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Latest Developments, October 26

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In the latest news and analysis…

License to bribe
Main Justice reports that a co-author of a US Chamber of Commerce proposal to water down the Foreign Corrupt Practices Act has just become the FBI’s general counsel.
“In its report ‘Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act’ the Chamber said that the FCPA is a costly burden to business and ‘there is also reason to believe that the FCPA has made U.S. businesses less competitive than their foreign counterparts who do not have significant FCPA exposure.’ The paper called for five specific reforms including limiting a company’s ‘successor liability’ for the prior actions of a firm it has acquired and giving a clear definition of ‘foreign official’ under the statute.
The Open Society Foundation, a George Soros-funded organization issued a report, charging that [Andrew] Weissmann’s plan would ‘significantly reduce the scope and efficacy of the FCPA while substantially undermining more than 30 years of successful U.S. leadership in promoting global anti-corruption standards.’ ‘[T]he Chamber’s proposal looks more like a license to commit pervasive and intentional bribery than a modest attempt to eliminate the risk of prosecutorial over-reach,’ the report said.”

Proposed EU legislation I: A victory for transparency
Tearfund’s Jonathan Spencer welcomes proposed EU legislation that would require extractive industry companies listed in Europe and operating abroad to disclose what they pay to host governments on a project-by-project basis.
“[This information] will play a key role in releasing resources for development, improving transparency and engaging citizens with their governments. Evidence from other countries has shown that where details of budgets and projected expenditure is published, the money is much more likely to reach its intended destination and support development.”

Proposed EU legislation II: Bad for business
But a number of the companies – including Anglo American, Rio Tinto, Shell and Total – that would be subject to the proposed legislation have argued in a letter to the European Commission that such regulations are misguided and would be bad for business.
“One example is oil or gas fields which cross borders, where governments are understandably careful to safeguard the confidentiality of the terms they offer to investors,” said the letter.
“Further damage to competitiveness will be caused by the additional cost and administrative burden of project-level reporting.”

Proposed EU legislation III: No legal teeth
On the other hand, France’s Citizen Forum for Social and Environmental Responsibility argues the European Commission’s proposal lacks legal teeth.
“In fact, notwithstanding progress in certain areas such as reporting obligation, the [European Commission’s] statement on social and environmental responsibility does not address other crucial questions. The proposal lacks concrete measures to improve the legal responsibility between the parent company and its subsidiaries: companies based in Europe cannot, therefore, be considered responsible for violations perpetrated by their subsidiaries and subcontractors in the South. Nor does the statement spell out the legal avenues that would guarantee real access to justice for all victims of violations.” (Translated from the French.)

South-South cooperation
The Guardian has reproduced part of an IRIN series on how countries like Brazil, India, China and South Africa are changing the world of aid as they become increasingly significant donors.
“Many are not new at all – India, Brazil and China have been giving aid for decades – but what is new is that a group of non-western donors is giving more humanitarian and development aid year on year, and reporting it more consistently to official trackers, such as the UN’s Financial Tracking System (127 donors reported aid in 2010).
As they “emerge”, the traditional hegemony held by western donors over how and where aid is dispersed is starting to be dismantled.”

South-South colonization
While many within the development industry speak of the growing importance of South-South cooperation, Al Jazeera uses the issue of African land grabs to raise the question of possible South-South colonization.
“What would Gandhi say today were he to know that Indians, who were only freed from the shackles of colonialism in recent history, were now at the forefront of this “land-grabbing” as part of the race for foreign control over African land and resources; currently being called the Neo-Colonialism of Africa?,” ask the Ethiopian authors of an open letter to the people of India.

One-step solutions
The University of Ottawa’s Rita Abrahamsen argues that attempts to rein in trading of “conflict minerals” are well-intentioned but may not be particularly helpful for ending African conflicts.
“The danger is that by making illegal mining the only story about the conflict in eastern Congo, other causes—requiring more complex solutions—will be ignored. Meanwhile, the international community will invest vast sums in cumbersome tracking procedures that may be easily avoided in an environment of weak institutional capacities and porous borders.
Ultimately, then, the campaign against conflict minerals might do more to restore Canada’s image abroad and make Canadians feel like ‘good global citizens’ than it does to bring peace to the DRC.”

