Month: January 2019

Iranian crude oil imports by Asia’s top four buyers dropped to the lowest volume in three years in 2018 amid U.S. sanctions on Tehran, but China and India stepped up imports in December after getting waivers from Washington.

Asia’s top four buyers of Iranian crude — China, India, Japan and South Korea — imported a total 1.31 million barrels per day (bpd) in 2018, down 21 percent from the previous year, data from the countries showed.

That was the lowest since about 1 million bpd in 2015, when a previous round of sanctions on Iran led to a sharp drop in Asian imports, Reuters data showed.

The United States reimposed sanctions on Iran’s oil exports last November as it wants to negotiate a new nuclear deal with the country. U.S. officials have said they intend to reduce the Islamic Republic’s oil exports to zero.

On a monthly basis, Asia’s imports from Iran rebounded to a three-month high of 761,593 bpd in December as China and India stepped up purchases after Washington granted eight countries waivers from the Iranian sanctions for 180 days from the start of November.

“We expect Iranian exports to Asia to remain stable at around 800,000 barrels per day until May, when the waivers expire,” said Energy Aspects analyst Riccardo Fabiani.

In December, China’s imports climbed above 500,000 bpd for the first time in three months, while India’s imports rose above 302,000 bpd.

Japan and South Korea did not import any Iranian crude that month because they were still sorting out payment and shipping issues, but the countries have resumed oil lifting from Iran this month.

During the 180-day period, China can import up to 360,000 bpd of Iranian oil, while India’s imports are restricted to 300,000 bpd. South Korea can import up to 200,000 bpd of Iranian condensate.

“After May, it will all depend on the U.S. administration’s decisions, which at the moment remain completely obscure. On balance, they are likely to extend the current waivers, although rumors are that there could be a significant cut in waivered volumes,” Fabiani said.

As a precaution, Indian Oil Corp, the country’s top refiner, is looking for an annual deal to buy U.S. crude as it seeks to broaden its oil purchasing options, its chairman said Wednesday.
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Ghirardelli and Russell Stover have agreed to pay $750,000 in fines after prosecutors in California said they offered a little chocolate in a lot of wrapping.

Prosecutors in Sacramento, San Joaquin, Shasta, Fresno, Santa Cruz and Yolo counties sued the candy makers, alleging they misled consumers by selling chocolate products in containers that were oversized or “predominantly empty.”

Prosecutors also alleged that Ghirardelli offered one chocolate product containing less cocoa than advertised.

The firms didn’t acknowledge any wrongdoing but agreed to change their packaging under a settlement approved earlier this month. Some packages will shrink or will have a transparent window so consumers can look inside.

San Francisco-based Ghirardelli and Kansas City-based Russell Stover are owned by a Swiss company, Lindt & Sprungli.
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President Donald Trump will sign an executive order Thursday pushing those who receive federal funds to “buy American.” The aim is to boost U.S. manufacturing.

Peter Navarro, director of the White House National Trade Council, told reporters during a telephone briefing the policies are helping workers who “are blue collar, Trump people.” Later he amended that, saying he “every American is a Trump person” because Trump’s economic policies affect everyone.

 

Navarro said the order would affect federal financial assistance, which includes everything from loans and grants to insurance and interest subsidies.

 

He says some 30 federal agencies award over $700 billion in such aid each year. Recipients working on projects like bridges and sewer systems will be encouraged to use American products.

 

 
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Thousands of commuters flock to Manila’s railway tracks every day, but rather than boarding the trains, they climb on to wooden carts pushed along the tracks, to avoid the Philippine capital’s infamous traffic gridlock.

The trolleys, as the carts are known, most of them fitted with colorful umbrellas for shade from the sun, can seat up to 10 people each, who pay as little as 20 U.S. cents per ride, cheaper than most train rides.

“I do this because it gives us money that’s easy to earn,” said Reynaldo Diaz, 40, who is one of more than 100 operators, also known as “trolley boys,” who push the carts along the 28-km (17-mile) track, most wearing flimsy flip-flops on their feet.

“It’s better than stealing from others,” said Diaz, adding that he earned around $10 a day, just enough for his family to get by. A trolley boy since he was 17, he lives in a makeshift shelter beside the track with his two sons.

Diaz said the trolley boys were just “borrowing” the track from the Philippine National Railways, but the state-owned train company has moved to halt the trolley service after the media drew attention to its dangers recently.

The risk arises because those pushing and riding the trolleys have to watch out for the trains to avoid collisions.

