My biggest gripe about the Wonthaggi desalination contract here in Victoria under John Brumby's Government has been decision-making and its lack of transparency. Many of us have done our best on the internet to research the consortia - AquaSure and BassWater - involved in the final bidding process but most of us are enthusiastic and slightly knowledgable amateurs without the resources to put into extensive legal searching let alone being able to do anything approaching due diligence requirements.
If you go here, dear Networker, you will get more detail on what is involved. In fact, here is a checklist:
I did uncover early in the piece Veolia's human rights breaches in providing a light rail system to illegal settlements in Jerusalem and passed the information to interested parties. Now - and why only now? - it comes to light that Suez Environment's parent company, GDF Suez has been fined for illegally logging the Amazon rainforest. Clearly, the $75,000 fine is a mere tap on the knuckles for GDF Suez. There is no mention of what happend to the timber or its value but my guess it would have had a value in excess of $75,000.
Staggering news to say the least.
So let's start nailing the Brumby Government
on its due diligence.
Firstly, what is due diligence?
Go here for a basic all purpose description.
If you go here, dear Networker, you will get more detail on what is involved. In fact, here is a checklist:Due Diligence Checklist: Table of Contents
- General Company Data
- Financial Information
- Corporate Agreements
- Legal Documents
- Intellectual Property Rights and Product Information
- Insurance Coverage
- Litigation History and Documents
- Employees & Human Resources (HR)
- Environmental Matters
- Tax Filings and Documents
- Marketing and Customer Information
- Internal Controls & Information Systems
- Sales Operational Information
- Support Services & Product Pricing
Please note there are three headings relevant to the matter under discussion"
- General company data: everything about Suez Environment needs to be known - who owns it, its antecedents, its structure, its operations and where they are situated. Everything needs to be known. If something comes up that has not been discovered in the usual due diligence process, then the due diligence carried out has failed. Successful due diligence leaves no surprises.
- Litigation history and documents: it could be argued that because Suez Environment is a separate legal entity from GDF Suez that litigation and fines against GDF Suez could not be expected to be discovered and were irrelevant to the Victoria contract. That argument does not wash. Due diligence is about discovering everything - even the dirty washing of the relatives that can reflect on the entity under review.
- Environmental matters: the old dictum that the apple does not fall far from the tree holds true in most cases. Environmental vandalism by the parent company means that there is an almost iron-clad guarantee that a similar culture will be engendered in derivative companies. Transmission of corporate culture is virtually guaranteed.
Further Reading:
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