Category Archives: Macau

DEIGNAN AWARD FOR RESPONSIBLE ENTREPRENEURSHIP

Fr. Stephan Rothlin SJ

Director of the Macau Ricci Institute at the University of St. Joseph,

Researcher at the Faculty of Business and Law

of the Faculty of Business and Law of USJ,

CEO of Rothlin International Management Limited, Hong Kong & Beijing

The launching of the Deignan Award for Responsible Entrepreneurship marks a milestone in the development of the ESG (Environmental, Social and Governance) agenda in Macau and in Hong Kong. When I started doing business ethics consulting and research in China, Hong Kong and Macau more than twenty years ago the promotion of the so-called good practices seemed to be an entirely hopeless endeavour in a culture suffering from rampant corruption, widespread labour abuse and a host of unfair trade practices. The awareness of the need to implement Corporate Social Responsibilityor the new catchword ESGhas undeniably risen over the past few years. In fact, facing the renewal of their licenses, corporations are now challenged to demonstrate in a tangible way that their wellbeing and profits benefit the larger society.

There are still lingering doubts about the timing of such an award precisely when so many people simply struggle to survive, and during a period where a growing number of people feeling frustrated about the way the pandemic is handled are considering leaving Macau or Hong Kong.

These doubts need to be taken seriously because the point of such an award would certainly not be to create a mere dreamworld but to initiate a competition which inspires innovation and entrepreneurship, reflecting a sense of fairness and integrity. The ongoing crises, now made more urgent with the prospect of an escalatory trajectory of the war in Ukraine, may offer Macau a healthy wake-up call to break away from its overreliance on monopolies and focus instead on the need of many young people hoping to make their own start in business.

I always felt that the strongest inspiration for ethical behaviour comes when leaders walk the talk and stick to their values. As I had the chance to work over many years with Fr. Alfred Deignan SJ (1927-1918) on different business ethics projects, I felt that the example of this widely esteemed educator with a passion of sharing the values of integrity, compassion and honesty left a decisive mark in various circles of society in Hong Kong and beyond. I felt therefore that in these times of crisis the Deignan Award could be a very inspiring way to demonstrate the positive impact of sound values that are making a difference in our very demanding and competitive marketplaces.

Alfred Deignan who served also as a founding member of the Macau Ricci Institute shared with me his disappointment that often enterprises pay mere lip service to compliance, business ethics, ESG and Corporate Social Responsibility. This frustration over what he sensed was wide ranging hypocrisy as well as some research on the impact of awards by my colleagues inspired me to create an award linked with the memory of this passionate educator. The Deignan Award is meant to remind businesspeople in Hong Kong and Macau that a new paradigm of economics oriented to the benefit of the larger society in contrast to a narrow focus on profit maximization is not only urgently needed but also may be a key to sustainable success in business. I would therefore expect that over time the Deignan Award could mark a combined effort from different players in society seeking to combine entrepreneurship with sound ethical business practices. There is plenty of empirical evidence that a firm commitment to due diligence and good business practices will more and more become a critical factor for success and would for sure minimize a host of risks linked to traditional practices of corruption.

The award obviously presupposes that the candidates are diligent in their compliance with the rule of law and ethical norms. However, a key success factor is to demonstrate that a SME has made some significant progress in a certain area of Responsible Entrepreneurship. This need not require excellence in all the areas of Corporate Social Responsibility. However, a key point is to demonstrate that ethics and law are enhanced as key factors for business success and implemented at all levels in an enterprise.

A unique feature of the Deignan Award is the strong link between entrepreneurship and ethics. There is often a misunderstanding that CSR stands in the way of business success as a kind of roadblock. This is demonstrably false and counterproductive. The Deignan Award will collect empirical evidence showing how much social innovation and entrepreneurship can be enhanced through sound business practices. Another major feature is that we have a sound academic groundwork for the award. Instead of falling into the trap of superficial glamour surrounding all-too-many awards, my colleagues from various sectors of academia in Hong Kong and Macau have been working very diligently to define appropriate criteria for the award. There will be a continuous process of evaluation of ways to define and to improve the award. I am also glad that we have produced a solid body of bilingual materials in English and in Chinese about what Responsible Entrepreneurship and CSR are all about and how they can shape a new business culture.

