A member of a clean-up team scoops oil from the sea near near Dalian Port, off Liaoning province, in north-east China.
A member of a clean-up team scoops oil from the sea near near Dalian Port, off Liaoning province, in north-east China.

China oil spill is 'more serious than reported'



BEIJING // An environmental group has called on Chinese authorities to redouble efforts to clean up a group of islands polluted by what has been described as China's worst-ever oil spill. Greenpeace China also has voiced concerns over the health of fishermen who worked without protective clothing or equipment to collect oil after the incident in Dalian last month.

Tom Wang, a spokesman for Greenpeace, said the group calculated that at least 60,000 tonnes of oil had been collected in clean-up operations. Greenpeace investigators recently returned after investigating the incident for more than a week. The group believes oil continued to leak into the water until July 22, six days after the spill began. "It's way more serious than the government said at the beginning," Mr Wang told The National.

In contrast, the government says just 1,500 tonnes were spilt, according to figures released shortly after a pipeline at a China National Petroleum Corporation terminal burst at the port of Xingang in Dalian. Officials last week declared the clean-up successful, less than two weeks after the first leaks. Rick Steiner, an American clean-up specialist hired by Greenpeace to assess the spill, has estimated that up to 90,000 tonnes of oil may have entered the sea.

Reports have indicated that some of the oil was released deliberately by workers to prevent the spread of fires in a storage depot. They feared the blaze could have engulfed a tank containing dimethyl-benzene, a substance extracted from crude oil that would have produced toxic vapours had it caught fire. As many as 8,000 workers and 800 fishing boats were involved in cleaning up the spill, which is said to have covered an area of 50 square kilometres in the sea off Liaoning province in north-east China.

Men were seen working without gloves, goggles or respiratory equipment when they collected oil with buckets. Some were even pictured covered with oil and wearing just their underwear. Those taking part received payment for useable oil they collected from the water. Reports indicate that some fishermen suffered vomiting, headaches and skin rashes. Mr Wang said Greenpeace officials saw fishermen pass out from what is thought to be inhalation of fumes from the oil.

"They didn't really have any protective gear," he said. He added that "there hasn't really been any assessment yet" of the environmental impact of the spill. The extent of the damage caused by the oil was, he said, "still a huge question mark". Initially, beaches in the Dalian area, which is a popular region for tourists were closed. But Mr Wang said there was no longer much visible sign of the oil on the mainland after clean-up operations, although some could be found further into the sand.

The group continues to have concerns about the state of several small islands further out to sea that it believes may still be heavily polluted and have yet to be cleaned. "There's still a huge amount the government needs to send people on to clean up, for example the islands. There is no way anybody could really totally clean up any kind of spill," Mr Wang said. "When it comes to the seafood, we've seen local fishermen trying to clean up shells and oysters and try to sell the products to the market. That's pretty scary because it's highly toxic in the food chain."

Amid its many environmental problems, China has suffered a series of large-scale leaks involving the petrochemical industry, including an oil leakage from a pipeline in Shanxi province earlier this year. @Email:dbardsley@thenational.ae

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Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Europe’s rearming plan
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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.”

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Unresolved crisis

Russia and Ukraine have been locked in a bitter conflict since 2014, when Ukraine’s Kremlin-friendly president was ousted, Moscow annexed Crimea and then backed a separatist insurgency in the east.

Fighting between the Russia-backed rebels and Ukrainian forces has killed more than 14,000 people. In 2015, France and Germany helped broker a peace deal, known as the Minsk agreements, that ended large-scale hostilities but failed to bring a political settlement of the conflict.

The Kremlin has repeatedly accused Kiev of sabotaging the deal, and Ukrainian officials in recent weeks said that implementing it in full would hurt Ukraine.

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