Employee Benefits Law

The dynamic between defamation and legitimate workplace fact investigation remains vitally important for employers.  A recent Indiana Supreme Court decision provides important support for employees bold enough to report workplace misconduct.

Most people know that making false statements about someone may lead to a claim of defamation or slander.  Under Indiana law, accusing someone of criminal or occupational misconduct raises the specter of defamation "per se" under Indiana law.  Defamation "per se" constitutes an important weapon for wrongly accused employees, and a real danger for employees reporting workplace misconduct.

Read the full article about protection for workplace investigations.
 

Continuously "Naughty" Employees Could be a Liability

This installment of the Informed Employer is brought to you because of that one employee who, despite your best efforts to insulate your business from any number of employment law liabilities, will inevitably go off and do something so colossally stupid that you could not have possibly prepared for it.  Yes, just when you think you have drafted every policy and trained your employees accordingly, one of your supervisors takes his sales team to the top of a hill and…

…waterboards a team member.
 
Read the entire article about problematic employees.
 

On November 15, 2010, the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments) issued an Amendment to the interim final rule relating to a group health plan's status as a "grandfathered" plan under the Patient Protection and Affordable Care Act (PPACA).  The interim final rule, which was published by the Departments on June 17, 2010, provides that if an employer or employee organization enters into a new policy, certificate or contract of insurance after March 23, 2010, the policy, certificate or contract of insurance would cease to be a grandfathered plan, and thereby, lose the plan's exemption from several coverage mandates under the PPACA (although an exception applied to collectively bargained insured plans).  The Amendment to the interim final rule reverses this position and permits an insured group health plan to change health insurance coverage without ceasing to be a grandfathered plan.  The change provides parity with self-insured group health plans, which are permitted under the interim final rule to change third-party administrators without losing grandfathered status.

Read the entire alert.

 

The Small Business Jobs and Credit Act of 2010 (the Act) was signed into law by President Obama on Sept. 27, 2010.  The Act includes a temporary exclusion for 100 percent of any gain recognized on the sale of qualified small business stock (QSBS) acquired after Sept. 27, 2010, and before Jan. 1, 2011.  In addition, during this period, the excluded gain is not treated as a preference item for purposes of Alternative Minimum Tax, although other limitations may apply.  This change results in a potentially significant federal income tax benefit to non-corporate investors, essentially reducing to zero the federal tax rate for capital gain on QSBS to which the change applies. Investors only have until Dec. 31, 2010, to take advantage of this tax benefit.

Read the entire article written by Kristine Danz about the Act's temporary provisions.

Hangzhou is the wealthiest province in China, mostly due to their successful industries. Near where the delegation is staying are dealers for Lamborghini, Porsche, Bentley, Mercedes – any luxury car you can imagine. It's also very global and Americanized. For instance, we went to dinner last night at an Italian restaurant (in part because we've had a lot of Chinese food already!) that had Mexican food and ESPN was on. As we walked back to our hotel, we heard a rock band playing what sounded like the kind of music you would hear in the U.S. (other than they were singing in Mandarin) and then they broke into "Take Me Home, Country Roads" by John Denver.

Today, we visited a company owned by the Chint Group, which produces low-voltage electrical, power transmission and distribution equipment. They are listed as one of the top Chinese companies by Fortune and are the fourth largest private employer in China, with over $3 billion in revenue. Their subsidiary, Astro Energy, is a leading supplier of solar products in China, a brand-new enterprise only in existence since 2006 with approximately 8,000 employees. They make solar panels and solar cells that can be used for power stations, homes and commercial use on the top of roofs and on the ground. They export most of their products primarily to North America and Europe, with Germany and Spain as the two key purchasers of their products. They are selling in 90 countries worldwide. 

Astro Energy is very big on research and development. They spend about three percent of their revenue on R&D and have a special research and development center. They even have a location in Silicon Valley that focuses on R&D for sales, marketing and manufacturing.   We had a fascinating plant tour. Because of the sensitivity of the equipment, we had to go through an air-cleaning machine. We wore hair nets, jackets and covers over our shoes. Their machines are new, automated and expensive. The equipment was designed in Switzerland. They have a very big focus on quality control. They guarantee their product for 25 years, so it is very important that they create a quality product. Astro Energy is looking for innovation from its employees, and they talk a tremendous amount about safety and environmental protection, and taking care of their employees. It is a publicly-traded company, partially owned by the government, but they talked a lot about their private independence vs. government control.

