The trip was quickly branded a mere stunt. But Wang did not seem to mind, saying that, unlike actors, the businessmen were playing themselves and that he hoped to see more, and better, such events in the future. Afterwards, he and his companions made numerous appearances in the Chinese media, talking about Copenhagen and advocating low-carbon ideas.

On December 5, Wang and Feng Lun, chairman of Beijing Vantone Real Estate, were chosen to board the %26ldquo;Climate Express%26rdquo;, a special train from Brussels to Copenhagen organised by the United Nations Environment Program, the International Union of Railways and the World Wildlife Fund. Another group of %26ldquo;green entrepreneurs%26rdquo;, including Marjorie Yang, chairwoman of textile manufacturer Esquel Group; Zhang Yue, chairman of Broad Air-conditioning; Zhang Zaidong, chairman of Beijing Fengshang Real Estate; Song Jun, president of hotel and travel investment firm Beijing Jiuhan Tiancheng and Huang Ming, chairman of Himin Solar Energy Group travelled north from Germany with Lu Zhi, Peking University professor and head of the Shanshui Conservation Centre. They met with Deutsche Bank%26rsquo;s climate finance team in Frankfurt, visited Europe%26rsquo;s solar-power %26ldquo;capital%26rdquo;, Freiburg, and then joined the property group in Copenhagen.

This was the first time Chinese entrepreneurs had attended a UN climate-change conference as observers and a rare high-profile appearance at an international climate-change event. Hopes were high for these enlightened businessmen, both in China and overseas. So what did they actually do?

At a small ceremony to mark the start of the trip held at Beijing%26rsquo;s exclusive Chang%26rsquo;an Club, they said they wanted to put forward the Chinese business world%26rsquo;s stance on climate change, and learn about the business risks and opportunities it will bring. On December 8, they set out this stance at their first appearance in Copenhagen. This took place away from the Bella Center, the main conference facility, at the five-star Radisson hotel, where Chinese premier Wen Jiabao would later stay. Unfortunately very few foreign reporters were present and almost all the attendees were Chinese. So why, those present wondered, couldn%26rsquo;t they just have held the press conference in China?

On December 11, these business leaders were not present at the Business Day event, hosted by the World Business Council for Sustainable Development (WBSCD) and the International Chamber of Commerce (ICC).

The WBCSD has 200 members, including Shell, Duke Energy, E.ON, BP and Rio Tinto. At Copenhagen the WBCSD advocated a global carbon market and a voluntary industrial code, covering industry, agricultural oil use, nuclear power and carbon capture and storage. The ICC, a similar organisation whose members include several major polluters such as Areva, Exxon Mobil and Vattenfall, continued to tell political leaders that business is part of the solution and that economic growth and free trade should be given priority.

The reason the Chinese group was absent was simpler than many thought. The head of the delegation, Wang Shi, had already left Copenhagen due to a prior engagement and the other members, for the most part having poor English and little experience of international events, were not too keen to attend %26ndash; and so they didn%26rsquo;t.

As head of one of the world%26rsquo;s largest property firms, Wang Shi was undoubtedly the most prominent member of the delegation. In 2007, Vanke started to use reusable steel frames in buildings, rather than the traditional wood. Over the past three years, this method has been applied to 600,000 square metres of building space and, after Copenhagen, Wang set a new target of two million square metres. His ambitions do not stop there, however. Wang wants to lead China%26rsquo;s property sector in making a contribution of more than 10% to China%26rsquo;s 2020 emissions target.

Wang told all of this to the Wall Street Journal and Daily Telegraph newspapers while he was on the Climate Express, to widespread acclaim. And so his early departure, to a certain extent, reduced the voice of Chinese business at Copenhagen. More disappointing was the fact that, although the Business Day was on the agenda provided at the pre-departure press conference and was widely reported in both Chinese and western media, not a single Chinese businessperson was seen at the actual event.

However, the Business Day, which brought together chief executives of giant multinationals, was also lacking attendees from South Africa, Brazil and India. Moreover, those who did attend did not gain much. As Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change told them, the negotiations going on at the Bella Center were inter-governmental and the participants temporarily had to put business to one side.

The delegation was more influenced by events not on the agenda; namely, the civil society activities they attended as private individuals, such as marches organised by non-governmental organisations (NGOs). Song Jun of the Jiuhan Tiancheng, commented that the range of protests by NGO members gave him more to think about than the disorganised negotiations and dull reports and made him more determined than ever to keep his business on a green path. This entrepeneur, often criticised for being too idealistic, has always tried to persuade more people to accept traditional Chinese ideas of conservation, calling for a limit on human demands rather than technical solutions to environmental and climate issues.

