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NZ Cannabis Reform

Things are looking up for cannabis users in New Zealand as the country's recently elected prime minister has openly stated that she wants to initiate a national discussion surrounding the legalization of cannabis. Jacinda Ardern, who became the 40th prime minister in October 2017, has declared her intentions to work in conjunction with her Cabinet to take advice on the subject before making a final decision on a date for a referendum. 

As the leader of the New Zealand Labour Party, she is currently governing the nation as part of a Coalition government with the NZ First Party and supported by the Green Party of New Zealand. Although the proposed changes to legislation regarding cannabis use are driven by a Green Party manifesto stating the drug should be legalized for personal use, including its cultivation and possession, during her election campaign, Ardern was very frank about her opinion that people should not be imprisoned for using cannabis. However, she also expressed her concerns about young people having access to a potentially harmful product. As part of the Green Party manifesto, an age limit was proposed to be introduced for personal use, and proposals for the removal of penalties for people who were growing their own marijuana for medicinal use.

Ross Bell, the New Zealand Drug Foundation's Executive Director agrees with the Prime Minister that a new look at the nation's drug policy is long overdue. In polls carried out by his organization, he has seen that 65% of respondents are keen to change the law as it currently stands, which is more than four decades old.

However, while he is in favour of the Green Party's interest in opening discussions into the subject, he also cautioned that it was necessary to acknowledge that cannabis can have a harmful effect on society, and that a wholesale move to a free-market arena, in his opinion, would be a negative step.

The Canadian government has taken steps to legalize the use of cannabis in their country by 1st July 2018, however at the present time they are still struggling to satisfy their legal obligations internationally. Canada has already legalized the use of medicinal cannabis, but strict guidelines are being put in place, with cannabis oil, fresh and dried flower being initially available with edibles set to follow. Canada has also stated that they will be putting clear guidelines into practice regarding the marketing of marijuana products, although as yet there have been no final decisions about whether plain and child-proof packaging will be used and whether endorsements will be banned. Whatever the final decision on that matter, there will be strong prohibitions on marketing which could prove to be appealing to young people, and there will be no selling through vending machines or self-service display cases permitted. There will also be limits set for those who want to cultivate their own cannabis plants, with a maximum of 4 plants per household implemented, and only 30g of dried cannabis solely for personal use will be permitted to be carried. Anyone found selling or giving cannabis to a minor or who drives under the influence of the drug will face a stiff penalty.

Although the timing of any referendum has not been determined, it has been suggested that the vote will take place before 2020 if at all possible. The changes that the public will be voting on include:

  • Legalization of cannabis for personal use, including its cultivation and possession – at the present time, it is still unclear whether or not the selling of cannabis would be made legal.
  • Age restrictions on the use of cannabis, with a legal age limit being introduced for personal cannabis usage. That age, however, has not yet been agreed on or set.
  • Driving after using cannabis – the existing law about driving under the influence of marijuana would be replaced, and a new law which is based on the correlation of cannabinoid levels and impairment would be introduced

Should Kiwis vote yes on the legalization of cannabis, the following changes would be put in place.

 

·         Medical cannabis would be legalized, with penalties being removed for anybody suffering from a debilitating, chronic or terminal condition who possesses, grows or uses marijuana products for a therapeutic purpose, so long as they are supported by their medical practitioner.

·         Licensed medicinal cannabis products will become more accessible, with the process through which medicinal cannabis products are licensed being accelerated and the barriers being lowered for manufacturers to submit their new cannabis-based products to Pharmac for funding so evidence can be gathered rapidly and then more speedily distributed when approved.

 

However, before taking any decisions with regard to a referendum date, the New Zealand government want to assess the evidence provided from overseas jurisdictions which have already legalized the sale of cannabis in order to determine the right model for their own country.

 

The policy would remove penalties for medicinal use while broader changes in legislation for cannabis use were still in the pipeline, however there would be other steps taken under the terms of the policy to help avoid the problems associated with drug use, including free counselling to be introduced for people under the age of 25, greater access to mental health support and services across the entire community, welfare system overhauls and increased access to drug and alcohol services for all.

Although no final decisions have been made yet about a referendum date or the final details of the policies being voted on, it seems clear that there has been a shift in both public and political opinion around the use of cannabis, and certainly for medicinal purposes, which will serve to benefit existing users before the end of the decade.

This also creates an amazing opportunity for people wanting to invest in New Zealand who want to be a part of what will become a boom industry. If New Zealand gets to the front of the queue, this will be a major economic boom for New Zealand.

 

New Zealand Government Update

After one of the strangest elections in New Zealand history, New Zealand finally has a government. Labour's Jacinda Ardern has been crowned New Zealand Prime Minister by Winston Peters and New Zealand First. 

Through this, we will go through the structure, the policy information we have and what the implications are for National. 

Structure

The Government will be a Labour - NZ First government that has a confidence and supply agreement with the Green Party. This is not a Labour - NZ First - Green government as many commentators are stating. There is a Labour - NZ First Coalition agreement which is looking to give Winston Peters the Deputy Prime Minister job (the same job he held under National under Jim Bolger). New Zealand First will get four ministerial positions (it is unclear if this includes Winston or is including Winston) and one Parliamentary Undersecretary. 

The Ministries that New Zealand First will get are:

• Foreign Affairs
• Infrastructure
• Regional Economic Development
• Internal Affairs
• Seniors
• Defence
• Veterans' Affairs
• Children
• Forestry
• State Owned Enterprises
• Racing
• Associate Finance
• Associate Education and an Under-Secretary for Foreign Affairs and Regional Economic Development

The Greens have a confidence and supply agreement with Labour. This government represents the first time that the Green Party have had Ministers, even if they are outside the cabinet. 

The Ministries that the Greens will get are: Climate Change, Associate Finance, Conservation, Women, Land Information New Zealand, Associate Environment, Statistics, Associate Transport, Associate Health and an Undersecretary to the Minister of Justice (Domestic and Sexual Violence).

Prime Minister - designate Ardern has dismissed the fact Climate Change as a minsitry is outside the government as something she can do as she doesn't need convincing on the subject.

The full roll out of Ministries will happen at the swearing in ceremony later this week. 

Considering the Labour gains from the Maori Party, the Maori Development portfolio is one that is promoting a lot of speculation as to who will receive that portfolio. This considering that Deputy Labour Leader, Kelvin Davis is likely to pick up Corrections as one of his portfolios in the government. 

Today the Labour - NZ First agreement and the Labour - Green agreements were both signed. 

Here are the substantive policies inside the agreements:

• Regional development: A $1 billion per year Regional Development (Provincial Growth) Fund

• Rail: Significant investment in regional rail.

• Forestry: Re-establish the New Zealand Forestry Service, and planting 100 million trees per year in a Billion Trees Planting Programme.