Astro Energy is a very Americanized company. Their management team is comprised primarily of people that are either from the U.S. or have been educated in the U.S.  Every person we met with was from the U.S. They travel all over the world to various solar-powered trade shows, including the largest in the world which was recently held in Los Angeles. They have a real affinity for America. In the next year, they'd like to have a manufacturing facility in the U.S. This is the second energy-related company we have met with in less than 24 hours whose goal is to have a manufacturing facility in the U.S. Labor costs seem to be very low in China, because so much of the process is automated. 

We spent a lot of time talking about the pros of Indiana and why Indiana would be a great place to locate. It is going to be very important for them to find places in the U.S. with the sourcing and infrastructure resources they need. For instance, they need glass. In Indiana, Muncie has a great glass history and industry!

China is very interested in how government policy interfaces with renewables and renewable energy standards. I think, given the growth in the electric demand in China and the serious air quality issues that they have, out of necessity China is going to be the world leader in renewable energy technology. It is amazing how much growth there has been in such a short amount of time. Many companies that have been in existence for 10 years or less are already doing billions in revenues.

Fee transparency in retirement plans, particularly participant directed plans such as 401(k) and 403(b) plans, has been the subject of heated debate for the past several years.  The Department of Labor recently issued several sets of regulations designed to facilitate fee transparency by requiring various forms of disclosure by service providers and plan administrators.  The most recent of these regulations was issued on Oct. 14, 2010, and requires plan administrators to disclose information about plan fees, expenses and investment options to participants and beneficiaries in 401(k), 403(b) and other types of defined contribution plans if investments are participant-directed.  These regulations are effective for plan years beginning on or after Nov. 1, 2011 (Jan. 1, 2012, for calendar year plans).

Section 404(a) of ERISA requires plan administrators and other fiduciaries to discharge their duties prudently and solely in the interest of plan participants and beneficiaries.  The investment of plan assets is a fiduciary act subject to these fiduciary standards.  The Oct. 14, 2010, final regulations are intended to assist plan administrators of 401(k) and 403(b) and other participant-directed individual account plans in satisfying this obligation by requiring that participants and beneficiaries be provided on a regular and periodic basis with sufficient information regarding fees, expenses and investment options to allow them to make informed decisions regarding the investment and management of their accounts.  These new disclosure rules apply regardless of whether the plan already meets the fiduciary standards set forth in Section 404(c) of ERISA.  Although the regulations apply only to retirement plans that are governed by the Employee Retirement Income Security Act of 1974 (ERISA), governmental and church plans will likely be affected by these new requirements as well, to the extent that the disclosure rules become standard or best practices in the industry.

Read the full article on new fee disclosure requirements for retirement plans.

Brad Wheeler, Vice President for Information Technology & Chief Information Officer,
Indiana University

One challenge that we face in our organization is the constant task of educating a large number of staff, students and faculty on the importance of practicing safe habits when working with data.  The most common security issue we experience is not the result of malicious, intentional acts by hackers or employees, but rather irresponsible mistakes by good intentioned employees (e.g., placing valuable data onto an unsecured thumb drive, then misplacing it).  While there is no way to completely prevent this type of security breach, we believe that by providing our staff, faculty and students with an abundance of information on safe network practices and proper data handling, we can hope to greatly reduce the likelihood of a security breach.

In regards to malicious actions by hackers and employees, what we have seen in other organizations are coordinated, planned attacks.  For example, one specialist is hired to break into the system, another specialist is hired to enter the system and wait (sometimes for months) for the valuable data to come across so it can be taken, then another specialist is hired to come in afterwards and remove all traces of the entry.  This type of organized attack is difficult to plan against and even more difficult to discover.  Leaders of IT organizations will need to take a pro-active approach in dealing with these concerns.

John F. Frank, Sr. Vice President & CIO, Brightpoint North America

I walked away from the roundtable with the following thoughts:

Everyone represented is highly aware of the possible security issues their respective companies face, and have implemented the best measures available with the resources, tools, and money that is available.  Everyone recognizes that a security issue is inevitable no matter how many safeguards you put in place, and there is a point where no amount of money can guarantee a breach will not occur, so each organization has to do their best to safeguard the highest impact areas within reason.