It is already a positive sign that our teams involve so many different key business players in Macau and in Hong Kong. However, we must work very hard to bring the networks together to debate various aspects of key issues and make sure that the key values of the award which are not financial get the recognition they deserve. We must recognize that there is still a long way to go in bringing about a new economic paradigm.

The usual dynamic is to aim to lay a firm ground in the first and second award cycle with a clear communication strategy about the awards aim and methods. This will be the basis to extend and develop the award so that it will gain prominence beyond Hong Kong and Macau in the Greater Bay Area. With our colleagues we have concluded that it may be prudent to start first in Macau and in Hong Kong and make all the possible efforts to communicate the awards values here. However, from the very beginning we have in mind that SMEs from Mainland China will be able to participate at a later stage.

The slogan and encouraging message of the Deignan Award is: Just do good business.

I think that it is quite tough these days, given several obstacles and restrictions, to be financially successful while still paying full attention to ethics and law. I therefore hope that the Deignan Award will be a modest but significant element in creating like-minded networks of SMEs in Hong Kong and Macau. No matter at which stage of an SMEs development, entrepreneurs need the constant support and inspiration especially from people who have proven that it is worth going the extra mile: that SMEs doing good business are the engine of sustainable economic development. Moreover, I have published a set of 46 cases of Business Ethics under the title Doing Good Business in Chinese (World Scientific Press, 2021) which argues on an empirical basis that sound ethical business truly counts and is rewarded with success in business.

The Deignan Award will hopefully reveal one of Macaus comparative advantages, which is sadly too often overlooked or just simply ignored: Despite or in midst of simplistic misconceptions of Macau as a gambling hub, the Deignan Award could open a host of new perspectives on Macau as a unique platform of intercultural exchange and mutual tolerance, that have been cultivated over centuries and have never been affected by any major violent clashes. In the midst of preconceived and misinformed ideas contrasting what the West and what China may be about, the achievements of award winners will certainly demonstrate how business success actually results from mutual respect and genuine reciprocity, inspiring a constant drive to innovate and listen to each other. Despite or in midst of massive current challenges, Macau and Hong Kong can still be rediscovered as privileged places where their cultural and economic achievements would not have been possible without the mutual embrace of basic tolerance and the genuine joy that personal and business success for sure will benefit the larger society.

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OPINION - Better to light a candle than curse the darkness - Macau Business

Seven workers employed in The Parisian which is currently a designated medical observation hotel have tested positive for Covid-19, health authorities announced today (Thursday).The seven employees under closed-loop management were tested positive during July 10 to July 14, with five of them to be security guardsand two of them involvedin food distribution and other supporting tasks.Some other 30 staff were identified as a high-risk group and have been put under medical observation.Novel CoronavirusResponse and CoordinationCentre Coordinator, Dr.LeongIek Hou, indicated that as some workers in the medical observation hotel are tested positive, the health bureau has decided to extend the number of quarantine days for some people under medical observation.Some 144 people who have already completed the quarantine are required to receive another 5 days of medical observation, while some 29 people who have not completed the isolation are required to have their observation period extended.

After a The Venetian hotel employee was found to have tested positive the Macau Government Tourist Office (MGTO) requested for all hotel workers within the Sands China group to require employees to undergo a daily nucleic acid test for Covid-19.

Staff working in the groups hotels was also asked to avoid entering the community unless necessary and to implement stricter pandemic prevention measures.

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Seven workers at The Parisian test positive for Covid - Macau Business

A Macau SAR government delegation today (Wednesday) addressed human rights concerns in the first of three sessions with the United Nations (UN) Human Rights Committee, regarding the SAR freedom of assembly and sexual minorities rights.

During the ongoing evaluation sessions from July 13 to July 15, the Macau SAR is required to undergo reviews by the Committee of 18 independent international experts on how they are implementing the Covenant as well as the Committees previous recommendations, and discuss Macaus human rights situation with UN officials.

The Human Rights Committee also reports and other submissions from Macau non-governmental organizations addressing several matters in the SAR, with some joining briefings with the Committee.

In the first session held online UN representatives expressed their concerns over the rights to freedom of assembly in the SAR, especially addressing the Macau governments obstruction of the previous remembrance events for the Tiananmen protests and gatherings in support of the Hong Kong democratic movement.