• Auckland Port: Commissioning a feasibility study on moving the Ports of Auckland to Northport

• Biosecurity: A funding increase to Biosecurity NZ and a select committee Inquiry into biosecurity

• Irrigation: Honour existing Crown Irrigation investment commitments

• Monetary policy: Review and reform the Reserve Bank Act

• Minimum wage: Increase to $20 an hour by 2020, with the final increase to take effect in April 2021

• Tax: Increase penalties for corporate fraud and tax evasion, and introduce a tax on exports of bottled water

• KiwiBank: Investigate KiwiBank's capabilities to become the Government's banker when that contract is next renewed.

• Foreign ownership: Strengthen the Overseas Investment Act and create a comprehensive register of foreign-owned land and housing

• Research and development: Increase R&D spending to 2 per cent of GDP over 10 years

• Health: Re-establish the Mental Health Commission, annual free health checks for seniors with the SuperGold card, free doctors' visits for all under 14s, increasing the age for free breast screening to 74

• Education: Restore funding for gifted students and Computers in Homes, pilot counsellors in primary schools, free driver training for all secondary school students, restart Te Kotahitanga teacher professional development

• Defence: Re-examine the Defence procurement programme

• Housing: Establish a Housing Commission

• Law and Order: Work towards 1800 new police officers over three years, investigate a volunteer rural constabulary programme, increase funding for Community Law Centres, establish a Criminal Cases Review Commission

• Social Development: More funding for family violence networks, including Women's Refuge and Shakti, pilot a Youth Education, Training and Employment programme and provide 800 extra places for the LSV scheme, introduce Ready for Work programmes

• Superannuation: Keep age of eligibility at 65

• Environment: Move to an emissions-free government-vehicle fleet by 2025/26, introduce a Zero Carbon Act and independent Climate Commission, which will consider including agriculture into the ETS, establish a tyre stewardship fund, piloting alternatives to 1080, work towards a Kermadec Ocean Sanctuary

• Conservation: More funding for the Department of Conservation

• Democracy: No new parliamentary building this term, an independent review of electoral processes and enrolments, and a review of the parliamentary processes, and pass a 'Waka Jumping' bill

• Immigration: Ensure work visas reflect skills shortages and cut down on low quality international education courses, and take action on migrant exploitation, particularly international students

• Pike River: Commit to re-entry to Pike River

• Other: Build a Maori Battalion museum at Waitangi, review retail-power pricing, allow a conscience vote on a NZ First euthanasia referendum bill, a Public Inquiry "a decade after Shand" to investigate the drivers of local government costs, support NZ First's racing policy, work towards a Free Trade Agreement with the Russia-Belarus-Kazakhstan Customs Union, record a Cabinet minute regarding the lack of process followed prior to the National-led government sponsorship of UNSC2334, concerning the Israeli settlements in Palestinian territories occupied since 1967

The New Zealand Green Party and Labour have a separate confidence and supply agreement which has a number of policy concessions in them in return. These include:

• Climate Change: Introduce a Zero Carbon Act and establish an independent Climate Commission (which will also look at transitioning to 100 per cent renewable electricity by 2035), analyse all new legislation for climate impact, establish a Climate Change board of public sector CEOs and a set of indicators for environmental, social and economic sustainability

• Transport: Investigate a Green Transport Card to reduce the cost of public transport for low-income people and welfare recipients, prioritise National Land Transport Fund towards rail infrastructure as well as cycling and walking, cancel Auckland's East-West motorway link, work towards light rail from Auckland city to airport

• Green economy: Government-backed Green Investment Fund of $100 million to stimulate up to $1 billion of new investment in low carbon industries by 2020, assist agricultural sector to reduce biological emissions and improve water quality

• Environment: Increasing conservation funding and predator control, commit to minimising waste to landfill by reducing all waste classes by 2020

• Rivers and lakes: Stronger regulation to clean up waterways, fund freshwater enhancement, wind down Government support for irrigation, better enforcement of the Resource Management Act

• Ocean Sanctuaries: Work with Maori to establish the Kermadec Ocean Sanctuary as well as a Taranaki blue whale sanctuary

• Welfare: Ensure access to entitlements, remove excessive sanctions, review Working for Families, provide safe sleeping environments for vulnerable families

• Health: Free counselling for under-25s, increase funding for alcohol and drug addiction services, referendum on the personal use of cannabis by the 2020 election

• Education: Ensure children with special needs and learning disabilities can fully participate in school

• Pay equality: Eliminate the gender pay gap within the core public sector

• Homes: A rent-to-own scheme will be part of Labour's Kiwibuild programme, increase in the number of homes insulated

• Refugees: Adequately fund and support family re-unification for refugees

 

German Coalition Formation

After a long and impressive 12 year run at national helm, Angela Merkel’s center right CDU/CSU hit a snag last month, when the results of national elections were televised. The polls revealed a downturn in CDU/CSU performance compared to 2013 – indicating the party wouldn’t be able to attain absolute majority in the Bundestag, the national parliament. That, coupled with the rise of far-right, anti-immigrant Alternative for Germany, or AfD, has caused palpable unease among Merkel’s cohort.
 
But the frenzy of elections has blown over and the focus among leading parties has now shifted to seeking out possible coalition partners. A possible ‘Jamaican Coalition’ (a partnership of CDU/CSU, FDU, and Greens), that would entail FDP and Greens entering torturous political negotiations with Merkel’s conservative block, is among the most likely scenarios  and has thus been a subject of post-election analysis. 

The three parties of so called ‘Jamaican coalition’ have previously never come together for coalition at the center – only governing the state of Saarland together during 2009-2012. Currently, they face disagreements over a range of issues like volume of migrant inflow, tax structure, environment policies, and EU reform. Accordingly, the proscribed coalition contract between the three that sets out policy and legislative priorities for upcoming government is expected be quite detailed and lengthy.

It should be noted that at the Federal level, the FDP will be expected to join a Merkel Government if given the option. The Green Party has never joined a government at the Federal level that has not been lead by the SPD. 

Though Christian Lindner’s FDP and Merkel’s CDU/CSU share similar socioeconomic outlook and together form the Germany's center-right coalition that has governed the country at a federal level for the most part since independence, they’ve their share of nuanced differences over more than a few issues. Most notably, FDP’s recognition of Germany as a cosmopolitan society and and its embrace of immigration, a focus on entrepreneurship promotion, increased liberalization of economy, and critique of expansive welfare system form the key points of contention between the two. For its part, thus, the FDP is expected to respond cautiously to Merkel’s alliance overtures as its checkered political history with Kohl led CDU during the 1990s – during which it won between 6.2 and 11 percent of the vote in Bundestag elections – will serve to deter Lindner from embracing centrist conservatives and re-experiencing the electoral embarrassments of the past. The 1998 federal elections in which the CDU/CSU - FDP coalition lost, the FDP's nearly 30-year presence in government coalition came to a rather unceremonious end and marked a major setback in party’s history.

