Kloppers a casualty of a new era of austerity

A SENIOR BHP Billiton executive recounts a story about being ensconced in a meeting at the group’s head office tower in Melbourne when the chief executive, Marius Kloppers, strode in, removed the phone pod used for conference calls from the centre of the round table and put it in a cupboard. The participants were dumbfounded.
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Another staffer recalls Kloppers, who sits atop a staff of 40,000 in 25 countries, swooping down unannounced to tidy up the computer cords behind his desk.

The soon-to-retire head of the world’s largest mining company has a mantra: accountability and simplicity. He has been outed before for the militaristic-like neat freak obsession that trickled down to every layer of the organisation – no eating hot food at the desk and one framed photo per employee.

On May 10, Kloppers will work his last day at the helm of BHP Billiton, cruise home to his suburban home in Melbourne, kick off his black leather slip-ons and place them (neatly) in the assigned cupboard. He will then turn his attention to the Higher School Certificate.

The youngest of his three children is about to face this academic challenge. His contribution to his daughter Gabrielle’s performance may be more about time management than math. ”We manage by policy but not detail,” Kloppers says.

But this week was all about the management of his legacy. Since announcing he would vacate his position as one of the world’s most powerful executives, it’s been back-to-back briefings and meals with with analysts and investors, flanked by his successor, Andrew Mackenzie.

His scorecard has been picked over and compared with peers. His greatest achievements and worst moments have been trawled through. Jaws have hit tables at the $75 million value of his valedictory pay packet.

The one thing Kloppers, who is often described as the smartest person in the room regardless of the size and calibre of the crowd, didn’t have control over was the timing of his departure. He would rather have seen out the year but the board had different ideas. The heady era of the resources boom is over and BHP’s chairman, Jac Nasser, decided now was the time for fresh blood.

During his time Kloppers had attempted $200 billion of acquisitions and billions more investment in new projects. Mackenzie, a Scotsman, is tailor-made for the BHP’s new phase – consolidation, watching the pennies and working the assets harder. Importantly, he has operational experience in energy as well as minerals.

Rarely has the ground been so meticulously prepared for the departure of a chief executive, or a corporate machine worked so hard to prepare the ground for the changing of the guard.

The process began in November with a leak to the Financial Times newspaper, citing headhunter sources, proclaiming with certainty that the search for a successor to Kloppers had begun.

Aghast as the company claimed to be at such a notion, there was no real attempt to deny it. There was equal finger-wagging by the BHP machine at suggestions this could be connected to the company’s $2.84 billion impairment charge in August over its recently acquired shale assets in the US. The board was well prepared for this barrage of criticism. Such was its desire to distance Kloppers from single-handed blame that Nasser took the unusual step of backing him up in a statement, saying he supported the actions of the chief executive and agreed it was the right investment decision for BHP.

The task ahead was to convince investors. In this endeavour there has been mixed success.

Nasser didn’t have to read the tea leaves to know how unpopular the $20 billion shale oil/gas asset was in the eyes of analysts and investors. It was a major factor in Kloppers’ declining score in last year’s Corporate Confidence Index – a confidential ratings report based on views of analysts and investors. The price of the gas these assets contain has experienced a minor improvement but some of BHP’s investors remain sceptical. This has been despite the fact that the media has been warming to the investment, taking the view that it could ultimately change the geopolitical landscape around the world supply of energy.

THE pressure to inject fresh managerial blood only increased towards the end of last year when the prices of its two major products, iron ore and coal, went into a downward spin.

Kloppers, like his peers, had promoted caution and warned of some price moderation. But none had seem the commodities rout coming. The pack had collectively gazed through the same rose-clouded crystal ball.

There has always been an intense rivalry between Australia’s two resource giants, BHP and Rio Tinto. Be it size, performance, the quality of assets, stock prices or shareholder returns, these two are forensically compared. They have now lined up on a new measurement – the replacement of their CEOs.

Kloppers’ resignation, coming hot on the heels of the departure of the Rio boss, Tom Albanese, is not just coincidental.

Nasser denies it had any bearing but fresh governance brings with it the opportunity to reposition priorities around everything from capital expenditure, exploration and balance sheets to dividend policy.

But the unceremonious ousting of Albanese gave Rio a fresh slate, in the same way as the removal of the heads of two other mining majors, Xstrata and Anglo American, had done a few months earlier.

But where Rio and Anglo sold the changes as an opportunity for an overhaul, BHP’s new boss Mackenzie is labelling his task as pursuing the same strategy but with extra vigilance.

The deference in approach between BHP and Rio is chalk and cheese.

Where Albanese was busy packing framed photos of his family in cardboard boxes while the announcement of his removal was being made, Kloppers was presenting the half-year results to the market with Mackenzie at his side.

The company had even produced a video of the outgoing and incoming chief executives together, all smiles and unity.

It was a BHP love-in full of effusive praise for Kloppers, humility from Mackenzie and backing vocals from Nasser.

Of Mackenzie, Kloppers talks personally: ”You showed faith in me … which was beyond anything, and you know I consider you in a very real sense – not just in theory but in practice – the guy I will go to if I’m asking advice for my kids.”

Nasser swooned: ”Under Marius’ leadership we’ve seen BHP grow to one of the most valuable companies in the world, and that isn’t an opinion, it’s there in the results.”

The chief financial officer, Graham Kerr, had the task of presenting the details of the half-year result, which included a 38 per cent fall in earnings before interest and tax, further exacerbated by $2.7 billion of impairments on BHP’s alumina and nickel assets.

CLEARING some of the underperforming assets out of the BHP portfolio at an acceptable price will be Mackenzie’s job.

