This new customised scam gives the old fashioned con artist the full leverage of the electronic funds transfer era.

A new wave of money transfer fraud techniques is on its way to New Zealand. It is the President scam, so called because it is centred on the departure from secure procedures triggered by a very senior official in the targeted organisation intervening and giving the appearance of wanting the fraudulent transfer to take place.

Under the President modus operandi someone poses as the boss of an organisation. They then conjure up an exception of some kind and which requires an instant transfer of money. The controlling officer, the one at the receiving end of the email or telephone call, then instructs the operations person concerned to implement the transfer. Or transfers it personally.

Inherent in this confidence trick is the artificial flap and the urgency it generates, an urgency designed to wash away any remaining security steps, especially any suspicion about the entity on the other end of the money transfer.

The theme of the President scam is that it differs from other transfer frauds in that it is designed to be implemented and completed in minutes rather than hours.

However the preparatory spade-work by the perpetrator will take much longer and involves a close study of the voice and verbal pattern of the senior official, the President, who is being mimicked. It will also require an evaluation of the vulnerability of the authorisation chain and especially of the individual who will press the button on the transfer.

These weak links may include for example a command chain noted for an informal i.e careless approach to established procedures.

Also an organisation in which the boss, the President, is known for making procedural short cuts. A boss who is feared in this context represents a weak link because line staff will want to avoid incurring their ire and so be more willing to take the procedural short cut.

There are of course a number of variants on the President scam.

These include the scam artists impersonating suppliers who claim that if a certain payment is not immediately made, that they will cause, for example, a production line to close down.

A particularly nasty twist is when a known adviser, perhaps the head of an organisation’s firm of accountants appears to be ringing in, urgently advocating the settlement of this or that account before the sky falls in.

In Europe where the President scam was developed and refined there can often be a conspiratorial aspect to the impersonation in which the scam artist seeks to impersonate elements of the forces of law enforcement, and seeks the covert assistance of someone connected with money transfers on the grounds of patriotism.

The money transferred under the President scam moves quickly through the hot money arteries, bouncing around countries with low banking surveillance, before being laundered, and often factored through commodities and other merchandise.

The history of the preceding waves of electronic scamming indicates that the International fraud artists turn their attention to New Zealand when they have picked the eyes out of the low hanging fruit in the northern hemisphere.

This time, as we shall see, is about now. Neither can we claim that the President technique has not already been applied to New Zealand. It may have been intercepted. Or the victim organisation has shut up about it.

Anyone involved in money transfer knows that by its very existence any chain of authorisation is vulnerable just because humans are involved.

So we have to hold onto something solid. In this case documentary credit instruments represent the best banking landmark. This means, in this context, sight documents.

Why? Because seeing is believing. Any departure, any exception, from authorised procedure must be verified by “sighting” the individual, the President, the CEO, or the CFO who is demanding the implementation of the exception to standard practice i.e. the money transfer.

The reason that sight procedures (never in this connection ever to be confused with citing or even “site” procedures)apply now is just because unlike previous waves of point to multi point stacked scams, the President formula relies on a high degree of customisation.

This means for example that an email used in the scam will be customised around the known habits of the President and also around the known personality of the target, the officer of the organisation authorised to make the transfer.

This email may, for example, have a holiday home telephone number. “Ring me for verification.” The person at the other end of the line will be the impersonator, perhaps with a nasty cold in order to cover up any discrepancy in tonality.

It is this customisation that makes the President scam so dangerous to New Zealand organisations.

Organisations should now evaluate the wisdom of displaying and generally publicising the names of their treasury people, especially on their web sites. They are the point of departure for practitioners of the President scam.

As practitioners turn their attention to southern latitudes we find that only in the simplicity of direct sight, the face-to-face encounter, is there an antidote to this curious yet so far extremely successful blend of the old fashioned confidence trickster merged now with the speed of light of a numerical transfer.

How vulnerable are New Zealand medium to large organisations to this new threat?

Until now the publicised victims of electronic scams of all stripes have been individuals, householders.