One of the best ways to predict a secure environment is to hire the right people into your company.  The most damaging and most difficult to identify security breaches are the ones that can be caused, usually inadvertently, by an employee.  We need to hire and employ people that use a bit of common sense, and are willing to periodically participate in company awareness training.  Data, stored and moved digitally or in small media, are the most vulnerable.  This is where the aware employee is essential to the protection of the company.

All agreed that the biggest outside threat comes from rogue countries that are bombarding our systems with SPAM, viruses, and other insidious attacks that could risk a broader or global Internet crisis.  This is the one risk that no single company can fight, and there is a big question mark as to whether state, federal, and international governments have this scenario planned and mitigated.

Ice Miller LLP is pleased to announce that Best Lawyers has named three Firm attorneys as “Indianapolis Best Lawyers Lawyer of the Year” for 2011.

Preparing for the Future

Ice Miller is reissuing an updated summary of the provisions under the Patient Protection and Affordable Care Act (PPACA) that impact employers.  Ice Miller originally issued this summary on March 30, 2010.  Since that date, the Departments of Health and Human Services, Labor, and the Treasury have issued several rounds of interim final rules and other guidance regarding the PPACA provisions that apply to Group Health Plans.  As of the date of this reissue, guidance has been published with respect to:

• a tax credit available to small employers that offer health coverage to their employees;
• the extension of dependent coverage mandate and related tax relief;
• the Early Retiree Reinsurance Program;
• rules for maintaining grandfathered plan status;
• application of the PPACA coverage reforms on retiree-only health plans and HIPAA excepted benefits;
• the prohibition on lifetime and annual dollar limits and procedures for a temporary waiver;
• the prohibition on pre-existing condition exclusions;
• the prohibition on rescissions in health plans;
• patient protections afforded under the PPACA;
• coverage for preventive health services with no cost-sharing requirements;
• requirements for internal claims and appeals processes and external reviews; and
• the HIPAA opt-out for self-funded nonfederal governmental health plans.

While there is still more expected, a critical mass of guidance has now been issued that allows employers sponsoring group health plans to move toward finalizing plan design changes for next plan year.  As employers begin preparing for open enrollment season in the coming weeks and months, the PPACA provisions discussed in this summary require a fresh look.  Ice Miller has, therefore, revised its original summary to include discussion of relevant guidance and the obligations such guidance places on employers sponsoring group health plans to timely amend plan materials, make required disclosures to employees, and offer special enrollment opportunities to their employees.

View and print the updated summary.

View and print Ice Miller's list of steps that plan sponsors should be taking now to comply.

The recently enacted Small Business Jobs Act of 2010 (H.R. 5297) includes two important retirement plan provisions.  The bill was signed into law by President Obama on Sept. 27, 2010.

The first provision allows governmental 457(b) plans to be amended to allow participants to treat elective deferrals as Roth contributions.  Roth contributions are currently permitted under 401(k) plans and 403(b) plans. This provision is effective for tax years beginning after Dec. 31, 2010.

The second provision allows an employer sponsoring a 401(k), 403(b) and/or governmental 457(b) plan that permits Roth contributions to be amended to allow participants to roll their pre-tax account balances to a Roth account under the plan.  The rolled over amount can be included in taxable income.  However, the 10 percent tax penalty under Internal Revenue Code Section 72(t) generally imposed on early distributions would not apply.  Further, rolled over amounts consisting of after-tax contributions would not be included in taxable income.  A participant electing a rollover to a Roth account can spread the tax burden by paying the tax in 2011 and 2012.
 

Agencies Issue PPACA Implementation Guidance

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA).  Six months later, the PPACA's "first round" of coverage mandates are set to go into effect.  Group health plans must comply with the following coverage mandates beginning with their next plan year (Jan. 1, 2011, for calendar year plans):

• Extension of dependent coverage to age 26;
• Elimination of pre-existing condition exclusions for enrollees under age 19;
• Prohibition on lifetime and annual dollar limits;
• Prohibition on rescissions;
• Provision of first dollar coverage for preventive health services (non-grandfathered plans only);
• Internal claims and appeals procedures and external review process (non-grandfathered plans only);
• Mandated patient protections (non-grandfathered plans only);
• Non-discrimination rules extended to insured plans (non-grandfathered plans only); and
• No discrimination based on health status (non-grandfathered plans only).

