Today in the press

Thursday 31 January 2013 09.46
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

ESRI DISPUTES CSO FIGURES ON PUBLIC AND PRIVATE PAY - The Central Statistics Office has significantly underestimated the premium public sector workers earn over their private sector counterparts, an ESRI paper has stated. In an unusual development, the ESRI paper criticises the manner in which the State’s statisticians have measured the premium, writes the Irish Times. Last October, the CSO found that, when adjusted for a host of factors - such as education levels and experience - public employees earned between 6-19% more than their counterparts in the private sector in 2010. In the paper published in the ESRI’s quarterly commentary yesterday, Elish Kelly and Seamus McGuinness of the ESRI and Philip O’Connell of UCD’s Geary Institute write: “As labour market researchers, we take a different view to the CSO on this issue.” They find that average public sector worker pay was almost 17% higher than in the private sector when relevant factors were taken into account. The main reason for disagreement is the manner in which the CSO accounts for organisation size. Larger organisations tend to pay more. The CSO categorises all public sector workers as employees of a large organisation. Today’s paper disputes this on the basis that many public sector workers, such as teachers and gardaí in rural settings, have working environments more akin to small businesses, which pay less than big companies.

***

LIFE INSURANCE FACES SHAKE-UP AS FEES AND CHARGES COME UNDER SCRUTINY - Life and pensions providers are facing mergers, exits and a radical scaling back of their operations, a leading Central Bank regulator will tell a conference today. The Irish Examiner says that life companies will also be told to alter the way they pay commissions to advisers to stamp out the churning of policies. This is where consumers are moved from one provider or policy to another in a bid to generate new commissions. Some life companies are tackling "commission competition" but more firms will need to change their business models, head of life insurance regulation at the Central Bank, Mark Burke, will tell the conference. The sector needs a shake-up because firms still have the same cost base now as existed during the boom, he will tell the delegates at a life and pensions industry conference, organised by Eunan O'Carroll of Core Consulting. This was despite a 60-70% fall-off in new business being written since the market peaked four to five years ago. This means the three main players now control 70% of the market. Mr Burke does not name these companies but they are understood to be Irish Life, New Ireland and Zurich. There are between seven and eight firms based here in the pensions and life business, with a total of 16 if companies based in the UK that sell here are also counted. Mr Burke says some companies have begun to tackle their cost base, and lay off staff.

***

IBRC ‘NOT COMPLIANT' WITH BANK RULES - The Irish Bank Resolution Corporation (IBRC) is not compliant with the Central Bank’s regulatory requirements needed for a banking licence, although it is not expected that it will have any implications for its operating model. The fact was disclosed in the Central Bank’s interim report, released last June. The Irish Examiner says that Finance Minister Michael Noonan, confirmed that IBRC is still not meeting these requirements in response to a parliamentary question posed by Sinn Féin’s Pearse Doherty this week. “IBRC currently has a banking licence and is regulated by the Central Bank of Ireland. However, I have been advised that as disclosed previously in the bank’s published accounts, as it is an organisation in wind down, IBRC is not in full compliance with Irish regulatory requirements,” the minister said. In its last set of accounts, IBRC stated that, “regulatory compliance risk primarily arises from a failure or inability to comply fully with the laws, regulations, standards or codes applicable specifically to regulated entities in the financial services industry”. “The bank continues to operate as a regulated entity and, as such, is therefore subject to certain minimum prudential and other regulatory requirements. At Jun 30, 2012, the bank is not in full compliance with all Irish regulatory requirements. While the bank ensures that the relevant authorities are kept fully informed in this regard, noncompliance may result in the group being subject to regulatory sanctions, material financial loss and/or loss of reputation,” it said.

***

NESTLE FOUND LIABLE OVER SPYING ON NGO - Nestlé, whose clashes with activists over sales of baby milk formula in Africa led to widespread boycotts in the 1980s, has been found liable in a civil case over the secret infiltration of a non-governmental organisation, write the Financial Times. A Swiss court last week ordered Nestlé and the Swiss security company Securitas AG to pay compensation following revelations that an infiltrator had attended “workgroup” meetings of Attac, an anti-globalisation group. Some of those meetings took place at members’ homes. The world’s biggest food company has been at pains to repair relations with NGOs since the milk formula debacle, which led to new health regulations on its marketing. The rise of social media and rapid dissemination of any wrongdoings - and a new generation of more socially conscious consumers - has further encouraged the maker of KitKats and its peers to address issues ranging from child labour on cocoa farms to saving water. Such initiatives are often carried out in partnership with NGOs. But even though Nestlé has been fostering closer ties with its one-time foes, it has now been found to have been involved in the monitoring of activist activities. The long-running legal saga began in 2008 when Attac filed criminal and civil allegations against Nestlé and Securitas after Swiss TV alleged that an Attac workgroup in the canton of Vaud had been infiltrated by a Securitas employee on behalf of Nestlé in 2003.

Keywords: presswatch