But where Albanese had been turfed as a result of a $14 billion write-down in its aluminium division and the ill-fated coal purchase in Mozambique, Kloppers’ mistakes were, by comparison, negligible.

It will be years before an informed judgment can be made on BHP’s shale gas punt. The $40 billion attempt to acquire Potash Corp was not considered a cross on Kloppers’ scorecard but the inability to seal the deal attracted some criticism.

Far more controversial was Kloppers’ $147 billion attempt to buy Rio Tinto. ”What a fantastic deal that would have been for the time that it was launched, when I think from memory the iron ore price was about $40 [per tonne]. What a terrible deal that would have been in the global financial crisis. We engineered a way that we would have had a choice, and we exercised that choice,” Kloppers said.

As luck would have it, European competition regulators knocked it back. Kloppers says it was more a case of disarming the gun than dodging the bullet.

His near six-year reign is marked by this aggressive acquisition strategy, which for some of his time was enabled by riding on the wave of record commodity prices, while some was seizing the opportunity provided by a strong balance sheet and struggling competitors to try to add to the company’s stable of large tier one assets.

e world over the past six months has changed and BHP’s strategy has evolved.

Mackenzie and his new counterpart at Rio, Sam Walsh, have a new agenda – a new imperative. It’s not about spending, it’s about saving.

Neither BHP nor Rio talk about acquisitions now. Sam Walsh delivered a homily last week, when releasing Rio’s results, about getting back to basics, accountability and operating like a small business.

While expressed differently, Mackenzie delivered the same message this week. It’s about focused investment on the large established assets and cost reductions.

It’s about bleeding the assets harder and reducing the expenditure and using it more judiciously.

This is the new battle ground.

Exactly which of the BHP’s executives Mackenzie chooses to help him in this task is unknown. There will be a reshuffle and senior roles will go or change. Those in key management roles will be sweating on them over the weekend.

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Engaging Scot ready to confront future head on

Andrew Mackenzie says BHP has a ‘critical role to play in ensuring the supply of the basic commodities that the world needs to grow’.IF YOU want an insight to Andrew Mackenzie’s mind, the third floor of London’s Magdalen House is a good place to start.
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Here in the humble offices of British think tank Demos, the future chief executive of BHP Billiton laid out some of his boldest ideas for society, more than a decade before he would become one of its best paid and most influential citizens.

A flick through ambitious papers like Ethics and the Multinational Corporation reveal a version of Mackenzie that many in the mining industry would recognise today.

There’s a striving for social progress, a demand for companies to think beyond their bottom lines, and a clear belief that open markets are the only way to ensure the world’s population get the food and energy they need. There’s even a wish for business to occasionally win a place in peoples’ hearts: ”We love successful sports teams and entertainers; maybe we could learn to love successful companies too.”

Twelve years on, Mackenzie is about to take control of the world’s most valuable mining company, and with profits beginning to slide, you sense he will soon discover just how compatible ethics and multinationals can be.

There was no coverage of the BHP leadership transition in the Kirkintilloch local newspaper, despite the Scottish town having bragging rights as the childhood home of the world’s newest captain of industry. The 56-year-old Doctor of Chemistry was raised here amid a climate of coalmine closures – an experience that may prepare him for dealing with tough decisions facing BHP’s coal mines in Australia’s eastern states.

While his Scottish roots were paraded proudly this week, Mackenzie has often referred to himself as an ”internationalist”, in a mark of respect to the six nations he has lived in during a career in oil and gas, chemicals and, more recently, mining and resources.

Judging by the thoughts shared in Ethics and the Multinational Corp-oration – a manifesto jointly authored with then colleague David Rice for Demos in 2001 – the notion of an international community sits comfortably with Mackenzie. ”The world, we feel, would benefit from a more international political leadership to complement strong business leadership, creating a more plural society which increases the wellbeing of all the world’s citizens,” they wrote.

The article investigates the decline of nation states and the unplanned rise of corporations as ”the main vehicles for delivering social, environmental and economic progress”.

”Employment, social policy and the environment used to be regarded as the concern of government. Now as a result of globalisation, society appears to be taking some of this power from government and giving it to business.”

If those comments set a high bar for his tenure at BHP, consider these thoughts from the same publication, in the context of BHP being one of the world’s biggest producers of carbon intensive energy through coal, oil and gas. ”Multinational corporations should be happy to be seen as powerful advocates and exemplars for human rights and the environment,” wrote Mackenzie and Rice.

”The only hope for massive reductions in future greenhouse gas emissions to slow climate change may be unilateral action from companies on behalf of their customers, employees and other stakeholders.”

While opinions can change over the years, Mackenzie is known to still believe that companies like BHP are doing more for the world than merely making shareholders wealthy.

Mackenzie is known to believe the mining industry plays a significant role in maintaining peace and stability in the world’s developing nations, by ensuring the raw materials needed to improve living standards are made available in sufficient quantities to prevent tensions spilling over.

Those views were hinted at during this week’s press conference to announce his appointment.

”We have an absolute critical role to play in ensuring the supply of the basic commodities that the world needs to grow, both in population and in wealth,” said Mackenzie in his address to the Australian media.

”You can count on me to continue Marius’s success of using the best management techniques possible and the appropriate technology to develop those ore bodies sustainably for the world and for the shareholders, so that the world gets the resources that it needs to grow in a sort of harmonious way.”

The comments can be seen as a polite challenge to sections of the public – and perhaps the Chinese government – to reconsider the antipathy they hold toward big resource companies like BHP and Rio Tinto.

Mackenzie has spent the past five years at BHP after being poached by Kloppers from Rio. His CV also contains a PhD on the behaviour of hydrocarbon deposits underground and a 22-year stint at BP.

