In China and across Asia, governments significantly impact the environment in which corporations and organizations operate. Constructive engagement with government leaders and officials at the working level has become ever more important for success and the ability to navigate political and regulatory risk. Effective outreach to government organizations determines the ability to minimizethenegative impact of a crisis, or capitalize and derive opportunities from a supportive regulatory environment.
Case 1: Reassessment and Feasibility Study for Ongoing Operations of a Major R&D Facility in China
North Head helped a global leading company to conduct an investigation on regulatory changes that are potentially affecting the company’s license to operate for one of its global R&D centers located in China. Consequently provided strategic counsel on repositioning and government relations going forward.
The industry in which the company operates in is relatively sensitive. In prior months the R&D center had received a series of rejections to its applications to conduct research projects in China. Government officials were reluctant to speak publicly about the reasons for the rejections and any possible regulatory change. Furthermore, internally, different parts of the company have different views and interpretations of events.
North Head’s research helped clarify outstanding questions regarding the regulatory environment affecting the R&D invested assets in China. It thus allowed the company to make strategic decisions regarding the future direction of the company’s operations in China. North Head’s third party perspective also helped the company reassess and validate internal systems for government relations and intelligence gathering. Following North Head’s intelligence and counsel, the company revamped its government relations systems and is now taking more proactive measures for influencing government policy in priority areas.
Case 2: Campaign to Lower Tariffs on Forestry Products within APEC
During the Indonesian APEC chairmanship of APEC, North Head provided communication campaign support for the Indonesian Pulp and Paper Association (APKI) and the Indonesian Oil Palm Society (MAKSI) to facilitate greater trade of forestry products in the region.
In 2011 APEC established at the instigation of the U.S. a list of Environmental Goods and Services (EGs), where tariffs are slated to drop by 2015 to a maximum of 5 percent. The present list of some 55 products is essentially manufactured items (boilers, incinerators, turbines etc) except for one, floorboards from bamboo. The list is preferential to developed markets. Due to the consensus decision making of APEC, the U.S. and others have blocked the inclusion of products of priority to developing markets. This includes forestry products.
The campaign was effective for this first phase. Based on engaging the Indonesian government, the APEC Business Advisory Council (ABAC) and other governments to exert influence, the APEC ministerial meeting and heads of government subsequently agreed to review the inclusion of rural development and poverty alleviation criteria.
The APEC Leaders’ Declaration of 8 October states that ‘in order to link our economies and markets ever closer together, we will explore (achieving the Bogor Goals of free and open) trade in products that contribute to sustainable and inclusive growth through rural development and poverty alleviation.”
Indonesia, China, Peru, and Papua New Guinea have agreed to form a task force that will come back in 2014 with recommendations as to how these criteria can be incorporated into a products list subject to lower tariffs.
This effectively provides a route to circumvent the opposition to the inclusion of paper, palm oil and rubber to the EGs list. Follow on work is planned during the 2014 Chinese chairmanship of APEC, including with ABAC and the four country task force.
Case 3: Other Government Relations Cases
A world’s leading FMCG company
North Head provided the company with a range of public affairs services, including:
- Support for its management drafting submissions to the Beijing Mayor’s Business Advisory Council.
- Development of community relations plans for high priority specific plants/facilities.
- Training and development programs for internal public affairs team.
- Competitive analysis of major political events including the National People’s Congress.
- Briefing for senior executive visits to China.
- A major report on research and innovation policy and trends in China for priority technologies pertinent to the company. This was the basis for a reassessment of the positioning and business development for R&D assets in China.
- Preparing report for China Public Affairs team to brief global counterparts.
An American pharmaceutical association
The association consists of cutting-edge pharmaceutical and biotech companies in America engaged in US policymaking in the pharmaceutical sector. In China, the association advocates the interests of association members to governmental bodies to create a better business environment and has a number of partnerships and projects for engaging the Chinese authorities.
North Head provides:
- Ongoing monitoring, analysis and counsel to the association of market, public policy and regulatory trends for healthcare in China. The primary vehicle is a monthly report.
- Support for senior executive visits, including the Chairman and President respectively.
For its Chairman and President visits to China, North Head devised a three-step communication strategy, which included:
- Briefing industry media on core issues.
- Publishing feature articles written by the CEO on Global Times.
- Planning and organizing high-profile media roundtables.
Through these visits, the association’s influence in China was enhanced and key messages were well-communicated.