“Of course we get scared of the trains,” said Jun Albeza, 32, who has been a trolley boy for four years after he was laid off from plumbing and construction jobs.

“That’s why, whenever we’re pushing these trolleys, we always look back, so we can see if there’s a train coming. Those in front of us will give us a heads-up too.”

When a train approaches, the trolley boys quickly grab the lightweight carts off the track and jump out of the way along with their riders.

Still, there have been no fatal accidents since the makeshift service started decades ago, some of the trolley boys told Reuters.

A Manila police officer confirmed that records showed no casualties related to the trolley boys.

“It is really dangerous and should not be allowed, But we understand that it’s their livelihood,” said the officer, Bryan Silvan. “They’re like mushrooms that just popped up along the tracks and they even have their own association.”

When the Philippine National Railways began operation in the 1960s, its network of more than 100 stations extended to provinces outside Manila.

But neglect and natural disasters have since caused it to cut back operations by two-thirds, even as the capital’s population has ballooned to about 13 million.

For office workers and students, the minutes shaved off daily commutes justify the risks of trolley rides.

“The distance to our workplaces is actually shorter through this route,” said one office worker, Charlette Magtrayo.
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U.S. lawmakers on Wednesday introduced legislation to limit the president’s power to levy import tariffs for national security reasons. The bills face an uncertain future but underscore bipartisan concerns on Capitol Hill over the rising costs of the Trump administration’s trade policies.

The United States in 2018 slapped duties on aluminum and steel from other countries, drawing criticism from lawmakers who support free trade and complaints of rising supply chain costs across business sectors.

Two bipartisan groups of lawmakers Wednesday introduced legislation known as the Bicameral Congressional Trade Authority Act in the Senate and the House of Representatives.

The bills would require Trump to have congressional approval before taking trade actions like tariffs and quotas under Section 232 of the Trade Expansion Act of 1962. The law currently allows the president to impose such tariffs without approval from Capitol Hill.

“The imposition of these taxes, under the false pretense of national security (Section 232), is weakening our economy, threatening American jobs, and eroding our credibility with other nations,” said Republican Senator Pat Toomey of Pennsylvania, co-sponsor of the Senate bill.

Toomey led a similar push last year that did not go to a vote.

It is unclear that Congress would consider taking up such legislation now. Still, the bills underscore mounting pressure from lawmakers to address concerns over tariffs, especially those on Canada and Mexico as lawmakers prepare to vote on a new North American trade deal agreed to late last year.

​Republican Chuck Grassley from Iowa, chairman of the Senate Finance Committee, earlier pressed the Trump administration to lift tariffs on steel and aluminum imports from Canada and Mexico before Congress begins considering legislation to implement the new pact.

Numerous business and agricultural groups have come out in support of the United States-Mexico-Canada agreement, but have said its benefits will be limited so long as the U.S. tariffs and retaliatory tariffs from Canada and Mexico remain in place.

Companies are able to request exemptions from the steel and aluminum tariffs, but the process has been plagued by delays and uncertainty.

“Virginia consumers and industries like craft beer and agriculture are hurting because of the president’s steel and aluminum tariffs,” said Democratic Senator Mark Warner, co-sponsor of the Senate legislation. “This bill would roll them back.”

Republicans Mike Gallagher of Wisconsin and Darin LaHood of Illinois and Democrats Ron Kind of Wisconsin and Jimmy Panetta of California introduced the House legislation.
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The Trump Organization, responding to claims that some of its workers were in the U.S. illegally, said on Wednesday that it will use the E-Verify electronic system at all of its properties to check employees’ documentation.

A lawyer for a dozen immigrant workers at the Trump National Golf Club in New York’s Westchester County said recently that they were fired on Jan. 18. He said many had worked there for a dozen or more years. Workers at another Trump club in Bedminster, New Jersey, came forward last month to allege managers there had hired them knowing they were in the country illegally.

“We are actively engaged in uniforming this process across our properties and will institute E-verify at any property not currently utilizing this system,” Eric Trump, executive vice president of the Trump Organization, said in a statement provided to The Associated Press. “As a company we take this obligation very seriously and when faced with a situation in which an employee has presented false and fraudulent documentation, we will take appropriate action.”

“I must say, for me personally, this whole thing is truly heartbreaking,” he added. “Our employees are like family but when presented with fake documents, an employer has little choice.”

Launched in 1996, the E-Verify system allows employers to check documentation submitted by job applicants with records at the Department of Homeland Security and the Social Security Administration to see whether they are authorized to work. 