The first wave was the Nigerian one in the fax era. Then followed a medley centred on phishing or bank impersonation. Dismayingly the banks insist on using emails to send out their promotional material which means that they cannot collectively state that any email from a trading bank is by definition a false one.

It is in this year’s wave, the telephone calls from Microsoft accredited agent impersonators that we find the direction of this new scam.

As this particular Microsoft scam developed it was observed that recipient caller display bars began to show New Zealand telephone numbers.

Though replies indicated that the caller display numbers elicited no response.

Another pointer is the arrival in the Auckland area especially of criminal gangs working over ATMs.

We are entering the era in which organisations will have to start becoming reticent about their financial authorisation chains in terms of who staffs them.

Similarly with IT structures in which any unanticipated request for tests should be flatly ignored.

At least, until the sight verification.

| From the MSCNewsWire reporters' desk - European Correspondent  ||  Tuesday 22 August 2017   |||

Rod Oram goes under the covers of Fletcher Building's results for Newsroom and finds the source of its financial problems with project cost blowouts: corporate governance.

The table below from Fletcher Building’s results presentation on Wednesday clearly shows the company’s incompetent corporate governance.

Five years into the biggest, longest construction boom this country has ever seen our largest construction company has lost almost $300m on its $2.65bn order book for commercial buildings.

Two big projects – the Justice Precinct in Christchurch and the Sky City convention centre in Auckland totalling $737m of work -- account for the bulk of the losses.

This, though, is not a simple story of two bad projects.

Fletcher has written down the value of the rest of the order book of Building + Interiors, the commercial building business in its construction division. Breakeven is the best it hopes for on this $1.49bn of business, it announced at its results briefing.

Nor is this bad news a bolt out of the blue. B+I eked out EBIT of only $16m a year over the 12 years to fiscal 2016. Add in the infrastructure business, the other main part of the construction division, and Fletcher’s EBIT on all construction averaged only $32m a year over the 12 years.

That insight is on slide 30 of Fletcher’s results’ presentation to analysts. Anyone wondering how Fletcher could achieve only a 6.76% total return to shareholders over the past six years of booming construction and stock markets will find the 1hour 24 minutes’ briefing revealing.

Continue to read the full article here

| A Newsroom release by Rod Oram  ||  August 20,  2017   |||

In an article published on Newsroom this morningCatriona MacLennan challenges the Government's mantra that work lifts families out of poverty, arguing that the spread of labour hire work at the expense of permanent employment exacerbates the problem

Hard-won employment protections achieved over more than a century are being eroded by the emergence of labour hire companies in New Zealand, Australia, the United Kingdom, the United States and elsewhere.

These companies operate as intermediaries between workers and the organisations for which work is carried out. Examples are cleaning, airline catering and airport baggage safety officers.

Instead of being employed by the business for which they are working, workers are contracted to that company through labour hire and temping firms. The aim is to cut costs for businesses. Firms do not have to provide full-time or a regular number of work hours. Nor do they need to pay holiday pay, sick pay or superannuation contributions. Workers might be required to pay for their own equipment and safety boots, as well as ACC levies. And there is no obligation to promote staff and pay higher wages as employees become more senior.

However, for the workers, this means low wages, no job security and insecure hours of work – and hence income – from week to week.

Labour hire firms receive “sign on” bonuses of several thousand dollars from the business. The labour hire firm also charges the business an hourly rate for each worker which is significantly higher than the rates paid to workers – perhaps $3 above the minimum wage.

As a result, in New Zealand, people now work alongside each other doing exactly the same tasks, but under vastly different conditions. Employees have regular hours and ongoing work, while the labour hire workers have no security and are generally paid several dollars an hour less than their colleagues.

Many labour hire workers are migrants, who have little bargaining power and often are not aware of New Zealand employment law.

A legal challenge to labour hire work began in the Employment Court at Auckland on 14 August 2017.

The case is brought by E Tū union in the names of two workers. The defendant is LSG Sky Chefs New Zealand Ltd, which is owned by German airline Lufthansa and runs airline catering kitchens in Queenstown, Christchurch, Wellington and Auckland.

