Latest Developments, February 1


In the latest news and analysis…

Legal letter
The Twittersphere has uncovered, seemingly thanks to the Globe and Mail’s Geoffrey York, a 2011 letter addressed by American law firm McKenna, Long & Aldridge to Senegalese President “His Excellency Maitre Abdoulaye Wade” who is currently facing mass protests over his decision to seek a third term in contravention of the country’s constitution.
“It is indeed an honor to consult with you and to provide representation for The Office of the President with respect to your efforts to seek a third term as President of The Republic of Senegal. I will lead a team of lawyers and professionals at McKenna Long & Aldridge (hereinafter “MLA”) who have been assembled to research and analyze your authority to seek a third term under the Senegalese Constitution and other relevant laws, create a white paper that discusses our conclusions, and develop and implement an agreed upon protocol for sharing these findings with appropriate officials and interested parties in the United States and in The Republic of Senegal.”

Drone suit
The Washington Post reports the American Civil Liberties Union has filed a suit against the US government in order to obtain documents pertaining to its use of drones, though only insofar as they involve the targeted killings of US citizens.
“The lawsuit, filed in the U.S. District Court for the Southern District of New York, charged the Justice and Defense departments and the CIA with illegally failing to respond to requests made in October under the Freedom of Information Act (FOIA). It cited public comments made by President Obama, Defense Secretary Leon E. Panetta and other officials in arguing that the government cannot credibly claim a secrecy defense.

‘The request relates to a topic of vital importance: the power of the U.S. government to kill U.S. citizens without presentation of evidence and without disclosing legal standards that guide decision makers,’ the complaint said.

Mining suit
The Montreal Gazette reports a group of NGOs has asked the Supreme Court of Canada to decide whether a Canadian mining company can be held liable for its alleged involvement in a massacre in the Democratic Republic of Congo eight years ago.
“The group says Anvil Mining Ltd. provided logistical assistance, such as planes, trucks and drivers, to the Congolese military during a rebel uprising in Kilwa, a town near the Dikulushi copper and silver mine the company owned in the Central African country until 2010.
That year, the five-member Canadian Coalition Against Impunity asked the Quebec Superior Court to approve a class-action suit on behalf of relatives of an estimated 100 victims.
Anvil Mining contested the court’s jurisdiction and lost – but that ruling was overturned last week by the Quebec Court of Appeal.”

Coronary capitalism
Harvard University’s Kenneth Rogoff uses the example of the food industry to suggest the “pathological regulatory-political-economic dynamic” of the financial sector is present throughout Western capitalism.
“Highly processed corn-based food products, with lots of chemical additives, are well known to be a major driver of weight gain, but, from a conventional growth-accounting perspective, they are great stuff. Big agriculture gets paid for growing the corn (often subsidized by the government), and the food processors get paid for adding tons of chemicals to create a habit-forming – and thus irresistible – product. Along the way, scientists get paid for finding just the right mix of salt, sugar, and chemicals to make the latest instant food maximally addictive; advertisers get paid for peddling it; and, in the end, the health-care industry makes a fortune treating the disease that inevitably results.”

Colonial plant policy
Jeune Afrique reviews a new book by Serge Volper that explores how colonial powers not only took resources from Africa but also imposed the forced production of cash crops with implications that are being felt to this day.
“But the most effective way to meet certain requirements rested on another form of constraint. ‘The colonial system imposed monedy,’ Volper explains. ‘The prevailing barter system – commodities for manufactured products – evolved when the colonizer introduced taxation. The people then had to work to obtain the money necessary to pay taxes…’ Obviously, the crops that would best feed the population were not on the list of priorities. Based on climate, workforce and land, the different regions under French control were pushed to develop specific crops. Cocao in Côte d’Ivoire, peanuts in Senegal, bananas in Guinea, vanilla in Madagascar. Only cotton production did not meet with success, which did not come until after independence.” (Translated from the French.)

Math problem
ECONorthwest’s Ann Hollingshead explains why a recent Global Financial Integrity report estimating illicit financial outflows from Mexico at $18.7 billion per year – of which $15.3 billion is attributable to transfer mispricing – used a non-traditional method for reaching that figure.
“[Author Dev] Kar does not net out ‘reversals’ or illicit inflows from his estimates. This diverges from more traditional models, where economists do subract illicit inflows from illicit outflows, resulting in a lower ‘net’ estimate of capital flight. But this gives a skewed picture. Illicit inflows [Editor’s note: I changed “outflows” to “inflows” here to correct what I believe is a typo], because they are illegal by definition, are not supplementing the domestic economy in the same way an illicit outflow is detracting from it.

Why should laundered money offset the damage of tax evasion?”

Raising the CSR bar
In light of the ongoing controversy over Dow Chemical’s association with the 2012 London Olympics, the Institute for Human Rights and Business’s Salil Tripathi argues future organizers should extend the ideal of excellence to corporate responsibility by subjecting prospective sponsors to a rigorous screening process.
“It is clear that a quick check of company reputation isn’t adequate. Reputation surveys are notoriously subjective. Nor can the existence of corporate sustainability policies be sufficient: there are many companies that have policies in place which commit them to respect human rights, to act in a responsible manner, to operate in a sustainable way, and to obey the law. And yet, many companies still end up committing or being associated with abuses. The new UN Guiding Principles on business and human rights – which provide the authoritative due diligence steps all companies need to take, including to track and monitor performance – are a promising yardstick to deploy. Companies that can effectively demonstrate they are acting in line with this international framework should in theory pass such a screening.”

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