During his presidential campaign, Republican Donald Trump called for all employers to use the federal government online E-Verify system. He told MSNBC in 2016 that he uses it at his properties, and that there should be a “huge financial penalty” for companies that hire workers who are in the country illegally.

Several of those workers from Trump’s properties paid visits to Congressional offices this week in hopes of raising support for their fight against possible deportation. One Democrat, New Jersey Rep. Bonnie Watson Coleman, confirmed Wednesday that she had invited a maid who had cleaned President Trump’s rooms at Bedminster as her guest at his State of the Union speech.

The maid, Victorina Morales, was featured in a New York Times story last month titled “Making President Trump’s Bed: A Housekeeper Without Papers.” She has said that managers there knew she was living in the country illegally, helped her obtain false documentation and that she was physically abused by a supervisor.

Morales’ lawyer, Anibal Romero, said that Morales had accepted the invitation.

The Trump Organization has said it does not tolerate employing workers who are living in the U.S. without legal permission, and any problems with hiring is not unique to the company.

“It demonstrates that our immigration system is severely broken and needs to be fixed immediately,” Eric Trump said in his statement. “It is my greatest hope that our ‘lawmakers’ return to work and actually do their jobs.”

President Trump has repeatedly cast the millions of immigrants in the country illegally as a scourge on the health of the economy, taking jobs from American citizens. He has said they also bring drugs and crime over the border.

He turned over day-to-day management of his business to Eric and his other adult son, Donald Jr., when he took the oath of office two years ago. The Trump Organization owns or manages 17 golf clubs around the world.
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A surge in cases of urban slavery in Brazil brings new challenges for prosecutors and labor inspectors, top government officials said on Wednesday.

Last year 523 workers were found in slavery-like conditions during labor inspections in Brazilian cities, about 225 more than in 2017, government data released Friday shows.

“We found that there is fragmentation happening. Instead of one big sweatshop with 20, or 30 people, we now have many, with four of five, usually family owned,” said  Maurício Krepsky, head of the Division for Inspection and Eradication of Slave Labor.

The change makes detection harder, Krepsky said. Last year 42 workers were rescued from slavery-like conditions in sweatshops in São Paulo.

Urban slavery on the move

The country has the world’s fourth-largest garment production industry, with 1.5 million direct employees.

In Brazil, the textile industry is fragmented and informal, with thousands of immigrant subcontractors from Bolivia and Paraguay sewing clothes in small shops — some of them sweatshops — for well-known national retailers.

“Working conditions in Bolivia manage to be worse than those in Brazil, so they are very easily groomed (by traffickers),” said labor prosecutor-general Ronaldo Fleury.

Rural enslavement is still more common — 1,200 people were found in slavery-like conditions in rural areas last year — but there are added complexities for cases in cities.

Victims in rural areas usually stay in one place, while urban victims can be moved around quickly, or may even be mobile themselves, as investigators found in 2018.

“To me that is the single-most challenging aspect of it (urban slavery). In a sweatshop you pull up a truck and you can move the sweatshop in a few hours, while a farm stays put,” said Fleury.

Dairy workers rescued

Urban slavery isn’t confined to sweatshops. More dairy workers were rescued last year than those making textiles.

In 2018 inspectors found 52 people trafficked from Brazil’s poor northern states to São Paulo, where they were put in debt bondage and made to work at the bottom of the dairy supply chain, as door to door salesmen.

The numbers last year were high, Krepsky said, which indicates the necessity of continuing to work in urban areas.

“In urban areas we identify more frequently than in rural ones signs of slave labor happening in a more covert way … like a false formalization of the activity, as to hide the true employer.”
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U.S.-based Sunoco Pipelines has agreed to pay hefty fines and make procedural changes after it was found in violation of state and federal environmental laws in connection to oil spills in three states. 

The U.S. Environmental Protection Agency and state regulators in Texas, Louisiana and Oklahoma said Sunoco Pipelines and its Louisiana partner Mid-Valley Pipeline Company have agreed to make amends for the spills that occurred in 2013, 2014 and 2015. 

Sunoco has also agreed to take additional steps to prevent and detect corrosion in its pipeline segments, including in the ones no longer in use by the company. 

“This excellent result shows how a strong federal and state partnership can bring about effective environmental enforcement to protect local communities in these states,” said Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division.

The fines of more than $5 million will be used to restore waterway shorelines when disasters strike, including other oil spills. 