For Greens though, the core issue remains to be environment and climate change. While the FDP stands for market liberalization, the Greens advocate a strong welfare state, government investments and strict quotas for more environmentally conscious policies. Also, as the FDP calls for greater German investment in international security, the Greens argue for more spending to curb unemployment among European youth and improving education. On Europe, unlike CDU and FDP, the Greens oppose giving Frontex, Europe’s border control agency, more power and disagree with CDU and FDP on the idea that Germany ought to do more for its debt-stricken neighbors. Their manifesto instead proposes a Green New Deal for Europe to do away with austerity, investment in a circular economy, and digitalization of Europe. Another aspect of the possible Jamaican Coalition is the diverging views on immigration between the leftist greens and CDU’s populist Bavarian sister, CSU. It is therefore not far-fetched to say that under present circumstances, the possibilities of two coming together in a coalition are slim.

This is a Coalition formation that has never been tried in Germany. It will require calm and cool negotiations to ensure that the trade-offs to form the Coalition are brought together to deliver Germany the stable government required. 

We do not believe another Grand Coalition is in the SPD's interests after going through another election with a falling vote share after another term in the 'grand' coalition. Most in the SPD see Opposition and the best way forward and to allow the 'Jamaica' option to be pursued in order to ensure the AfD is not the official Opposition.

The SPD and the Greens say that they would put any coalition deals to a vote of their members, raising the risk of new elections, given the strong grassroots resistance in both parties to a pact with Merkel. We would rate the chances of a new election at 10-15% in reality as our team and people on the ground know that the party who forces the new election will be the losers in it. 

 

German Election Analysis

The results of German general polls have been announced. To expectations of many political pundits and commentators, Angela Merkel led center-right CDU/CSU has clinched a majority with almost 33% of total votes – a figure that is slated to hand her 218 seats in Bundestag. The Social democrats, or SPD, helmed by Martin Schulz, is trailing second with just over 20% votes and is projected to command 138 seats in the house.

The most interesting aspect of the poll however is the rise of AfD, a far-right, anti-immigration party, which had previously struggled to enter mainstream politics. It emerged as the largest party in the house by claiming a significant 13.5% of the vote – a proportion that will land it 87 seats. This shift marks the first time a far-right party has been able to make its way to Bundestag in last six decades and spells a change of tone in nation’s future parliamentary discourse.

Shortly after the results were made public, Schulz confirmed statements by other senior party members that the SPD would not reenter into a coalition with the CDU/CSU but opt for opposition.

With SPD out of the possible governing coalition, that leaves Merkel with the pro-business Free Democratic Party or FDP and the Greens as potential partners. They have scored 10% and 9% of votes respectively and together with CSU, form the most likely ruling trio. It’s a coalition that’s widely been dubbed as the Jamaican coalition after the three parties’ respective black, green, and yellow flags – the same colors that fashion Jamaican national flag.

It’s worth mentioning that while this coalition has worked at state level, it hasn’t been tried over national stage before – a reality that analysts predict will necessitate complex negotiations before any mutually agreeable arrangement can be reached. Merkel’s conservative party is itself divided in two camps, her Christian Democratic Union (CDU) and its Bavarian sister Christian Social Union which is headed by Horst Seehofer. The two wings began to diverge few years ago and are increasingly taking on distinct political identities. Meaning that the sought after alliance, in another sense, would comprise four separate parties with sometimes nuanced but mostly disparate outlooks.

The Greens, a party born out of the 1968 social revolution is also split into two camps - leftist ("Fundis") and the more pragmatic centrists ("Realos") and will be sending two delegations for negotiations.  The business friendly FDP would be wary of putting itself through the same predicament that it had to face after forming a coalition with Merkel in 2009. The party, according to reports, will be pushing for the seat of finance minister in any likely coalition – a demand that will require Merkel to swap her finance minister and long term aide Wolfgang Schäuble to some other role.

In any case, the results of recent poll have created an interesting and complex political ground in Bundestag in which the traditionally dominant CSU/CDU stands at its lowest parliamentary strength in decades. This electoral equation will lead to a tough and drawn-out negotiations between prospective ruling partners and require conservative CDU/CSU to make uneasy compromises if it wished to reelect Angela Merkel as national chancellor for the 4th consecutive term.

Kenyan Election Update: Military Rigging Claims

National Super Alliance (NASA) presidential candidate Raila Odinga said there was a plan to rig the August elections. The opposition leader tabled details of alleged rigging plans involving security forces to aid Jubilee hold on power in an operation named Dumisha Utulivu (Keep the Peace). The statement by NASA and the accompanying documents immediately went viral among Kenyans on social media.

The document presented to the public by NASA indicated that a number of officers and soldiers will be participating in the plot. It mentioned the selection of 'regime-friendly' soldiers and the use of signal-jamming equipment in selected areas mainly in Central Kenya, which is perceived to predominantly support the Jubilee regime.

According to Raila, the soldiers are being trained on how to cut off power and water in Kibera and Mathare slums and keep people out of city centre.

“Also included will be 226 new soldiers, being trained to be deployed in this mission. The soldiers don’t have networks in the military. Because they are new, they will readily take any orders, and at the same time cannot be identified, nor can they communicate with other soldiers who might not be privy to the plot and would oppose it,” Mr Odinga's running mate, Kalonzo Musyoka, claimed.

President Uhuru Kenyatta and his Deputy President, William Ruto, dismissed the rigging claims saying Raila has sensed defeat and is now discrediting the polls at every opportunity.

In a move that surprised many, on Friday, Kenya Defence Force (KDF) spokesman, Colonel Joseph Owuoth, reportedly confirmed the authenticity of documents presented by NASA on the “Dumisha utulivu” operation. However, he said they were quoted out of context and that military was apolitical and professional.

With just about 10 days to the elections, IEBC Chair, Wafula Chebukati, said the Commission had put “strict measures” in place to prevent rigging. The IEBC chair said IEBC had no plans of deploying KDF anywhere in the electoral process.

Defence Cabinet Secretary Raychelle Omamo disowned the documents presented by NASA, saying she had not seen them and that the KDF were not plotting anything outside the law.

Political analyst Mutahi Ngunyi expressed worry about KDF's admission of the authenticity of a letter presented by the Opposition on an alleged rigging plot.

"Military documents do not leak. And if they leak, military never confirms that they are authentic."

He added via Twitter on Saturday: "KDF Spokesman executing a scheme. Worrying."

NASA politician, Prof. Anyang Nyong’o, claimed that KDF Spokesperson Colonel Joseph Owuoth, who, the previous week, confirmed the authenticity of documents presented by NASA, had gone missing.

Prof. Nyong'o claimed at a press briefing in Kisumu that Col. Owuoth was ordered to go on compulsory leave right after issuing the statement confirming NASA’s allegations. He was also ordered not to talk to the press and to go to his home in Koru.

The Colonel was said to have been in constant communication with his sister until Monday morning. He boarded a public transport vehicle in Nairobi and went silent once he reached Nakuru (or was assumed to have reached Nakuru), and was not heard from again.