Two labour hire firms, Solutions Personnel Ltd and Blue Collar Ltd, are named as third parties in the case.

Approximately 200 temporary workers are contracted to LSG Sky Chefs through the third parties. Many are paid only the minimum wage and do not have security of employment.

The workers are seeking a declaration under section 6(5) of the Employment Relations Act 2000 that they are in fact employees of LSG Sky Chefs. They claim that, although they signed a contract with Solutions Personnel which was expressed to be a contract for services, they were in fact employed by LSG Sky Chefs.

The hearing is expected to finish on August 18.

Many parents work two or three jobs to try and support their families but the minimum wage of $15.75 an hour is simply not enough to live on. The spread of labour hire work at the expense of permanent employment is exacerbating this precarious existence for some families.

There are also attempts in other countries to deal with the erosion of pay and other workers’ rights linked to the use of labour hire companies.

These have been prompted by alarm at the spread of labour hire. In 2012, there were estimated to be 36 million temporary workers worldwide, with 11.5 million of them employed daily as agency workers. The United States had 11.5 million agency workers, while Europe had 8.2 million and Brazil 7.1 million.

The European Union in 2008 issued Directive 2008/104/EC on temporary agency work. This was designed to provide protection to agency workers: it states that the basic work and employment conditions of agency workers should be at least those of employees.

However, the way in which courts in different European Union nations have interpreted the directive has largely undermined its effectiveness. Instead of focusing on its purpose, courts have concentrated on the word “temporary” and held that the directive applies only to short-term work.

One example of this is a court case in the United Kingdom in 2013, which aimed to provide rights to agency cleaners who had worked for a firm for between six and 25 years without ever obtaining the security of permanent employment.

The court held that regulations made under the European Union directive applied only to workers placed for a fixed period with a firm. If they were there indefinitely, they did not come within the ambit of the law.

One lawyer described the decision as driving a “coach and horses” through the protection intended to be given to agency workers.

In Canada’s Ontario, there was a 33 percent increase in temporary workers in the decade to 2014. That growth was double the rise in the number of permanent employees in that time and the wages of the temporary workers were significantly lower. In 2015, the median wage of a temporary worker in Toronto was C$15 an hour, while permanent employees were paid $22.40.

Ontario passed the Stronger Workplaces for a Stronger Economy Act 2014, aiming to provide legal protection to agency workers. Earlier this year, Bradford City Council voted to end its use of temporary staffing agencies, with councillors blaming the businesses for trapping workers in a cycle of poverty and insecurity.

In South Africa, labour hire is known as “labour broking” and has caused concern for many years.

A law which took effect in 2015 aimed to curb temporary employment services and give additional protections to vulnerable workers. It has been challenged by labour brokers.

New Zealand has seen a fall in real wages in recent decades and increasing insecurity of employment for workers.

Despite a growing economy, real average private sector wages in this country dropped by 0.5 percent in the 12 months to June 2017.

The Government’s mantra is that work lifts families out of poverty.

Sadly, that is no longer the case in New Zealand. Many parents work two or three jobs to try and support their families but the minimum wage of $15.75 an hour is simply not enough to live on.

The spread of labour hire work at the expense of permanent employment is exacerbating this precarious existence for some families.

The test case brought by E Tū will demonstrate how much protection current laws can provide to agency workers, or whether law reform is needed.

* Catriona MacLennan is a barrister and journalist and carried out research for the plaintiffs in this case.

| A Newsroom release  ||  August 17,  2017   |||

It appears Japanese factories, companies are looking beyond the IOT and or IOE; aiming to connect a variety of assets, e.g., machines, data, technologies, people, and organizations, as well as the existing industries and digital technologies, thereby bringing about the creation of new added value and the solutions to societal problems, bringing “Connected Industries” to fruition.

Industrial sensors,data and communications are becoming the core topic among factories, companies that foresee themselves in advanced industrial automation. IOT, smart solutions are at surge for individual customer; where as for factories it seems the challenges are more especially getting the machines to communicate in safer environment.