Since the enactment of the PPACA, the Departments of Labor (DOL), Health and Human Services, and the Treasury have jointly published several phases of interim final regulations, issued sub-regulatory guidance, and invited comments concerning many of the changes that will impact employers and retirement systems that sponsor group health plans.

Read the entire article.
 

Agencies Issue PPACA Implementation Guidance

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA).  Six months later, the PPACA's "first round" of coverage mandates are set to go into effect.  Group health plans must comply with the following coverage mandates beginning with their next plan year (Jan. 1, 2011, for calendar year plans):

• Extension of dependent coverage to age 26;
• Elimination of pre-existing condition exclusions for enrollees under age 19;
• Prohibition on lifetime and annual dollar limits;
• Prohibition on rescissions;
• Provision of first dollar coverage for preventive health services (non-grandfathered plans only);
• Internal claims and appeals procedures and external review process (non-grandfathered plans only);
• Mandated patient protections (non-grandfathered plans only);
• Non-discrimination rules extended to insured plans (non-grandfathered plans only); and
• No discrimination based on health status (non-grandfathered plans only).

Since the enactment of the PPACA, the Departments of Labor (DOL), Health and Human Services, and the Treasury have jointly published several phases of interim final regulations, issued sub-regulatory guidance, and invited comments concerning many of the changes that will impact employers and retirement systems that sponsor group health plans. 

Read the entire article.
 

As the economy continues to improve, many Indiana companies that survived the recent recession are beginning to look at options for expanding their businesses outside of Indiana. In fact, the 2010 CEO survey found that many companies are likely to pursue expansion opportunities outside of Indiana over the next 18 months. Ice Miller attorney Dale Stackhouse comments on a number of legal issues companies need to consider before expanding outside of Indiana or overseas to include corporate and tax issues, employment issues as well as trademark and potential currency/foreign exchange risks. To view the full article by Dale Stackhouse click here.

Since 2007, one issue has consistently dominated the list of top issues for CEOs – corporate reputation.  As Warren Buffett reportedly said, "It takes 20 years to build a reputation and five minutes to ruin it.  If you think about that, you'll do things differently."  Just ask BP, Enron or Arthur Andersen.  Even in times of major economic change, the 2010 CEO survey found that CEOs, for the most part, maintain a relatively consistent structure of priorities. 

Since we first conducted the survey in 2007, we've seen the explosion of social media Web sites including LinkedIN, Twitter, Facebook and everything from Advogato to Zooppa.  In this emerging virtual world, reputation and reputation management will likely play an even bigger role as customer complaints and employee grievances hit cyberspace and the potential to reach millions of consumers in mere seconds. 

If you thought good news traveled fast, bad news travels even faster.

The Butler University College of Business, Ice Miller and Inside INdiana Business announced today the results of their fourth annual statewide survey of Indiana's chief executive officers, senior executives and business owners. The survey, "The State of Our Business – A Perspective from Indiana Executives," provides insight and understanding on the significant issues facing the state's business leadership.

The project partners identified 2,420 CEOs and other executive officers as potential respondents. Of those contacted, 428 responded to a comprehensive online survey designed by the Butler University College of Business.

The project partners identified 2,420 CEOs and other executive officers as potential respondents. Of those contacted, 428 responded to a comprehensive online survey designed by the Butler University College of Business.

"The survey found some reasons for optimism," stated Gerry Dick, president of Grow INdiana Media Ventures, LLC and host of Inside INdiana Business. "For example, many CEOs report there is now a stronger likelihood they will pursue adding jobs compared to their outlook in 2009." The survey found that central Indiana companies are more likely to add jobs as are companies with less than $5 million in revenue and those between $10 million and $50 million in revenue.

"We're now seeing several trends emerge as we start to analyze the data over a four year period," noted Byron Myers, chief managing partner, Ice Miller. "Many of the priorities of Indiana executives, with the exception of customer loyalty and retention, received importance ratings that are statistically equal to ratings received in 2009 as well as all past years of the survey. This may be an indication that even in times of major economic change CEOs maintain a relatively consistent structure of priorities."