The session was chaired by Photini Pazartzis, Professor of International Law and Director of the Athens Public International Law Centerand member of the UN Human Rights Committee.

Secretary for Administration and Justice Andr Cheong Weng Chon lead a delegation of 17 Macau officials.

Replying to the questions raised by the committee, Adviser of the Office of the Secretary for Security, Zhang Guo Hua, indicated that according to Article 21 of the UN International Covenant on Civil and Political Rights, the rights of freedom of assembly can be restricted based on specific reasons, and the Macau authorities decision of suspending the memorial events for the Tiananmen Incident was made in accordance with the law.

In 2021, the Public Security Police Force (CPSP) refuse the request submitted by the Macau Democratic Development Association to hold the June 4th Tiananmen Incident candlelight assembly, in the name of pandemic prevention.

The association later appealed to the court against the decision made by the police, but the appeal was rejected by TheCourt of Final Appeal for the reason that the event violated the relevant provisions in the Penal Code of Macau and the principle of good faith stipulated in the Code of Administrative Procedure.

The Macau delegation representative stressed in todays session that the judgment made by the court confirmed the illegality of the memorial events for the Tiananmen Incident, and pointed out that there are legitimate reasons to cancel the event if its purpose has violated the Penal Code of Macau.

Also, the adviser emphasized that when the exercises of freedom of speech and assembly have led to the open promotion of provocative, offensive, slanderous, insulting, and ridiculing remarks, the actions of organizing such assemblies are of course unacceptable.

Therefore, the decision of the authorities is made in accordance with the law and is also a final solution, Zhang added.

Meanwhile, the adviser noted that the protests supporting the Hong Kong democratic movement were also banned because the purpose of the event violated the law.

The protests referred aimed to oppose the excessive use of force by the Hong Kong Police but were later prohibited by the SAR government and courts, with some people gathering at the supposed time of the protest at Senate Square detained for questioning and later released.

Zhang declared that the theme of the event was to publicly accuse and condemn the actions conducted by the Hong Kong police authorities, and if the Macau government allows such demonstrations against the Hong Kong police to be held, it will indicate that the government agrees to create a platform to interfere the internal affairs of the neighbouring SAR.

This will violate the basic principles of the SARs constitutional system, the Macau delegation representative said.

Meanwhile, the Head of the Macau Delegation, Secretary for Administration and Justice, Andre Cheong Weng Chon made remarks addressing the concerns over the rights of the sexual minorities and stated that such issues are difficult to handle in Asian societies which are deeply influenced by traditional culture and values.

The secretary stressed that it is challenging to revise laws to obtain more legal protection for sexual minorities before a social consensus is formed since such revisions are difficult to be passed by the Legislative Assembly.

Some UN officials at the end of the evaluation session questioned that the Macau government did not give any substantial response to the sexual minorities issues, including gender markers on transgender citizens identity documents, same-sex marriage and domestic violence laws, and asked the Macau government to provide more concrete measures to promote social awareness and acceptance on the minorities people.

Director of the Legal Affairs Bureau, Liu Dexue responded that the SAR government has set up a special working group a few years ago to conduct a comprehensive and systematic study on these issues.

The representative reiterated that Macau as an Asian society is influenced by oriental traditional culture on the issue of marriage, gender and family, and the authorities also hope to find a solution that can balance the interests of different groups which is in line with social consensus.

We need to focus on the rights of the minorities, but also the majority, Liu said.

Also, the legal affairs bureau director indicated that although Macaus domestic violence law does not specifically include same-sex couples, protection of such rights are involved in other general laws and can be handled in accordance with relevant provisions.

The Macau government initially proposed the inclusion of same-sex co-habitants in the scope of the domestic violence law in 2011, however, the authorities decided to drop the reference to same-sex partners in 2012.

To this date, the government still declines to rectify the exclusion of same-sex partners, in defiance of the recommendation made by the UNs Committee against Torture (CAT).

After the remaining two sessions on July 14 and 15, the UNHuman Rights Committee will then hold a press conference on July 27 to present its conclusions.

Although the Peoples Republic of China has not ratified the ICCPR the international agreements governing the handover of Hong Kong and Macau to China ensured the ICCPR would still apply in both areas, after having its jurisdiction previously extended to both regions by the United Kingdom and Portugal respectively.