No wonder Japan introduced “Just in time Manufacturing” , Kaizen ,TQM, TQC concepts in the past; In response to fierce international competition resulting from increased globalization, as well as labor shortages and a reduced number of skilled workers due to falling birthrates and aging populations, the companies in Japan have come up with new concept called as “Flexible Factory Partner Alliance” .

The formation of this alliance or this concept is pretty simple and straightforward, utilizing advanced automation technologies of ICT in manufacturing to improve productivity and to tackle to seamless communications among machines, factories , plants in an secured wireless network.

Japanese companies always stressed upon ‘visualization’ in production equipment and production status is the stepping stone to moving forward for improving productivity, and as product development cycles have shortened in recent years, there has been a demand for greater flexibility in the configuration of production facilities equipment and in modifying the production line construction. As a means of achieving greater flexibility, there are rising expectations for wireless communications among machines, different plants and factories.

A major issue in wireless communications in factories where various wireless systems coexist is communication instability due to interference between wireless systems and the impact that has on equipment operation. There had previously been few efforts, however, to resolve this sort of wireless communication issues in manufacturing facilities; To find solutions Alliance of 7 companies in Japan have been formed .

OMRON, ATR, Sanritz, NICT, NEC, Fujitsu, and Murata Machinery have been conducting trials of wireless communications and evaluating the wireless environment in factories. These companies and organizations have at academic conferences and other venues broadly proposed coordination control technology that would enable stability in communications. This would work by controlling independent wireless systems for each piece of equipment, with specific use cases in actual manufacturing facilities.

These companies have come together to form the Flexible Factory Partner Alliance to promote the formulation of standards for coordination control technology. This will thereby ensure stable communications in an environment where various wireless systems coexist, as well as promote their use and further accelerate the adoption of wireless systems in manufacturing facilities.

Through the initiatives of this alliance, the partners will work to meet expectations for a new industrial revolution 4.0; 5.0; accompanying the spread of the use of IoT in manufacturing facilities. Sensors, Data and Communication in safer Wireless communications in manufacturing factories that are expected to accelerate wireless-connected devices to increase productivity, and disseminate the standards.

Few companies were working on trial specifications; last month the first set of 7 companies announced the first alliance . OMRON Corporation, Advanced Telecommunications Research Institute International (ATR), Sanritz Automation Co., Ltd., National Institute of Information and Communications Technology (NICT), NEC Corporation, Fujitsu Limited, and Murata Machinery, Ltd., while Professor Andreas Dengel of the German Research Center for Artificial Intelligence (DFKI)) is appointed as Chairperson.

Experts say "Based on the traditional concepts safe manufacturing concepts; Japanese companies aims at IoE (Internet of Everything)" that connects people as well as machines and things; smart factory is one main part where people /humans take leading role.The use and communication of on-site data, ideas of people seamlessly are important.The data utilization evolves and impacts equipment and factory facilities, Many companies are working towards a thorough process Specifically, Connecting objects (connecting), Connect information (visualize), Improve (Collect and analyze information, create value) and Expanding the scope (sharing data).

Although the Implementation and utilization of IoT in many Japanese factories has been existing for many years now ; or being started, it is merely an extension of the traditional Kaizen effort for the purpose of "productivity improvement" to the last step of product manufacturing.

Few of the Japanese factories feel that to understand the magnitude of change that can be brought by connecting machines, factories and various things in manufacturing plant and to understand the ROI for the given product , line and market these things can not be taken only at the manufacturing site.

While Private companies are working at group factories alliances program; Recently, Japan Ministry for Economy, Trade and Industry [METI] proposed a Policy Concept Titled “Connected Industries” as a Goal that Japanese Industries Should Aim for an ideal approach that Japanese industries should strive for.

As one of the efforts for promoting the Connected Industries policy concept, a goal to create value through connecting a variety of industries,last month the Ministry of Economy, Trade and Industry (METI) held the first symposium for this policy concept, bringing together approximately 600 stakeholders.