“Our nation relies on the oil and gas sector to meet our energy needs, and we also expect companies to do so while protecting our vital water resources,” said EPA Regional Administrator Ann Idsal. “Companies who violate this responsibility must face consequences and assure their future compliance.”
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The Philippines ranked among Asia’s 10 fastest growing economies in 2017. Consumer power, remittances from overseas workers and an influx of call centers had given it that status, raising hopes for easing rampant poverty. Then GDP expansion wobbled in 2018 because of rising prices and lack of new direct investment.

Now state spending on new infrastructure and local tourism are expected to decide whether the Philippines can get back on track this year.

The Philippine economy grew 6.2 percent last year, down from 6.7 percent in 2017 and 6.9 percent a year earlier. Inflation dented consumption in late 2018, while factory investors stayed away for lack of infrastructure compared to what’s available elsewhere in Asia. Storm damage to crops, another economic backbone, and the six-month shutdown of the tourist hotspot Boracay Island ate away further at growth.

“I think it’s a combination of factors,” said Eduardo Araral, associate professor at the National University of Singapore’s public policy school. “One would be inflation, because that would slow down consumption. Infrastructure is always a constraint. The economy is growing, but the bottlenecks are not yet fixed.”

Slumps in farming, consumption

A spike in consumer prices in the Philippines in late 2018 angered many, testing the popularity of President Rodrigo Duterte in his third year in office. August inflation set a nine-year record at 6.4 percent, then the highest in Southeast Asia.

World oil price hikes were felt at the pump, while reports of rice scarcity raised prices in some parts of the country. More than 70 percent of the $313 billion Philippine economy comes from consumption, and people – especially the poor – mind their spending when prices are up.

The GDP struggled to grow also after deadly typhoon Mangkhut caused $509 million in agricultural damage in September and three months later tropical storm Usman caused another $19 million in farm losses.

The Western Pacific archipelago gets typhoons every year but still lacks infrastructure to withstand them, said Song Seng Wun, regional economist with the private banking unit of CIMB in Singapore.

Tourism was robust overall last year, but the closure of Boracay Island hurt the country’s prime tourism spot. Duterte declared a state of calamity from April through October to clean up the island, which had brought in more than $1 billion in tourism receipts in 2017.

Quest for investors

But the lack of capital investment weighs particularly hard on economic policymakers this year. The country, known for cheap, skilled labor, is still missing the ports, railways and power generation capacity that business people expect before opening shop. Investment would create jobs, in turn easing poverty.

“In terms of the whole ease of doing business, the Philippines ranks very low, but one of those reasons is poor infrastructure,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit.

To attract more capital, the government is building $171 billion worth of infrastructure by 2022, one of Duterte’s priorities in office. By the same year, the government aims to cut poverty from 22 percent to 14 percent of the population.

Officials are sighting for this year new roads and a railway system on the impoverished island of Mindanao, flood control work around Manila and the first phase of a Metro Manila subway project, Budget and Management Secretary Benjamin Diokno said on his department’s website.

Progress on infrastructure would also show that the Philippines can overcome political fights that include open spats between Duterte and his detractors in Congress or the mass media, economists believe.

“Investors like clarity,” Song said. “So when you have leaders or opinion makers who can be very abrasive as well, would you want to be putting in millions of millions of investments given that environment?”

The budget department flagged manufacturing growth as an “area of concern.” In a statement on the 2018 economy, the department urged more transport infrastructure and asked Congress to amend the Foreign Investments Act, which deters foreign investors by limiting how much they can invest in certain local industries.

Bright spots

Some analysts already point to bright spots in the 2019 economy. Tourism on the heavily populated island Cebu stands to help real estate there, Biswas said, while tourism and investment are booming near the former U.S. airbase at Clark Field.

The Asian Development Bank expects 6.7 percent growth this year.

“If you look at it from a perspective that the Philippines is actually working on its infrastructure to attract investors, you have a government commitment to keep on spending, and you have a country whose growth is actually moving away from the key cities but into other areas, that will support above 6 percent growth,” said Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in Metro Manila.
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Brazilian miner Vale SA identified concerns around its tailings dams in 2009 and studied but did not implement several steps that could have prevented or lessened the damage from last week’s deadly disaster, according to a corporate presentation seen by Reuters.

    

A tailings dam, used to store the muddy detritus of the mining process, collapsed on Friday, killing at least 65 in one of Brazil’s largest industrial accidents on record.            

