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NEWSLETTER(Page 4)
Main Index
Index:
* IBA BAR ISSUES COMMISSION
E-NEWS
* The International Bar Associations Human Rights Institute calls for the International Criminal Court to investigate war crimes committed in Georgia
* Third Annual Lecture on International Commercial Arbitration
* The International Bar Association denounces the raid of law firms offices in Russia
* Dear Iranian Bar Association
* Message from Phil Zeidman re 'The Best of International Pro Bono'
* IBA Buenos Aires Conference - Section 1 of 4
* IBA BAR ISSUES COMMISSION
E-NEWS
| August 2008 |  |
- IBA assists in set up of first ever Afghan bar association
- Message from the BIC Chair
AlejandroOgarrio
- The International Criminal Court (ICC) calls for closer dialogue with IBA member bar associations
- Report from the 3rd Annual Bar Leaders' Conference, May 2008, Amsterdam
- Beyond Polokwane: safeguarding South Africa's judicial independence
- Burundi: the media on trial
- Access to international justice through a new judicial and political international order
- IBA Council approves IBA Young Lawyers' Committee Guidelines on developing and maintaining young lawyers' organisations
Click for view full text of BAR ISSUES COMMISSION
E-NEWS - August 2008
Iba-enews
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* The International Bar Associations Human Rights Institute calls for the International Criminal Court to investigate war crimes committed in Georgia
Below is a news release issued today on the Georgia-Russia conflict.
Please feel free to forward to other interested parties and any relevant media contacts you may have.
Best wishes,
Romana
[For Immediate Release: Friday, 22 August 2008]
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The International Bar Associations Human Rights Institute calls for the International Criminal Court to investigate war crimes committed in Georgia
The International Bar Associations Human Rights Institute (IBAHRI) calls for the International Criminal Court (ICC) to investigate possible crimes within its jurisdiction committed on the territory of Georgia during the recent conflict between Georgia and Russia.
Established in 2002, the ICC is a permanent institution with jurisdiction over genocide, crimes against humanity and war crimes, including grave breaches of the Geneva Conventions.
The ICC Prosecutor, Luis Moreno Ocampo, confirmed on 20 August 2008 that the situation in Georgia is under analysis by his office. The IBA urges both parties to fully cooperate with the Office of the Prosecutor.
According to the UN High Commissioner for Refugees, the conflict has left over 100,000 people homeless, while many have been killed or wounded. There have been reports of war crimes being committed by the armed forces of both countries. Mark Ellis, Executive Director of the IBA, insists on the importance of not letting the perpetrators of such acts go unpunished. The ICC has been established specifically to address the most serious international crimes, he states. The IBA encourages both Russia and Georgia to cooperate with the Court in order to ensure that there is no impunity for the individuals responsible for these crimes.
Georgia has been a state party to the ICC since 2003, when it ratified the Rome Statute. The Courts jurisdiction therefore extends to international crimes committed on its territory or by its nationals. Although Russia is not a party to the ICC, the provisions of the Rome Statute allow it to accept, by declaration, its jurisdiction with regards to a specific crime.
The ICC represents a unique and powerful tool, states Justice Richard Goldstone, IBAHRI Co-Chair and former Prosecutor at the International Criminal Tribunal for the Former Yugoslavia. The announcement of the Courts possible involvement in the Georgia conflict reinforces its position as an essential actor in bringing justice to victims and ending impunity.
ENDS
For further information please contact:
Romana St. Matthew - Daniel
International Bar Association
Press Office
10th Floor
1 Stephen Street
London W1T 1AT
United Kingdom
Direct Line: +44 (0)20 7691 6837
Main Office: +44 (0)20 7691 6868
Mobile: +44 (0)7940 731915
Fax: +44 (0)20 7691 6544
E-mail: romana.daniel@int-bar.org
Website: www.ibanet.org
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* Third Annual Lecture on International Commercial Arbitration
| September 25, 2008, Washington, D.C. |  |
Dear Colleagues,
On behalf of the International Arbitration Program, I cordially invite you to the Third Annual Lecture on International Commercial Arbitration (http://www.wcl.american.edu/arbitration/annuallecture.cfm) which will take place on Thursday, September 25, at 5:30 p.m. at American University Washington College of Law, located at 4801 Massachusetts Avenue, NW, in the Mooers-Morella Ceremonial Courtroom (603).