Size doesn’t matter
The UN Population Fund has released its annual State of World Population just as the number of Earth’s inhabitants is set to hit 7 billion, but its authors are more concerned with how people live than with raw numbers.
“Environmental journalist Fred Pearce echoes the view that a small proportion of the world’s population takes the majority of resources and produces the majority of its pollution.
The world’s richest half billion people— about 7 per cent of the global population— are responsible for about 50 per cent of the world’s carbon dioxide emissions, a surrogate measure of fossil fuel consumption. Meanwhile, the poorest 50 per cent are responsible for just 7 per cent of emissions, Pearce wrote in an article for Yale University’s “Environment 360” website. ‘It’s overconsumption, not population growth, that is the fundamental problem,’ Pearce argued”

Latest Developments, September 27

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Equitable IP
Intellectual Property Watch reports on the opening of the World Intellectual Property Organization’s annual meeting with participants discussing matters ranging from the UN agency’s so-called Development Agenda to the protection of traditional knowledge, folklore and genetic resources.
“Opening day statements from a number of governments praised the current positive environment at WIPO and cited work that is progressing. But they also ranged in focus. India called for continued attention to an “equitable” IP system that balances rights of innovators with costs to society of granting them monopolies.”

Health Impact Fund
New School University’s Sakiko Fukuda-Parr and Oxford’s Proochista Ariana “find much merit” in the idea of a Health Impact Fund that would provide incentives to develop treatments for illnesses that primarily affect the world’s poor, but they also raise a number of concerns on matters of distribution, intellectual property rights, and alliances.
“While healthcare is undoubtedly important, it is naive to assume that it provides the solution to the kinds of health problems the poor face today. It certainly is not the most cost-effective approach and as such less likely to be a sustainable solution to the growing burden of ill health. Efforts that address root causes (ranging from water and sanitation to housing conditions and livelihoods) will serve to alleviate more than just one disease and thereby have further reaching impact on the lives of the poor. The donor governments and their taxpayers, therefore, are more likely to improve health and sustain such improvements if they enhance their efforts at alleviating poverty more generally.”

Security Council fairness
The UN News Centre reports representatives of several West African nations have called for an end to the “intolerable injustice” of Africa’s exclusion from permanent Security Council representation.
“Mauritania’s Foreign Minister Hamady Ould Hamady called for Security Council reform that would include permanent representation for Africa and the Arab Group. ‘The Security Council must fairly reflect the will of the entire international community,’ he said.”

Arab Spring redux
The UN News Centre also reports on a warning that world leaders ignore inequality and political disenfranchisement at their peril.
“‘In a world linked by social media, the risk of a peoples’ uprising that transcends continents and borders is real. It is a kind of social chaos which we must prevent,’ said Surujrattan Rambachan, Trinidad and Tobago’s Foreign Minister, in his address to the annual general debate of the General Assembly yesterday.
‘The world must now more than ever allocate its resources equitably, ethically, sustainably and transparently.’”

Canadian bribery
TrustLaw’s Luke Balleny suggests that after taking nearly a decade just to establish a unit tasked with enforcing its foreign bribery laws, Canada is showing signs it may at last be getting tough.
“Since the Niko Resources prosecution, two more Canadian companies have been raided by the RCMP’s International Anti-Corruption Unit. The mining company Blackfire Exploration had its Calgary office searched on July 20 over allegations that the company bribed a Mexican mayor. Just over a month later, engineering giant SNC-Lavalin had its Ontario offices searched over possible corruption involving a $1.2 billion World Bank bridge project in Bangladesh.”

