Latest Developments, February 29

In the latest news and analysis…

Pharma corruption
Reuters reports on global efforts to rein in corruption in the pharmaceutical industry, as multinational drug companies seek to expand their business beyond traditional markets.
“The drugs business is particularly exposed to corruption, Transparency International says: pharmaceuticals create vast opportunities for graft across both rich and poor countries. Its 2011 Bribe Payers’ Index ranks pharmaceuticals and healthcare 13th out of 19 industries on probity – a lower ranking than defense firms, though above mining and construction.

Over the past year eight of the world’s top 10 drugmakers – Pfizer Inc, Novartis AG, Merck & Co Inc, Sanofi, AstraZeneca, GlaxoSmithKline Plc, Johnson & Johnson and Eli Lilly & Co – have all warned that they may face liabilities related to charges of corruption in numerous overseas markets.
Investigations into potential wrongdoing by pharmaceutical firms cover activities in countries including Argentina, Brazil, Canada, China, Germany, Italy, Poland, Russia and Saudi Arabia, according to company filings. They also involve possible improper conduct of clinical trials, which are increasingly being run in lower-cost Asian or East European countries.”

Sustainable development?
The Gaia Foundation has released a new report that highlights the rate at which global extractive industries have grown over the last 10 years.
“For example, iron ore production is up by 180%; cobalt by 165%; lithium by 125%, and coal by 44%. The increase in prospecting has also grown exponentially, which means this massive acceleration in extraction will continue if concessions are granted as freely as they are now.

The rights of farming and indigenous communities are increasingly ignored in the race to grab land and water. Each wave of new extractive technologies requires ever more water to wrench the material from its source. The hunger for these materials is a growing threat to the necessities for life: water, fertile soil and food. The implications are obvious.”

Time limit
The Guardian reports the UK government plans to implement new rules that would require migrant workers earning less than £35,000 a year to leave after 5 years.
“Ministers hope changing settlement rights for skilled workers will put plans back on track to cut net migration from its current 250,000 a year to ‘tens of thousands’ by the next general election. They believe the £35,000-a-year earnings threshold will ensure only the ‘brightest and the best’ migrants settle in the UK. But critics say it will simply mean only the wealthy and the comfortable are able to come and live and work in Britain permanently.”

Power, Inc.
Foreign Policy’s David Rothkopf examines what it means to live in a world where large numbers of corporations have grown more powerful than most countries.
“Today’s corporations often conduct something very much like their own foreign policy. They launch active political advocacy campaigns, such as ExxonMobil’s lobbying to kill U.S. acceptance of the Kyoto Protocol. They undertake significant security initiatives, as in the company formerly known as Blackwater’s defense contracting during the Iraq war. They also provide health care, training, shelter, and other functions that states ought to but can’t or won’t provide.
The result is societies that are profoundly out of whack, with far too much power in the hands of massive, often distant corporate entities that are only accountable, fundamentally, to their shareholders. Meanwhile, the public is seeing that the increasingly weak institutions designed to give them a voice are unable to meet some of the most basic terms of the social contract, as the issues that need to be addressed are effectively beyond their jurisdiction.”

Remedy gaps
Haley St. Dennis of the Institute for Human Rights and Business argues the current US Supreme Court case pitting Nigerian plaintiffs against oil giant Shell is a “stark reminder” that voluntary corporate policies are not always enough to prevent environmental and human rights abuses.
“But clearly governments must be at the forefront in ensuring effective remedies. Under the state duty to protect, governments have an obligation to ensure access to justice through provision of effective judicial and non-judicial remedies accessible to all.

It is safe to say that whether or not the Supreme Court finds in favour of the Kiobel plaintiffs, the need for more accessible forums for national or international redress to answer grievances unable to be remediated locally will remain a priority on the public agenda. Given the high threshold of evidence involving international crimes, tort laws such as [the Alien Tort Claims Act] and similar international processes, though often arduous, offer more accessible options.”

The cost of complicity
In a Q&A with Embassy Magazine, the University of Massachusetts Amherst’s Léonce Ndikumana discusses African capital flight which, he says, “kills babies.”
“We then look at the linkages between external flight and external borrowing. Statistically we find that for every dollar that comes into Africa, between 40 and 60 cents comes out of the continent in the form of capital flight. Africa keeps 40 cents, but Africa is going to have to pay the whole dollar, because it’s the debt that they signed.

We emphasis the fact that capital flight is the result of mismanagement, corrupt management in Africa, but also complicity of foreign actors including banks that take this money being robbed from the continent and turn a blind eye and don’t ask any questions about a government official bringing a million to deposit.”