Established in 2006, the annual lecture offers an eminent figure in international arbitration a platform on which to share his or her ideas on novel issues and current trends in international arbitration from his or her own perspective. This year's lecture, €œEstablishing Claims for Damages, Costs and Interest in International Arbitration€ will be presented by The Hon Sir Vivian Ramsey, QC, Justice of the High Court, London.
CLE credit is available for this event. The lecture is free and open to the public, however, registration is required. To register, please click here.
http://www.wcl.american.edu/secle/registration
For more information, please contact:
International Arbitration Program,
American University Washington College of Law,
4801 Massachusetts Avenue, NW, Washington, DC 20016,
Telephone (202) 274-4321,
Facsimile (202) 274-4226,
E-mail: arbitration@wcl.american.edu,
Website: www.wcl.american.edu/arbitration
Sincerely,
Dr. Horacio A. Grigera NaÃn
Director, International Arbitration Program
SAVE THE DATE!
Fifth Annual Seminar on International Commercial Arbitration:
How to Handle Intellectual Property and Telecommunication Cases
October 27-30 in Washington, D.C.
Early registration deadline: September 15, 2008
International Arbitration Program - 4801 Massachusetts Avenue, NW-Washington, DC 20016-8181 - 202-274-4321 - arbitration@wcl.american.edu
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* The International Bar Association denounces the raid of law firms offices in Russia
Please see the news releases below. If you are able to place this on your website or in your organisations journal/newsletter, that would be most welcome.
Kind regards,
Romana
[For Immediate Release: Wednesday, 03 September 2008]
The International Bar Association denounces the raid of law firms offices in Russia
The International Bar Association (IBA) is deeply concerned by recent reports of law firms offices being raided by the Russian police.
Eduard Khairetdinov, who is representing Hermitage Capital Management and its trustee HSBC, saw his office raided by police officers on the night of 20 August 2008. Moreover, he and two other lawyers were apparently issued summonses to appear as witnesses in a case they are involved in.
This not only contravenes Russian legislation, but also goes against the Basic Principles on the Role of Lawyers adopted by the United Nations.
The President of the IBA, Fernando Pombo, recalls that According to the Basic Principles, governments need to ensure that lawyers are able to perform all of their professional functions without intimidation or harassment. Improper searches of lawyers offices constitute a clear disregard of these international principles.
Mark Ellis, Executive Director of the IBA, states that such actions indicate another sign of deterioration of the rule of law in Russia. Respect for the role of lawyers and the independence of the judiciary represent an essential feature of the rule of law, he said. When government agents interfere with the work of lawyers, it is not only the legal profession that is threatened, but the overall legal order in the state.
The IBA urges the Russian government to ensure the protection of lawyers rights and to refrain from any unjustified interference in their work.
ENDS
For further information please contact:
Romana St. Matthew - Daniel
International Bar Association
Press Office
10th Floor
1 Stephen Street
London W1T 1AT
United Kingdom
Direct Line: +44 (0)20 7691 6837
Main Office: +44 (0)20 7691 6868
Mobile: +44 (0)7940 731915
Fax: +44 (0)20 7691 6544
E-mail: romana.daniel@int-bar.org
Website: www.ibanet.org
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Main Index
* Dear Iranian Bar Association
| .justicemakers.net | |
1. The demand for JusticeMakers is global. Defenders, judges, and police officials from 101 countries have combined to visit http://www.justicemakers.net more than 2,500 times. Together, theyre posting projects like Justice in Customary Courts in Swaziland, discussing Criminal Justice in India in the JusticeMakers Forum... and thats just the start of it. For more on the JusticeMakers community, I have pasted an excerpt from a recent JusticeMakers Newsletter below my signature.
2. You are the key to identifying and encouraging the worlds JusticeMakers. Many of the would-be JusticeMakers are so consumed with their work that they dont even know we exist. We need your help! Here are four easy ways you can assist us in getting 300 high-quality applicants by the September 14 application deadline.
a. Nominate would-be JusticeMakers using our online form.
b. Post one of our web banners on your website or blog.
c. Share our JusticeMakers film via email, Facebook, or other social networking sites.
d. Register for JusticeMakers and provide feedback to applicants as they refine their proposals.
Thanks again for all your support, and let me know if you have any questions!