In 2002, Song started investing in the Moonlight Lake eco-tourism project in the deserts of Inner Mongolia, in northern China. But it is hard to stick to environmental ideals in today%26rsquo;s China and he has suffered a number of financial setbacks, only making a profit after five or six years. Next he plans to implement his new grasslands conservation plan in Xilin Gol, which aims to bring back herders forced to leave by environmental problems. The plan won support from Wang Shi and Zhang Zaidong at Copenhagen %26ndash; perhaps the most concrete result Song got from the summit.

Regardless, many people were left disappointed by the performance of these entrepreneurs at Copenhagen. Like the Chinese government, the Chinese business world has, over the last few years, been striving to improve communications and keep up with the global response to climate change and environmental protection. But getting that message across fully and accurately still needs work.

However, some are doing better than others. The story of how Zhang Yue of Broad Air-conditioning gave up his private jet is well known. And Broad’s non-electric air-conditioners were the focus of the only corporate case study in a report presented to G8 leaders by former UK prime minister Tony Blair in 2008. Zhang came and went at Copenhagen, clutching his own document, Measures to Reduce CO2 Emissions. He believes that there is huge potential for emissions reductions to be made by the Chinese public, though nobody knows how he has worked this out.

Many are also familiar with the story of Huang Ming%26rsquo;s solar empire and he was one of the delegation%26rsquo;s most active speakers. He also organised a football match to urge countries not to pass the buck on climate change and, on returning to China, called for COP18, the UN-sponsored climate summit scheduled for 2012, to be held in China. Shi Zhengrong of solar firm Suntech Power is even better known internationally. In May 2009, he was the only Chinese entrepreneur from the private sector to appear at the World Business Summit on Climate Change in Copenhagen. Unfortunately he was not able to be present at COP15.

But, for these business personalities, whether they come across well or badly is not the important thing. Wang Shi, Zhang Yue and Song Jun are more concerned about the weak message sent out by Copenhagen. Without a clear, strong and long signal, it is hard for businesses to make investment decisions %26ndash; even for these pioneers who have not hestitated in going with the green flow.

Feng Jie is a journalist at Southern Weekend and was formerly a reporter at the China Economic Herald.

Homepage image from hudong.com shows (left to right) Song Jun, Feng Lun, Wang Shi, Zhang Yue and Zhang Zaidong.

At the time of writing this article, ICC National Committees are meeting, or are planning to meet, to discuss the content of the latest draft of the UCP 600 distributed by the UCP Drafting Group on 13 June. The outcome of the comments received to this draft will undoubtedly shape the way the final version will look. The intention is that the final draft will be issued towards the end of August or beginning of September 2006. ICC National Committees will then be requested to indicate a ‘yes’ or ‘no’ vote at the ICC Banking Commission meeting to be held on October 24/25, 2006 solely based on the content of that draft.

By the time the UCP 600 is approved the revision process, totalling just over three years, will have been one of the most exhaustive in the history of UCP.

This article, the first in a series, takes time to look at the origins of the revision and the initial considerations that have shaped its contents.

Initial drafting guidelines

At the outset, the ICC created a Task Force to deliver recommendations as to the issues that needed to be considered in the shaping and construction of UCP 600. The main recommendations can be summarised as follows:

• The revision should be “Technical” and not line by line;

• There is a need to review ICC Opinions, Decisions, DOCDEX cases and results of Court actions for any remedial action in the UCP;

• At the time, seven articles of the UCP had accounted for over 58% of all the ICC Opinions;

• On the other hand, seventeen Articles had resulted in none, one or two ICC Opinions; and

• There was a need to consider the incorporation of/relationship with ICC rules that had been developed since the implementation of UCP 500, namely URR 525, ISP 98 and eUCP.

Actual outcome as a result of the guidelines

Let us take each of these recommendations in turn and assess how they have influenced the UCP 500 revision process.

The revision should be “Technical” and not line by line;

Whilst the intention of the Task Force was for the Drafting Group to look at critical issues that had either arisen through misapplication of UCP 500 or new transport or insurance practices, the reality is that once a revision of a set of rules such as UCP commences there is a need to look very closely at each Article to assess the applicability of existing rules and consider any new concepts or processes that have either arisen during the life of UCP 500 or are necessary for the future under UCP 600.

There is a need to review ICC Opinions, Decisions, DOCDEX cases and results of Court actions for any remedial action in the UCP;

At the time the revision process commenced there were over 500 ICC opinions in place, 2 ICC decisions and some 40-50 DOCDEX cases. Each of the opinions was reviewed in order that they could be categorized as:

• an issue due to change in practices (banking, transport, insurance, etc.)

• an issue that has arisen due to lack of clarity, understanding or substance within the respective UCP 500 Article(s), or

• the request for an opinion could be considered as a ‘one-off’ and would not merit a change or addition to the wording in UCP.