These claims caused considerable concern, since they were made just days after the IEBC ICT manager went missing and was later found dead.

Col Joseph Owuoth resurfaced at a press conference at Defence headquarters alongside Defence CS Raychelle Omamo, and dismissed claims by his family and politicians that he is missing. He also said that he was okay and still on duty and not suspended as claimed by NASA leaders.

NASA's Prof. Nyong’o had told journalists in Kisumu that the family of Owuoth has reported him missing, a day being sent on compulsory leave.

The Defence CS, at the same press conference, said that the ministry had "carried out investigations to establish the veracity, authenticity and source" of the documents presented by NASA, and that the ministry "can state categorically that these documents are fake in all aspects."

SA No Confidence: Where to from here?

Tuesday 8th August 2017 is a day that will go down in history in the young democracy of South Africa.  A vote of no confidence in Jacob Zuma as president of the country was allowed to be cast in private and the result was closer than expected and whether this or the fact thevote was in private was most surprising is still open for debate.

However, what was the vote of no confidence really for?  Was the only the fact that South Africans and a growing number of MPs were unhappy about the way Jacob Zuma was running the country? The fact is that the vote of no confidence was a vote of no confidence in many areas of the turbulent and sometimes violent world of South African Politics.

The opposition lost the vote, one cannot truly say that Jacob Zuma won because a number of his own party members turned their backs on him and did not tow the party line. The vote demonstrated a healthy democracy but also highlighted the fact that some MPs and Ministers are so “captured” that it is a case of better the devil you know than to lose a job with good pay given as a reward for loyalty to one man and a family.

The anger towards those who voted to remove the beloved leader is, in the days after the vote, is beginning to surface. The ANC is a divided party, the tripartite alliance is under more strain the than ever before but the weakness or fear of those such as the SA Communist party who have been outspoken about Mr Zuma has become blatantly obvious. Inside ANC structures there is turmoil, vows to oust out or seek revenge against the twenty something ANC members who broke rank is starting to surface, this despite the vote being secret. The ANC, for these members has become a power hungry monster that has lost the moral high ground serving the few not the many like something from an Orwellian Animal Farm nighmare.

Opposition parties have concluded that while the vote of no confidence in Jacob Zuma may have been a win for the president is it a loss for a dying or maybe even now dead ANC. The broken and divided ANC along with its alliance partners is fighting for its life, clambering to find its identity. This leads to desperate measures and the prospect of impossible to honour promises in the run up to the 2019 elections.

A lot of trust in the ANC has been lost; the once loved struggle party is losing its lustre in an ever more educated and now less trusting citizenship of its country. The debate who should be the next ANC party leader is not an easy one and ames put forward are names that are popular only in certain enclaves of the party showing not just a divide but multiple, perhaps fatal, fractures. 

Cyril Ramaphosa, the struggle icon, wealthy businessman and trade unionist missed a golden opportunity to stand up for what is right in the no confidence vote and in the eyes of the people has lost some favour. He had the chance to do what the people wanted and didn’t choosing to stand by his party not his country.

Nkosazana Dlamini-Zuma, former wife of Jacob Zuma, could be the first woman president of South Africa. The very fact she is or was related to Jacob Zuma is perhaps a bridge to far for South African Voters and many are asking, “What has she really done?” The family ties to corruption are just too strong for many voters to think about with the name sending shivers down the spines of people throughout the country.

Other names in the hat include Former ANC Treasurer-General Matthews Phosa, Human Settlements Minister Lindiwe Sisulu, current ANC Treasurer-General and ANC National Chairperson and Speaker of the house Baleka Mbete.

Every single name has in some way been tainted with the same brush that has painted the ANC corrupt, incompetent and untrusted, each has had a chance to stand up and be the change but are either captured, afraid or just weak. This says a lot about the ANC, it shows how people get to where they are. It shows how favour and loyalty to a man or promise rather than being wiling and competent to perform and serve their country has become the norm, shedding light on a once glorious ANC that people had hope in that now shows how a few have benefitted over the many.

The successes of the ANC in improved education and placing some business in black hands have perhaps become the things that ultimately destroy the party, voting them out of power or barely hanging in there in some form of delicate coalition. Better-educated people, people who have waited too long for broken promises and the very fact that opposition parties have made massive changes in a number of major metros they won in local elections, mean the ANC is exposed. The Gupta emails, evidence of mass corruption and in recent days the stance on a senior minister accused of assaulting two women in a nightclub have shown the true colours of the current party.  These true colours clearly show how the party has become a dark, untrusted and distant shadow of the party that once fought and won the fight for freedom two decades ago.

Where can South Africa go? Who will win the next election?  It is difficult to say, party politics can get dirty and the ANC has its back to the wall. What is known is that the people of SA are unhappy and that can only mean two things, a low voter turnout that would favour the ANC or change of political direction that leads to unchartered territory. 

What the A-League Expansion Process can learn from the MLS

With the botched and stalled A-League expansion process currently going nowhere and with a lot of expansion bids seemingly in limbo watching potential capital investment into the game fly elsewhere; it is worth looking at the MLS Expansion Process for some blue Sky potential. 

Undoubtedly, the A-League could learn from the American process as could the local bids (and potential bids) learn from the expansion entries in the MLS.

For the A-League bids that don't currently have identified capital partners (eg. those bids that aren't the Sunshine Coast, Southern NSW, Canberra, Tasmania and Brisbane City); it's more than clear that certain disclosures around capital would have to be met in order to be considered real by any serious football board.

However, without the FFA willing to get their house in order, this is difficult. We know as advisory consultants in this space that potential investors will not invest without a clear pathway and some confidence set by the governing officials. 

We have seen from the MLS the benefits of a clear expansion platform to attract new investment into the league. There have seen a number of expansions with the MLS over the years.

Yet, in this round the MLS Commissioner has confirmed that teams 25 and 26 will be announced during the second or third quarter of 2017, at an expansion fee of $150 million each, and will begin MLS play by 2020. Teams 27 and 28 will be announced at a later date, at a price delivered in conjunction with the timeline. 

The league acknowledged ownership groups from 10 markets that have publicly expressed interest in securing an MLS expansion team: Charlotte, Cincinnati, Detroit, Nashville, Raleigh/Durham, Sacramento, St. Louis, San Antonio, San Diego and Tampa/St. Petersburg.

Three key aspects are considered top priorities when reviewing candidates: 

  • A committed local ownership group that has a passion for the sport, a deep belief in Major League Soccer and the resources to invest in the infrastructure to build the sport in their respective market.
  • A market that has a history of strong fan support for soccer matches and other sporting events, is located in a desirable geographic location and is attractive to corporate sponsors and television partners.
  • A comprehensive stadium plan that ensures the club will have a proper home for their fans and players while also serving as a destination for the sport in the community

The Stadium proposition has already been passed with the bid from the Tampa Bay Rowdies via a public referendum. On the other hand, St. Louis will remain a two-sport town after voters defeated a measure that would have helped pay for a stadium as part of an effort to lure a Major League Soccer franchise. City voters turned down Proposition 2 on Tuesday by a 53 percent to 47 percent vote. It would have provided $60 million from a business use tax to help fund a soccer stadium.

