Latest Developments, June 11

In the latest news and analysis…

Dangerous business
The UN News Centre reports that World Health Organization head Margaret Chan has singled out “big business” as a top threat to the fight against non-communicable diseases:

“ ‘It is not just Big Tobacco anymore. Public health must also contend with Big Food, Big Soda, and Big Alcohol. All of these industries fear regulation, and protect themselves by using the same tactics.’
She said these tactics include front groups, lobbies, promises of self-regulation, lawsuits, and industry-funded research that ‘confuses the evidence and keeps the public in doubt.’
They also include gifts, grants, and contributions to worthy causes that cast these industries as respectable corporate citizens in the eyes of politicians and the public, she added. They include arguments that place the responsibility for harm to health on individuals, and portray Government actions as interference in personal liberties and free choice.

‘Let me remind you. Not one single country has managed to turn around its obesity epidemic in all age groups. This is not a failure of individual will-power. This is a failure of political will to take on big business.’ ”

IP enforcement
The Guardian reports that a new draft agreement gives the world’s poorest countries an eight-year “grace period” instead of the exemption from international intellectual property laws that they had sought:

“ ‘They should have gotten more,’ says Sangeeta Shashikant, of the Third World Network, an NGO with offices in Geneva. ‘Eight years is nothing, really. The conditions in [least developed countries] aren’t really going to change in eight years.’
A handful of rich countries – led by the US and the EU – were reportedly adamant in their opposition to the LDCs’ proposal, which would have allowed the countries to maintain their exemption from the intellectual property rules for as long as they remained officially classified as LDCs.

If LDCs were to lose their exemption, any of the countries that failed to comply with the Trips agreement would be open to lawsuits under the WTO’s dispute settlement system. While it would be unlikely for a developed country to challenge an LDC in that forum, rich nations could use LDCs’ non-compliance to pressure them in other ways, such as by withholding aid money.”

Lethal aid
Reuters reports that the US could decide as early as this week to help arm Syria’s rebels:

“U.S. officials are adamant that Washington will not put ‘boots on the ground,’ which means deploying troops.
Fredrick Hof, a former senior U.S. official who worked on Syria policy, said the administration might decide to take charge of the distribution of weapons to the rebels, but not necessarily to provide U.S. arms.”

Boundless Informant
The Guardian reports that the National Security Agency’s newly revealed surveillance program extends well beyond monitoring communications within the US:

“A snapshot of the Boundless Informant data, contained in a top secret NSA ‘global heat map’ seen by the Guardian, shows that in March 2013 the agency collected 97bn pieces of intelligence from computer networks worldwide.
Iran was the country where the largest amount of intelligence was gathered, with more than 14bn reports in that period, followed by 13.5bn from Pakistan. Jordan, one of America’s closest Arab allies, came third with 12.7bn, Egypt fourth with 7.6bn and India fifth with 6.3bn.”

Thinking ahead
The Blue Planet Project’s Meera Karunananthan writes that events in El Salavador, where a ban on metal mining is being considered, show how difficult it can be for a “developing” country to protect its fresh water:

“Meanwhile, both [US-based] Commerce Group and [Canadian-based] Pacific Rim are using a World Bank trade tribunal to circumvent community consent and state regulation. They are suing the Salvadoran government for more than $400m through the International Centre for the Settlement of Investment Dispute (ICSID), whose mandate is to protect investment rights.

As scientists and world leaders deliberate on how to fix the global water crisis, there should be greater international support for communities and countries attempting to forge new paths away from water-destructive economies. If El Salvador overcomes the odds and becomes the first country in the world to ban metal mining, it could serve as a model for a world grappling with the threat of an imminent water crisis.”

State secrets
CBS News reports on documents suggesting the US State Department covered up allegations of serious wrongdoing by its staff:

“In such cases, [Diplomatic Security Service] agents told the Inspector General’s investigators that senior State Department officials told them to back off, a charge that [former Inspector General investigator Aurelia] Fedenisn says is ‘very’ upsetting.
‘We were very upset. We expect to see influence, but the degree to which that influence existed and how high up it went, was very disturbing,’ she said.
In one specific and striking cover-up, State Department agents told the Inspector General they were told to stop investigating the case of a U.S. Ambassador who held a sensitive diplomatic post and was suspected of patronizing prostitutes in a public park.”

