Walking through the gleaming hallways of the Dubai International Financial Centre (DIFC) last week on my way to a seminar on corporate governance, I was struck by an improbable sight.An acquaintance of mine who works for one of the world's largest investment banks was strolling along carrying his laptop and newspaper inside a bag made of jute. Jute was traditionally used in sacking material, but over the past few years many retailers have been providing shopping bags made of jute and other natural materials.
A jute bag, unlike a typical plastic bag, is durable and when it eventually wears out it returns naturally to the soil, from which it came.My pal was the last person I would expect to see with such a bag, especially in the DIFC. He is no eco-warrior. Nor is he in the avant-garde of haute couture. Rather, he is one of the many successful men in their 40s who work at the DIFC. He drives a gas-guzzling sports car and accumulates more air miles in one year than I could muster in a lifetime. So I'd hardly put him in the category of green citizen of the year.
But since he is using a bag made of jute, he does have some environmental credentials. After all, he is not using a plastic bag. The rest of us in the UAE use 1 billion plastic bags each year, out of a total annual global usage of somewhere between 500 billion and 1 trillion. The vast majority of the plastic bags that we use are not biodegradable, which means they'll be around for at least 1,000 years before they break down completely. And in the meantime, unfortunately, camels are dying in the UAE at a rate of about two a day as a result of eating discarded plastic bags.
People use sanitised plastic bags for a variety of purposes and dispose of them in countless locations: sometimes they are thrown into dustbins, but other times they are tossed out of car windows. When we discard them, they break into microscopic toxic fragments that contaminate our soil and waterways and enter the food chain as animals consume them while feeding. If the animals are ingesting them, so are we.
Some countries are by legal mandate moving away from plastic to bags made from materials such as jute and recyclable paper. Bangladesh, for instance, has banned plastic bags entirely, China has banned the provision of free plastic bags, and, in 2002, Ireland introduced a tax on plastic bags that has reduced consumption by 90 per cent. In all cases, the change in consumer behaviour came about through legal mandates and, crucially, the enforcement of the legislation.
Because of the legislation and accompanying public awareness campaigns in these countries, merchants who did not co-operate faced fines, and the accompanying bad publicity would cost them customers. Likewise, shoppers' bag use was policed, but by other customers, who would make those not co-operating with the campaign feel like outcasts. The result has been that consumer behaviour has changed.The importance of enforcing legislation is a point argued well last week by Dr Nasser Saidi, the chief economist of the DIFC, in a speech to a group of regulators at a corporate governance seminar organised by Hawkamah and the Mudara Institute of Directors.
I was on my way to that event when I was distracted by the banker with the bag. Obviously, Dr Saidi was not discussing plastic bags but the importance of good corporate governance in the battered financial services sector.He said the financial systems needed a college of supervisors based in each global financial centre to monitor the players in the market. And the colleges should be willing to share information with one another. His contention is that markets and institutions do not regulate themselves. The rules have to be imposed and enforced.
In a paper on the corporate governance of banks in the MENA region, which was released in November by the Hawkamah and MENA-OECD (Organisation of Economic Co-operation and Development) corporate governance working group, Dr Saidi said: "Strengthening the banking sector's legal and regulatory standards and improving its transparency and disclosure is critical to the sustainable growth and stability of the region. The policy brief on corporate governance of banks identifies key corporate governance challenges affecting banks in the region and makes recommendations for strengthening their governance practices. The policy brief's recommendations go beyond merely strengthening governance practices within the banking sector and seek to transform banks into agents of corporate governance change in the larger economy."
It seems to me that my jute-bag-carrying banker had paid heed to this advice and was seeking to transform bankers into agents of positive change by becoming an example of green consumerism himself.In the end, my curiosity got the better of me and I looked him up on the way out of the DIFC. I asked him why he had a jute bag, to which he replied, "It's my mother; she told me to use it, and mothers know best."
Since our mothers are not watching over the financial services sector, let us hope the regulators are.Rehan Khan is a business consultant and writer based in Dubai.