The Human Rights Committee is one of theten so-called UN Treaty Bodies the guardians of the nine main international human rights treaties , and is considered alongside other Treaty Bodies as aquasi-judicial body, as it emanates from a legally-binding treaty.

It reviewsthe implementation of the ICCPR by countries on a regular basis, usually every four to eight years, through a dedicatedreview processthat takes into account civil society shadow reports.

Hong Kong and MacausLists of Issues the first stage of review were adopted by the Committee in August 2020 and both regions are now set for formal review during the Committees upcoming session untilJuly 27, 2022.

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Freedom of assembly and sexual minorities' rights discussed in first Macau SAR session with UN Human Rights Committee - Macau Business

MANILA, Philippines The Department of Migrant Workers said it is ready to assist overseas Filipino workers in Macau, especially those who have either tested positive for COVID-19 or are affected by the pandemic-related work suspension there.

All hands are on deck to bring as many COVID-care packages and food packs to OFWs who may have neither the means nor the mobility to buy food and medicines, Migrant Workers Secretary Susan Ople said in a statement on Tuesday.

The Philippine Consulate in Macau already provided food packs to 100 OFWs and is also giving out food,medicines, and vitamins.

Macau has imposed a week-long work suspension from July 11 to 18 at commercial and industrial businesses following a surge in COVID-19 cases. This includes casinos and other non-essential businesses.

The DMW reported that 57 Filipinos residing in red zones or buildings under lockdown and yellow zones or control zones have tested positive for the virus so far.

Quarantine hotels are housing 26 OFWs who have either tested positive for COVID-19 or those who have been exposed to the virus.

With the 26,400 documented OFWs in Macau, 5,295 are working in the hotel and gaming industries.

The DMW said it already met with Department of Foreign Affairs Acting Migrant Workers Undersecretary Eddie de Vega, Philippine Consulate in Macau Consul General Porfirio Mayo Jr., and leaders of the Filipino communities there to harmonize efforts to reach out to as many affected OFWs as possible.

"Based on the assessment of labor attach [and lawyer] Ma. Nena German, the probability of mass retrenchment of workers during the weeklong suspension of non-essential business activities will not take place,"Ople said.

However, the department said it is still monitoring the situation in Macau because of the "No Pay Leave"policy similar to "No Work, No Pay" in the Philippines for the work suspension.

"Our consul general will be using diplomatic channels to bring our concern over this labor policy to the relevant authorities in Macau,"Ople said.

Meanwhile, the Overseas Workers Welfare Administration (OWWA) said active OWWA members who are experiencing COVID-19 symptoms and may need to be isolated or hospitalized can avail of a $200 financial aid from the government.

"All other OFWs, however, may avail of the food packs provided by the consulate for the duration of the suspension period. These requests for assistance are evaluated in accordance with the OWWAs guidelines,"OWWA Administrator Hans Cacdac said.

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DMW ready to assist Macau OFWs caught in work suspension - Philstar.com

The Federal Reserve watchdog has cleared two top officials of wrongdoing over stock trades that created an uproar, prompting several to leave their posts and led to rule changesat the central bank.

A key focus was trading by former Fed vice chair Richard Clarida in February 2020, just as the central bank was preparing to slash interest rates to support the economy, which sent stock prices higher. Clarida resigned in January 2022, two weeks before his term was up.

Fed Chair Jerome Powell also was a target of the probe for trading by his family trust in 2019, during trading blackout periods around Fed policy meetings.

In a memo to Powell, the Office of Inspector General for the Federal Reserve Board, said we did not find evidence to substantiate the allegations that former vice chair Clarida or you violated laws, rules, regulations, or policies related to trading activities.

But they noted that Clarida failed to report the trades in question.

The probe did not cover the activities of Dallas Fed bank chief Robert Kaplan or his Boston counterpartEric Rosengren, who resigned last year amid the controversy.

The watchdog is conducting a separate review on their activities.

Critics say the officials benefited from inside information on Fed policy and interest rates.

The two officials also engaged in large stock trades in 2020, at a time when the central bank was aggressively acting to support the US economy amid the impact of the Covid-19 pandemic.

Clarida reportedly moved between $1 million and $5 million into a stock fund from a bond fund in February 2020, a day before Powell announced the central bank could take action as the Covid-19 pandemic worsened.