Sending you my warmest regards,
Karen Tse
CEO and Founder, International Bridges to Justice
http://www.ibj.org
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JusticeMakers User Newsletter | August 12, 2008
UPDATE: PRELIMINARY APPLICATION DEADLINE MOVED TO SEPTEMBER 14, 2008
For those of you working to perfect your preliminary application, you now have an extra month! Due to demand from partner universities and recent technological challenges among users, the JusticeMakers team has decided to extend the deadline to September 14.
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INSIDE THE CRIMINAL JUSTICE FORUM
A sample of the discussions taking place in the JusticeMakers Criminal Justice Forum:
Re: Criminal Justice in India
The abuses people are getting from the judiciary systems in most of the countries is due to the ignorance of procedures by victims and the absence of denunciation systems. Once you put in place a mechanism to reveal to public all the abuses you are informed about, police or Magistrate will think twice before acting in an abusing way.
Re: Delayed Justice
Judicial backlog is a serious issue which must be addressed by anyone who works on criminal justice reform. While it can be a problem in developed countries, it is usually more severe in developing and post-conflict countries due to the lack of a modern case management system, as well as the necessary personnel, equipment and infrastructure to ensure that criminal matters are heard promptly.
Re: Access to Justice: What are our common challenges?
What is access to justice? It is a common global term. But it has different meanings in different contexts. For example access to justice in the United Kingdom and access to justice in Burundi. What does access to justice means in your context, your town, your village, your community? Did you have access to justice programs in your country? What were the outcomes and impact of such programs?
Have something to share? Start your own conversation.
(Note: You must be logged in to the JusticeMakers site for the above link to function properly.)
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FEATURED JUSTICEMAKER
Name: Geraldine
Country: Angola
Project Name: Exhibition of Justice
The first step is to visit different prisons to meet people (suspects) in detention. At least 20 cases would be selected and basic legal briefs\summaries of the cases would be prepared. The next step would be to organize a week long exhibition, like an art exhibition, with pictures of the criminal suspects and summaries of the cases and the cost of legal aid for each case. Private corporate enterprises, for example the oil companies, legal practitioners (lawyers, advocates, judges, ministry of justice), NGOs, international organizations would be invited to the exhibition, the objective being to get them to either take on the cases pro bono, fund legal representation for the cases or create lobby and pressure on the justice department to expedite the legal processes. The cases would also be published in the newspaper for a week to familiarize other people with the case.
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COMMUNITY STATS
Here are a few statistics about the JusticeMakers Community:
* The site has more than 180 registered JusticeMakers from 30 countries around the world
* Since June 26, www.justicemakers.net has been visited 2,500 times
* Site visitors have come from 101 countries
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Not interested in JusticeMakers updates? Unsubscribe to this newsletter by replying to this email with UNSUBSCRIBE in the subject line.
JusticeMakers is a project of International Bridges to Justice, a registered US 501(c)3 organization (EIN: 31-1771358).
10 Rue de Berne, 1201 Geneva, Switzerland
p. +41.22.731.2441 | f. +41.22.731.2483
http://www.ibj.org
Copyright 2008 International Bridges to Justice
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* Message from Phil Zeidman re 'The Best of International Pro Bono'
Please find below a message from Phil Zeidman, organiser of this Pro Bono session.
Kind regards
Sibylle
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Re: 'The Best of International Pro Bono'
I am writing to call your attention to this program, which we will be holding in Buenos Aires following enthusiastic responses to the first two such programs in Chicago and Singapore. It will be held from 3:00‑6:00 p.m. on Thursday, October 16, and I hope you will be able to join us.
As in previous years, we have selected the most effective and innovative international pro bono programs initiated by law firms and other organizations and we will spotlight them on panels emphasizing an interchange of views, audience participation and questions and answers. As in past years we will provide a geographic focus, underscoring the emerging pro bono culture in Latin America itself. It should be lively, informative and inspirational.
A new feature this year will be the launch of internationalprobono.com, the first interactive website focusing on international pro bono activities. Initiated by the Public and Professional Interest Division, it is a remarkable innovation; we will demonstrate its use in the context of the program itself.
I look forward to seeing you there.
Philip F. Zeidman
Sibylle Duell
PPID & BIC Administrator
Visit www.internationalprobono.com, the new IBA site where legal professionals engaged in pro bono around the globe can find useful resources and contacts.
