Latest Developments, December 5

In the latest news and analysis…

Unravelling social contract
A new report by the Organisation for Economic Co-operation and Development says its member countries are experiencing their highest levels of inequality in over 30 years and calls on governments to revise their tax systems so that wealthy individual pay “their fair share of the tax burden.”
“Launching the report in Paris, OECD Secretary-General Angel Gurría said ‘The social contract is starting to unravel in many countries. This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that greater inequality fosters greater social mobility. Without a comprehensive strategy for inclusive growth, inequality will continue to rise.’”

Ethiopia’s financial losses
Global Financial Integrity’s Sarah Freitas estimates that Ethiopian losses due to illicit financial outflows amounted to $3.26 in 2009, which was more than the combined value of the development assistance it received and the products it exported.
“What can be done? The first step the international community should take is to hamper the ability of corrupt and tax-evading Ethiopians to launder their money in the global financial system.  This could be accomplished by establishing a global system of automatic exchange of tax information. In this way, Ethiopian authorities could much more easily track the bank accounts their tax evaders have established around the world. Furthermore, the G20 governments could push for an end to shell companies by calling for beneficial owners of all companies, trusts and foundations to be known to government authorities.  This would make it far more difficult for the corrupt and the criminal to hide their ill-gotten gains behind a wall of corporate secrecy.”

SEC contrivances
Butler University’s Mike Koehler, a.k.a. the FCPA Professor, writes about a recent court ruling in New York that pertains to the Securities and Exchange Commission’s practice of resolving cases – whether involving allegations of foreign bribery or not – without requiring an admission or denial of guilt from the defendants.
“In prior cases, Judge Rakoff has said that this policy contributes to a ‘facade of enforcement’ (SEC v. Bank of America) and is a ‘stew of confusion and hypocrisy unworthy of such a proud agency as the SEC.’ (SEC v. Vitesse Semiconductor)
Last week, Judge Rakoff, in denying the SEC-Citigroup settlement, again had pointed words as to the SEC settlement device typically used in FCPA enforcement actions.

‘An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous.  The injunctive power of the judiciary is not a free-roving remedy to be invoked at the whim of a regulatory agency, even with the consent of the regulated.  If its deployment does not rest on facts – cold, hard, solid facts, established either by admissions or by trials – it serves no lawful or moral purpose and is simply an engine of oppression.’
Judge Rakoff stated that the ‘SEC, of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency’s contrivances.’”

IP enforcement
Intellectual Property Watch reports that a group of civil society organizations has sent a letter to the World Intellectual Property Organization to express concerns over the UN agency’s “approach to enforcement” regarding piracy and counterfeiting.
“The signers highlighted a lack of transparency about WIPO technical assistance activities, the extensive link being made to public health and safety (which they called “questionable and tenuous at best”) as led by industry, and the possibility that WIPO enforcement activities might be undermining existing flexibilities in IP law. Signers included AIDS groups, digital civil liberties groups, and organizations working on development on the ground in countries around the world.”

Asbestos pushing
Canada’s biggest opposition party is criticizing the government for throwing its weight behind the country’s controversial asbestos industry during negotiations for a trade agreement with India.
“In response to questions from [International Trade critic Brian] Masse, the Chief Negotiator for the Canada-India Comprehensive Economic Partnership Agreement admitted Canada is currently working to eliminate tariffs on asbestos exports to India. Currently there is a 10 per cent duty on asbestos exports to India, the world’s second largest consumer of asbestos.
‘We already dump hundreds of thousands of tons of asbestos each year into developing nations – and now we want to make it easier for asbestos magnates to do so?’ said MP Pat Martin (Winnipeg Centre). ‘This is deplorable and Canadians need to let their government know they will not put up with this any longer.’”

Blood diamond casualty
Global Witness has announced it has left the Kimberley Process, a certification program it helped establish in the hopes of cleaning up the international diamond trade.
“The Kimberley Process’s refusal to evolve and address the clear links between diamonds, violence and tyranny has rendered it increasingly outdated, said the group. Despite intensive efforts over many years by a coalition of NGOs, the scheme’s main flaws and loopholes have not been fixed and most of the governments that run the scheme continue to show no interest in reform.”

A greener Green Revolution
In a Q&A with the Inter Press Service, International Fund for Agricultural Development President Kanayo Nwanze calls for a new kind of agricultural revolution.
“The Green Revolution was successful because it focused on very clear messages: increased fertiliser use, increased improved seeds and irrigation. But we found out in the long term that it is not sustainable. So now we need to look for sustainable approaches to production that do not destroy the environment and are available to a wide spectrum of farmers in Africa and in the world as a whole.”

Transnational coordination
University of California at Santa Barbara’s William Robinson argues the current “global political economy can no longer be contained through consensual mechanisms of social control” and predicts a protracted period of conflict.
“It is noteworthy that those struggling around the world have been shown a strong sense of solidarity and are in communications across whole continents. Just as the Egyptian uprising inspired the US Occupy movement, the latter has been an inspiration for a new round of mass struggle in Egypt. What remains is to extend transnational coordination and move towards transnationally-coordinated programmes.

In my view, the only viable solution to the crisis of global capitalism is a massive redistribution of wealth and power downward towards the poor majority of humanity along the lines of a 21st-century democratic socialism in which humanity is no longer at war with itself and with nature.”

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