The latter was considered a crucial factor in him beating rivals to the top job, given BHP’s increasing focus on oil and gas. Those who have worked beneath Mackenzie in his role as chief executive of BHP’s non-ferrous division say his moral perspective is one of his nicer aspects.

While profits are the focus for any businessman, they report that Mackenzie has a prevailing desire for his work to achieve something good for the world. This principle comes through in much of his earlier writing with Demos. He was thanked for his role as a sounding board to Paul Miller and Paul Skidmore in their 2004 publication Why future organisations must loosen up, which explored the growing trend for people to want ”their work to be more aligned with their human values”.

Mackenzie explored the topic himself in Ethics and the Multinational Corporation, where he and Rice wrote: ”It is preferable for employees to be able to project their personal values through work rather than leave them at the door. Talented people may not work for companies whose ethics clash with their personal values: money is not everything.”

The softer side of Mackenzie may cheer BHP’s rank-and-file staff, who under Kloppers worked under a rigid set of rules governing office conduct, including bans on pungent food and a strict ”clean desk” policy.

”Compared to Marius, whose IQ is sky high but his EQ [emotional quotient] is not, Andrew has a much higher EQ,” said one source close to the leadership transition.

”He is very good with people, he has got a softer side to him than Marius. Really, these days you want in business someone who has got a good IQ and a good EQ, so they are good with people.”

Mackenzie and his wife Liz move to Melbourne at a time when BHP appears to be coming back to earth after the heady peaks of the mining boom. While Kloppers’ time as chief was punctuated by large acquisition attempts on Rio Tinto, Canada’s Potash Corp and a desire to build greenfield ”mega-projects”, Mackenzie’s era looks set to be more modest thanks to the recent cooling of commodity prices.

He has indicated that divestments are more likely than acquisitions. Growth will be incremental and typically generated through expansions and improvements at existing assets.

Mackenzie has promised a ”lazer-like focus” on keeping costs down and he has vowed to create synergies between BHP’s petroleum and mining divisions. The initial reaction suggests the investment community are willing to give him a fair go.

”In our view, the new appointment is positive as we view Mackenzie as highly capable, he appears to be more willing to listen to the market, and it removes the uncertainty around the succession plan,” wrote JPMorgan’s Lyndon Fagan this week.

Judging from his work with Demos, Mackenzie would expect nothing less: ”Public lynching of business leaders attempting to learn from honest failure, or trying to forge pathways into an unclear future, makes us all risk averse. A constructive outlook would allow us all to be much more optimistic about an ethical future by creating more space for politicians but also for industrialists, to lead.”

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Market recovers to end week higher

THE sharemarket reversed some of Thursday’s substantial losses, the biggest one-day fall since May, closing above 5000 points to end the week on a positive note.
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The S&P/ASX 200 Index rose 0.8 per cent on Friday, up 38 points to 5018.1, and the broader All Ords rose 38.1 points, 0.8 per cent, to 5036.7.

On the ASX 24, the March share price index futures contract reached 4996, 29 points higher with 39,902 contracts traded.

”Overall it [Thursday’s loss] seemed to be a slight hiccup,” CommSec analyst Steven Daghlian said. ”The market is back up and both the ASX and the All Ords have crept back up above the 5000-point mark and that is a good sign.”

Deutsche Bank’s head of research sales, Glenn Morgan, said Thursday’s heavy losses were an overreaction to what was said in the US Federal Reserve minutes about bond purchases.

”The outlook was probably more balanced than people thought on reflection,” Mr Morgan said.

A fairly optimistic tone set by Reserve Bank governor Glenn Stevens in a statement to the House of Representatives standing committee on economics on Friday also lifted sentiment, with some economists speculating that the interest rate easing cycle could be coming to an end.

Mr Stevens said the high Australian dollar had helped offset the surge in investment in the mining industry, which otherwise would have led to higher interest rates.

All sectors ended higher on Friday. Gold rose 3.5 per cent, financials 0.8 per cent and materials 0.2 per cent. The big four banks all had gains, with Westpac and NAB each closing 1.3 per cent higher.

Miners BHP Billiton and Rio Tinto finished 0.8 per cent and 0.9 per cent lower respectively but Newcrest Mining rose 1.55 per cent.

Mr Morgan said the reporting season had turned the mood on the markets more positive, after fears at the start of the year that the rally would not have been backed up by companies’ earnings.

”There have been a few disappointments but our analysts have been upgrading forecasts for the next two years during reporting season, something we haven’t seen for quite a while,” he said. ”There’s still be a bit of [price-earnings] expansion, but I think we’ve found a floor in earnings, companies have done a terrific job on costs and if we get a better macro-economic backdrop, the leverage to the upside could be quite large.”

Telstra added 6¢ on Friday to $4.56 and Woolworths jumped 42¢, 1.24 per cent, to $34.27.

Billabong shares tumbled 5¢, 5.5 per cent, to 86¢ after the troubled surfwear retailer announced a half-year loss of $536.6 million and downgraded its underlying earnings.

Oil and gas producer Santos impressed investors enough with a positive outlook for cash flow from new liquefied natural gas projects to overshadow a fall in net profit, closing up 15¢ at $12.05.

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Heavy claims, but profits still surge

After years of disappointment for investors, there are growing signs insurance companies are turning the corner. Despite 2013 beginning with more damage claims from ex-Tropical Cyclone Oswald and bushfires in many of the eastern states, share prices have shot out of the blocks, rising as much as 20 per cent this year after bumper profit results.
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Two of the biggest players this week underlined the rapidly improving conditions.

