An oil spill blackens the coast of Fujairah in February last year. The Ministry of Environment and Water is considering a national plan to deal with oil spills along the UAE coast.
An oil spill blackens the coast of Fujairah in February last year. The Ministry of Environment and Water is considering a national plan to deal with oil spills along the UAE coast.

National plan considered on oil spills



DUBAI // The Ministry of Environment and Water is considering a national plan to deal with destructive oil spills amid growing concern over the country's vulnerability. Khamis Bu-Amim, the president of the Regional Clean Sea Organisation (Resco), said the plan was ready and the question now was when the ministry would finalise it with the Government and approve it. The Resco is a consortium established in 1972 by oil companies in the region to co-ordinate emergency response.

Mr Bu-Amim made the announcement on the sidelines of a workshop for oil industry professionals on responses to accidents at sea. The UAE does not currently have a plan to deal with or contain oil spills. The Resco estimates the number of spills along the UAE coast to be more than 140 each year, many due to accidents in the storing and drilling of oil. Few companies are willing to disclose operational spills, said Mr Bu-Amim, adding that a proper framework and plan would help "educate" companies about their responsibilities.

The draft plan was presented to the ministry after it signed a memorandum of understanding with the Resco last year. At the time it was suggested the country would use satellite navigation systems and real-time satellite images to spot oil slicks and catch cargo ships that pollute coastal waters. In addition to an emergency plan, the country's approach could include training programmes and provisions for evaluating the impact of oil spills on marine life.

"The plan is the catalyst to everything you need to do," said John Dipple, the managing director of Seacor Environmental Services, an environmental consultancy and emergency services provider. The east coast of the UAE was suffering in particular from oil spills because of "deliberate or accidental dumping from ships", he said. The country is vulnerable because of the volume of marine traffic and the potential impact on the utilities and tourism sectors.

kshaheen@thenational.ae

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A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.

Defined Contribution Plan (DC) 

A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”