Hit ‘em where it hurts
The CBC reports on the operations of Canadian mining companies in Guatemala where much of the “violence revolves around the drug cartels and the mines” and their opponents are turning to Canadian courts for help.
“The latest is a multi million dollar claim against Hud Bay Minerals filed by 11 Mayan women allegedly raped when they were cleared off the land 4 years ago. The law suits are a new tactic in an old war – a war over land: – the government and the mining companies on one side, the Mayans and human rights workers on the other.”

Default and devalue
Martin Feldstein, a Harvard economist and top advisor in the Reagan administration, says the only way for Greece to save itself is to default on its debt even if the consequences for the eurozone could be dire.
“If Greece leaves the euro after it defaults, it can devalue its new currency, thereby stimulating demand and shifting eventually to a trade surplus. Such a strategy of “default and devalue” has been standard fare for countries in other parts of the world when they were faced with unmanageably large government debt and a chronic current-account deficit. It hasn’t happened in Greece only because Greece is trapped in the single currency.”

Krugman’s crisis
Princeton economist Paul Krugman undergoes a crisis of faith in his chosen field as he perceives among his colleagues a lack of historical understanding and of desire to learn the truth.
“In 1971 it was clear that economists knew a lot that they hadn’t known in 1931. Is that clear when we compare 2011 with 1971? I think you can actually make the case that in important ways the profession knew more in 1971 than it does now.”

Latest Developments, September 20

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In the latest news and analysis…

Drones in paradise
The Wall Street Journal reports the US military will begin launching armed drones from the Seychelles as it steps up its campaign against perceived terror threats in East Africa.
“The U.S. has used the Seychelles base for flying surveillance drones, and for the first time will fly armed MQ-9 Reapers from the Indian Ocean site, supplementing strikes from a U.S. drone base in Djibouti.”

Radical corporate transparency
A new Publish What You Pay report on 10 major extractive industry companies details the extent to which they rely on subsidiaries in “secrecy jurisdictions” – 2,083 such subsidiaries between the corporations examined – to maximize profits and, according to PWYP, deprive poor countries of massive amounts of income.
“This is why, in order to combat this veil of secrecy, PWYP Norway believes every company should publish their full revenues, costs, profits, tax and the amount of natural resources it has used, written off and acquired in any given year in every country it operates. This is known as country-by-country reporting (CBCR).”

Resource extraction and indigenous rights
The UN’s top expert on the rights of indigenous peoples, James Anaya, has released the results of an extensive questionnaire-based study that suggests natural resource extraction and other major construction projects are having adverse effects on indigenous communities around the world.
“The vast majority of indigenous peoples’ responses, many of which stemmed from the direct experience of specific projects affecting their territories and communities, rather emphasized a common perception of disenfranchisement, ignorance of their rights and concerns on the part of States and businesses enterprises, and constant life insecurity in the face of encroaching extractive activities,” according to Anaya.

Taking the long view
Mongolian President Tsakhia Elbegdorj spoke to Reuters about a law that bans mining in his country’s river and forest areas.
“Half of the territory is covered by exploration licenses. I think that’s enough,” he said.
“We have to save our wealth (for) our next generation.”

Massive Chevron payout looming?
A US appeals court has overruled a lower court’s decision that prevented Ecuadoran plaintiffs from collecting billions in damages (awarded by an Ecuadoran judge) from oil giant Chevron over pollution in the Amazon rain forest.
“In February, a judge in Ecuador ruled that Chevron should pay to clean up contamination in the oil fields where Texaco, bought by Chevron in 2001, once worked. But the company persuaded a U.S. judge to block enforcement, arguing that the verdict was the result of fraud. Chevron even filed a criminal conspiracy case against the Ecuadorans.”

Fraud refund
The Institute for Accountability in Southern Africa’s Paul Hoffman draws attention to a legal precedent he thinks should be relevant to the inquest called last week by South African President Jacob Zuma into a 1999 arms deal that is alleged to have involved bribes from a number of foreign companies.
“These findings, still good law, on the effect of bribes on contracts are the key to obtaining the refund of purchase prices paid to arms dealers who allegedly bribed their way into contention in the arms deals. A R70bn [US$ 9 billion] bonanza for taxpayers is surely a worthwhile endeavour.”