International Bar Association 2008 Conference
Buenos Aires, Argentina 12-17 October 2008
Meet with over 3,000 international legal professionals
Over 150 working sessions
Share knowledge and expertise
For further information and to book online CLICK HERE
www.ibaner.org
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Main Index
* IBA Buenos Aires Conference - Section 1 of 4
| IBA Daily news Buenos Aires Conference 2008 Monday October 13 | |
Hernando de Soto
You may not realise it, but you all create pictures of fact.
Hernando de Sotos apple is just an apple. As he explained last night in his keynote speech at the International Bar Association Opening Ceremony, the apple is nothing without its relationship through the laws and policies
lawyers use to establish order in the globalised economy.
Lawyers hold the key to the worlds problems, he said. You may not realise it, but you all create pictures of facts. The exchange of legal titles establishes value and relationship between companies, countries
and individuals, de Soto explained.
Later de Soto thrust his passport in the air, opened it, and proclaimed he is not defined by his nationality or his heritage, but by the documents and legal titles that support his passport and establish his economic relationship to the rest of the world.
The uniformity between country borders that allows his safe passage around the globe is a product of lawyers that create facts and policies to establish his citizenship. There are over six billion people in this world, he said. And the only way for them to know each other is through law.
De Soto went on to give his view on the evolving global economy and the credit crisis. He said that once the property titles and their relationships to the rest of the world become too complicated to establish ownership, the economy is bound to collapse the way it has the last few months.
The world hinges around the information that property brings into a place, de Soto said. Addresses release information about ownership and who a location relates to.
Fond of his metaphors, de Soto used the example of a pencil, whose wood, lead, eraser and metal were all formed in different countries but brought
together by a series of economic relationships.
Sometimes we only see things when they come together, he said. Then I look at this pencil and see the process of it coming together.
The sub-prime crisis, then, is the lack of easilly identifiable relationships between buyers and sellers who have complicated the marketplace with securitisation.
Its a problem of knowledge, he said. When you know who owns what you are able are able to see the invisible things. You can see the relationships.
De Soto thinks the sub-prime crisis is just at its begining for lawyers, because it is their job to re-establish those relationships to find out who owns what property.
Property creates the most important informational relationship system ever, he said. In the sub-prime crisis people left real estate and went to securitisation, which negated relationships. Now we dont know
who owns what.
He managed to place the economic issues in perspective, comparing them to the chronic sub-prime crisis in his native Peru. A country where 60% of the population lacks the property titles that establish business relationships with the rest of the world.
This front against globalisation, leaves more than four million people behind global development. These people are voting against against the system because they arent a part of it.
De Soto explained that when he was invited to speak in July, he thought he
would discuss the economic crisis of Peru and other impovershed nations. But the western world caught up and launched itself into a crisis of its own, due largely to complicated securitisation methods, and a lack of legal uniformity.
Property has to be precise, updated and standardised to be recognised on a global market, he said. The worlds problems are legal problems.
De Soto is the pre-eminent economist in South America and President of the Institute for Liberty and Democracy, based in Lima,
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IBA OPENING CEREMONY
Peru. He was distinguished as one of the leading Latin American innovators by Time magazine, as well as one of the 100 most influentioal people in the world.
IBA President Fernando Pombo introduced de Soto as a genius, a remark that drew a smile of flattery from the keynote speaker. He was behind the most innovative economic issues in the world, Pombo said, and we couldnt have a better speaker for this conference.
Before de Soto spoke a variety of IBA delegates took to the stage to give background to the conference.
Chief of the Cabinet of Ministers in Argentina Horacio Rodriguez Larreta explained that this was the second time Buenos Aires has hosted the prestigious event, and that it was the largest collection of south American
lawyers there had ever been.
Pombo said that there are 117 countries represented at the conference, which brings numerous Latin American and north American speakers together with the rest of the world. For the first time the IBA welcomed Afghanistan
lawyers, who have establish their own pillar of justice, according to Pombo.
Chair of the IBA Legal Practice Division David Rivkin said it was remarkable that the conference will have record numbers, with 4,500 attendees despite the threats and economic crisis the world is undergoing.
The importance of lawyers grows exponentially, he said. It is important, now more than ever, that we help our clients and governments. We are the glue that holds it together.