"This year's CEO survey shows that the general business mood is improving but most CEOs are hesitant to implement solid growth strategies until the economy settles down somewhat," said Bill O'Donnell, director of graduate programs, Butler University College of Business. "We are also pleased that now, with four years of data, we can start tracking trends and see the direction CEOs view the state's economy to be moving."

Study highlights from 2010 include the following:

•  Customer reputation is back on top as the highest ranked business issue. In 2009, the highest ranked issue was customer loyalty and retention.
•  K-12 education and innovation continue to be ranked as the strongest disadvantages for Indiana as compared to neighboring states. Cost of living is still seen as the strongest advantage that Indiana has over neighboring states and has been on the rise as the strongest advantage since 2007.
•  CEOs believe the availability of private funding sources is significantly less compared to 2009.
•  A new question was added in 2010 regarding CEOs' plans to hire workers. There is optimism among CEOs that they will hire in 2010, as adding full-time and part-time workers was ranked above the midpoint on the scale.
•  Having enough time is still CEOs most challenging issue, although keeping up with technology has moved up in the ranking.
•  New questions about social media were added to the section relating to information technology. One-third of CEOs said they have a policy concerning social media usage for employees.

The project partners will continue to benchmark the results from the 2010 survey and monitor, discuss and analyze the state's progress. A full summary of the report can be found online at: www.inceosurvey.com.

This morning we met with the chief managing director of Eli Lilly India, Sandeep Gupta.  The delegation was greeted with large bouquets of flowers, lit candles and the tilaka (the name for the Indian dot) was placed on our foreheads.  It was most definitely a warm and friendly greeting.

The Lilly Indian facility was started in 1993 as a joint venture with Ranbaxy Labs.  They currently have over 430 employees and became a Lilly subsidiary in 2001.  Sixty percent of their portfolio focuses on diabetes and another 20 percent on oncology.

India does not yet have a comprehensive patent system.  They did pass a law in 2005 indicating that patents could be obtained and protected in India, but it's been a very slow implementation process.  As a result, there are very few patents, which can prevent companies, like Lilly, from having an even larger presence.

The cost of health care was a topic in this meeting.  The Indian leaders believe health care costs in the U.S. are higher because the U.S. spends a large amount of money on research and development, where most countries do not invest as much in finding cures.  Ninety percent of new molecules discovered are discovered by the U.S.

Of course, pharmaceuticals were also discussed.  Brand name pharmaceuticals are important in India.  The U.S. may have one brand name and several generic brands.  In India, they have multiple brand names and people pay a lot of money for the brand names.  Even with the focus on brand names, 650 million Indians have no access to any medicine – brand name or generic.  Likewise, 80 to 90 percent of Indians are without health care insurance.

We were able to learn about India during or visit to the Lilly facility.  India has approximately 1.2 billion people, four times the number of people in the U.S.  Sixty percent of the Indian population is less than 30 years old, so it's a very young country.  They feel like their current government is very progressive and they reward innovation and try to reduce bureaucracy.

I've mentioned the vast difference in the living standards in rural and urban areas.  Seventy-one percent of the population lives in rural areas and 29 percent live in urban areas.  Population growth is slowing, but the literacy rate is rising, particularly with women.

The impact of the global economy is much less significant on India than with other countries.  For instance, although the global economic downturn affected India, it did not impact it nearly as negatively as some other countries.  India does not have a heavy reliance on exports.   They rely on their own domestic consumption.  They are "domestically led," which means they are somewhat insulated from global downturns and are much less volatile.

India has the fourth largest economy in the world.  In 2014, they expect to pass Japan and become the third largest economy.  Fifty-five percent of their economy is service based.  Their economy used to be 25 percent agriculture, but that's down to 19 percent.  The percentage involved in manufacturing has also decreased, but the service industry has increased.  They compare and contrast themselves frequently to China.  They point out that a large part of China's economy is manufacturing.

While at Lilly, we had a “town hall” type of meeting with the employees and local leaders.

After we left Lilly, we met with Vilasrao Dagadojirao Deshmukh, the minister of heavy industries and public enterprises for the government of India..  He talked about the various industries the government is involved in.  They are running airlines, making watches, running utilities, and a lot of other industries started because of a void from the lack of interest in private companies.  The government is competing with the private sector.  They are in a position now of turning some of these government initiatives into joint ventures and public/private partnerships.