Suncorp shareholders, who have endured a wild ride in recent years after the Queensland firm was pummeled by claims for flooding, saw net profits jump by almost a half to $574 million.

Its arch rival, IAG, said profits had more than tripled to $461 million in the half, with dividends doubling.

The bumper results raised hopes among some analysts that the industry may be entering a sweet spot for profit growth, which should also benefit QBE’s when it hands down its results next week.

But with Suncorp and IAG each delivering total shareholder returns in excess of 50 per cent in the past year, the question on many minds is whether the growth is sustainable.

The rapid expansion in profit margins at IAG – the nation’s biggest car and home insurer – illustrated just how much money the sector is making.

Helped by its dominant position in what is essentially an oligopoly, its insurance margin surged from 7.7 per cent to 19.19 per cent, which brokers said was the highest in living memory.

”Profitability simply does not get any better than this, at least not sustainably,” an analyst at Bank of America Merrill Lynch, Andrew Kearnan, wrote in a note.

Kearnan argues IAG’s prospects look ”solid” for the next year or so, but it could be entering a period of ”peak earnings” and at current share price it is already priced at 2.5 times its book value.

RBS Morgans made a similar argument, saying that although IAG had hit a ”sweet spot,” much of the good news has been factored into its share price, its highest in more than five years.

Instead, RBS and Kearnan both have Suncorp as a preferred pick. For one, Suncorp has built up substantial excess capital from the profit rebound and is tipped by some to reward shareholders with a special dividend, as it did last year.

Deutsche Bank’s Kieren Chidgey said the company was unlikely to keep all its surplus capital and he expected a 31¢ final dividend plus a special dividend of 15¢ at the end of the year, compared with its interim dividend of 25¢.

Despite the rebound, things have not always been as positive for insurance firms. In recent years a horror run of natural disasters here and overseas has pushed up costs through billions in claims and global increases in the cost of reinsurance. At the same time, investment returns have been crimped by skittish sharemarkets.

Suncorp endured a double-whammy during the global financial crisis when its banking arm had a near-death experience after funding markets froze.

This year, however, recent flooding and bushfires are within insurance industry allowances, and profits are being bolstered by a buoyant sharemarket and hefty rises in premiums. IAG said home and car premiums could rise 5 to 10 per cent this year .

But just as some question how banks can continue to prop up profits by re-pricing mortgages, there are also doubts over how much insurance companies can continue to boost earnings through higher premiums.

An analyst at Nomura, Toby Langley, cautioned that if wage growth were to slow it could result in increased ”consumer activism” with individuals becoming more discerning about their insurance policy purchases.

Insurance chief executives are also keen to present an image of caution. And as always, it seems mother nature is the wildcard.

Asked if the industry was seeing the light at the end of the tunnel this week, IAG’s Mike Wilkins said he was pleased with the company’s results, but added: ”We are still open to the volatility and the vagaries of mother nature as well as investment markets and other extraneous factors.”

Or as Suncorp’s Patrick Snowball put it when asked by JP Morgan analyst Siddharth Parameswaran to update his view on the company’s allowances for natural disasters: ”Sid, would you like to tell me what’s going to happen with the rains for the next six weeks?”

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Expansion plans put Santos in the box seat

Santos chief executive David Knox.CONNECTING the east coast to overseas energy markets, and pushing up domestic gas prices, has transformed Santos by increasing the value of its oil and gas assets, its chief executive, David Knox, says.
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Santos reported a 31 per cent fall in its full-year net profit to $519 million on Friday. The 2011 result was boosted by $408 million in gains from the sale of assets, including the Evans Shoal offshore field in the Bonaparte Basin, and a stake in the Gladstone LNG project.

Almost everything else was up. Production rose 10 per cent last year to 52 million barrels of oil equivalent, and sales rose 18 per cent to $3.2 billion. Excluding one-offs, Santos’s underlying profit rose 34 per cent to $606 million. The shares rose 15¢ to close at $12.05.

Mr Knox said Santos was three years into its transformation from an Australian to a regional energy player, underpinned by its investment in the $US18.5 billion GLNG project, fuelled from Queensland’s coal seam gas fields.

Along with two other approved CSG-LNG projects in Queensland – Origin Energy’s APLNG and BG’s QCLNG – the effect would be to increase gas prices to between $6 and $9 per gigajoule or higher.

”Our strategy in getting involved [in Gladstone LNG] was to unlock the domestic gas market,” Mr Knox said, and the resulting increase in east coast gas prices had ”completely rebased Santos’s gas portfolio”.

Santos said the GLNG project was on budget and on schedule. Both Mr Knox and the chief financial officer, Andrew Seaton, stated unequivocally that the company would not need to raise equity – whether to fund the GLNG project, or to maintain the company’s credit rating – under any currency or oil price scenario. While construction activity would peak this year at GLNG, cash flow would soon kick in from the Fletcher Finucane and PNG LNG projects.

Mr Knox talked up the prospects for Santos’s exploration for shale gas in the Cooper Basin, saying ”we are optimising our [drilling] program to maximise the potential for unlocking this basin” and reiterating that if recent successful flows at its Moomba and Gaschnitz wells were replicated, ”the play could be multiple TCF [trillion cubic feet of gas]”.

The Santos remuneration report noted Mr Knox received total pay of $5.9 million last year, up 18 per cent from $5 million in 2011.

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Pick of the purple patch

ATTENTION all novelists, published and unpublished: you are creatures of fragile ego, notoriously plagued by self-doubt. There might be dark moments when you convince yourself you are so bad you might be the worst novelist ever.
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Cheer up. You aren’t. Apart from those who lived and died in obscurity, that honour goes to Amanda McKittrick Ros, an Irish school teacher born in 1860 who wrote several novels (one, Irene Iddesleigh, was a bestseller) and a number of poems, all of staggering awfulness.