THE PICTURE
(David Rivkin, Hernando de Soto, Fernando Pombo and Horatio Rodriguez
Larreta listen to Martin Solcs introductory remarks )
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Which of
POLL: CREDIT CRUNCH REGULATION
The regulatory response to the liquidity squeeze has been confused and confusing, says Rachel Evans
The European Commissions proposed reforms to the Capital Requirements Directive are a complete disaster, according to in-house and private practice lawyers. The plans, under which originators would have to maintain a 10% stake in any product that transfers credit risk, were singled out by 50% of lawyers as the worst regulation to proceed from the credit crunch.
If the ECs suggestions become law, originators will have to maintain positions in products such as securitisations, derivatives, syndicated loans and corporate bonds. This would have serious repercussions for banks balance sheets and the amount of regulatory capital that institutions have to
hold.
Laughable and pathetic
The ECs proposals are bleeding hilarious, says one lawyer. Banks simply dont have the capital to hold against all the vanilla debt issuances from corporates. This will increase exponentially the extent of the credit crunch. Bravo European Commission.
The Commission published the potential changes in July after negative feedback from the industry pushed the EC to drop an earlier scheme. The initial proposals would have required originators of securitisations to hold capital to cover 15% of the structure, regardless of whether the originator maintained any exposure. These suggestions were rejected by the market as ineffective and anti-competitive for EU banks, but the revised plans seem little better.
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Crunch reactions were worst?
By requiring originators to maintain an exposure in deals they originate, the EC hopes to align their interests with those of investors. This should promote better origination and due diligence standards.
But originators often keep a stake in their deals, and indeed did so on many of the sub-prime deals that went wrong. Lots of institutions already maintain the equity slice, comments one lawyer.
However, if an institution wants to pass on the risk, I dont see why they shouldnt be allowed to. These proposals will not only increase regulatory capital costs but also limit how much its possible to raise at the triple-A
level.
The special contender
However, its not only European regulators that got it wrong. The UK governments special resolution regime (SRR) was a serious contender for worst regulatory response of the year. A quarter of lawyers questioned by
IFLR expressed concerns about the legislation to save failing banks.
The temporary act that enabled Northern Rocks nationalisation has broad and powerful language that is potentially very scary, says one partner. Ultimately, it displays the power of the state it can do anything. The government needs to clarify the extent of such powers when putting them into permanent legislation.
There is also consternation on the wording of the regime with regards to netting. The SRR would allow the government to split failing banks into toxic and sound institutions. Not only will this create a lottery for creditors,
with those whose debt is moved to the sound institution receiving remuneration and those left with the toxic bank losing out, it could also destroy netting arrangements. Netting allows banks to consider the net
owed by various counterparties rather than the sum due for each transaction. Splitting banks could tear apart these arrangements.
As one counsel comments: The SRR enables the idea of partial transfer and the cherry picking of contracts, which could fundamentally upset netting. The authorities are considering protecting some netting arrangements but they dont know which ones. Lawyers warn that hedge fund brokerage which relies on contract netting could be badly affected, with hedge funds opting to do deals outside of the UK.
Holding onto hope
Regulators are not, however, failing at everything. When lawyers were asked about the positive regulatory responses to the credit crunch, 43% mentioned the increased focus on liquidity. The Bank of Englands Special Liquidity Scheme was described as cleverly designed and the European Central Banks scheme was also praised.
But more than two-thirds of those surveyed felt that the industry had not been sufficiently consulted on new regulation. There were only two weeks to respond to the ECs proposed changes to capital requirements. Many lawyers also highlighted the recent short-selling rules as a classic example of regulators acting without consultation. As one lawyer said when asked how regulators should improve consultation with the industry: Have some.
The ECs proposals are bleeding hilarious. They will increase exponentially the extent of the credit crunch. Bravo European Commission
European Commissions 10% rule - 50%
Credit ratings agencies - 6%
FSA short-selling - 19%
Special resolution regime - 25%
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Profile: Akira Kawamura
Give something back
The IBAs Secretary-General, and nominee for Vice-President, talks about meeting Ban Ki-moon and helping the world through the IBA with Jaspreet Sira
How long have you been involved with the IBA?
I cant actually remember exactly, but for quite some years. I began as just a normal member. I did many things: I was a counsel member of the Legal Practice Division, I was Deputy Secretary-General. But I suppose my active involvement with the IBA began at the Auckland Conference, in 2004, where I was elected as the first Chair of the Bar Issues Commission.
When was that?