The MLS effort in Charlotte, which was among the favourite thanks to the city’s size and importance in a growing area of the country, is on life support after the city declined to approve the funneling of tax revenue earmarked for tourism toward a portion of a stadium.

In Indianapolis, an effort to get the state legislature to pass a bill allowing taxes generated at and adjacent to a new soccer stadium to be spent on its construction has gone nowhere. 

The first teams to enter the MLS in the 21st Century were Real Salt Lake and Chivas USA for which they paid $7.5 Million to enter. These bids will be paying $150 Million entry fee.

In the A-League, there are no local ownership requirements. This means that any serious capital investor and those seeking to bring a bid together really need to be a homogenous working unit. This is required in terms of PR, engaging with the three tiers of government and with the FFA authorities. 

The importance of a quality investor group has already been shown in the MLS expansion bid process. On the one hand, we see the Nashville bid bringing in the owners of the Minnesota Vikings into their bid consortium. Mark Wilf, his brother Zygi, and cousin Leonard, in their 13th season as majority owners and of the Minnesota Vikings, has signed on as a minority owner of Nashville Soccer Holdings, the business enterprise led by billionaire Nashville businessman John Ingram.

This is not to say any expansion process is smooth sailing.

The Sacramento bid, which had been considered a slam dunk for entry, have fallen into disarray with the addition of Meg Whitman (Former Hewlett-Packard CEO and Mitt Romney Presidential Backer) into the ownership group.

One would have thought a press release would have been forthcoming from the club, but one never appeared, even on the club's website. A press release instead emerged from an entity calling itself Sac Soccer & Entertainment Holdings. Now there are disputes about whether or not the bid will be the Sacramento Republic or not.

We would also note that the right ownership group should not be a substitute for a corporate partner structure that works. Any bid that can show good governmental and corporate buy-in to the bid, will have a leg up in this process. The A-League simply can not afford another team that has a revenue base that is too narrow without local corporate buy-in to the brand. 

If we look at the FC Cinncinati bid for the MLS expansion, a year before they played their first game in the USL (the American 2nd tier), the club had 17 corporate sponsors signed up. Toyota is the USL jersey sponsor. 

The fact is, the expansion process in the A-League will need some components which the FFA will have to include when they finally get the house in order. These are:

  • Stadium
  • Catchment Area
  • Capital Requirement
  • Local Talent Depth
  • Support History

Therefore, there are a lot that bids, or potential bids, can do to prepare to enter the FFA process in a serious way.

Firstly, there is the private sector capital backer. The backers will need to be somewhat flexible with the components they will need to invest in, the total sum of the capital investment and be prepared to invest long term in the bid as there is no 'end date' for this process as such. Sports investment exit strategies are not comparable to almost any other investment.

This is shown by the divisions with the Sacramento MLS bid intrigue around their ownership structure and whether or not the Republic name will be used if granted one of the spots in the MLS when the MLS goes to 28 franchises. For more information about this, click here

  • Stadium: There are many bid proposals that have been declared/are being contemplated that will need an agreement on a stadium. This could require receiving funding commitments from a local council, state or territory government or getting an agreement with the owning level of government to receive private sector investment. 
  • Catchment Area: If you don't have a catchment area of around 500,000 the bid won't be commercially viable. Now, there are some bids that are pushing the limits to make their bid catchment areas appear bigger. The catchment area also needs to be around the 500,000 mark to ensure that the bid can prove localised support for the game.
  • Local Talent Depth: This is a subjective criterium. However, the bid needs to have a real and in deep pitch in this space. This also needs to be about ensuring that the bid is backed by the State FA and the junior clubs in the region. 
  • Support History: This all comes back to community engagement. If the bid is based off an existing team, the figures from that team come into figuring. However, as a bid, you need to engage in a solid community engagement campaign to engage your catchment in the bid and bring a level of 'hype' behind your bid. 

Don't underestimate the value of bringing a derby to the table as well. If we look at what makes the A-League sizzle, look at the Sydney derbies, Melbourne derbies and Central Coast-Newcastle rivalries. Even the rivalries that Brisbane Roar have had with the now defunct Gold Coast and Northern Fury sides were commercial gold for the league. This immediately brings into focus the prospects from Southern Syndey, Woollongong, South Melbourne, Brisbane City, Sunshine Coast and Ipswich. 

This is actually one of the big drawcards for bringing St. Louis into the MLS. St. Louis also helps MLS fill out the midwest U.S.—the league cares about geographic coverage—and instantly creates a couple of promising potential rivalries. An I-70 derby with Sporting Kansas City could become one of the league’s premier showdowns, while the enmity Blues and Cardinals fans traditionally have for their rivals in Chicago could form the basis of another run rivalry. 

The geographic coverage argument from St. Louis also provides the basis for arguments for bids from places such as Tasmania and Canberra.

However, for any prospective bid, the best thing we could do is show a living exemplar of a side to model a bid on: Atlanta United FC. 

Before they started, they had 24,000 season tickets sold; outdoing the top attendance rates of the MLS. 

Atlanta United's inaugural season may still be far from over, but already the club is on the road to becoming MLS's most successful expansion team.

The team is performing well in their first season, reaching for the playoff stages. The average attendance for the team is around 44.000 spectators, which are more than good numbers. If we look at how the first squad was built, we won’t find stellar European signings, like most of the franchises, do as a marketing tool in their first years. The squad is built around young players with some experienced ones from the MLS and some interesting young foreigners. 

They hired Gerardo Martino as their first manager (originally from Barcelona) and are also heavily invested in the youth development in their catchment area.

All of this is part of a long-term project, and it’s exactly what the A-League should be seeking for the new teams. For a franchise to be successful (and in the end, the league depends on the success of the franchises), it needs to be self-sustainable for the most part.

The main difference between traditional clubs and franchises is that sentiment of 'belongingness' that a club has: people will always belong to their club, no matter who’s the newest signing or in which position or division they’re in. 

The A-League are still a long way off creating any environment of belongingness for new entrants. The wait continues.

 

Kenyan Election Update: Ballot Paper Dispute

On Friday, July 7th 2017, the High Court nullified the tender for the printing of presidential ballot papers for the August 8, 2017 presidential election to, Al Ghurair Printing and Publishing Company.

In its ruling, a three-judge bench hearing a judicial review filed by the opposition National Super Alliance (NASA) found that the Independent Electoral and Boundaries Commission (IEBC) failed to conduct adequate public participation in the tender process, a move that they said goes against constitutional requirements. Further, the bench found IEBC’s decision to meet representatives of Jubilee and NASA at the exclusion of other parties fielding presidential candidates was inappropriate.