Weeks later, the Fed slashed its benchmark lending rate to zero and pumped trillions of dollars of liquidity into the financial system to keep it functioning as the pandemic caused a sharp downturn.

US stock markets plunged, but then shot up in the months to follow in a rally seen as partially fueled by the Feds easy money policies.

Under new rules adopted in January, Fed officials are banned from holding individual stocks, bonds, cryptocurrencies and certain other investments, and cannot trade during periods of heightened financial market stress.

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Fed watchdog clears top officials of violations over stock trades - Macau Business

Aman who lives in a Red code building attempted to jump from his apartment at Yue Xiu Gardens along Avenida do Ouvidor Arriaga.

He was transported to hospital after displaying signs of emotional distress yesterday, according to the Fire Services Bureau.

The Public Security Police (PSP) dispatched police with shields and firefighters to enter the unit. During the inspection, it was found that the man was irritated and was emotional because of being stuck at home for too long due to the lockdown of the building.

He had allegedly expressed his desire to jump off the building, which led the family to call authorities.

This incident is directly related to the pandemic because of such issues as unemployment and pressure, said a citizen on a social media post that shows police cordoning off the area.

I feel that Macau has become a sad city, and I can no longer see the warmth of Macau in the past, said another.

According to the report, the area where the building is located had been in lockdown from July 8 and the health code had been turned to a red code, which bans residents from leaving their apartments. Staff Reporter

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Man in red zone attempts to jump from building - Macau Daily Times

Peruvian prosecutors said Wednesday they will investigate President Pedro Castillo for alleged influence peddling, overturning an earlier decision to wait until his term ended.

The president is alleged to have put undue pressure on army and air force chiefs to favor military officers sympathetic to the leftist government in the annual promotion process.

The probe was suspended in January by the former attorney general on the grounds that Castillo could not be investigated while exercising his mandate.

But on Wednesday the prosecutors office tweeted that it had annulled that suspension, and that a preliminary investigation would take place.

The president has been summoned to testify on August 4.

Castillo, a leftist, has only been in power since last July his term ends in2026 but Congress has already voted to try and remove him twice.

In June, Castillo testified in an investigation into alleged corruption in his political and family circle.

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Peruvian president to be investigated for influence peddling - Macau Business

Germany will on Thursday remember more than 180 people killed in severe floods a year ago, as concerns mount over climate change and the country looks to overhaul its planning for future disasters.

President Frank-Walter Steinmeier will embark on a tour of the Ahr valley, while Chancellor Olaf Scholz will attend a memorial event in the hard-hit town of Bad Neuenahr-Ahrweiler.

A series of events are also planned in neighbouring Belgium, where 39 people were killed in the deluge.

Severe floods pummelled parts of the German Rhineland over two days in July last year, ripping through entire towns and villages and destroying bridges, roads, railways and swathes of housing.

Between 100 and 150 millimetres (four and six inches) of rain fell between July 14 and 15, according to the German weather service an amount that would normally be seen over two months.

Forecasters had issued warnings, yet many residents were simply unaware of the risks of such violent flooding, with dozens found dead in their cellars.

The disaster prompted criticism of Germanys flood warning system and a criminal inquiry was opened into local officials for negligent homicide.

The government has since pledged to introduce phone alerts in the form of cell broadcasting and to reinstall sirens, many of which have been taken down in recent years.

Introducing a new disaster management plan on Wednesday, Interior Minister Nancy Faeser admitted there had been major failures over the past years and decades.

The government is planning a new annual civil protection day from 2023 to raise awareness of how to respond in a disaster and make our country more crisis-proof, Faeser said.

The disaster also raised concerns about climate change, with one international study showing that man-made global warming had made the floods up to nine times more likely.

A year on, Germany is set for more extreme weather with temperatures of up to 40 degrees Celsius (104 degrees Fahrenheit) expected this week as a heatwave sweeps across Europe.

Ralph Tiesler, president of the BBK federal disaster management agency, told the Funke media group on Wednesday he believed some areas in Germany may become uninhabitable due to extreme weather events.

I say that some areas should not be resettled due to climate change and the acute threat of severe weather disasters and floods, he said.

Bad Neuenahr-Ahrweiler, a town of 30,000 people famed for its thermal baths and wellness tourism, was among the areas hardest hit by the floods.