Abetting repression
The BBC reports UK-based Gamma International is denying that it supplied software to the ousted Egyptian regime so that it could monitor online voice calls and emails.
“The files from the Egyptian secret police’s Electronic Penetration Division described Gamma’s product as “the only security system in the world” capable of bugging Skype phone conversations on the internet.
They detail a five-month trial by the Egyptian secret police which found the product had ‘proved to be an efficient electronic system for penetrating secure systems [which] accesses email boxes of Hotmail, Yahoo and Gmail networks’.”

With friends like these…
Development consultant Ian Smillie says Western governments and the humanitarian organizations that serve as “fig leaves covering up the inattention” of the international community will have to start behaving very differently in Somalia if they want to help provide long-term solutions to the conflict-racked, famine-stricken country.
“None of the humanitarians, [the Canadian International Development Agency] included, has anything to say about the roller-coaster involvement of the West in Somalia, alternately arming, then aiding, then invading, then abandoning the country – then supporting an Ethiopian invasion that led to the rise of the extremist al-Shabaab militia and their brutal but entirely logical expulsion of Western aid workers.”

Intellectual property vs. cancer treatment
The Guardian’s Sarah Boseley writes that the UN conference on non-communicable diseases has focused almost exclusively on prevention rather than treatment, an outcome the US and EU lobbied hard to achieve.
“The pharmaceutical industry and its supporters in the EU and US where research and manufacturing takes place are very keen that nobody should get the idea that a declaration which allowed poor countries to bypass patents and obtain cheap copies of normally expensive Aids drugs should in any way be mentioned in the context of NCDs. That might open the doors to developing nations using the legislation to obtain new cancer and heart drugs – which make huge profits for the companies in the rich world.”

Patents around the world
The UN News Centre reports new figures showing the number of international trademark and patent application rose in 2010, though global distribution remains highly uneven.
“The top 10 patent offices accounted for approximately 87 per cent of all [trademark] applications in 2009, with the United States, Japan and China filing about 60 per cent of the total.”

Latest Developments, September 12

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Latest Developments is undergoing a change of format in order to free up more time for original Beyond Aid reporting. All constructive feedback is welcome.

In the latest news and analysis…

Corruption
The BBC’s Hugh Schofield places allegations former French president Jacques Chirac and his prime minister Dominique de Villepin accepted millions in cash from African heads of state within a historical context of often unsavoury relationship between France and its former colonies on the continent.
“Under the original arrangement, the African leaders guaranteed French access to mineral resources and arms contracts, and helped France maintain its standing on the continent. In return a French military presence more or less ensured their survival in power.”

Reuters reports US officials are looking into possible corruption involving the aerospace industry.
“According to a document obtained by Reuters, the FBI briefed other government agencies in June about a project focused on possible corruption associated with sales and maintenance contracts between aerospace companies and state-owned airlines.
While the aerospace industry has long been subject to such scrutiny, the new initiative focuses on sales and maintenance contracts on the commercial side, not in defense.”

Fiscal policy
Harvard economist Dani Rodrik argues European political leaders need to embrace fiscal unification if they want to save the eurozone.
“Yet this cannot mean that fiscal policy for, say, Greece or Italy would be run from Berlin. A common fiscal policy implies that the elected leaders of Greece and Italy would have some say over German fiscal policies, too. While the need for fiscal unification is increasingly recognized, it is not clear whether European leaders are willing to confront its ultimate political logic head-on. If Germans are unable to stomach the idea of sharing a political community with Greeks, they might as well accept that economic union is as good as dead.”