    

The Brumadinho disaster, coming just over three years after a similar incident at another mine partially controlled by Vale, has fueled calls for a management overhaul and erased more than 70 billion reais ($18.61 billion) in Vale’s market value.      

But a decade ago, the world’s largest iron ore miner was considering ways to use fewer tailings dams, including alternative uses for the waste rock, according to the 73-page presentation.

The presentation pointed to the rising volume of tailings produced at the company’s mines, with some locations producing hundreds of thousands of tons of tailings daily.

    

The report suggested Vale make building materials from tailings, including bricks, a step that would give the company another revenue source and lessen the volume needing to be stored using dams.

    

The 2009 Vale report had recommended the company undertake a project to be called “Zero Dams” that would have involved drying out tailings, among other steps. It was not known whether the report reached the top levels of Vale management nor why it was not implemented.

    

Vale declined to comment. The report’s author, Paulo Ricardo Behrens da Franca, left Vale a year after submitting it and now works as an industry consultant. Reached by Reuters, he did not comment.

    

‘Inherently Dangerous Structures’

Vale’s Brumadinho facility was built using the cheapest and least-stable type of tailings dam design, a commonly used structure in mining known as “upstream construction.”

    

Chile, Peru and other earthquake-prone countries ban the design, in which tailings are used to progressively construct dam walls the more a mine is excavated. Brazil is not as earthquake-prone as its western neighbors, but even small seismic activity has been shown to affect tailings dams.

Because these types of tailings dams are waterlogged, they are easily susceptible to cracks and other damage that can cause bursts like the one that occurred last week near Brumadinho.

“A tailings dam may look safe, but it’s still retaining a lot of moisture behind it,” said Dermot Ross-Brown, a mining industry engineer who teaches at the Colorado School of Mines. “They’re inherently dangerous structures.”

    

Tailings dams tend to be shorter in height than conventional water dams, but often are far wider in span.

    

The disaster’s cause remains unknown. Vale said the dam had not received tailings for about two and a half years and was in the process of decommissioning, a step that should have lessened risk, engineers said.

    

“It’s really puzzling to me this happened as the (dam) was closing,” said Cameron Scott of SRK Consulting, a mining engineering firm. “This disaster will make future mine permitting harder.”

   

The dam had passed a September 2018 inspection by the German firm TUEV SUED AG and Vale Chief Executive Fabio Schvartsman said equipment had shown the dam was stable on Jan.

10.            

 

On Tuesday, Brazilian state prosecutors arrested three Vale employees and two TUEV SUED employees.                

    

Risk

Brazil has nearly 4,000 dams that are classified as having “high damage potential” or being at high risk, with 205 of those dams containing mineral waste, the country’s Regional Development Minister Gustavo Canuto said.             

Analysts and engineers said that the Brumadinho disaster will hopefully push the industry to stop storing wet tailings and instead move toward the more-expensive-but-safer process of storing dry tailings.

That process requires drying the tailings and storing them on-site, abrogating the risk of a dam burst. The approach is becoming more popular in Canada and other countries with stricter mining regulations.    

“The industry doesn’t yet fully realize the risk its taking on with those type of wet tailings dams,” said Matt Fuller of Tierra Group International Ltd, a tailings engineering consulting firm.

 

Officials in Brazil’s Minas Gerais state, where the disaster occurred, say they are now going to push for legislation requiring dry mining and forcing miners to tear down tailings dams when they are located above communities.

A similar proposal failed last summer, with its defeat attributed by the bill’s sponsor to lobbying pressure from mining companies.

    

Brazil is still reeling from the 2015 collapse of a larger dam, owned by the Samarco Mineracao SA joint venture between Vale and BHP, that killed 19 people.

    

After Samarco, the International Council on Mining and Metals (ICMM) issued updated guidelines for its members to try to safeguard tailings dams used to store waste left over from mining operations.

    

The ICCM said on Saturday that the mining industry still has “lessons to learn” from Samarco and similar events.            

Mining companies typically hire engineering firms that specialize in tailings dams to build the structures, not necessarily dam contractors themselves, a step that some industry observers hope changes soon.     

“The mining companies are not placing dam safety at the forefront of their preoccupations,” said Emmanuel Grenier, a spokesman for the International Coalition of Large Dams (ICOLD), a non-governmental organization focused on dam engineering.

The group “is recommending that dams, especially large dams, be built by dam professionals, but it is too rarely the case for tailing dams,” Grenier said.

($1 = 3.7614 reais)
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