Over 2,000 people have since left the town, but the majority have chosen to stay and rebuild their homes even as promised help is slow to arrive.

A return to the way things were will still take time, town mayor Guido Orthen told AFP, with the rebuild very much a work in progress.

We still have temporary infrastructure, temporary playgrounds, temporary schools, temporary roads that make life possible, he said.

With former chancellor Angela Merkel still in charge at the time of the floods, the government pledged a total of 30 billion euros ($30 billion) in federal and state aid to help with the reconstruction effort.

But in the state of Rhineland-Palatinate, only 500 million euros in aid has been handed out of the total 15 billion euros set aside.

In neighbouring North Rhine-Westphalia, 1.6 billion euros of government support has been approved for use, out of a total of 12.3 billion euros.

Frustration is building among those trying to rebuild their lives.

We want to exist in the eyes of Germany, Iris Muenn-Buschow told AFP from the dilapidated ground floor of her home in the town of Sinzig.

We have the impression that everything else that goes on in the world is more important than what happens here in Germany, she said.

by Ina FASSBENDER with Femke COLBORNE in Berlin

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Flood anniversary prompts sadness and soul-searching in Germany - Macau Business

British Conservative leadership contender Penny Mordaunt came under blistering attack Thursday after she surged in the race to succeed Prime Minister Boris Johnson, as another candidate faced elimination.

The little-known Mordaunt, a committed Brexiteer who was briefly Britains first woman defence secretary before moving to less senior government jobs, has emerged as the darling of Tory grassroots members.

In the first round of voting by Conservative MPs on Wednesday, she came a strong second behind former finance minister Rishi Sunak and ahead of Foreign Secretary Liz Truss, and was installed as the new favourite by bookmakers.

Polls point to the Royal Navy reservist beating Sunak, Truss and the other three remaining candidates comfortably, once the members decide between the final two.

Two candidates were knocked out Wednesday, and the bottom ranking contender was to be eliminated in a second vote by MPs later Thursday.

Former foreign secretary Jeremy Hunt, one of those eliminated,threw his support behind Sunak, whose resignation from the cabinet last week helped spark a ministerial revolt against Johnson after months of scandal.

Drawing a pointed contrast to Johnson, Hunt said the former Chancellor of the Exchequer was one of the most decent, straight people with the highest standards of integrity in politics.

But the wealthy Sunak faces questions about his familys tax affairs and prior decision to retain US residency. And he is opposed to immediate tax cuts to confront a post-pandemic cost-of-living crisis, stressing the need instead for fiscal responsibility.

Truss, who campaigned against Brexit in Britains 2016 referendum before becoming a zealous supporter, was formally launching her campaign with vows of tax cuts and a smaller state.

My mission is to make our country an aspiration nation, where every child, every person has the best opportunity to succeed, she was expected to say, as her supporters urged two outsiders still in the race to drop out to avoid fragmenting the right-wing vote.

Mordaunt, a junior trade minister who is relatively untainted by the scandals of Johnsons premiership, has come up the middle between Truss and Sunak with a campaign strong on patriotic themes.

But the Daily Mail took aim at her stance on transgender people, one of Britains culture war debates that has energised the partys right-wing.

Mordaunt was telling lies after previously supporting transgender people in the role of equalities minister, only to take a harder line at her campaign launch this week, the newspaper quoted a Truss ally as saying.

Her political enemies have also jibed at Part-time Penny, alleging she has not taken her government roles seriously.

That line of attack was given new impetus from a dramatic intervention by former Brexit minister David Frost, who was Mordaunts boss until both moved on last year.

Based on their time working together, Im afraid I would have grave reservations about her entering 10 Downing Street, Frost told TalkTV, revealing that at his request, Johnson had removed her from their department.

Im sorry to say this that I felt she did not master the detail that was necessary in the negotiations (with Brussels, over Northern Ireland) last year, he said.

She wouldnt always deliver tough messages to the European Union when that was necessary, and Im afraid she wasnt sort of fully accountable, she wasnt always visible. Sometimes I didnt even know where she was.

There was no immediate response from the Mordaunt camp.

