Latest Developments, December 19

In the latest news and analysis…

Creative corrupter
The New York Times has published an extensive report on retail giant Wal-Mart’s corrupting influence in Mexico, based on evidence from “tens of thousands of documents” and interviews with government officials and company employees:

“The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.

Over and over, for example, the dates of bribe payments coincided with dates when critical permits were issued. Again and again, the strictly forbidden became miraculously attainable.”

First acquittal
Reuters reports that the International Criminal Court has handed down its second-ever decision, acquitting Congolese militia leader Mathieu Ngudjolo Chui:

“The court’s first verdict found [Thomas] Lubanga guilty of recruiting child soldiers to another militia in the same conflict in Ituri. Some observers said the different outcomes of the trials for militia leaders from different tribes could cause new friction.
‘Lubanga was a Hema leader, and the acquittal of a Ngudjolo, a Lendu, just after the conviction of a Hema could exacerbate tension between the two ethnicities in Ituri,’ said Jennifer Easterday of the Open Society Justice Initiative.”

Calling it off
Association Sherpa has ended its partnership with French nuclear giant Areva, calling the company’s health measures in Niger and Gabon “public relations exercises”:

“The arrival of Luc Oursel at the head of Areva coincided with a change in the culture of the company in terms of sustainable development and as a result, led to a questioning of its capacity to respect the letter and spirit of the 2009 agreements:

  • While the 2009 accords led to the much-needed medical monitoring of over 700 African workers, it is incomprehensible and unacceptable that the compensation process, which benefited the families of two French expatriates (a patently insufficient number), offered nothing to any Nigerien or Gabonese workers even though the medical condition of more than 100 of them was examined;
  • The decontamination of [Gabon’s] Mounana site, where production stopped in 1999, promised by [former CEO] Anne Lauvergnon, has stalled. It was carried out only partially and unsatisfactorily, with the result that local populations are still exposed to radiation risks;” [Translated from the French]

Aid hypocrisy
The Guardian reports on the UK’s Department for International Development’s “breathtaking arrogance” for demanding transparency from recipient governments while refusing to make public a report on its own expenditures:

“The department said releasing the report could “undermine DfID’s commercial interests and lead to DfID incurring greater expense which would consequently undermine our ability to fulfil our role and to achieve value for money in the use of public funds”.
Disclosure could also reveal personal data about individuals, make other governments and international organisations less willing to share information with Britain, and ‘severely prejudice the policy development process’ within government by inhibiting open discussion, it said.”

Good intentions
The Financial Times reports that American legislation aimed at ending the role of minerals in fuelling DR Congo’s conflict is making matters worse so far:

“ ‘We’re getting the opposite of what they wanted. And we still have conflict,’ says Emmanuel Ndimubanzi, head of North Kivu provisional government’s mining division, who says tens of thousands of jobs across the sector have been lost. A proposal in the act to spend $25m to help out-of-work find jobs and fund mineral tracing schemes was dropped.

The landmark US [Dodd-Frank] act has created the first compulsory framework to disclose the provenance of potential conflict minerals across the industry. But beset by delays, loopholes and vague guidance, it has complicated and impeded initiatives by industry, regional governments and international donors, as well as the UN and OECD. These include tagging schemes, chains of documentation and a mineralogical ‘fingerprinting’ pilot scheme already under way.”

Nuclear stagnation
Inter Press Service reports that the Federation of American Scientists has warned that the US and Russia are reducing their nuclear arsenals at a slowing rate:

“ ‘Both the United States and Russia appear to be more cautious about reducing further, placing more emphasis on “hedging” and reconstitution of reduced nuclear forces, and both are investing enormous sums of money in modernising their nuclear forces over the next decade,’ [FAS Nuclear Information Project director Hans M. Kristensen said.]

Given the new data, the implication is that either a new set of arms-reduction treaties will need to be agreed in coming years, or each country will need to embark on new unilateral programmes of reduction. If neither of those takes place, ‘large nuclear forces could be retained far into the future.’ ”

Tarnished reputation
The Montreal Gazette reports on calls from both inside and outside Canada for Ottawa to hold the country’s mining companies to account for their behaviour abroad:

“But as mining investment has exploded over the last decade, so too have conflicts involving Canadian mines, from the Pueblo Viejo mine in the Dominican Republic, where 25 people were injured in clashes with police in September, to the Pierina mine in Peru, where one person was killed that same month. (Both are mines owned by Barrick Gold, but protests are not restricted to Barrick mines.)
All the while the Canadian government’s role in defending, even promoting, mining companies’ interests has solidified.”

Global ambulance chasers
CorpWatch reports on a growing and lucrative branch of law that involves suing governments on behalf of corporations:

“Legal experts have denounced this trend. ‘Investment treaty arbitration … imposes exceptionally powerful legal and economic constraints on governments and, by extension, on democratic choice, in order to protect from regulation the assets of multinational firms,’ writes Professor Gus van Harten of the Osgoode Hall Law School in Toronto.

There are five major arbitration tribunals that take on these cases – the World Bank’s International Center for Settlement of Investment Disputes (ICSID) in Washington DC, the Permanent Court of Arbitration (PCA) in the Hague, the Court of International Arbitration (LCIA) in London, the International Chamber of Commerce (ICC) in Paris and the Chamber of Commerce in Stockholm (SCC).