Photographs of Ros show a woman who looks a bit like Margaret Dumont, the perennial society matron and butt of jokes in the Marx brothers films, who never quite understood they were meant to be funny. Perhaps Dumont and Ros had something in common there.

Ros had a bit of trouble starting her brilliant career when no one would publish her work. But her first husband, Andrew, came to the rescue and put up the money for Irene Iddesleigh to be published. From then on, there was no stopping her.

It was not the plots of her novels that were so bad: they were romantic melodramas of the kind popular then, though much harder to follow than most. It was her prose that defied belief. Here’s a typical speech from Irene’s outraged husband: ”Speak! Irene! Wife! Woman! Do not sit in silence and allow the blood that now boils in my veins to ooze through cavities of unrestrained passion and trickle down to drench me with its crimson hue!”

As Mark O’Connell explains in his book Epic Fail, Ros knew enough to make ”a lunge in the general direction of the literary” but not enough to understand how such things as metaphor and syntax work. Nothing gets called by its name. Eyes are ”globes of glare”, trousers are ”the southern necessary”. O’Connell suspects ”she may have inadvertently invented postmodernism”.

After a critic brought her work to wider attention, Ros acquired what every writer craves: a wildly enthusiastic cult following that persists to this day. She became the subject of a biography, and a literary festival was held in her honour. Mark Twain praised her and Aldous Huxley analysed her. The Inklings, the club of Oxford dons that included Tolkien and C. S. Lewis, held regular Ros readings at their local pub (they gave prizes to the readers who could last the longest without laughing).

Ros appreciated her fans, but she never grew to love her critics. Even though she was blessed with a complete lack of humour, she seemed to detect some mockery at work in the review that declared Irene Iddesleigh ”titanic, gigantic, awe-inspiring … I shrank before it in tears and terror”. She never lost an opportunity to attack her critics, even devoting two pages of her novel Delina Delaney to an entirely irrelevant diatribe against such ”hogwashing hooligans”.

Did she never come to understand that her whole fan base was ironic? Apparently not. She sincerely believed her work was up there with Defoe, Dickens et al, and once wrote to her publisher about the Nobel prize in literature: ”What think you of this prize? Do you think I should make a ‘dart’ for it?”

There’s something weirdly admirable about Ros: maybe it’s the serene courage of her artistic conviction. She should be celebrated in the same way we celebrate Ed Wood, the eccentric creator of Plan Nine from Outer Space, generally seen as the worst film made. She once said, ”I expect that I will be talked about at the end of 1000 years”, and I’m not at all convinced that she’s wrong.


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Merger moves closer
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THERE’S a long way to go but the proposed merger between Random House and Penguin is closer to becoming a reality after the US Justice Department completed an investigation of the deal and said it would have no objections. It’s safe to assume that other regulatory authorities might well follow the example set by the Americans and approve the union that will give the new entity more than 25 per cent of the global consumer anglophone publishing market. When Penguin’s global boss, John Makinson, was in Melbourne last October, shortly after the announcement of the merger, this column asked him about the possibility of the deal coming unstuck. ”The regulatory process is a pretty complicated one; it involves a lot of different jurisdictions so it would be a very brave chief executive who said there is no possibility of this thing going wrong here but you would expect that we would have taken fairly comprehensive legal advice before making an announcement of this kind, which indeed we did. So we feel we have the ability to meet the regulatory tests in the major jurisdictions, but I don’t want to pretend this is going to be a completely straightforward process. Obviously we’re going to have very detailed discussions with the Department of Justice in the States, with the European Commission and, indeed, here in Australia and Canada and other jurisdictions.” The Australian Competition and Consumer Commission is undertaking an ”informal review” and considering the proposed transaction under section 50 of the Competition and Consumer Act 2010, which ”prohibits acquisitions that substantially lessen competition in a market, or are likely to do so”. The ACCC expects to reveal its outcome in early March.

Amazon under attack

WHEN the Random and Penguin deal was announced, much was made of it as creating a bulwark against the increasing power of Amazon. Makinson told Bookmarks that ”the strength of Amazon featured in our thinking just as the pressure on physical booksellers featured in our thinking”. So Makinson might have given three cheers to the comments of James Daunt, managing director of British bookshop chain Waterstones. Certainly owners of bricks-and-mortar bookshops would. In an interview with the Financial Times, Daunt got stuck into the online retailer for destroying jobs and for the loose tax regime it enjoys. ”What proportion of jobs do they create in a warehouse relative to the number they destroy on the immediate high streets around them, and why is the taxpayer funding this destruction?” He said the online retailer’s business model was a ”job destroyer” and castigated politicians for not creating tougher tax rules for multinational companies. But to be fair to Daunt, who last year made a deal with Amazon to sell its Kindle e-book readers, he did acknowledge in the interview that, like supermarkets, Amazon offered ”tremendously good value”.

Shop sales steady

FIGURES from the US should give enthusiasts for the traditional bookshop some cheer. In 2012, sales dipped by only half a percentage point to $15.3 billion, a result that was described by Publishers Weekly as the smallest drop in years. The monthly results fluctuated throughout the year – in May, for example, they jumped 5.7 per cent compared with the same month in the previous year, while in September they dropped 8.3 per cent. December bookshop sales climbed 2.9 per cent to $1.7 billion.