Several television debates between the remaining candidates loom, with the first Friday night, ahead of weeks of nationwide hustings in front of Tory members. The eventual winner is set to be announced on September 5.

by Jitendra JOSHI / Joe JACKSON

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New UK Tory favourite accused of lethargy and 'lies' - Macau Business

The amendment to the Gaming Law has finally been approved, ending a troubled process that began nine months earlier with the launch of a controversial public consultation and without prior consultation with casino operators.

Among the changes introduced, the broadening of the range of financial obligations (fiscal and parafiscal) of future concessionaires stands out.

Although in a normal economic situation, they may make sense, in the current domestic (zero-economy) and external environment (with particular focus on the restrictions imposed by Mainland China on citizens wishing to travel for gambling activities), they will certainly adversely impact Macanese casino operators lives.

The financial obligations are, in addition to the special gaming tax, which remains at 35% of gross gaming revenue, as follows:

Contribution in the amount of 2% of gross gaming revenues to a public fund (not necessarily the Macau Foundation) whose purpose is the promotion, development, or study of actions of a cultural, social, economic, educational, scientific, academic and philanthropic nature. Set in 2002 at 1.6% of gross gaming revenue, the new percentage represents an increase of 0.4% in the direct tax burden.

Contribution in the amount of 3% of gross gaming revenues to urban development, tourism promotion, and social security. Set in 2002 at 2.4% of gross gaming revenues (1.4% for SJM), the new percentage represents an additional 0.6% (1.6% for SJM) in the direct tax burden.

Minimum of 5 billion patacas of share capital and net stand during the concession term. The new minimum share capital is 25 times the share capital currently set (200 million patacas), and no distortions to commercial law rules regarding net stand exist. To understand (or not) the systems logic, the new minimum share capital is 50 times higher than that required to open a bank (100 million patacas).

Bond as a guarantee of performance of legal and contractual obligations. Fixed in 2002 at 700 million for the first five years of the concession and 300 million for the remaining period, it is expected that the Macau government will revise the values upwards since they represent values from more than 20 years ago.

Payment of complementary income tax on profits and dividends. Since 2002, the Macau government has granted casino operators (very) generous tax exemptions, exempting from this tax the whole profits from gaming activities. And allowed a lump sum payment in lieu of the complementary income tax on dividends distributed to shareholders. In several replies to written interpellations from the Macau Legislative Assembly members, the Macau government has always justified the tax breaks to prevent the same income from being taxed twice. Curiously, no amendment to the Gaming Law was made in this regard. Could this be understood as a paradigm shift, with the principle of normal taxation of complementary income tax now fully applicable? Is the Macau government aware that this fact pushes the final tax burden above the 50% mark?

Remuneration due for the use of the casinos and gaming equipment and utensils, which will revert to the Macau SAR at the end of the concessions and subconcessions (as once the reversion occurs, the casinos cannot be sold by the Macau SAR). It includes, as could not be otherwise, remuneration for the use of casinos that, although legally not required to revert to the Macau SAR, were, kindly and certainly without coercion, ceded free of charge by the concessionaires and subconcessionaires for reversion. What criteria will be used to determine the remuneration for the use? Market price?

Premium (as compensation for the concession award), divided into a fixed part (set in 2002 at 30 million patacas) and a variable part, according to the type of tables operated (established in 2002 at 300,000 patacas/year for each VIP table and 150,000 patacas/year for each non-VIP table) and 1,000 patacas/year for each gaming machine, with a minimum guarantee of no less than 45 million patacas/year. Using the same criteria to determine the (special) premium charged for the extension of the concessions and subconcession, the new fixed part of the premium should not be less than 95 million patacas/year. As for the variable part of the premium, we will see what awaits the concessionaires, hoping that the Macau government has done its homework and learned its lesson, realizing that it makes no sense to keep it among the criteria for the awarding of concessions, where it appears as the value to be proposed by the concessionaires.

Special premium, corresponding to the special gaming tax due to the difference between the gross revenue generated by gaming tables and gaming machines and the minimum threshold set by the Chief Executive. It is a mystery what criteria will be selected to determine whether the gross gaming revenue of a gaming table or machine located, for example, at Casino Lisboa, should be higher/lower than that found in any other casino when the data that could serve as a reference refer to a reality that no longer exists, either because it is based on the junket operation, or before the restrictions imposed by Mainland China towards gambling.