The number of such lawsuits registered at the ICSID has skyrocketed. In 1996, just 38 cases were under arbitration but by 2011, this had risen almost 12 fold to 450.”

Latest Developments, December 12

In the latest news and analysis…

Canada out of Kyoto
The New York Times reports that mere hours after the international community agreed at the Durban climate change conference to extend the Kyoto Protocol, Canada has become the first country to withdraw from the accord.
“‘Kyoto, for Canada, is in the past,’ the environment minister, Peter Kent, told reporters shortly after returning from South Africa. He added that Canada would work toward developing an agreement that includes targets for developing nations, particularly China and India.
‘What we have to look at is all major emitters,’ Mr. Kent said.
Under the Kyoto Protocol’s rules, Canada must formally give notice of its intention to withdraw by the end of this year or else face penalties after 2012.
The extent of those penalties, as well as Canada’s ability to redress its inability to meet the treaty’s emission reduction targets, is a matter of some debate.”

Trade mispricing
Global Financial Integrity’s Sarah Freitas writes that the Philippines lost an estimated $142 billion due to illicit financial flows over the last decade, but that corruption and bribery accounted for a relatively small part of that amount .
“The study found that the majority of the illicit outflow, US$113.7 billion, is due to the mispricing of imported and exported goods. Trade mispricing is a phenomenon where individuals and corporations use fraudulent commercial invoices to smuggle money out of the country, usually in order to facilitate tax evasion. A large corporation or very wealthy individual in the Philippines will trade with a counterpart in another country, but will manipulate the price and quantity of exported goods to send more money offshore than represented by what they report to the government. The individual or corporation then collects the extra money later, usually in a bank account in a tax haven or secrecy jurisdiction.
This means that while the Philippines has seen significant outflows from corruption, bribery, and kickbacks, their biggest priority when addressing illicit capital flight should be to tackle trade-related tax evasion.”

Slow start
The Guardian reports that after 40 years of mining uranium in Niger, the French state-owned company Areva has agreed to begin monitoring the health of its employees.
“Deaths from respiratory infections occur at almost twice the national average in Arlit, according to Greenpeace. In a 2010 report, the organisation found water wells in Akokan contaminated with radiation levels up to 500 times higher than normal, and radioactive scrap metal for sale at local markets. Meanwhile, mining activity has drained almost 300bn litres of water from aquifers, key water sources in the desert.”

Biofuel crimes
A new report produced jointly by the Food and Agriculture Organization and Transparency International suggests the troubles with the growing biofuel industry go beyond issues of food security.
“The drive to find alternative energy sources to mitigate climate change has resulted in a rush of money to related investments in countries. Yet many countries with governance and corruption challenges are considered among the most attractive destinations for biofuel investment.
In the case of Colombia, the rapid expansion of the cultivation of palm oil has been linked to reports of paramilitaries, hired by private interests, allegedly pushing poor communities off their land to increase the available area for planting.”

Boycott fever
Forbes blogger E.D. Kain writes about the Florida Family Association’s efforts to get companies to pull their advertising dollars from TLC’s reality TV show All-American Muslim, a campaign the group claims has succeeded with 65 of the 67 companies it pressured.
“The FFA’s statement on the matter reads: ‘‘All-American Muslim’ is propaganda clearly designed to counter legitimate and present-day concerns about many Muslims who are advancing Islamic fundamentalism and Sharia law… The show profiles only Muslims that appear to be ordinary folks while excluding many Islamic believers whose agenda poses a clear and present danger to the liberties and traditional values that the majority of Americans cherish.’”

Durban disappointment
Oxfam’s Tim Gore argues that the final deal that came out of the Durban climate summit prioritized legal obligations over ambition and equity.
“Many developing countries are concerned the terms of the new agreement will pressurise them to act in the same vein as developed countries. The impassioned appeals of India and others to keep fairness at the heart of the new regime are not reflected in the text of the final agreement, which makes no distinction between the relative effort required by large and small historic and per-capita polluters, or between the richest countries and those where millions of people still live in poverty and hunger.”

Ecosocialism
In a Q&A with People of Colour Organize!, British Green politician and activist Derek Wall discusses the concept of ecosocialism and answers whether “zero growth” is possible in a capitalist system.
“The short answer is no. Firms compete to make profit. Those who make the most profit can reinvest in capital and with more efficient machinery they out compete other firms.
Firms have to make profit to survive. It’s not a case of wicked capitalists but instead a system with a built in growth imperative.
The problem is, from declining oil to diminishing fish stocks, an environmental wipeout is occurring.”

Dangerous game
In an Al Jazeera interview, Columbia University economist Jeffrey Sachs talks about the madness, as he sees it, of the American financial system.
“And the problem that the Occupy Wall Street and other protesters have is: you don’t deserve it, you nearly broke the system, you gamed the economy, you’re paying mega fines, yet you’re still in the White House you’re going to the state dinners, you’re paying yourself huge bonuses, what kind of system is this?
When I talk about this in the United States, I’m often attacked, ‘oh, you don’t believe in the free market economy’, I say, how much free market can there be? You say deregulate, the moment the banks get in trouble, you say bail them out, the moment you bail them out, you say go back to deregulation. That’s not a free market, that’s a game, and we have to get out of the game. We have to get back to grown-up behaviour.”