The Bar Issues Commission was created in 2004, by the amendment of the Charter of the IBA and I was elected as the first Chairman. I feel that the reason I was elected as BIC Chair was that I had been developing close friendships with the Bar leaders of both developed and developing countries via cross-border legal programmes.
I was the Bar Issues Commission Chair for two years and subsequently I stood for the position of Secretary- General of the IBA. The election was held in 2006 in Chicago, and it so happened that I was elected Secretary-
General.
So what does your role as secretary-general entail?
My responsibility is to coordinate between the many Bar leaders and the IBA office in London. On a personal note, I am particularly interested in helping developing countries, including Myanmar, Laos, Kazakhstan and numerous African countries.
What has been your best moment working with the IBA?
Last year I went to New York and I met the secretary general of the United Nations, Ban Ki-moon, and I had a very interesting discussion with him. He told me that he relies heavily on the IBA to promote rule making globally and also that he is very interested in how the IBA can help the least
developed countries.
That must have been a very important moment for you
This was an extremely important for me; in fact, I took it as my mission. This year we were very successful in organizing a special Iraqi lawyers training programme. I do believe, above all, that the doctrine of Rule of Law is globally prevailing and universally trusted.
Our mission is very important, and I think that we have an important role to play for peace building in both the warring and post conflict countries. Basically, my focus is in two directions: one developing Bars, the other Bars postconflict or in warring countries.
Can you tell us about the Iraqi lawyers training programme?
We have a group of lawyers that is used to dealing with Iraqi problems; they have a significant amount of Arabic materials, which we use to train the Iraqi lawyers. I really feel there should be a greater exchange of knowledge between Iraqi and non-Iraqi lawyers; there is an immense amount to learn from each other.
Last spring the IBA had a meeting in Zagreb; representatives of the Iraqi Bar, including its President came to the gathering. It was here that the President asked for our help to rebuild the Iraqi Bar, I promised that I would help because it is such an important cause.
What action have you taken?
I went to the UN and I asked the UNDEF (the United Nations Democracy Fund) for help. Only the IBA is in a position to do that, because the IBA is non-political, it is just a rule of law advocate. I am glad to say that the IBA is trusted, by people such as Ban Ki-moon, and we must respond to that kind of trust.
ROFILE: AKIRA KAWAMURA
When the IBA was established in 1947, it said that it was the United Nations of the Bars and law societies of the world and, simultaneously, that the IBA is the Bar of the United Nations. The IBA was always very closely related to UN activities from day one, so I definitely want to continue that dialogue.
Which sessions at the conference are you most looking forward to?
Well, this conference is very important because it is held in south America. This is only the second IBA conference to be held there. Latin America is a growing area for the legal profession, which should make the conference all the more interesting.
I would have to look at the many options around, but the Rule of Law symposium should be very significant. The symposium always focuses on different issues and though I have not been told what they will be exactly, Im sure it will be a very enlightening and progressive conference on the
mission of lawyers in the global age.
How many delegates are you expecting at this years conference?
So far, Ive heard that the registration is growing very rapidly; I may be wrong but my guess is 3500. In Singapore, most of us, myself included, were very pessimistic, because Singapore is so far away. But it was a record, our largestever conference. Buenos Aires is very far away so my estimate
is a cautious one.
Why do you think people find it so beneficial to attend?
As you may be aware, the registration fee is extremely high, very costly; yet so many lawyers come to the conference from all over the world. There are many reasons. One of my friends from the IBA told me there were three reasons for the lawyers gathering in this fashion. Firstly, they want to
learn more about latest developments and other current topics.
Also, they come to the conference to make friends and business allies: networking is the second reason. But most importantly, so many lawyers come together at the IBA conferences to try and do something good.
They are not selfish people, something I am very proud of; the lawyers are heavily orientated towards public interest. They like to spend money to participate in the IBA ultimately to do something good for society.
You mentioned building professional networks. What will there be in terms of social programmes at the conference?
Well, there are many social programmes, nice receptions and dinners every night. Most of the dinners and parties are free and it is a chance to meet many friends, new friends and old friends. Moreover, at the sessions you will meet lawyers with a common interest. All of us delegates exchange name cards, all attendants come to the conference bringing a box of name cards and they end up distributing all of them.
Many bring with them brochures, pamphlets or leaflets of their practices. And when we get back from the conference we find we have very heavy bags of those documents: they are extremely useful for networking.