It appears Japanese factories, companies are looking beyond the IOT and or IOE; aiming to connect a variety of assets, e.g., machines, data, technologies, people, and organizations, as well as the existing industries and digital technologies, thereby bringing about the creation of new added value and the solutions to societal problems, bringing “Connected Industries” to fruition. To this end, the Japanese government is advancing a wide variety of policy initiatives in cooperation with private sector parties.

| A Manufacturing Tomorrow release  ||  August 16,  2017   |||

Inflation targeting practises are similar across many central banks despite significant differences in their formal frameworks, says the Reserve Bank in its latest Bulletin article published today.

The Bulletin article titled “An international comparison of inflation targeting frameworks” looks at how New Zealand’s Policy Targets Agreement compares to nine other advanced economy central banks, and how the specifications in each framework compare to the actual practice of each central bank.

“In order to conduct the comparison we focused on five components of an inflation-targeting framework: the inflation target definition, communication of monetary policy, secondary considerations, assessment of inflation-targeting performance, and framework reviews and revisions,” says the article’s author, Senior Economic Analyst Amber Wadsworth.

“Overall we find that the formal inflation-targeting frameworks can differ greatly between the central bank, but, in practice, each bank operates in a similar manner.”

“The central banks we looked at have similar inflation targets and produce similar monetary policy reports and inflation targeting assessments. There is more variability in the financial stability considerations when setting monetary policy, and how the inflation-targeting frameworks are reviewed and revised,” says Wadsworth.

More informationRead the Bulletin – An international comparison of inflation-targeting frameworksListen to the Behind the Bulletin interview

| A RBNZ release  ||  August 16,   2017   |||

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The Government has today outlined new measures to promote a more competitive economy, Commerce and Consumer Affairs Minister Jacqui Dean says.

“Competition is one of the key drivers of economic success which is why the Government is focused on creating a competitive economy which delivers results and choice for New Zealanders,” Ms Dean says.

“The Business Growth Agenda Paper, Promoting Competition, which I am releasing today sets out what actions we’re taking to lift competition for the benefit of New Zealand’s consumers.”

The Government has agreed on three broad areas of focus:

1. Maintaining the effectiveness of New Zealand’s competition laws and institutions.
2. Identifying barriers to competition, and opportunities to promote competition, in specific sectors and across the economy.
3. Actively seeking open trade and investment policies which can mitigate the disadvantages of New Zealand’s small size and distance from major markets.

“New Zealand’s competition law and our Commerce Commission are important contributors to domestic competition, and are well regarded internationally and we are continuing to build on that.

“Other recent measures include passing the Commerce (Cartels and Other Matters) Amendment Bill last week which deters anticompetitive cartel behaviour.

“And following a review of the Commerce Act, the Government is progressing legislation to allow the Commerce Commission to undertake market studies to ensure markets are operating effectively,” Ms Dean says.

Read Promoting Competition here: http://www.mbie.govt.nz/info-services/business/business-growth-agenda/pdf-and-image-library/2017-documents/promoting-competition.pdf

| A Beehive release  ||  August 15,  2017   |||

The technology sector is booming in the South Island, especially Christchurch, Dunedin, Nelson and Queenstown, Delta Insurance’s Karl Samson, the only liability underwriter on the ground in the South Island, says.

Delta offers much more than insurance for technology risks, they are recognised as market leaders in the broad Liability Insurance market and this ranges from very standard coverages such as Public Liability and Statutory Liability right through to more niche products such as UAV (Drone) insurance,” Samson says.

“But in particular, Delta’s offerings for technology and cyber liability are a great fit for key South Island technology companies. We are looking to really establish ourselves as a key partner for the technology sector and we’ve just signed up as member of Canterbury Tech to better get to know some of our customers and prospective customers.

“As well as being a leader in the technology sector, we were also the first in New Zealand to offer a local environmental and pollution risk solution which, covers increasing and problematic risks such asbestos and meth. This type of innovation sets us apart from the rest.

“This point of difference is leading to a better understanding of South Island businesses and brokers. We want to provide more effective solutions to South Island businesses – one example is the technology sector,” he says.