A Tartt return

SHE can hardly be called prolific – two novels in 21 years – but at long last another is on its way. Donna Tartt’s third novel, The Goldfinch, will be published in the US, Britain and Australia in October by Little, Brown. Her most recent novel, The Little Friend, came out 10 years ago to little enthusiasm from readers and critics, unlike her first, The Secret History, which sold millions on publication in 1992. Apparently, the new novel has been with the publisher since 2008. According to its description, young Theo Decker survives an explosion in New York that kills his mother. To avoid being taken into care, he scrambles between nights in friends’ apartments and on the city streets. He then becomes obsessed with a small, mysteriously captivating painting that reminds him of his mother and soon draws Theo into the art underworld. The novel ”is a haunted odyssey through present-day America. It is a story of loss and obsession, survival and self-invention, and the enormous power of art.”

Tolstoy with sex appeal

ANDREW Davies has a pretty good track record adapting for the small screen classic novels from the 19th century. Think Pride and Prejudice – yes, he was responsible for Colin Firth as Mr Darcy emerging wet and tantalising from that lake – Bleak House and Little Dorrit. In Sense and Sensibility he had a fireside sex scene at the start of the first episode, a seduction scene not mentioned and certainly not dwelt on in Jane Austen’s novel until page 218. When Davies spoke at the Melbourne Writers Festival in 2008, he told the audience at one session that Pride and Prejudice was all about ”sex and money and young people with raging hormones”. So what are we to make of the news that Davies’ next project is a six-part adaptation for the BBC of Tolstoy’s whopper, War and Peace? He says Natasha Rostova beats Elizabeth Bennet as the most loveable heroine in literature. And Davies wants to get women ”excited about one or two of the male stars”, apparently.

POETRYA Useful Fan

Queen Victoria woke up near the embersof a burnt-out gum, where Tony Abbottdozed lightly in his capacity as VolunteerFirefighter. Her copy of his publication,The Minimal Monarchy proved a useful fanfor her. Active charity work always seemed to her odd, like Mr Gladstonecombing the streets for ladies to reform,but she supposed being Leader of her Oppositionwas still the cause of great frustration. Abbottseeing her at last felt huge reliefthat she wasn’t Santamaria, Mannixor Loyola, with all of whom he’d growndeeply tired of conversation. “Mam,”he implored, “I do not despise women,” sinceshe looked motherly not minimal and seemedto understand him with her owlet gaze. She sawthe genuine stillness of hurt, did notpoint out that electorally it would not matter, said:”Some woman has flirted with you, thenattacked you and you expected goodness, justas my dear Mr Disraeli required Mr Gladstoneto provide him a radical context. But onecannot always rely on the enemy’s rightness, a flirtnot to attack one after flirting. That is whatthe flirtatious always do. Concern yourself,as Mr Gladstone would, with the singlemothers she impoverished on that very day.”  “As Mr Disraeli also would,” he added, forthe mercy from her fierce woman’s eyes.

Jennifer Maiden



NIGERIAN novelist Chika Unigwe discusses her writing. 6.15pm. The Wheeler Centre, 176 Little Lonsdale Street, city.

LES Murray on the sacred in life. 6.30pm. Carmelite Centre, 214 Richardson Street, Middle Park. $25. Bookings: thecarmelitecentremelbourne.org; 9690 5430.


CLIVE Hamilton considers the threats posed by ”geoengineering” the planet. 12.45pm. The Wheeler Centre.

MICK Dodson discusses indigenous politics with Robert Manne. 1.30pm. John Scott Meeting House, La Trobe University, Bundoora.

JAMES Button discusses his memoir Speechless with Bruno Lettieri. 6.30pm. VU Bar, Building M, Level O, Footscray Park campus, Victoria University, Ballarat Road, Footscray. $13/$6. Bookings: bruno.lettieri@vu.edu.au; 0422 298 643.

LAUNCH of Belinda Hawkins’ Every Parent’s Nightmare. 6.30pm. Readings Hawthorn, 701 Glenferrie Road.

NOEL Tovey discusses Little Black Bastard and And Then I Found Me. 7.45pm. Hares & Hyenas, 63 Johnston Street, Fitzroy. $15/$10. Bookings: trybooking南京夜网 (keyword: hares).

This story Administrator ready to work first appeared on Nanjing Night Net.

Setting a killer pace

A PARAMEDIC knows better than anyone that catastrophe, even death, lies in wait for ordinary people, striking at the most unlikely of times. Meeting people on the worst day of their life was one reason Katherine Howell decided to step back from the brightly lit, high-stakes world of emergency medicine to write.
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”I was losing it, psychologically,” Howell recalls of the decision seven years ago. ”I came to think everyone was destined for some kind of grim end. I really believed it was only a matter of time before I or someone in my family would get cancer.”

Chronic fatigue, stress and a patient who once threatened, ”I know where you live and I have a shotgun,” unravelled a composure built over 15 years. Years of scribbling away at drafts of unpublished novels during rare moments of downtime crushed what remained of her professional distance.

”I’d been writing for years and the better I got at it, the better I was able to put myself into characters’ shoes,” she recalls. ”I couldn’t turn that back off at work.

”I remember one accident where this young girl was dying in this car wreck. I was thinking, ‘Isn’t it terrible? All her family are there watching us, trying to get their loved one out of the car.’ I just couldn’t turn that off. I couldn’t stop thinking of jobs after I’d done them. Whereas others I worked with would say we’d done the best we could, I would agonise over them. I had high blood pressure, skin problems and was seeing a psychologist.”

Frantic, the draft manuscript Howell turned into her debut novel, the first in the police-procedural crime series featuring investigator Ella Marconi, was eventually picked up by Pan Macmillan. Selling into 11 countries, it won the Australian Sisters of Crime Davitt Award for adult fiction.