BG Group v. Argentina
Bloomberg reports that the US Supreme Court has agreed to hear a case in which a British oil and gas company is trying to obtain a $185 million award from Argentina’s government for capping natural gas prices in 2002:

“BG says the price freeze caused the bankruptcy of Metrogas SA, an Argentine gas distributor it previously controlled. BG says that, had it filed suit, it would have been punished under Argentine law and excluded from negotiations designed to mitigate the effects of the price cap.
The Obama administration urged the high court to reject the BG appeal, saying the appeals court reached the right decision.”

Let them eat cake
Oxfam’s Mohga Kamal-Yanni writes that the IMF, which may soon agree to lend millions to Egypt, does not seem to share Egyptians’ primary concerns, which she lists as “bread, freedom, social justice”:

“Instead, [the IMF] narrowly focuses on three economic measures: removing fuel subsidies, increasing the General Sales Tax (GST), and floating the pound, despite the clear signs of unrest among ordinary Egyptians as they have already started to suffer the impact of the fuel crisis.

And other ways to improve the fiscal and economic situation are not being taken seriously by either the government or the IMF. Civil society and academics have proposed measures such as progressive taxation, taxing the stock exchange, or removing fuel subsidies for rich people and energy-intensive industry. The IMF’s typical answer is that these measures would take time and not raise sufficient revenue.”

Latest Developments, December 15

In the latest news and analysis…

Park eviction
The Guardian reports on allegations that members of Kenya’s Samburu community have suffered violent abuse since being evicted from land sold to a pair of US-based charities.
“The London-based NGO Survival International said the Samburu were evicted following the purchase of the land by two American-based charities, the Nature Conservancy and the African Wildlife Foundation.
The groups subsequently gifted the land to Kenya for a national park, to be called Laikipia National Park.

A community leader, who did not wish to be named, described police harassment as enormous. He said police beat people, burned manyattas or traditional homesteads and carried out arbitrary arrests during the period leading up to and including the eviction last year. He said they also confiscated many animals and the intimidation has continued.”

State sues investor
Reuters reports that Brazilian prosecutors are suing Chevron and Transocean for $10.6 billion and are seeking to suspend their Brazilian operations over a November offshore oil spill.
“The case will add to already-large legal headaches for both companies. Chevron has already faced years of litigation over alleged pollution by Texaco, a company it bought, in Ecuador’s Amazon region decades ago.
Chevron was ordered by Ecuadorean courts in February to pay damages of $18 billion. The suit is now under appeal in Ecuador, and the dispute is also being reviewed by an international arbitration tribunal. Transocean was the rig operator in the giant four-billion-barrel Deepwater Horizon spill in the Gulf of Mexico in 2010.”

Investor sues state
The Inter Press Service reports on a protest outside a World Bank tribunal that is hearing a lawsuit brought by a Canadian mining company against the government of El Salvador for refusing to grant permits for a project along the country’s main water source.
“Pacific Rim, which has insisted long insisted that it would use the most up-to-date environmental technology and methods to ensure the integrity and health of the river, brought its suit under an “investor-state” provision of the 2005 Dominican Republic-Central American Free Trade Agreement (DR-CAFTA).
That provision allows corporations to sue governments over actions that allegedly reduce the value of their investments.

DR-CAFTA is an agreement strictly between the U.S. and Central American countries. Because Pacific Rim is based in Canada, which is not party to DR-CAFTA, it created a U.S. subsidiary in Nevada in 2009 to press its case before the tribunal, after it could not persuade the Salvadoran government to back the mining plan.”