Investment plan, whose value was set in 2002 at a minimum of 4 billion patacas for the 20 years concessions. The investment amount for the 10-year concession period (expected to be put out to tender) should be 5 billion patacas. The Macau government has stated in the past that the requirement for the new share capital was because it wanted future concessionaires to have sufficient funds to execute the investment plan (unaware that share capital does not serve this purpose but as a general guarantee for creditors and as a means of limiting the liability of shareholders). Since new brick and mortar developments will most likely not be required, what kind of investment casino operators will be forced to make remains to be seen.

Bank guarantee to ensure compliance with labor debts. Varying on the number of employees, it was set under the concession and sub-concession agreements at 3.5 billion (SJM), 2.31 billion (Venetian), 1.63 billion (Galaxy), and 1.21 billion (Wynn), and 820 million (MGM and Melco).

Full coverage of outstanding gaming chips and joint and several liabilities of qualifying shareholders (5% or more) for the outstanding gaming chips upon the termination of the concession. It is unknown whether the Macau government has previously ordered the creation of provisions, the adoption of solvency ratios, or the application of other prudential rules on the chips in circulation. The new measure ends a casino operators significant funding source (at almost zero cost).

Corporate social responsibilities that concessionaires must assume. Given the legal framework, the Macau government expects the concessionaries to meet public needs that they should develop or take care of using public money.Without the determination of precise limits, this obligation can turn into a white elephant.

Except for the exemption or reduction provided for the payment of complementary income tax and the exemption or reduction in the percentage of the contributions due, the legislator did not create where could and should safeguard mechanisms to be activated in economically troubled times. The rigidity of the law is not compatible with disturbed economic cycles such as the current one. It is one thing to provide safeguard mechanisms. It is quite another to use these safeguard mechanisms.

And the example of the expansion of foreign countrys customer markets as a justification of the public interest required for the Chief Executive to grant a reduction or exemption to concessionaires in the payment of contributions does not seem to make sense. As a matter of fact, in the Opinion of the 2nd Standing Committee of the Legislative Assembly on the draft law proposal amending the Gaming Law, it seems that the intention of the Macau government is not to reduce contributions by more than 1% when it states that when deciding on the reduction or exemption, the Chief Executive, on the assumption that he will ensure that the percentage of the current concessionaires contributions does not fall below the current level [4%], will fully assess the benefits that the concessionaire will bring to Macau at all levels, with the reduction focusing on the revenue generated by foreign tourists with the expansion of markets. What makes the Macau government think that the concessionaires will be interested in benefiting from the 1% reduction when, for example, for more than 20 years, they have not shown any interest in providing dredging services to benefit from 1% less in the payment of the contributions that SJM has always benefited from? How much will they need to spend to benefit from such a percentage?

What objective criteria could be used? Better yet, what criteria are consistent with Mainland Chinas (new) policy towards gambling, reflected, among others, in the restriction of movement of citizens wishing to travel for gambling activities or the warnings given to foreign countries to stop soliciting and promoting gambling to their citizens? What mechanisms will be implemented? Are we going to have air bridges with third countries? Zero-cost air travel? Tracking of players to find out which casino operator brought them if they played, and how much they spent? Do players want to be tracked? And if they play at a different casino operator, who benefits? And will the route monopolies that Air Macau only operates part of being reviewed? Will casino operators finally have a say in the development of Macau airport and Macau as a regional airport hub? What makes the Macau government think that casino operators will be more successful in the efforts it has been pushing for years to promote Macau throughout Asia through the companies representing the Macau Tourism Office, namely in India, Indonesia, Thailand, Korea, Japan, and Malaysia?

Whatever criteria are used, they will always have the enormous disadvantage (promoted by the Macau government itself) of making exactly equal concessions operating under different fiscal/parafiscal burdens, which will constitute a source of problems in the medium-long run.

Fortunately, the Macau government did not change the stamp duty so that the concessionaires of the (still) most crucial industry in Macau will pay, as in 2002, only 50 patacas as stamp duty for the signing of the concession contracts

Wishful thinking or not, all financial obligations without proper safeguard mechanisms make casino operators more economically vulnerable and, in the adverse economic situation in which they will be implemented, may represent death by a thousand cuts for the gaming industry.

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OPINION - Death by a thousand cuts - Macau Business