Industry outrage at ‘no print’ regulations for annual reports

Printing Industries has slammed the Federal Government's move to remove the legal obligation for corporations to produce printed annual reports.

“This is nothing more than a cynical exercise in shifting the print costs away from corporations and onto consumers,” says Peter Lane, national president for Printing Industries.

“Shareholders and the public will now lose their legal right to automatically receive important public information in its original printed format,” he says.

A number of institutional bodies, including the International Banks and Securities Association, lobbied the government for legislation to allow companies to make annual reports available on the internet, and require hard copies to be sent only to investors who request them.

The recommendation was considered by the Federal Government's taskforce on Reducing Regulatory Burdens on Business. While the government has confirmed it will ask Treasury to draft the appropriate enacting legislation, Lane says the government should not have bowed to pressure from financial institutions.

“The printing industry should have first been consulted by the government before it agreed to frame anti-industry legislation,” he says.

Lane says the government's decision, which will cost the printing industry tens of millions of dollars, comes at a time when more detailed annual reporting has become a cornerstone of improving corporate accountability.

“The rationale behind this is nullified if you then take away or restrict access to these reports,” he says.

“The cost saving argument doesn't stand up. Print costs are continually falling through new efficiencies and technology improvements. The reports will still need to be prepared and designed which are significant costs. Added to this is the cost of maintaining e-mail address databases, an increasing cost and an administrative nightmare.”

Lane says that in 2004 many major corporations backed a campaign encouraging shareholders to 'opt out' of receiving printed reports in favour of the internet. While the campaign was run on issues of environmental responsibility, Printing Industries claims a vast majority of people resisted the move.

“Now government is being solicited to overturn the public's wish by forcing people to 'opt in'. This is manipulating shareholders and the public. If you want to exercise your right to a printed report will you then be asked to pay to cover the print and postage costs?”

Lane insists the new default option will mean all shareholders and other interested parties will need to get a computer and a printer, purchase internet access, set up an e-mail account, purchase ink for their printer and plenty of paper - all at their own cost.

“Even small investors tracking their superannuation funds will need to have computer access to download their annual reports,” he says.

“We encourage everyone who may be put into this situation to exercise their right to receive printed material at no additional cost. There is no telling where this will end if you let your right to receive a printed annual report be compromised.”

Lane claims additional environmental costs exist because cartridge-based inks used for domestic printing do not recycle and the used paper, together with empty ink cartridges and replacement computers, end up as toxic landfill.

“Commercially printed products such as annual reports, magazines, leaflets, books and such are 100 cent recyclable and 100 per cent user friendly.”

He says printing a report for shareholders is a normal business on-cost and not an impediment to doing business like so many government charges and regulations are - which is where he claims the government should be focussing.
“People trust print and mistrust the anonymity and potential risk with internet communication. This is an attempt to force people into digital transactions that affect their personal communication preferences,” he says.

“Being able to put printed information, be it an annual report, prospectus or an account into a person's hand is non threatening, provides access equality and is often a measure of the credibility or legitimacy of the communication and the company who issued it.

“Importantly, it doesn't cost the consumer anything directly. Printed material provides a level of accountability and responsibility to shareholders or customers that can be overlooked or misdirected through the vagaries of digital communication.

“The plethora of access, information and messages can create more confusion and distrust among consumers using these mediums without the positive and safe reinforcement of the print medium.

“It is very cynical to try to offload the cost of reading communications to investors or customer who, in most cases, will need to print out the information for personal consideration or reference.”

Some Facts - Paper is renewable and recyclable

Paper is one of the most renewable and recyclable resources and the most ecologically sustainable resource on the planet. Plantation forests provide the fibre for papermaking and help the environment by absorbing carbon and emitting oxygen. The paper manufacturing process itself does not emit carbon and therefore doesn't contribute to the greenhouse emission problem.
From an environmental point of view, it's easier to recycle a few sheets of paper but this isn't the case for computers and consumables such as inkjet cartridges.

Some environmental comparisons:

It takes substantially more water to build a single PC than to manufacture one tonne of paper.

Internet usage in the US accounts for 8 per cent of total electricity consumption.

Computers left in standby mode consume on average $40 electricity each annually.

In Australia and many parts of the world coal is the primary source of electricity generation with detrimental impact on the environment (greenhouse gas emission).

Increasingly high numbers of computers going into landfill is posing an environmental hazard due to the lead and other toxic substance content.