The court ordered the IEBC to commence the procurement process afresh.

NASA had also argued that President Uhuru Kenyatta has a relationship with Al Ghurair, which  influenced the award of the tender to the firm. The court ruled that the evidence provided to support this claim fell short of the evidentiary standard required to prove it.

High Court judges Joel Ngugi, George Odunga and John Mativo found that public participation in the direct procurement process was necessary for free, fair elections.

In response to the court ruling, President Uhuru Kenyatta warned the Judiciary against what he considered a plan to frustrate the IEBC in order not to conduct the General Election on August 8th.

The President said Kenyans would not accept any attempt to postpone the polls from the date specified in the Constitution.

Speaking at a rally in Baringo County on Sunday, 9th July, President Kenyatta said the Judiciary should not take them for fools for being silent as the courts make decisions that could lead to the postponement of the elections.

(On NTV's talk show 'Press Pass' the next day, commentator Patrick Gathara pointed out that the 2013 General Elections were not held on the day specified in the Constitution, but on a day set by IEBC following a court ruling.)

"I want to tell those in the courts that because we have respected you for a long time we are not fools.
We cannot accept the courts to be used by those not interested in the elections to frustrate IEBC," said the President.

The President said it was strange that the IEBC had been allowed to go ahead with printing ballot papers for other elective positions but not for the president.

Chief Justice David Maraga, in his Twitter handle on the same day, termed the President's accusations as unfortunate.

"I would not ordinarily respond to statements made by politicians in the course of campaign activities, but these accusations are particularly unfortunate, based that they are on completely wrong premises."

The CJ said that he had at no time asked the IEBC not to proceed with the printing of ballot papers, contrary to statements by Deputy President William Ruto in Baringo on that Sunday.

"The comments I made in Mombasa and elsewhere, which were either deliberately or inadvertently taken out of context, were in reference to the courts' efforts to expeditiously clear the numerous petitions arising from the party primaries in order not to inconvenience the printing of ballot papers," said Maraga.

He added: " I have always been at the forefront of defending the cardinal principle of decisional independence of judges, and at no time have I ever directed any judge or judicial officer on how to determine the cases before them."

On Monday 10th July, Jubilee Party leaders accused judges who handled the tender case of conflict of interest.

The Jubilee leaders said that Judge Odunga’s wife is Siaya Senator James Orengo’s niece while Judge Ouko is related to NASA presidential candidate Raila Odinga's wife, Ida.

Speaking at the party’s headquarters in Pangani, Nairobi, the leaders led by Secretary-General Raphael Tuju said that Judges George Odunga and William Ouko should have recused themselves due to conflict of interest.

The IEBC appealed the High Court decision on the ballot paper printing tender, arguing that the judges erred in finding that public participation is a mandatory precondition to direct procurement conducted as provided under the Public Procurement and Assets Disposal Act. 

On Thursday, the 20th of July, the Court of Appeal overturned the High Court judgement and allowed the IEBC to proceed with the printing. 

The Court of Appeal said the High Court decision did not take into consideration the constitutional timelines within which General Election must be held. The five-bench judge also ruled that public participation is not a requirement in direct procurement, which was the procedure used by the IEBC in awarding the contract to Al Ghurair. 

The appellate judges did, however, agree with the High Court that newspaper cuttings are insufficient proof of a meeting between President Uhuru Kenyatta and Al Ghurair bosses and that such a meeting influenced the award of the tender.
 

The Future of South Africa

Open any South African newspaper or visit any South African news website and things do not look good.  On every page, there is something depressing and with an initial glance, one would assume things are getting worse.

But, are things getting worse in South Africa?

The answer is “yes” but it will not stay that way.

The Guptavisation of South Africa

Perhaps the most prominent name in South Africa today is that of Gupta. The Gupta’s are a family who arrived in SA in the late 1990’s with nothing, made friends in the right places and rose to become one of the most influential business families in the country.  For many years their business efforts and now exposed, alleged dodgy dealings were of little concern, until a Gupta owned Jet landed at the Waterkloof airbase in Pretoria full of guests for a wedding, a wedding too that has since come under the spotlight funded by corrupt, government money.

A flurry of media activity around the jet soon began to unearth the shadier side of the Guptas, President Jacob Zuma and a gravy train of ANC Politicians and heads of state owned enterprises. In recent weeks the so-called #GuptaLeaks emails have shed further light on the shady dealings of the Gupta Family and their associates of influence in Government and cast a shadow over the once valiant, now deemed corrupt, ANC.

The political space in SA is alive and a young democracy is showing it can work. However, weak leadership in the ruling party and mounting allegations of corruption are putting the democracy to the test. Recent downgrades in the South African currency, the Rand, are in many ways a result of the now political infighting and the results of poor decisions, lack of investment partly due to corruption and the lack growth that stem from this.

President Jacob Zuma is considered to be at the very heart of problems South Africa is facing, and his party, the ANC, is divided over his role as president and this too is beginning cause challenges in the country. There are calls for Zuma to fall with a growing list of over 700 accusations of fraud that the president and his cronies are fighting to keep out of court to enable corrupt gains to continue, and yet time and time again the “Teflon President” still remains in his seat.

Things will get better

Despite the political turmoil and the ever-deepening piles of emails and documents that sway the argument that corruption is rife and state capture has happened, there is hope. This hope is what makes South Africa the country it is and it is this hope that any investor in SA needs to appreciate.

In the middle of the 1980’s the escape out of Apartheid seemed impossible; in 1994, the dream came true. The people rose up and made South Africa new, or as new as they could. This fighting spirit remains in South Africa today, 2019 sees a general election and recent politics and the truth coming out about corruption are reasons for a change in SA.

The ANC, as it stands at this moment, has little chance of securing a majority and should corruption charges against many ANC Members be proven people should think twice about their vote. The rhetoric from other parties is becoming a powerful “don’t vote ANC” with both the DA, the official opposition and EFF, a breakaway from the ANC each gaining significant ground in recent municipal elections with major cities changing hands. These changes have unearthed appalling levels of mismanagement that are being put right, this is something any investor must acknowledge as a sign of things to come.

The view of SA for investors is clouded by smoke from the political situation. However, SA is a place where long term investment will yield good returns and shrewd investors will reap a just return with the right financial, social and humanitarian strategy behind their investment. The Rand, despite plummeting in recent months due to crazy political decisions should not be the deciding factor on investment; it is in fact fairly stable despite its value. One needs to look at the stability of the country outside the world of politics and that there is a nation hungry for jobs and a better country.

A change of government may not necessarily be the panacea investors are seeking to the problems in SA, nor is it something that can be assured of, and one needs to consider much more. The corruption in South Africa is now known to exist and people are aware of it, this will be further addressed as the democracy matures and those at the heart of it are ousted. Right now, is a time where clever money will receive a long-term reward while some of the problems are being fixed, now is the time to get a head start and have some patience.

