Latest Developments, November 15

In the latest news and analysis…

Vulture funds
The Guardian reports there are growing calls for the UK to close a legal loophole that allows so-called vulture funds to use Jersey courts to collect money from poor countries.
“Vulture funds legally buy up worthless debt when countries are at war or suffering from a natural disaster and defaulting on their sovereign debt. Once the country has begun to stabilise, vulture funds cash in their cheap debt deeds, at massively inflated cost to the countries.
In the case before the Jersey court, to be decided next month, FG Hemisphere, run by vulture financier Peter Grossman, is trying to collect $100m from the DRC on a debt that appeared to start out at just $3.3m. The original debt was owed to the former Yugoslav government to build power lines.”

Gibraltar tax ruling
Agence France Presse reports Europe’s highest court has ruled against a tax reform proposed by the UK for its territory of Gibraltar, on the grounds that it would constitute state aid to offshore corporations.
“The system was ‘specifically designed’ so that companies with no real physical presence could avoid taxation because it would be based on the number of employees and the size of business premises occupied in Gibraltar, the court said.
The assessment to levy the tax ‘excludes from the outset any taxation of offshore companies, since they have no employees and also do not occupy business property,’ the court said.”

Growing inequality
Euromonitor has released a new report that suggests global inequality is on the rise – “high net worth individuals” increased their wealth by nearly 10 percent in 2010 – and is likely to continue growing in the years ahead.
“It is possible for governments to help narrow the gap between rich and poor by introducing various redistribution mechanisms, such as social welfare programs, minimum wage legislation, higher taxes for the rich and better educational opportunities for the poor,” according to Euromonitor’s Gina Westbrook. “However, many governments are trying to tackle their growing debt troubles, leaving very little financial room for investing in efforts to ease the plight of the poor.”

Toxic dumping trial
Netherlands-based oil and metals trader Trafigura is back in a Dutch court appealing a million-euro fine for illegally exporting toxic waste that was subsequently dumped in Cote d’Ivoire, while the prosecution is seeking a penalty twice that large, as well as the overturn of acquittals for the city of Amsterdam and the Amsterdam Port Services.
“On July 2, 2006, toxic residues on board the Probo Koala were prevented from being offloaded for treatment in Amsterdam’s port and redirected to Abidjan, where they were dumped on city waste tips.
Trafigura, which denies any link between the waste and subsequent deaths and has an independent experts’ report backing its stance, reached out of court settlements for 33 million euros and 152 million euros in Britain and Ivory Coast that exempted it from legal proceedings.
But a United Nations report published in September 2009, found ‘strong’ evidence blaming the waste for at least 15 deaths and several hospitalisations.
The dumping caused 17 deaths and thousands of cases of poisoning, Ivorian judges said.”

Resource extraction harm reduction
The UN News Centre reports on a new book on exploitation of natural resources in post-conflict settings, which includes advice for the international community whence most extractive industry companies originate.
“The publication stresses four areas where international support can be helpful which include providing help to post-conflict countries so they secure better contracts with companies extracting natural resources, increasing transparency in payments and decision-making, supporting the monitoring of companies extracting natural resources, and encouraging strategic planning using revenues to provide immediate gains to the population.”

Reviving cluster munitions
Human Rights Watch’s Steve Goose says the US is leading the fight against the elimination of cluster munitions in negotiations, currently underway in Geneva, to establish a new draft law that would permit the “continued use, production, trade, and stockpiling” of weapons 111 countries have already agreed to ban outright.
“The [Convention on Certain Conventional Weapons] proposal would also establish a terrible precedent in international humanitarian law, adopting for the first time an instrument with weaker standards after one with stronger standards has already been embraced by most nations. The trend has been for the law to grow progressively stronger, with ever greater protections for civilians.”

Free trade opposition
Al Jazeera’s Patty Culhane blogs about the Asia-Pacific Economic Conference in Hawaii, the proposed Trans-Pacific Partnership and protesters not sold on the benefits of international free trade.
“The bottom line for these protesters is that they feel the expanding global economy means their culture is being replaced, their resources exploited and their natural wealth taken. It is true that tourism here means much of the money made goes back to the giant hotel chains. There are jobs, but is it better to be paid to clean up after tourists, or to work in a field? That isn’t really the question I’m learning. They don’t all necessarily want to go back to what they had, but they want a bigger share of what is here now.”

Arab Spring media spin
The University of Michigan’s Juan Cole contends the Western media’s coverage of the Arab Spring as a purely political protest was tactically motivated.
“If the revolutions in Tunisia, Egypt and Libya were merely about individualistic political rights – about the holding of elections and the guarantee of due process – then they could be depicted as largely irrelevant to politics in the US and Europe, where such norms already prevailed.
If, however, they centred on economic rights (as they certainly did), then clearly the discontents of North African youth when it came to plutocracy, corruption, the curbing of workers’ rights, and persistent unemployment deeply resembled those of their American counterparts.
The global protests of 2011 have been cast in the American media largely as an “Arab Spring” challenging local dictatorships – as though Spain, Chile and Israel do not exist. The constant speculation by pundits and television news anchors in the US about whether “Islam” would benefit from the Arab Spring functioned as an Orientalist way of marking events in North Africa as alien and vaguely menacing, but also as not germane to the day to day concerns of working Americans. The inhabitants of Zuccotti Park in lower Manhattan clearly feel differently.”

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.”