Investment regulation
A new report released by the Bretton Woods Project warns of the dangers of international financial flow volatility and argues poor countries must take measures to guard against foreign investment surges and stops.
“Even more effective would be policies in rich countries to tackle the risks from capital flows at their source. This includes better overall financial regulation, but consideration should be given to specific capital flows policy in source country. More regional and international coordination on capital account regulation, particularly enforcement of rules, would help developing countries deal with financial flows more effectively. Ultimately, a more ambitious global framework agreement could reinforce mutually consistent management techniques across source and destination countries.”

Mining fraud
The Financial Times reports on resentment in Ghana resulting from the perception that foreign mining companies are getting rich off the country’s resources and giving little back in return.
“One lawyer employed by a gold miner in the 1990s told the FT that the company he worked for systematically falsified its accounts to underestimate profits, thereby depriving the state of millions of dollars in taxes.
There are growing suspicions in government circles that similar tax fraud, known as transfer pricing, has been exercised systematically by companies in the sector.”

Illicit financial flows
A new report released by Global Financial Integrity estimates “developing” countries lost $903 billion to illicit financial outflows in 2009 (which is actually lower than the 2008 figure), capping a decade in which they lost $8.44 trillion.
“It would be encouraging to find that the 2009 reduction in illicit outflows occurred because of stronger governance within countries and more transparent financial dealings between countries. There is little indication that this is yet the case. The need for combined global effort to curtail illicit financial flows is more urgent than ever. We are pleased to note that the G20, OECD, World Bank, and others are beginning to take this issue much more seriously.”

An important distinction
ECONorthwest’s Ann Hollingshead draws a distinction between the concepts of “ill-gotten money” and “illicit financial flows,” which have markedly different economic impacts on poor countries.
“The [World Bank] authors study what they term ‘ill-gotten money,’ which they define as ‘money derived (illegally acquired) from crime and tax evasion.’ This includes not only illicit cross-boarder transfers and assets held abroad, but also illicit transfers and assets held and transferred domestically. The difference between this concept and illicit financial flows is important. The economic effect of a criminal activity alone is quite different than the economic effect of a criminal activity with a corresponding transfer of cash internationally. Or the economic effect of an illicit cross-boarder transaction where the underlying activity itself was not illicit.”

Legal corruption
The New York Times reviews Harvard law professor Lawrence Lessig’s new book, Republic, Lost, in which he explores the idea of legal corruption.
“There is, in his view, one thing holding back America, a legal but corrupt system of campaign finance. ‘Practically every important issue in American politics today is tied to this ‘one issue,’ ’ he writes. Mr. Lessig’s agenda (invoking Thoreau) is to attack ‘the root, the thing that feeds the other ills, and the thing that we must kill first.’
Existing campaign finance reforms, particularly donor disclosure and contribution limits, have done as much harm as good, leading to ‘a corruption practiced by decent people’ and legitimizing what Mr. Lessig calls ‘a gift economy.’ Disclosure of the identities of contributors has made the venal routine. The system ‘normalizes dependence,’ Mr. Lessig writes. ‘There’s is no shame in the dance.’ ”

Latest Developments, November 22

In the latest news and analysis…

Mining tax precedent
Australia’s proposed 30 percent tax on the country’s mining industry, which is “being eyed by other resource nations in South America and Africa,” has passed the parliament’s lower house by 73 votes to 71.
“[Prime Minister Julia] Gillard wants the new tax on mining profits to pay for a company tax cut and boost pensions, helping to spread the benefits of Australia’s resources boom to other parts of the economy struggling with the global downturn.
‘This is a way in which all Australians share in the bounty of the mining boom,’ Treasurer Wayne Swan told parliament.”

Surging investor-state lawsuits
A new Institute for Policy Studies report indicates that the number of lawsuits brought before international tribunals by oil, gas and mining companies against “governments seeking to increase the benefits of those resources for their own people” has risen sharply along with commodity prices in recent years.
“Under free trade agreements and bilateral investment treaties, foreign investors have the right to file such “investor-state” lawsuits in international tribunals to demand compensation for government actions that reduce their profits.
This newly updated edition of “Mining for Profits” finds that at the most frequently used tribunal, the International Center for Settlement of Investment Disputes (ICSID), 43 of 137 pending “investor-state” cases are related to oil, mining, or gas. By contrast, one year ago there were only 32 such cases and 10 years ago there were only 3.”

