International Business

Due to the specific chemical composition of Kashagan crude (with its high levels of poisonous H2S (hydrogen sulphide) and the high oil pressure, the field’s development could have a serious impact on the ecosystem of the region. This includes a potential danger to bird and marine wildlife and human health.

Political risk can affect the operations and profitability of a business as directly and quickly as any financial, physical, or market risk factor.   The impact of political risk is considered to be long-term because the risk rises over time, given the greater potential for events and changes over time.  Although political risk is extremely difficult to quantify, companies and investors must examine and understand the potential for political risks by closely examining the location's history, political institutions, and political forces at work in the region.

* Proper planning and due diligence are most important. Too many businesses begin operations in an unfamiliar country without having taken the time and devoted the resources necessary to ensure a better-than-average chance of success. Developing solid relations with relevant governing authorities is the preferred approach, but this may not always be possible or even desirable.

* another important component of creating a political-risk-friendly investment environment is to establish a good relationship with your workforce. Too often, foreign businesses are perceived as having uncaring managers who do not appreciate their workers. This can have dire consequences. One of the best ways to protect your assets is to generate a loyal workforce. Management can be replaced much more easily than can a workforce, and it is becoming more common for host governments to remove corporate managers and replace them with other experienced managers that will operate in accordance with government objectives.

* Be alert to what is happening in your host country. This may sound sophomoric, but it is easy to lose track...