Her next, The Darkest Hour, won the Davitt readers’ choice award in 2009. Cold Justice was named best novel in 2011, with the Davitt judges remarking on Howell’s ”superb characterisations” and the warmth and empathy of her writing, concluding the author was ”fast showing herself to be one of Australia’s leading authors”.

Web of Deceit is her latest, a tautly plotted crime thriller that unfolds with Howell’s signature shot of adrenalin, an ambulance call-out.

Sirens yelp through familiar Sydney streets as the reader is immersed in the paramedics’ vertiginous world of chaos and carnage. The emergency dash serves the novel’s demands for heart-hammering suspense and unpredictability and pitches Marconi and the paramedic team of Jane and Alex on a twin trajectory that unites them at Town Hall Station in response to a ”code 4 under a train”.

To their surprise, the paramedics discover the victim is Marko Meixner, a road-accident patient they had treated earlier that day. Meixner had driven his silver sedan into a power pole, the paramedics arriving at the accident scene to find him weeping, hunkered down into his seat peering over the dash, claiming someone is hunting him down.

Unlike her boss, Marconi is unwilling to write off Marko’s death as suicide or accident.

In Frantic, Marconi is introduced to readers as the restless detective eager for attachment to the homicide squad to which men of duller intellect have been promoted ahead of her.

By Web of Deceit, Marconi is a permanent member of the homicide team and having trouble bowing to the male-dominated brass.

Marconi is in the tradition of Sara Paretsky’s V. I. Warshawski: not only a smart detective but also a warm and compassionate woman who is more than a little unlucky in love, the type to blink away tears as she shoots to kill.

Seething when her homicide investigation is obstructed by overtime bans and petty bean counting, Marconi resorts to unorthodox policing methods to outwit her jailbird key suspect with a watertight alibi. When her boss demands she drop the stroppy attitude, Marconi can barely restrain a derisory snort.

Marconi is an idealist who always falls on the right side of justice, yet is wise enough to understand that ”even though we win, we lose”. It’s a life lesson Howell carried from paramedic to author: you can cradle the injured and sick, patch their wounds, but you can’t make the dead walk again.

Howell’s experience in the NSW Ambulance Service gives her Marconi series authenticity, though she dislikes the vogue for graphic crime scenes and gory forensic examinations. Sitting harbourside, eyeing a grey choppy swell, she finds writing can ”do her head in” some days.

On a good day, characters feel alive on the page. On a bad day, she starts imagining what a lovely fire the pages would make. ”Other times you’ll think what you’ve written is magnificent, but after you go off and work on other stories, you’ll come back and wonder what drugs you were on.”

The perfect book in her head is rarely the perfect book on paper, she says. To her brother, Phillip Guy, a writer of literary short stories, she comes with perplexing syntax problems. ”He’s good with the nitty-gritty; I’m about the whole rush of the novel.”

Howell’s first, naive attempts at writing were racy ripoffs of the Trixie Belden series, mysteries she had enjoyed as a teenager featuring a heroine who manages to solve mysteries that baffle dimwitted authorities.

”Nancy [Drew] was too prissy,” Howell says, laughing at the young detective who went on to trump Trixie’s popularity. ”Trixie is down to earth and a tomboy.”

During a year at university studying agricultural science, then 15 years working as a paramedic, Howell never stopped writing. Practice made close to perfect.

”In all that time I never knew if I was going to get there but I wanted to write stories that made other people feel the way I feel about other people’s books,” she says. ”I’ve met a lot of aspiring authors who have wonderful talent but they don’t have that willingness to sit down and keep working, and put aside that manuscript and write something else, and put aside that manuscript and write something else.

”They don’t have that stubbornness to keep going or they want to write but they don’t want to edit or they don’t want to listen to what an editor has to say.” Those shelved manuscripts – the Patricia Cornwell pastiche, the ghost detective fiction – are instructional if nothing else. ”I use them for workshops and ask, ‘What’s wrong with this page?’ and we all laugh. But I can see how with each one I got a little bit better and I learnt how to put in information, how to develop characters.”

The last of her four manuscripts became Frantic. Originally, she took it to Selwa Anthony, her agent, a woman with a reputation for spotting an instant bestseller. She sent it back. Where was the suspense, Anthony asked.

Howell decided to make the art of fictional suspense the topic of her master’s degree at the University of Queensland, then forensically applied theory to the new novel, stripping the narrative of extraneous detail, ramping up the tension, cultivating sympathy for the central characters and ending each chapter with a cliffhanger. Before starting a novel, Howell makes a habit of re-reading her thesis.

Frantic dramatises police corruption through the anguish of a good cop caught in its dirty paws, and there is a running thread in the series about gender politics in the force, but Howell is insistent that hard political truths should never subvert the primacy of plot and its urgent pacing.

The series’ setting is identifiably Sydney – Howell grew up in suburban Normanhurst but now lives on the Gold Coast – as Marconi trawls for evidence in Ryde, Granville, a Neutral Bay boat shed and an accounting firm in the city, though not in the crime-postcard way Ian Rankin evokes Edinburgh or James Lee Burke sketches New Orleans.

At 42, Howell finds herself at the vanguard of Australian female crime writers including P. M. Newton, Kathryn Fox, Sulari Gentill and Swaziland-born Australian Malla Nunn, whose book Blessed Are the Dead has been shortlisted for the Edgars.

The indisputable godmother of the genre is Cornwell. Howell believes it was her huge sales and the interest her books generated in forensic science that inspired many women here and overseas to write crime fiction.