Later in the day, we met with a senior partner in the Indian law firm of Seth Dua and Associates.  The firm has 34 attorneys, which by India’s standards is mid-sized.  Comparatively, Ice Miller has over 250 attorneys.  In India, you must be an Indian lawyer to practice law.  Several of the large law firms recently got into trouble for practicing law when they were not licensed to do so.   U.S. attorneys cannot even advise Indian companies.

Next we met with the minister of urban development, Jaipal Reddy.   The government is taking the problem of housing for the poor very seriously, although this is an overwhelming issue.

This evening there was a reception for the delegation.  The food was fantastic.  It poured down rain, but within a few minutes the heat had dried up all the moisture.

On the very last day in India we were able to visit the tomb of Mahatma Gandhi.  It was a solemn place.  Gandhi derived most of his principles from Hinduism, but believed all religions to be equal.  He was an avid theologian and read extensively about all major religions.  As we left the tomb, I was surrounded by Indian families who wanted to take pictures with me and their children.  I assume it was unusual for them to see the western attire and blonde hair.  There was a high terrorist alert so we were unable to visit any other locations.  We were advised to stay in our hotel, especially me as a blonde female.  It made me realize how I can take for granted how safe we are in the U.S.

We are now on our way home!  I’m ready to be back in Indiana, but I look forward to applying the lessons from this trip to helping Indian companies have even more economic success.

The trade delegation visited Agra, India today.  Agra has a substantial industrial base.  Many manufacturing plants and industry related wholesale markets are prominent here.  In addition to learning about these economic contributors, we were also able to see first hand how the city handles tourism and its impact on Agra's economy.  We were able to visit one of the seven wonders of the world, the Taj Mahal, also known here as "the Taj."

The Taj Mahal has a very important role in the economic viability of Agra.  This magnificent masterpiece attracts from two million to four million visitors each year.  More than 200,000 of those visitors come from overseas.

The Taj Mahal was built by Emperor Shah Jahan as a mausoleum for his third (and favorite) wife, Mumtaz Mahal, who died during the birth of their 14th child.  Construction for the mausoleum began in 1632 and was completed in 1653.  It serves a reminder of the great love story between Shah Jahan and Mumtaz Mahal and what a beautiful reminder it is.

The mausoleum is made completely out of white marble.  The marble is translucent so that, depending on the time of day, it either reflects a pink or white hue.  Within the mausoleum, there are beautiful flowers and vines made up of precious jewels which come from all over the world.  When light hits the flowers, you can see all different shades of red, orange, yellow, green and pink.

The Taj Mahal is built along the banks of the Yamuna river and has two smaller castles on either side.  It is amazing.  I am astounded when I think of the amount of labor and craftsmanship it took to create this piece of art.

On our way to Agra we visited remote areas of India, which have a completely different standard of living than the large cities.  There are wild monkeys everywhere.  When we were at a stop sign or toll road, the monkeys would climb on our vehicle.  There are also wild boars and cows walking around.  Along the rural streets we saw things Americans are used to seeing inside of a home: sleeping, eating, taking a bath, shaving, washing clothes, getting a haircut.  There are a lot of vendors on the street who sell fresh fruit and vegetables.  Refrigeration isn't common in the rural areas, so the street vendors play an important role in supplying fresh produce.

The rural areas also don't have running water.  They use water from the rivers for their daily needs.  It's a very hot time of year and the rivers are very low.  Because of that, you can actually see the trash and pollution in the water.  That was very sad.

In some of the mid-sized cities, cows are in the middle of the road.  We had an interesting experience when a man came up to our bus playing his flute.  He was charming a snake to come out of its container.

I've blogged about some of my thoughts about India and its culture, but I also want to include comments from a few of my fellow delegates.

Bryce Bennett:
The delegation went to Agra today to look at tourism and how the economy can be improved by creating opportunities for employment in the tourism industry.  We saw the different sides of India along the way, from the grand Taj Mahal to the poverty in the slums and the unfortunate living conditions to the environment that has been spoiled along the Indian highways.  It has been a very rewarding experience to learn more about the Indian culture.  We look forward to bringing the ideas and thoughts that we have generated from our trip back to Indiana, and Indianapolis in particular, for the benefit of our citizens.