Structures need to be put in place, the power utility, for example, has to turn itself around along with good governance and either investment or privatisation. South Africa cannot survive at all without this and many other current State Owned Entities that have been milked through corrupt dealings. There comes a point, and many will say it is coming soon, where the people of South Africa will have to rise up, bring the change they want and grow the country again as they did in 1994. Any investment will surely understand the importance of that.

Many lessons have been learnt in the last twenty plus years, these will be used to move forward and that makes South Africa a place that will be hungry for investment especially from investors with a heart for change not just profit.

 

 

Nawaz Gone: What's next for Pakistan?

The morning of July the 28th will be long remembered as a real watershed in the history of Pakistan’s politics. After having kept the country’s Prime minister waiting for months on scaffold, the Supreme Court- country’s apex judicial body- has finally decided to disqualify him on account of corruption. Nawaz Sharif, one of the most powerful premiers ever, was just months away from completing his 5-year tenure to become the first elected Prime Minister ever in the country’s history to serve a complete term in office. The decision was largely hailed by the opposition parties and the people alike. Since the verdict was announced, the country’s atmosphere has been rife with sanguinity that the decision marks the beginning of accountability process for all and sundry, even the oligarchs.

But is it really that simple?

The ruling party has tried to dispel the impression that this move is yet another assault on the nascent democratic process which has been hardly allowed to strike root. Former cabinet colleagues and party loyalists have also recorded strong reservations against the entire investigation process and the judgement itself. The opposition parties, however, are contending amongst themselves to take credit for the decision. Each one of them claims that the movements led by their party culminated into PM’s disqualification. Nevertheless, it’s PTI, led by Nawaz’s arch rival Imran Khan, who bags the maximum credit in terms of popular opinion.

The whole episode started with Panama Papers leaks which stated the Prime Minister’s children held offshore companies and properties in London and British Virgin Islands. Petitions were filed in the apex court demanding probe into the matter which the court rubbished, calling the petition ‘frivolous’. Only two months later, as the momentum against the Premier started to build up, the court decided to take up the case. After listening to the arguments from both sides, the court, in April, decided to order a probe into the matter by a Joint Investigation Team (JIT). The JIT presented its report three months later, in July, and after a few final hearings, the verdict was announced.

Although a popular one, the verdict still raises serious questions regarding the efficacy of the judicial system.

 The fact of the matter is that the court has not unseated the Prime Minister on account of corruption or money laundering. In fact those cases against the Prime Minister and his children have been transferred to National Accountability Bureau (NAB), which has been advised to file the references in an accountability court. The Premier is disqualified, however, on account of concealment of ‘assets’. The country’s law sanctions the declaration of sources of income and assets of persons who want to run for the parliament. But the law does not define what an ‘asset’ means. In Sharif’s case, the assets turned out to be his unwithdrawn salary of merely AED 10,000 which he had to receive from a Dubai-based company where he had served at a ceremonial post. To fetch this definition of an ‘asset’, the Judges made recourse to Black’s Law Dictionary which said ‘receivables’ also are tantamount to assets. The court even went further to define the terms ‘receivables’ and thus established that an unwithdrawn salary amounts to assets.

The Prime Minister was thus found guilty of concealment of assets, but perhaps the most damning thing about the verdict was that the court found the Premier not ‘honest’; Article 62 of the Constitution demands that the parliamentarians shall be ‘honest’ and ‘truthful’. This was the article which was ridiculed by the same court during the hearings of a petition in 2014, citing that ‘honest’ and truthful’ are vague terms and if they are applied in their stringent meanings they could lead to the disqualification of the entire Parliament. Even the PTI leader Imran Khan has said similar things in the past, but he won’t have scruples celebrating the same clause if it serves his own political ambitions.

The kind of love this nation has for conspiracy theories have encouraged some of the politicians and journalists to once again point the fingers towards the Army; the difference between the civilian and military’s outlook on Afghan and Indian policies being the rais onde Tre. It is a fact that the country has a long history of Army rule. It is also true that every putsch was backed by the supreme judiciary. But mere speculations cannot help reach the judiciary’s contention to pass such a stringent verdict.

It is too early to say how significant an impact this decision can cast on the voter base of the party, especially in the bellwether state of Punjab. It will depend largely on how successfully the ruling and the opposition parties can present their case in front of the people. Needless to say, the ruling party’s argument that this decision is a blow to democracy is a bit too overstretched to comprehend; in fact it can be a blow to dynastic politics. Having a majority in both the houses, the ruling party has enough choice to pick the Premier of its choosing, and the democracy can move forwards.

In run-up to the elections which are due next year, it is unlikely that there is a discontinuity in government policies; domestic and foreign. According to one argument, the Punjabi business interests have also grown too strong in recent years to let the ruling party change course abruptly. The military establishment might have a bargaining leverage in foreign policy if the incoming PM failed to assert himself. However, there is no significant change in the domestic policies expected in the foreseeable future.

Whether the judiciary has finally taken a decisive step to hold the political elite accountable or has it proved itself to be a media-courting agency, yet again, which could give in to public pressure? The answer to the question can perhaps be better sought once free trails in relation to graft and money laundering against the accused are conducted and the culprits are brought to the book.

The need for quality 'oppo'

The need for quality opposition research for entities tendering for government contracts, engaging in new markets and analysing competitors and those going into politics. 

Opposition Research (or oppo as its known); is the formal practice of gathering information that can be used to beat your opposition. Knowing your opposition is critical to engaging in any government, business or political endeavour. In order to get the win you need, Gravis Risk is the solution.

Yes, the old adage is true, knowledge is power.. You can't trounce your recruiting, tendering or political enemy until you thoroughly know everything possible about how your enemy operates. 

There is a easy temptation to consider 'opposition research' as a straight mudslinging enterprise, however, the corporate and government concept is not a crude 'dirt gathering' exercise. Rather, not unlike your typical audit, it is a due diligence measure. Indeed, companies do 'competitor research' regularly as part of their standard business operations.

Simply put, information is the key to ensuring that you are planning to win. The process is quite standard for a political fight, an accurate merger/acquisition strategy or a successful tender.

This is also where counterintelligence to restrict your competitors from learning about your firm is also important. Whether it is shielding your Intellectual Property (IP), your recruiting methods, data programs, strategic or tendering direction. Our Gravis Risk counterintelligence solution uses cutting-edge methods to identify the information in an organisation that is valuable and where an organisation is vulnerable to attack. 

Competitive and business intelligence has become a critical function in all major corporations. But for many, the need to develop a process to formerly gather the intelligence has somehow been either forgotten or sidestepped by corporate leaders.

With experienced competitor researchers with global experience we stand ready to deliver on this vital component of any winning strategy. 

Future for RTOs in Australia

Are you running a Registered Training Organization (RTO) in Australia? Then it will be highly rewarding that you are well aware of a couple of things that will help you survive the stiff competition in your niche. These could be the fact that: your trainers have to be up to date in terms of being equipped with the latest skills, understanding all that is involved in terms of having your business fully registered and ensuring that it complies fully with all government regulations.
 