Megaconferences
The Institute of Development Studies’ Lawrence Haddad wonders whether the upcoming Busan and Rio+20 summits – on aid effectiveness and sustainable development, respectively – will actually lead to new thinking. He gets the ball rolling with a few suggestions of his own, including:
“Ditching the terms “developed” and “developing” countries and replacing them with new terms such as “sustainable developing countries” and “developing countries” to stress the work that the richer countries have to do. Germany might be in the former category and the USA and China in the latter (although strictly speaking no countries can be classified as sustainable developing countries if the collective action failure on emissions continues).” 

The Guardian reports a Rio+20 organizer believes it is necessary to “un-environmentalize” sustainability discourse in order to win over new converts.
“The effort to broaden the principles of the original 1992 Rio Earth summit are likely to prove controversial. Supporters say the world needs a new, more inclusive approach to sustainability that emphasises the benefits to humanity because current efforts to protect nature are failing. Critics warn the increased emphasis on technology and markets will simply greenwash destructive levels of consumption and development.”

Resource extraction
The Globe and Mail’s Barrie McKenna takes Canada, home to about three quarters of the world’s mining companies, to task for its reluctance to implement the Extractive Industries Transparency Initiative.
“It wouldn’t be easy, of course…But a little more regulation and some federal-provincial stress could prove a lot more palatable than a reputation for spawning companies that run amok in the world.”

In an excerpt from his upcoming book on ethical investment, NAJ Taylor draws on the example of Australian miner Rio Tinto to suggest that investors are complicit in the misdeeds of the companies that earn them money.
“Behind the headlines of the global financial crisis is a deeper, more systemic fault line that rewards rampant capitalism. Too many invest in and operate mines such as Grasberg without any consideration of the ethics of so doing.”

La Paz-based freelancer Mattia Cabitza argues Peru’s new land law marks a radical departure from the region’s tendency to favour the interests of resource companies over those of indigenous populations.
“Against the wider backdrop of a struggle that pits the ancestral owners of untapped natural resources against greedy governments and corporations, Peru’s new law on the right of indigenous people to prior consultation may set a regional precedent in avoiding lengthy legal battles and, more importantly, in the prevention and reduction of social conflicts.”

Agriculture
The Guardian’s Mark Tran writes about some of the challenges that are likely to dominate this week’s G20 meeting on agricultural research and development.
“In their discussions on food security and self-reliance, ministers should be asking themselves what impact they will have on a woman farmer in Kenya with a few acres, who is struggling to grow crops on semi-arid soil to feed her family and generate income for school revenues.”

The Overseas Development Institute’s Steve Wiggins and Sharada Keats look at predictions for 2020 cereal prices that range from a significant increase to a gradual decline.
“The medium-term prospects for cereals prices depend much on policy. If too little is spent across much of the developing world on rural roads, health, education, water, and agricultural research and extension, then the outcomes could be as gloomy as those projected by Oxfam and Willenbockel. This applies all the more so if OECD countries do not support international public research for agriculture, and continue their beggar-my-neighbour polices of agricultural trade restrictions, and export and farm subsidies that distort world markets.”

 

Latest Developments, August 8

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Australia’s so-called Malaysia Solution is on hold for now. The country’s high court has said the Australian government may not have the legal authority to carry out the terms of the deal, which would involve sending 800 boat people to Malaysia to have their refugee claims processed in exchange for 4,000 who have been approved for permanent resettlement. Malaysia is not a signatory to the UN convention on refugees.

UNESCO head Irina Bokova has condemned last month’s NATO attack on Libyan state television that left 3 dead and 21 injured. “Media outlets should not be targeted in military actions,” she said, pointing to a 2006 UN Security Council resolution on the safety of media workers in conflict zones. Following the bombing, NATO justified its choice of targets: “Striking specifically these critical satellite dishes will reduce the regime’s ability to oppress civilians while [preserving] television broadcast infrastructure that will be needed after the conflict.” But Bokova appeared to head off this argument by saying “the NATO strike is also contrary to the principles of the Geneva Conventions that establish the civilian status of journalists in times of war even when they engage in propaganda.”