How do you think the social programmes help people to build professional networks? You talked about the distribution of cards, but anything else?
We also frequently refer work through these networks. I would quite happily refer my clients to the lawyers I meet and with whom I drink. I trust them and feel I could rely on them. Moreover, nowadays, many young associates want to spend time overseas. Many are interested in the Indian deal market, others are fascinated by the Islamic financial centers and some now may be interested in Brazil; if I have friends in those jurisdictions, it is easy to introduce our young associates to them. We can ask them to help our associates to learn or train in those remote locations
On a personal note, how do you find time to balance your role at the IBA with your role at Anderson Mori & Tomotsune?
Well, that is a difficult question. But I am quite senior now, and so I probably will not be expected to work as hard as before. Because I am getting quite old as well, I would like to concentrate on doing something good for society, and therefore I really do enjoy working for the IBA.
You are doing very well in terms of your contribution to the IBA
I am the first the first east Asian lawyer that has ever been appointed to the leadership of the IBA; its strange but its amazing. I enjoy that and the Asian lawyers like it. In a way, I think I am contributing to the development of the IBA in these Asian regions. Otherwise, Asians didnt know the IBA
very well and particularly those from Japan, China, Korea etc. In these jurisdictions, since I have been elected as Secretary-General of the IBA there has been a slightly increased awareness of the IBA.
So does your role with the IBA benefit your firm?
I think so, but it benefits the firm very indirectly, not immediately. Because of the IBA many of my partners are now exposed to the international deal market, and they learn many things from that. It is indisputably an asset for them and for the firm.
A basket of benefits
Nicholas Pettifer talks to Christopher Meyn of Gvea Investimentos about this mornings session on Latin American private equity
At 10.00 am today (2008/october/13) in Liberator A, there will be a discussion on Latin American private equity and hedge funds. Christopher Meyn is a partner at Gavea Investimentos and is speaking at the session. Here, he previews what he is likely to add to the debate and reveals reasons why he feels Brazil is the best country in Latin America for private equity houses to invest into.
Have you had some pre-discussions about what you are going to talk about in your session?
Im going to talk generally about the private equity environment in Brazil. There are two of us coming over from Brazil and that is a pretty traditional speech topic. Its a country that (right, wrong or indifferent) is perceived as a bit buffeted and delinked from a lot of what we are seeing right now globally. Its not true. It is a very attractive market, but like anywhere else, it is not magic: there is no silver bullet, there is no delinking from the global economy and there will be volatility here like anywhere else.
So Im going to talk about Brazil what the environment is like, what we see happening right now and what we think the outlook will be for the next two or three years. We have our own impression and people usually like to hear it, but whether its correct or not is up to the audience.
You mentioned existing legislation that makes Brazil attractive.
There are certain market friendly, investor friendly changes that have been implemented over the last few years. Youve got to take them as a basket of positive regime changes any one by itself is really not enough, but as a group the results are interesting. Tax incentives for foreign direct investment, including vehicles domestically and abroad that can be used to reduce or eliminate taxes for foreign investors, including private equity. The streamlining of capital flows back and forth between countries has been important.
Prior to the early 2000s, foreign exchange flows were processed with quite a lot of bureaucracy arcane registration processes to get your money flows approved. That led to some less than perfect mechanisms for capital flows here it stimulated parallel markets (as do the very high tax burdens in Brazil). But that has all been simplified and it is now fluid. It is no different having our money abroad and bringing it in than it is in any other developed economy.
What rules in particular have helped?
Law 2689 allows for capital gains and financial transaction tax exemptions on stock market investing for foreign investors.
More importantly, for direct investing in companies such as under private equity, you can use newly created and regulated investment vehicles. For example, the FIP (Fundo deInvestimento em Participaes a fund of investments structured like a limited partnership or a corporation) is a vehicle that investors can make investments in private entities through on a capital gains tax-exempt basis, including allowing for washing of gains and losses among investments in the same fund.
These structures and vehicles are gaining popularity and the lawyers involved do a good job. Tax haven domiciles change a lot here and if
youre not careful you can end up paying more tax than the basic rate.
If you find yourself in a locally classified tax haven, capital gains are
not exempt and in fact increased from 15% to a 20% rate. You have to
be in tune with what is happening while you are structuring both the
fund and the investments. Some things are just irreversible, so you want to
avoid making mistakes.
