Comparative analysis of financial assurance instruments for offshore oil decommissioning and mine restoration

This paper introduces how different bonding mechanisms for oil and gas decommissioning and mine restoration can ensure operators’ accomplishment of restoration/decommissioning liability and affect their budget. Four mechanisms presented and compared herein include surety bonds, cash collateral bonds, decommissioning and abandonment provisions, and lease-specific abandonment accounts. The author also provides some cautions and recommends amendments for each mechanism to be efficiently applied to oil and gas decommissioning in Vietnam so as to assure operators’ decommissioning duties without discouraging their potential investments.

Default Behaviors of Contractors under Surety Bond in Construction Industry Based on Evolutionary Game Model

In construction projects, some contractors will take default actions against the contracts to obtain maximum profits and damage the owners’ benefits as a result. In the construction markets where effective supervision is not performed well, contractors have more opportunities to default. Surety bonds were designed to solve the default problems and promote the sustainable development of the construction markets. This paper was proposed to explore the interactions between owners and contractors and investigate the influence of surety bonds (high penalty and low penalty) on the default behavior of contractors based on a static and dynamic evolutionary game analysis model. The results showed that applying the surety bond strategy is effective at decreasing the probability of the contractors’ default behavior when the credit system based on a surety bond system is well developed in the construction industry and the cost of the surety bond is low enough. Therefore, government strategies such as a better development of the credit system driven by surety bonds and the subsidies on surety bonds to reduce the cost can mitigate the contractors’ default behavior and keep the sustainability of the construction markets.

Construction Surety Bonding Criteria: The US Perspective

In the United States, construction contracts require that contractors submit surety bonds, hence shifting the contractor’s risks to the sureties. In order to take on the risks of project completion, the sureties employ a complex time-consuming evaluation process that assesses several factors of a contractor that are subjective to make a surety credit recommendation. Several small and emerging contractors find it very difficult to attain bonding capacities as they do not know the factors that go into the sureties’ consideration to extend surety credit. The purpose of this study is to identify the surety bonding criterion that influences bonding decisions through a series of interviews with surety professionals possessing extensive experience in the bonding evaluation process. The outcome is a list of factors that underwriters consider in issuing a surety credit to contractors. Understanding the surety bonding criteria employed by underwriters enhances contractors’ ability to secure required bonding capacities for their future projects.

GUARANTEE PRODUCT PORTFOLIO: PERFORMANCE AND OPTIMAL PORTFOLIO ANALYSIS

This study aims to analyze the performance of guarantee products and optimize guarantee portfolio at PT Penjaminan ABC. The method used in forming the optimal guarantee portfolio is the Markowitz method and the single index model. The results of the formation of optimal portfolios based on the Markowitz method show that there are five eligible guarantee products included in the optimal guarantee portfolio, namely construction financing, counter bank, general financing, micro financing, and multi-use financing. While custom bond, surety bonds, and other guarantees are not included in the optimal portfolio. In contrast to the Markowitz method, based on the single index model, all guarantee products are not eligible to be included in the optimal guarantee portfolio. Managerial implications of the optimal guarantee product portfolio is an increase in guarantee returns which will further increase company profits and increase company equity. An increase in company equity will reduce the gearing ratio in order to comply with regulations, because the gearing ratio is calculated by dividing the outstanding guarantee volume by the total equity.

Bonded Chinese Servants

Chapter 5 examines Chinese servants who were exempted from the exclusion laws and granted temporary admission as laborers. It argues that immigration officials implemented post-entry controls that were aimed at containment rather than protection. Following the passage of the 1882 Chinese Restriction Act, immigration officials brokered special arrangements that allowed white employers to continue to enter the country with Chinese servants in their employ, so long as they took out surety bonds that indemnified the government against the possibility that their Chinese servants might leave their service and remain in the United States on an unauthorized basis. The temporary admission of Chinese servants and their bonded condition offered an incipient version of a guestworker program. Chinese immigrant servants who lived in the United States legally—as well as birthright American citizens of Chinese descent—were also subject to various requirements by immigration officials that reinforced these workers’ dependency on white employers. The testimony of white employers was a crucial factor in determining whether Chinese servants would be credentialed as authorized residents. This was essential to avoiding deportation but also to being allowed to depart and reenter the United States.

Pre-employment costs associated with H-2A agricultural workers and the effects of the ‘60-minute rule’

Agricultural employers increasingly are turning to the foreign guest worker program, known as H-2A, as a means to secure a legal workforce. This paper outlines the procedural aspects and costs of recruiting and hiring H-2A workers. Cost data is from a 2014 survey of citrus harvesters and defines pre-employment costs as filing fees, advertising, surety bonds, travel, and housing. The pre-employment costs associated with guest workers are estimated to be nearly $ 2,000 per worker. The survey was motivated by the ‘60-minute rule’ imposed by the U.S. Department of Labor prior to the 2012-13 citrus harvesting season. Cost data were collected across two crop season, 2012-13 and 2013-14, to analyze the cost implications of the rule. We found that the 60-minute rule significantly increased filing fees. These fees, however, represent a very small share of total costs and overall pre-employment costs associated with the H-2A program did not significantly change.