”[She] creates an increased appetite in the market for crime fiction generally and so opens the door for more authors to be published here. Another reason might be that many women readers love crime fiction, so when they write, that’s what they produce. That’s why I write it, at least.”

This story Administrator ready to work first appeared on Nanjing Night Net.

Ardossi gets nod for MVP despite ban

Canberra Capitals players dress up for their end of year presentation dinner at Woden Tradies.Brigitte Ardossi was crowned the Canberra Capitals most valuable player on Friday night, the club opting not to rule her ineligible after slapping her with an internal suspension late in the season.
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In a disappointing campaign for the seven-time WNBL champions, the award was deserved recognition for the power forward, who was clearly their best and most consistent player.

Ardossi averaged 12.6 points and 8.5 rebounds a game, and stepped up admirably in the absence of injured superstar Lauren Jackson.

Basketball ACT chief executive Tony Jackson and Capitals coach Carrie Graf decided on Friday to award the 25-year-old the club’s highest individual honour.

The Capitals took the extraordinary step of suspending Ardossi for the last three matches of the season after she received an unsportsmanlike foul for deliberately tripping Townsville’s Rachael Flanagan.

The WNBL tribunal handed her a two-match ban, but Canberra refused to let her play in its final game against West Coast.

Ardossi expressed genuine remorse after the Flanagan incident. She emailed the Fire guard an apology, and fronted the media to express her regret.

She received rapturous applause when her award was announced at the Woden Tradies Club, having become a fan favourite in her two seasons at Canberra.

For the third straight year guard Carly Wilson was given the Kellie Abrams award for defensive player of the year, which was named after the former Capitals skipper who won six championships at the club.

AIS recruit Casey Samuels won the player on the rise award, an accolade won by Ardossi last season. Capitals skipper Jess Bibby won the players’ player gong for the second straight time after a strong finish to the season. Friday night’s function ended a momentous week for the Capitals after Graf re-signed for the next three seasons.

This story Administrator ready to work first appeared on Nanjing Night Net.

Time to tackle the trade problem

Forget shoulder charges, referee blunders and peptides – the biggest blight on rugby league is the farcical situation of players signing with clubs while still with another.
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Without downplaying the significance of allegations of doping in the NRL, initial reports are those incidents are isolated and not a widespread problem.

Players switching allegiances mid-season is.

Canberra Raiders young gun Josh Papalii is the latest to be caught up in the messy saga, as the Parramatta Eels secured his services for the 2014 season and beyond on Friday night.

Let’s make it clear, I don’t blame Papalii or his manager for engaging in talks with a rival club for a contract beyond this season.

It’s the system players have become forced to operate under, and one the NRL persists with despite constant condemnation from the game’s most influential stakeholders – the fans.

Without people walking through the turnstiles, or more importantly switching on their television sets, the NRL wouldn’t be the billion-dollar business it is today.

I’ve got no doubt players remain professional and don’t drop their level of performance irrespective of where they’re playing next year.

But how are fans expected to cheer for their favourite star and buy merchandise featuring their name or number knowing in 12 months’ time the jersey will be redundant?

We grow up with a belief sport is a tribal beast.

You don’t choose who to support, it’s instead passed on to us through the generations.

You stick by your club through thick and thin, the good and the bad, no matter how dire the situation.

Raiders fans know that better than most, having endured a roller-coaster existence of making the finals one year and missing the next for the best part of a decade, and haven’t won a premiership since 1994.

Football clubs pull on those heartstrings when they go on membership drives.

Campaigns thrive on emotive language, throwing around phrases such as ”belonging” and ”culture” with reckless abandon.

Then, in the same breath, we’re to understand sport is a professional business, and your favourite player one season may be running out in a different jersey the next year.

I’ve got no qualms with players switching clubs. It is, after all, the way they make a living.

The vast majority of the population would do the same – leave one employer for another if there was a significant pay rise on offer.

Papalii’s not the first and certainly won’t be the last.

New Zealand Warriors fans would have had mixed emotions seeing James Maloney run around last year knowing he’d be lining up for the Sydney Roosters in 2013.

The players’ association makes the argument its members need job security and can’t be expected to end a season not knowing where they’ll be the following year.

It seems to work pretty well in other sports.

AFL clubs can’t technically sign rival players until the end of the season, although many have been rumoured to have all but had the ink dry before the deal has been announced.

Soccer is just as successful at keeping their movements under wraps, while the biggest issue facing rugby union in this country is the uncertainty of re-signing players before knowing how much the Australian Rugby Union will contribute.

The Brumbies are keen to lock in several of their young stars, including scrumhalf Nic White and back-rower Colby Fainga’a, but can’t do it until they know what top-up amount they’ll get from the game’s governing body.

Perhaps a better example lies overseas.

No-one does professional sport better than the United States, where players are seen as assets and can be traded at a whim as seen at the conclusion of Friday’s NBA trade deadline.

There were crazy scenes in Houston where three of their players left their arena 20 minutes before their game with the Thunder as they’d been sent packing to another team.

Not even time for a farewell game, yet Papalii and others who abide by the NRL’s ludicrous rules get a farewell season. The madness continues.Deserving winner

Common sense prevailed at the Canberra Capitals’ presentation night with forward Brigitte Ardossi a deserving winner of the club’s Most Valuable Player award.

The stand-out player in a disappointing season, Ardossi was in danger of being ruled ineligible for an ugly tripping incident, which resulted in her being handed a three-game suspension.

Ardossi overstepped the mark on that occasion, but once she had served her punishment that should have been the end of the story.

She’s the type of tough and uncompromising player the Capitals sorely need to retain if they’re to turn their fortunes around next season.

This story Administrator ready to work first appeared on Nanjing Night Net.