Have there been any developments in the capital markets that have increased attractiveness of companies to investors?
I would certainly point to the creation of the Novo Mercado, which is the special listing designation within the Brazilian Stock Market (Bovespa). It was created in 2000 and now there are more than 100 companies listed. This designation is reserved for companies with the highest level of corporate governance and transparency within the stock market. So you can file to become a Novo Mercado company, and you must meet an advanced level of both shareholder friendly and market friendly characteristics. Such as a minimum float of 25%, one class of shares with tag along rights for all minorities, etc. So you align interests of all shareholders,no longer having the game of isolating minority share-holders or creating a control group, an us versus them mentality inside the company.
And this is attractive to investors.
Yes, there has been a great premium for the companies that have adhered to this set of requirements and you can actually start tracking that. The companies that comply have performed very well relative to the broader market. There has been, as I recall up to a 30% average premium in valuation for Novo Mercado companies. Whether that is statistically or purely linked to the Novo Mercado, who knows. But it is the right kind of movement for an investor its a private equity mentality.
The transparency helps too. That has helped stimulate a confidence that (and this goes hand-in-hand with a better macro economic environment for the long term) a sense that the equity markets are real. Its not just a capital game for the controlling shareholders to play with and jam the little guy at the end of the day. It has helped drive a lot of foreign investment into the stock market here.
Have there been any new legislative changes that have helped?
The relatively new bankruptcy law in Brazil has been quite beneficial. It sounds crazy to say, as it does nothing more than implement a European or American style bankruptcy system where none existed before. But it does
now provides a chance to have a controlled recovery process versus an arbitrary judge-ruled bankruptcy/liquidation proceeding.
Before, you would be bankrupt and some guy without any link to the business in some far away city would decide the life of the company for debtors and creditors. And it wouldnt always be rational. Today, creditor groups are formed, the recovery plans are submitted and negotiated,
and there is a waterfall of seniority in claims. This gives you a clear and better judicial system for resolving problems.
There has always been a good judicial system in Brazil, albeit a little bit slow; but this has helped create certainty for investors.
And all of these things together add up to a better environment for private equity investment?
Taken together as a whole, these legislative and structural changes have created a much better investment environment over the last five to seven years. None of these can match the most important thing though simply a better economic environment. Brazil has turned itself around and positioned
itself to be very, very stable for the long term, which hasnt really happened since the seventies.
Why Brazil? Its a much bigger country, its very western thinking and consumption habits are very much American. That can be good or bad. Good if youre selling Big Macs! Seriously though, there is more of a habit of adopting credit and therefore being a consumer in the truest sense. You will spend your earnings, you will take on credit and you will increase your consumption as your spending power increases. This is something we are used to seeing in the western world, but we dont really see it happening
in the same model elsewhere in emerging markets.
Here, it is happening. Its really hard to strip out one thing that has increased
Brazils attractiveness, but high interest rates create opportunity. They also create a challenge for private equity in terms of more expensive capital, but it keeps valuations down. So I view that as an opportunity if you are comfortable with risk.
Leverage is not a significant option with high rates and because of that you are doing a lot of things on a pure equity basis. Leveraged buyouts are tough to execute here and will continue to be so until debt is more creative and cheaper.
Are there any structural differences to deals in Brazil that make them stand out from other Latin American countries?
Im very Brazil-centric, but anecdotally I understand the judicial system here is clear and direct. It works. It may not work in the same time frame you were hoping it would, but it works and there is clarity to the law.
There is political stability too. Historically, Brazil tried all the tricks in the book to get itself out of problems. Price controls, tax regime change, nationalisation of assets none of it really works and the average Brazilian wont accept any new gimmicks. So prudent politics, steady economic policy and a very free media are certainly important contributing
factors.
Do you know of any future legal developments that will help promote investment in Brazil?
I dont think we will see any significant legislative changes in the near future. There is an election in a year and a half and there is never a great urge to shake the tree. The economy is humming along and so far any real softness in the economy seems to be lagging the global crisis enough.
So, what you worry about here is a change in the microenvironment in terms of capital markets and liquidity. Thats going to happen. I hate to tell everyone that, but it is going to be rough for some folks out here in Brazil.
But you are confident of your long-term investments?
We have always had confidence in Brazil. A little patience, a little cold blood and trying not to get emotional is the key.
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