At the time, seven articles of the UCP had accounted for over 58% of all the ICC Opinions;

Those seven Articles, namely Articles 9, 13, 14, 21, 23, 37 & 48 should not be of any surprise to letter of credit practitioners. The most worrying aspect was that Article 14 (Discrepant Documents and Notice) was the Article that had been the cause of most requests for an opinion. Just prior to the revision commencing, this concern had resulted in the ICC Banking Commission issuing a document entitled “Examination of Documents, Waiver of Discrepancies and Notice under UCP 500” to try and explain how the examination and refusal process should work under UCP.

Similarly, Article 48 (Transferable Credits) had given rise to a number of opinions and the ICC Banking Commission, again, issued a document entitled “Transferable Credits and the UCP 500″ to try and answer any burning issues in the handling of transferable credits.

It should also be remembered that in September 1994 the ICC issued 4 Position Papers, 3 of which covered Articles mentioned above – time limits under amendments (Article 9), Non-documentary conditions and linkage (Article 13) and naming of the carrier and signing transport documents (Article 23).

On the other hand, seventeen Articles had resulted in none, one or two ICC Opinions; and

This should have been easy – no problems, then leave the Articles alone. The reality is that whilst there may not have been many or any major issues, changing the style and language of the UCP necessitates some change even where it may not have been initially thought warranted.

There was a need to consider the incorporation of/relationship with ICC rules that had been developed since the implementation of UCP 500, namely URR 525, ISP98 and eUCP.

URR 525:
The easy option would have been to add the contents of URR 525 to the UCP 600 version of Article 19 of UCP 500. However, the ISP98 rules make a specific reference, in rule 8.04 to “Any instruction or authorization to obtain reimbursement from another bank is subject to the International Chamber of Commerce standard rules for bank-to-bank reimbursements”. Therefore, a separate set of bank-to-bank reimbursement rules was required and the decision of whether to include them within UCP 600 was one that need not be considered.

ISP98:
The issue here related to the fact that UCP had traditionally made reference to the rules also covering standby letters of credit, albeit qualified “to the extent the rules were applicable”. Some four years after the implementation of UCP 500, the ISP98 (International Standby Practices) were drafted and implemented to specifically deal with standby letters of credit. Now with a set of rules dedicated to the usage of standby’s, the question was whether UCP 600 should still cater for their application or whether their usage is solely under ISP98. The majority of ICC National Committees indicated a preference for the retention of applicability to standby’s in UCP 600 and this is the position today.

eUCP:
The eUCP was developed as a supplement to UCP due to the strong sense of feeling at the time that banks and corporates together with the transport and insurance industries were ready to make that ‘leap’ into the electronic world of document and data delivery. The hope and expectation that surrounded the development of eUCP has failed to materialise into day to day transactions and its usage has been, to put it mildly, minimal. Owing to this lack of usage, it was felt that this was not the right time to incorporate the eUCP into the UCP 600 and it will remain as a supplement albeit slightly amended to identify its relationship with UCP 600.

Construction of the Drafting Group and the establishment of a “Consulting Group”

As with any revision of a set of rules, the National Committees of the ICC nominated individuals for a role on the Drafting Group for the UCP500 revision. There are 9 members of the group covering representation for Western Europe, Eastern Europe, Asia and North America. A Representative was also taken into the group from SWIFT in order that the impact of any strategic changes in the rules could be considered at an early stage as to whether changes would be needed to the MT7 series of messages.

A new concept in managing the revision process was suggested and implemented. A group known as the ‘Consulting Group’ was created. This group was made up of over 40 individuals from 26 countries. Their role was to ensure:

a. that new concepts and ideas were in line with local country requirements and legal statute;
b. that the language used in the new text would translate sufficiently in local language (given the large number of translations of UCP that are undertaken); and
c. that members representing the transport and insurance
industries would be able to provide valuable input to the process.

Also, owing to the large number of participants and their country coverage, comments received would enable major issues to be overcome prior to the formal release of a draft to the ICC National Committees and their members.

Drafting highlights to date

1. So far, there have been 15 drafts released for comment including 3 complete drafts;

2. The majority of these drafts were reviewed by the Consulting Group prior to release to National Committees;

3. Over 50 countries have actively taken part in providing comments to the various drafts of the UCP 600;

4. The Drafting Group has held 12 meetings to date each lasting between 3 and 5 days. One further is planned for July 31 – August 2 to review any comments to the June 2006 draft;

5. The Drafting Group have reviewed over 4700 comments during the course of the drafting process; and

6. There have been 7 Banking Commission days where the draft and drafting process has been reviewed with the National Committees including a special session held in Dublin June 2005.