Creating new truths
J.D.M. Stewart, who teaches history at Toronto’s Bishop Strachan School, takes up the call issued by the Truth and Reconciliation Commission of Canada for the country’s students to be taught about the history of residential schools and their devastating impact on Aboriginal culture.
“As Mr. Justice Murray Sinclair, the TRC’s chair, wrote: ‘There is an opportunity now for Canadians to engage in this work, to make their own contributions to reconciliation, and to create new truths about our country.’ ”

Latest Developments, November 2

In the latest news and analysis…

Equity and sustainability
The UN Development Programme has released its new Human Development Report, in which it links the dual goals of global equity and sustainability – not for the first time, as illustrated by its quoting of another UN report from 1987.
“Many problems of resource depletion and environmental stress arise from disparities in economic and political power. An industry may get away with unacceptable levels of water pollution because the people who bear the brunt of it are poor and unable to complain effectively. A forest may be destroyed by excessive felling because the people living there have no alternatives or because timber contractors generally have more influence than forest dwellers. Globally, wealthier nations are better placed financially and technologically to cope with the effects of climatic change. Hence, our inability to promote the common interest in sustainable development is often a product of the relative neglect of economic and social justice within and amongst nations.” (emphasis in original)

A step backward
A group of NGOs is warning that international negotiations set for later this month in Geneva threaten to undo much of the progress to date on banning cluster munitions.
“Over the last few months, under pressure from several military powers that are opposed to the [Convention on Cluster Munitions], such as the United States, France has thrown it support behind a proposed international agreement, known as “Protocol VI” that would once again authorize the use of cluster munitions produced after 1980. A step backward, contradicting the norm established by the Convention, that would be unprecedented in international humanitarian law.
From Novermber 14th to 25th, country representatives will meet in Geneva to discuss the Convention on Certain Conventional Weapons (CCW) and will decide on the adoption of this new text. If it is passed, these barbaric weapons would once again be considered legitimate by certain states.” (Translated from the French.)

Corruption’s supply side
Transparency International has released a new Bribe Payers Index, which examines the “supply side of bribery” – the likelihood that companies from a given country or sector will offer bribes when operating abroad – and for the first time includes bribes paid between companies, rather than simply to the public sector.
“While this particular form of bribery remains largely overlooked by researchers and policy-makers, its impact is likely to be significant. Its effects can be felt through the entire supply chain, distorting markets and competition, increasing costs to firms, penalising the smaller companies that cannot afford to compete on these terms and those firms with high integrity that refuse to do so. This not only prevents a fair and efficient private sector but also reduces the quality of products and services to the consumer.”

Human trade
The Inter Press Service reports on the complex human trafficking networks that are flourishing in the Horn of Africa’s context of conflict, drought and hunger.
“According to one Kenyan human trafficking agent, the networks have links to politicians, senior police officers, non-governmental organisations, senior immigration officials, airline officers and resettlement officials in various countries.
‘These powerful people, including foreign diplomats and ministers in Kenya, have transformed access to foreign visas into a growth industry matched possibly only by piracy, selling visas for 10,000 to 15,000 dollars each to leaders of the networks,’ the agent says.”

EU reform fallout
The Centre for Research on Multinational Corporations (SOMO) has released a report suggesting the EU is undertaking financial reforms without regard for sustainability or their impact on poor countries.
“The new SOMO report provides some concrete recommendations on how the EU’s financial reforms need to be improved. All financial services, products and derivative trading need to be assessed for their risks and usefulness to society and the environment, as well as for financial stability. The supervisors and regulators of developing countries should have a say in the supervision and decisions concerning European banks that are operating in their country. Overall, speculative banking and financial markets need to be separated from retail banking and basic financial services, and that also means preventing financial links (e.g. loans) between banks and hedge funds.”

Due diligence
Following last month’s collapse of a French-owned hydroelectric plant in Panama, Counter Balance is calling on the European Investment Bank to investigate the troubled project for which it provided $220 million in loans.
“This is not the first problem with this project. In August 2010 a nearby village was flooded after the company opened a sluice. Other damage to private property was caused by detonations in the early stages of the construction. Additionally the Counter Balance report [published in the spring] lists a number of problems related to the project such as the excessive cost of the project (3 times higher than average for these projects), the alleged speculation on land which the company could buy below marked prices and the failure by the project promoters to properly consult local communities.”

There will be blood
The Courthouse News Service reports California-based Occidental Petroleum has been accused in a federal complaint of giving millions of dollars to a Colombian army unit whose alleged misdeeds included the killings of three union activists.
“The Colombian army provided security to an ‘association’ made up of [Colombia’s state oil company] Ecopetrol, Occidental and Spanish oil company Repsol, the plaintiffs say. Occidental’s Colombian subsidiary, Oxy Colombia, committed roughly $3 million to the army under the agreement, an amount ‘so large that Occidental’s U.S.-based leadership must have approved the 2004 Security Agreement,’ the complaint states.”

Enforcing transparency
The Taskforce on Financial Integrity and Economic Development has issued a statement ahead of the G20 summit in Cannes, in which it suggests concrete ways that world leaders can “focus on the underlying, systemic causes of the current financial crisis.”
“A free-market cannot flourish when rules of fair play are perverted by the corruption and legally-condoned tax cheating that has resulted from 30 years of de-regulation, liberalization and increasing financial secrecy provided by tax havens.
As the living standards and job prospects of billions of people suffer, the fundamental injustice of the current financial system has led to the groundswell of anger represented by the ‘Occupy’ movements around the world. Many of the ill effects currently suffered by ‘rich country’ economies have been endured by the developing world for decades.”