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    Siemens Stuck with Adani Coal Mine

    Stockholm (NordSIP) – In a lukewarm statement, Joe Kaeser CEO of Siemens, announced that the board had decided the company would continue to participate in the controversial Adani Carmichael coal mine project in Queensland Australia.

    The issue pertains to a contract for the provision of a rail track signaling system by Siemens to be used in the coal mine. Following the recent Australian bushfires and the consensus that climate change is one their causes, even such marginal contributions to coal mine projects have become controversial.

    In the letter, the CEO tries to convey the message that the company did its best to disentangle itself from this project but was unable to do so. “There is practically no legally and economically responsible way to unwind the contract without neglecting fiduciary duties,” Kaeser explains. “I do realize, most of you would have hoped for more. While I do have a lot of empathy for environmental matters, I do need to balance different interests of different stakeholders, as long as they have lawful legitimation for what they do.”

    Aside from the legal constraints binding the German company to the project, there are also reputational considerations to take into account. “Keeping our promises is Siemens’ highest priority. Only being a credible partner whose word counts also ensures that we can remain an effective partner for a greener future. In this case, there is a legally binding and enforceable fiduciary responsibility to carry out this train signaling contract.”

    The CEO also notes that the Siemens will not tolerate any environmental standard violations. “Given the importance of legitimate environmental concerns, we have secured the right to pull out of the contract if our customer violates the very stringent environmental obligations,” he explains.

    Noting that other competitors would have provided the signalling system in the event Siemens would have pulled out, the CEO went on to add that. “had it been my own company, I may have acted differently.”

    As a result of the review process Siemens has also decided to establish a Sustainability Committee with external members to give environmental concerns increased priority and attention in the future.

    “I do know that we are far from perfect. And, we should have been wiser about this project beforehand. Now, we need to be a supplier, who sticks to its commitments as long as the customer stays on legal grounds, too,” Kaeser concludes.

    Image © Adani

     

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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