The US is eager to get more involved in Mexico’s escalating drug war but faces laws forbidding foreign soldiers or police from operating on Mexican soil, according to the New York Times. The solution so far has been the deployment of CIA agents, with possible reinforcements to come from private security contractors. Meanwhile, there will soon be 5,500 private troops operating under State Department command in Iraq, but “no one outside State knows anything more, as the department has gone to war with its independent government watchdog to keep its plan a secret,” according to Wired’s Spencer Ackerman.

There is much uncertainty in Somalia’s capital Mogadishu after Islamist rebels withdrew from the city over the weekend, leaving observers to wonder whether the move represents a retreat or simply a shift to guerrilla tactics. There also appears to be lingering confusion among humanitarian organizations in Al Shabab-controlled areas over strict US rules that are ostensibly meant to ensure the rebels do not benefit from foreign assistance but are having a chilling effect on groups looking to provide emergency food aid. “USAID says they want to move, they do want to get us funding, and from their perspective it’s all sort of green light, ready to go,” an anonymous aid official told the Huffington Post. “Maybe they’re not really understanding that NGOs are quite nervous, especially the American ones — and the European ones are taking their cues from the Americans.” US aid to Somalia dropped from $230 million in 2008 to below $30 million last year. But the White House has just announced an additional $105 million in emergency aid for the Horn of Africa, bringing the total up to $565 million for the year so far.

South Africa’s maternal mortality rate has “more than quadrupled over the last decade,” according to a new report by Human Rights Watch. But in a piece on Africa’s high rates of economic growth, Witney Schneidman, president of Washington-based consulting firm Schneidman & Associates International says “Africa’s moment is at hand.”  He praises South Africa where “for the past 15 years, the government has pursued an economic policy that has brought greater financial discipline and macroeconomic stability.” Schneidman does, however, concede South Africa “has a first-world economy” but “faces developing-world challenges.”

The Guardian reports on the Nigerian fishing village of Goi destroyed by oil spills and one of its inhabitants suing Shell in The Hague for reparations. Another piece in the same paper suggests Gaza’s new, Spanish-run five-star hotel provides “hope” in a place “where there are no tourists and around 70% of the population lives below the poverty line.”

In the ongoing punditry frenzy over credit rating agency S&P’s decision to downgrade the US debt slightly, “chutzpah” and “overreach” are two frequently recurring terms. Paul Krugman, who wrote last year that such agencies “were a big part of that corruption” which triggered the financial crisis in the first place, now compares S&P to a “young man who kills his parents, then pleads for mercy because he’s an orphan.” The author of a post on the Economist’s Democracy in America blog does not necessarily disagree but also sees plenty of chutzpah in those now blasting S&P: “So yeah, S&P failed to accurately identify the junk that made up those troublesome mortgage securities. But I can hardly fault them for trying not to repeat the mistake when evaluating the make-up of America’s political system, which is ultimately responsible for paying the country’s bills.” And the Overseas Development Institute’s Jonathan Glennie, sounding a little annoyed at the Americentrism of it all, asks via Twitter: “why has s&p overreached itself just because it has downgraded us bonds? Are its analyses of other countries less important!?”

Fraud lawyer Monty Raphael shows little enthusiasm for the UK’s new bribery act, arguing that without proper enforcement, “it will change little or nothing.” And while the act only deals with offences occurring since it came into force, he wants to see a mechanism to deal with “all the accumulated corruption committed before July 1 this year.” He calls for an integrated anti-corruption agency, along the lines of those currently operating in Hong Kong, Singapore and New South Wales. Recognizing that governments are not eager to take on new spending these days, he suggests: “Resources presently available can be channelled into a single investigation and prosecution agency with a wide remit, and with penal, civil and administrative powers. It should include within its remit Parliament, the legal system and all public and private sectors.”

Former World Bank economist Dennis Whittle praises his former employer for its attempts at “democratizing” development, by which he seems to mean the increased use of focus groups. “If the World Bank can make progress in this area,” he argues, “the payoff for the entire aid field could be large, both in terms of finding effective policies as well as catalyzing more openness and accountability.”