Sanjay Patel:
We took a trip to Agra today, leaving Delhi around  6 a.m.  From a large city, the nation's capital, we drove through the rural agricultural areas.  We saw the big city lights and were able to compare it to the rural life and heart of Indians working day in and day out just to make it.  We ended up at the Taj Mahal.  I've seen it twice before, but it was much more special this time.  As an adult I can appreciate the true history and architecture of it and the work that went behind it.  We've had the opportunity to really take in what this country stands for.  My parents are from India, so I've been here several times.  This particular trip has opened my eyes on the economic opportunities we can bring back to Indiana.

This morning the delegation met with the Confederation of Indian Industry, which is an entity similar to a Chamber of Commerce.  During this meeting we talked with the executive director of Mahindra, Arun Nanda.  Mahindra is a $6.3 billion company that employs over 100,000 people across the globe.  They manufacture and market utility vehicles and tractors.  They also have a significant presence in information technology (IT), financial services, tourism, infrastructure development, trade and logistics.  The company has three plants in the U.S. (Texas, Tennessee and Georgia) that manufacture tractors and they cater to what they call the "hobby farm market."

We then met with members of the Bombay Chamber of Commerce and Industry, and Dr. Atindra Sen, director general of the chamber. The chamber was established in 1836 and is the oldest chamber in India.  The chamber has 20 subcommittees that focus on different segments of industry such as legal affairs, agribusiness and international trade.

During my conversations with Indian business leaders I've observed that clean technology and "green" or environmentally friendly practices are not widely used in India.  This may be an opportunity for various industry segments within the U.S. to bring their expertise to this market.

What this market is very interested in is quality.  This has been a shift partly because labor costs are increasing and, as a result, product quality has become a focus. 

We've also talked a great deal about the Indian legal system.  In general, the legal system is not highly trusted and people believe someone's word is sufficient to reach an agreement.  The legal system is based on common law and has been largely influenced by the British rule, so it's very similar to our system; however, there are some differences.  They have no juries and no tort law.  Areas such as real estate, corporate, commercial or most types of business transactions are very similar to the U.S. which make it desirable for U.S. companies to want to do business here.  An interesting fact I learned about the court system is that the India Supreme Court is clogged with property cases and it would take approximately 300 years to handle all of the property cases on the current docket.

I referenced a study by Dr. Geert Hofstede on intercultural business communications in my last post.  One area he studied is the Power Distance Index (PDI).  The PDI is a reflection on how much a culture does or does not have hierarchical relationships and respect for authority.  As I've mentioned, India places great importance on hierarchy.  For countries with a high PDI, like India, the study says that people can expect to encounter more bureaucracy in organizations and government agencies.  The property case backlog in the India Supreme Court is a prime example of this indicator.

After the meetings, we went to the Gateway of India, which is a monument located on the waterfront in the Apollo Bunder area in South Mumbai.  The Gateway is an 85 foot high arch.  It was used by fishermen as a jetty and later renovated to be used as a landing place for British governors and other dignitaries.  The arch combines both Hindu and Muslin architectural style and is striking.

During my visit I've come to appreciate many beautiful aspects of Mumbai.  The city lies on the Arabian Sea and has stunning views.  The Bandra Worli Sea Link bridge enhances the beauty of this coastline.  The bridge was recently completed and took six years to build.  It is an operator billed bridge, which means an operator provides the capital to build the bridge and owns it for a certain number of years, possibly 10 years or more, and gets the toll money that then pays for the building of the bridge.

Although Mumbai is a beautiful city, the traffic and congestion hinder its appeal.  Traffic is so bad that very large corporations use helicopters to transport people locally rather than dealing with the traffic.  Because it's so crowded and congested, it's acceptable to be late for appointments, although it's more acceptable to be late when you're meeting with government officials than corporate leaders.  People also honk constantly.  Honking is not considered rude and is used as a way of letting someone know that they're close to you. 

So with all the stress from traffic, how do people relieve the tension?  One way is cricket.  Cricket is the number one sport in India and it's everywhere.  If you go by any park, there are always people playing cricket.  As I mentioned in my last post, it's summer here and the temperature is about 106.  It's incredibly humid and very hot and people are still outside playing cricket!