Transparency not enough
A new report by the University of British Columbia’s Philippe Le Billon argues  initiatives to improve governance of the extractive industries tend not to go far enough.
“Among other priorities, transparency initiatives should demand higher disaggregation of information disclosed by extractive companies and host governments. Transparency requirements should extend beyond revenues to licensing, contracts, physical resource flows, and other production factors, as well as to public expenditure. Extractives transparency initiatives also need to integrate elements of the tax justice and tax evasion agendas in order to expand their relevance to the effort to reduce illicit financial flows.”

Accessible innovation
Intellectual Property Watch reports on a conference marking the 10th anniversary of the Doha Declaration on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and Public Health, which addressed the question of how to encourage innovation while keeping medicines accessible to the world’s poor.
“‘The sustainability of access at the end of the day is going to come back to the issue how you finance R&D,’ [James Love, director of Knowledge Ecology International] said. Love argued that it is essential to de-link the prices of medicines and the development of new medicines in order to fulfil ‘the promise of Doha’ and access to medicines for all.”

Supply and demand
Agence France-Presse reports on a new World Wildlife Fund assessment of the palm oil market which suggests that, despite improvements, companies are not doing enough to ensure the oil they buy comes from sustainable sources.
“Palm plantations are considered one of the biggest threats to rainforests in countries like Malaysia and Indonesia — the source of 85 percent of world palm oil supply — as virgin forests are typically cleared to make way for them.

The scorecard focuses on major companies in Europe, Australia and Japan, the world’s biggest palm oil markets.
About 5.2 million tonnes of certified sustainable palm oil was produced last year — roughly 10 percent of world supply — but only 56 percent was purchased, the WWF said.”

Unsustainable food
The International Institute for Environment and Development uses the example of ketchup to illustrate how unsustainable the global food industry is.
“Analysis of the steps involved in processing ketchup – from farming the tomatoes through to packaging – to transporting and retailing that symbol of American mass consumerism reveals an alarming fact. To produce it requires a mind-boggling 150 separate processes, across several continents, according to research cited in a new book by the International Institute for Environment and Development.
It’s just one small part of a ‘staggeringly inefficient’ food system according to the new book Virtuous Circles. When the overall energy costs for producing food are taken into account – including farm machinery, transportation, processing and packaging – ‘the modern food system consumes between ten and fifteen calories of fossil fuel energy for every calorie of food energy (nutrition) produced.’”

Just say no (to the war on drugs)
The Overseas Development Institute’s Jonathan Glennie argues wealthy, recreational drug-consuming countries need to renounce the war on drugs in order to “save west Africa from a fate worse than Mexico.”
“Clearly an end to prohibition will not end the problems created by the war on drugs at a stroke, nor the problems created by drugs themselves. The gangs that are now so powerful in Colombia, Mexico and elsewhere engage in many types of crime including people trafficking and kidnapping. But one of their largest sources of income would be decimated, as prices fall in a regulated market.
Insiders are more hopeful than ever that an end to global prohibition is possible within a decade. Both Barack Obama and David Cameron, the leaders of two of the most important drug-consuming nations in the world, are on the record in their opposition to the war on drugs before they were elected. If they followed through on their promise of a rethink they could go down in history as the leaders that began one of the most important global policy shifts of our time.”

Symbolic justice
Princeton University’s Richard Falk writes about past and present efforts to address the double standard of victors’ justice that has been the international norm since the end of World War II through “societal efforts to bring at large war criminals to symbolic justice.”
“The existence of double standards is part of the deep structure of world politics. It is even given constitutional status by being written into the Charter of the United Nations by allowing the five permanent members of the UN Security Council, that is the winners in 1945, to exercise a veto over any decision affecting the peace and security of the world, thereby exempting the world’s most dangerous states, being the most militarily powerful and expansionist, from any obligation to uphold international law.”