You may be one of those business persons who really want to get ahead of their competitors but don’t know how. You are at the right place as you will soon be discovering some of the right information required to make you cling to a healthy spot amongst other RTOs.

In other for your business to really stand the test of time, you must realize that your understanding concerning how the world is evolving has a great role to play in determining its rate of success. The RTOs are not an exception to this fact. The business of running a training firm has suddenly become a lucrative one and you can only imagine that it will attract the interests of more investors. As such, you want to get the best skills that are available at your disposal so that you can be ahead of the pack. 

This is not something you want to keep informal as you need all the professional help you can get in ensuring that your training organization is being manned by trainers who are always up to date in terms of their knowledge base. There are organizations you can consult in this regards as they have what it takes to help equip your trainers with all the necessary tools and techniques that will make them the best in their respective fields.

When it comes to running any kind of business in developed countries, you want to make sure your business registration fully complies with all the rules and regulations put in place by the appropriate authority. Getting all the necessary approval from such authority will only help you in adapting to different client needs. This is so because the more accreditation you get, the more services you will be considered qualified to render.

The world has gone global and as such, your business will be highly limited when you are restricted to just running trainings for local folks. This is where the need for being a CRICOS accredited organization comes into play. With such an accreditation, you are regarded as one of the licensed organizations by the Australian authority that is authorized and qualified to offer trainings for oversea students. Your organization will be recognized as an approved information provider in this regards.

This is where the Gravis Government team comes in. We are here to guide you through the process of CRICOS accreditation to ensure that your RTO can grow to a sustainable point and then be looking towards future growth strategies. In a crowded marketplace, you need to have an edge; we can deliver. For more information please click here

 

Social Enterprises: Points of failure to protect against

The growing trend in the NGO sector is to develop Social Enterprises as a means of alleviating the load of NGO balance sheets from an ever shrinking government funding pool. However, there are many pitfalls that these businesses get into (not unlike normal businesses) that need to be guarded against.

Before getting into the topic, I would like to mention two rules of thumb. Some ideas work and others don’t – that’s the first one. Knowing something that you shouldn’t do is more worth than knowing what you should do – and that’s the second rule of thumb. The purpose of mentioning these points is actually to relate the concept of successful and failed ideas that arises in every newly born enterprise. Talking specifically about the social enterprises, there arises numerous ideas for the welfare purpose and most of them gets failed due to some technical and managerial reasons (mentioned below), and when ideas gets failed, the purpose of a particular social enterprise gets failed and hence, when purpose gets failed, the enterprise as a whole gets failed.

Remember: Social Enterprises are businesses that provide a social dividend back to the NGO that owns them; often in both 'soft' (business being utilised by clients) and 'hard' (cash) returns.

Faulty Foundations: Get your foundations right before you start. You need to finance yourself, not just your social enterprise. Too many entrepreneurs equate starting a business with getting a job. They take a salary from the business increasing its chance of failure. The business is spending cash it can't afford, reducing the time available to develop a profitable product.

Beware the Love-struck Founder: Love-struck founders need to be balanced out in any social enterprise. Most people that are involved in NGOs are some of the most passionate, amazing people you will meet when it comes to their cause. That is what attracts them to the NGO in question. However, we need to remember that Social Enterprises are still businesses. They still need to make money in the real marketplace and they need to be run as such. Social enterprises will fail the same as normal business without experienced management. 

Due Diligence: If you were going to buy a house, car or business, you would do due diligence on the asset. Before entering into any new social enterprise, you must engage in a quality due diligence process. In order to do this properly, the 'owning' entity needs to enter into an independent due diligence partnership; for this, our Gravis Risk team needs to be engaged.

Cross Subsidisation: There are plenty of NGOs that go into the social enterprise of their choice as a means of ameliorating the pressure on their budget bottom line with the ever present pressures from a shrinking pool of social services funding from the Federal and State Governments. Then, for a variety of reasons they find themselves in a position where they are cross-subsidising the operating budget of the social enterprise instead of the other way around. This is unsustainable and needs rectifying ASAP.

Growth Strategy: Like all things in business, unless you plan to grow, stagnation will follow. The peculiarity of social enterprises are the number of entrepreneurs that pursue ideas that only work at a large scale. This means that social enterprises need to be moving into a scale where they are sustainable. 

For a consultation on your idea for a social enterprise, your social enterprise that is up and running and needs to be taken to the next level or your social enterprise that is 'stuck in the mud' - get in touch with the Gravis Risk team today by clicking here.

Gravis Risk due diligence...

Due diligence is a phrase that has been traditionally used to reflect the analysis activities that occur during merger and acquisition activities. Recently the due diligence process has been extended to include the evaluation of business affiliation and partnership agreements.

Due Diligence is generally comprised of legal due diligence and financial due diligence. At this time, research into financial assets, articles of incorporation, market share, technology, hardware and business competencies are examined and as a result, there is a need for businesses to engage with Gravis Risk who have vast experience so as to deliver professional due diligence partnerships for businesses making new investments or proposing to merge or buy other companies.

Statistics indicate only 15% to 25% of all mergers and various business combinations live up to expectations. 25% to 30% are reported to be outright failures, with the acquired entity being liquidated at a loss within 3 to 5 years of acquisition. The remaining 45% to 60% result in little or no apparent benefits to the buyer's shareholders to prevent this and similar occurrences, there is need to contact Gravis Risk.

In today's merger activity, we see an alarming trend of companies paying too much for the organisations they are acquiring. Declining equity prices are creating a disconnect between what owners want for their businesses and operating companies will pay. 
 
We help study key cultural and organisation effectiveness domains and they include:

  • Leadership: vision. mission. values, business strategy development, leadership effectiveness and ethics. 
  • Relationships: trust, collaboration, inter/intra group relationship, community and customers.
  • Communication: feedback, information sharing, employee trust in information
  • Infrastructure: formal procedures, processes, system, policies, structure and teams involvement and  
  • Finance: perception of financial health and the role of the employee and the level of financial comprehension and impact on the business. 
  • Cultural Descriptors: a list of predetermined values which can be customised to reflect the organisation's values.
  • General Climate: open-ended questions that capture the stories and suggestions from employees.

The outcome of this is a cultural resume. This document shows that results of a cultural diagnostic and lays out the unique organisational culture of each business unit inside the target entity. The Cultural Resume helps stakeholders going forward and creating the measurable action plans for the cultural integration efforts for those going forward. 

Some of the tips we use to increase the potentials of our success includes:

  • The use of an appreciative inquiry when examining the culture of business units.
  • We use a validated assessment tool that collects both quantitative and qualitative data.
  • We include culture as a part of your due diligence process and be prepared to addresses the issues between business units with action.
  • We involve employees in the integration effort. 
  • We allocate dedicated time and resources for the project.