us to redefine the company and focus on what became their successful product line, single sign-on software."

This technology, sign-on software, which allows companies with different systems to be able to work securely together, became the company's niche product. Says Dando: "Wedgetail, up to that point, had some good relationships with big companies like IBM, but the difficulties with getting into those markets was turning those relationships into new product sales." One of those relationships was with Utah-based security company Vintela. By 2004, the Vintela/Wedgetail relationship was functioning well and "it was pretty obvious that the two companies were really quite complementary," says Dando.

Discussions regarding a merger began and by mid 2004 Vintela acquired Wedgetail. Allen & Buckeridge and US venture capital firm the Canopy Group jointly invested approximately $US2 million ($2.6 million) to $US3 million into the newly combined company. The merged company created a good relationship with Microsoft, which invested in the company a couple of months later. Chris Skilling, who was the chief executive of Vintella, remained CEO of the merged company. "Jennifer did a fantastic job," Dando says. "She came in at a time of turmoil in the market. She really helped the company refocus on what was the right strategy and helped set up the merger and then she didn't stand in the way of the merger with her personal objective. She stood back aside from that and let the company go on to better things."

In early 2005 Vintela went into discussion with California-based Quest Software, which ultimately bought the business out entirely within six months. Dando says it was a combination of things that led to the final exit of the company. An effective route to get the technology out of the research centre was the first step, he says. Good management by the whole team (by Zanich in particular, he says) was also important, as was the flexibility of the team.

Road to riches
· Wedgetail developed sign-on software that allowed companies with different systems to work securely together.
· Utah-based security company Vintela acquired Wedgetail in 2004.
· Quest Software, a Nasdaq-listed global software house, acquired Vintela in 2005 for $100 million.

The mining industry is beginning to take a longer-term approach to its assets, says Miriam Hechtman.

Mining is an extractive industry, not generally considered sustainable. But the industry is beginning to face up to the challenges of tackling environmental, economic and social implications, taking a triple bottom line approach. "As a mining operation, we are in the non-renewable resources business," says Brendan Hammond, Argyle Diamonds' outgoing managing director. He labels mining resources as "endowment assets" that are jointly owned by society. "If we have endowment assets it is not good enough that we mine them to simply generate great shareholder returns," he says. "We have to also convert these assets to a variety of in-perpetuity assets that are able to be handed on to future generations."

Significant opposition has prompted the mining industry to begin setting higher standards. The International Council on Mining and Metals (ICMM) was formed in 2001 to act as the international leadership and representative body for the industry. The council is made up of 16 companies and about 25 industry associations. Council secretary-general Paul Mitchell says members are bound by "sustainable development principles". "They've committed to them, adhered to them and report their performance annually against them. "They do that using a set of indicators that we developed in partnership with the Global Reporting Initiative during the course of 2004," Mitchell says.

The new face of mining is driven by a desire to improve the industry's reputation, trust and understanding with relevant stakeholders. At the end of the day, it is an economically driven approach. "The reason for doing all that," says Mitchell, is to "maintain or improve access to land capital and markets as well as attract civil talent into the industry. "The foundations are clearly business related, for no esoteric reasons." In terms of environmental impact, ICMM recently signed a memorandum of understanding with the World Conservation Union, which provides the basis for a dialogue between the two organisations over the next five years.

Minerals Council of Australia chief executive Mitchell Hooke says Australian industry is being lauded as a leader in environmental performance. It was an industry at real risk of losing its social licence to operate, says Hooke, but is now committed to building communities beyond the life of the mine. "What you're now seeing is the industry's shift from reclamation and rehabilitation to in fact building sustainable eco-systems," he says. Hooke conceded that big challenges remain, notably safety and health, saying the industry is "still short of our goal of zero fatalities and injuries".

The Centre for Social Responsibility in Mining at the University of Queensland focuses on the sustainability of the community and the contributions to regions. Professor David Brereton, director of the centre, says he is hesitant to make generalisations about Australia's development. "There's a lot of variation within the different sectors of the industry, between companies and even within the companies," Brereton says. "One of the big focuses for our centre is Aboriginal employment." Brereton says Zinifex's north-west Queensland-based Century Mine has made an important contribution by creating employment opportunities for Aboriginal people. The challenges lie in the more remote areas of northern Australia, "where you have often substantial Aboriginal population and you don't have a lot else happening in terms of economic development".

Assessing the environmental and social aspects of the investment opportunity is viewed as equally as important as the financial component, says BHP Billiton's vice-president of sustainable development and community relations, Ian Wood. "If you get those issues wrong it can erode the value of the investments quite dramatically," Wood says. To monitor these issues, BHP has implemented a "tollgate process" that all investment decisions have to pass through. "Our focus at the moment is really on consistent application of the company's sustainable development policy across all of our assets around the world," says Wood. "I think in Australia one of the issues that we clearly are working with is indigenous employment and our programs in the Pilbara region of WA. "We are working towards improving indigenous employment opportunities by ensuring that local people are trained and have the capacity to take meaningful positions in the company."

Hammond says: "What we have to be able to do is do business in a way that makes the world a better place at the same time as making heaps of money for everybody.
"And that is the less trodden path and it is a really tough path. It calls for being very, very innovative, at all levels of the business, from strategic planning down to core day-to-day operational delivery."