Delta is also New Zealand’s only risk management-led cyber insurance provider with a comprehensive panel of IT experts to help clients manage their cyber security risk. This includes access to a free pre-loss cyber risk assessment as well as access to experts in the event of a cyber-attack.

Delta director Ian Pollard says its vital they have someone on the ground such as Samson who is 100 percent aware of the requirements and issues facing brokers in the South Island.

Samson has 12 years’ industry experience, with recent roles at multinational brokerages dealing with a wide range of clients across the South Island, including sole traders, listed companies and government departments. He has a Bachelor of Commerce and Management from Lincoln University.

| A Make Lemonade release  ||  August 15,  2017   |||

Auckland Airport has today announced a new partnership with AOE, a leading global technology service provider, to create a ‘multi-retailer mall’ which enables international travellers to purchase retail products and airport services via mobile and online.

Richard Barker, Auckland Airport’s general manager retail and commercial, says, “It is exciting to be able to partner with AOE to create an ‘omni-channel’ commerce platform that further improves our customer experience.”

“Expected to launch mid-2018, our new online ‘multi-retailer mall’ will enable international passengers to purchase from multiple airport retailers with a single transaction and then pick-up all their items from a single collection point, thanks to a sophisticated back-of-house operation. It’s the ultimate ‘click and collect’ shopping process.”

“The online platform also means that international passengers can shop at any stage of their travel journey, using their own devices, and at a time and place that is convenient for them - be it before they leave home, on-board their aircraft using in-flight Wi-Fi, or while sitting in any domestic or international airport.”

“The platform’s staged introduction will eventually see most airport retailers participating. All Auckland Airport products and services, including parking, loyalty and lounge access will also be integrated into the online mall, making it easier and more convenient for travellers to shop.”

“Frankfurt Airport has successfully introduced AOE’s omni-channel commerce platform and we understand there is also strong interest from a number of other leading airports around the world. We are excited that Auckland Airport’s introduction of the technology will be a first for any airport in Australasia. It will ensure that we deliver one of the most advanced digital airport retail experiences in the world and that we can significantly expand the range and type of products and services we offer to our customers.”

“Today’s partnership announcement continues the digital transformation of Auckland Airport. It supports our Faster, Higher, Stronger business strategy focus on strengthening our consumer business and builds on the recent launch of our mobile-first Strata loyalty programme. Importantly, it will help to provide our passengers with a one-of-a-kind personalised journey” says Mr Barker.

| An Auckland Airport release  ||  August 14,  2017   |||

 Wellington Drive announces exclusive agreement with Alaska Refrigeration for the sales and distribution of its SCS Connect system in Vietnam.

Alaska Refrigeration www.alaska.vn is a refrigeration equipment manufacturer and distributor based in Vietnam, supplying a wide range of appliances for domestic and commercial applications.

Wellington’s CEO, Greg Allen said; "The agreement with Alaska is another indication of the increasing importance of Wellington’s brand and its SCS solutions in the Asia Pacific market. As the profile of SCS has grown with large global soft drink and beverage brands we are seeing increasing opportunities in new countries across the broader food and beverage market. This agreement with Alaska is consistent with our regional partnership model and utilises Alaska’s local knowledge and technical resources to service Vietnamese customers and support our mutual regional growth plans."

Commercial refrigeration systems fitted with Wellington Drive’s SCS Connect refrigeration controller already lead the way in Smarter Cooler technology. Wellington’s SCS platform and Smarter Cooler tool-set provides the commercial refrigeration market with fleet management systems and the data needed to improve the effectiveness of cooler fleets. They offer a beacon management platform and other location based digital marketing technologies to engage and interact with consumers at their point of purchase in front of the cooler.

| A WDT release  ||  August 14,  2017   |||

To support Money Week 2017, the Reserve Bank and the Commission for Financial Capability have collaborated in a series of videos to encourage people to better manage their debt and talk more freely about their finances.

The videos focus on this year’s Money Week theme of ‘debt’ and feature some of the families associated with our banknotes and connects with other pioneering New Zealanders, and the Queen, who appear on our Brighter Money banknotes.

Watch the videos

|  A RBNZ release  ||  August 14,  2017   |||