Latest Developments, September 19

In the latest news and analysis…

Strike over
Reuters reports that workers at Lonmin’s Marikana mine in South Africa have accepted a 22-percent pay increase to end six weeks of deadly labour unrest:

“The Marikana police shootings were the deadliest security incident since the end of white minority rule in 1994 and, for many South Africans, painfully recalled security force massacres of black demonstrators under apartheid.
In all, 45 people died in the Marikana unrest, which spread beyond Lonmin to other platinum firms around Rustenburg and some gold mines.”

Towards transparency
The Wall Street Journal reports that a “key panel of the European parliament” has voted in favour of proposed rules that would require oil, gas and mining companies to declare what they pay to foreign governments:

“Under the proposal approved Tuesday, companies would have to disclose all payments of more than 80,000 euros ($105,000) on a country-by-country basis, and would have to specify how much money was allocated to each project.

The rules approved by the committee would delete a provision in the European Commission legislation that exempted companies from making disclosures barred by the host country.”

Asbestos rebirth
The Montreal Gazette reports that a Canadian asbestos mine is expected to reopen despite the federal government’s decision to stop opposing the controversial mineral’s inclusion on a UN list of hazardous substances:

“Adding asbestos to the hazardous-substances list under the United Nations Rotterdam Convention would require exporting countries to inform importing countries about the hazards of using it, and to include safe-handling and proper precautionary measures.

Although other countries could try to block the addition of asbestos, it is Canada that has worked hardest to prevent that from happening, said Kathleen Ruff, a human-rights adviser to the Rideau Institute.”

Restricting restrictions
IRIN reports on a new study that calls on the World Trade Organization to ensure that poor countries are exempted from the food export restrictions of other nations:

“The WTO allows countries to impose export restrictions and bans as a temporary measure to address critical food shortages. But these restrictions affect poor countries, which buy most of their food supply, in two ways: They push food prices up globally, making it more expensive for poor countries to buy food, and they force food-importing countries to shop for deals long distances away.

In April 2011, the net food-importing developing countries (NFIDCs) submitted an informal proposal at the WTO for a new paragraph to be included in the draft Doha Accord exempting them and the [Least Developed Countries] from export restriction put in place by other countries. UN agencies and most food experts agree that export restrictions influence sharp spikes in prices, helping to drive food prices up during 2007/2008 crisis. At least 23 countries had either banned or imposed restrictions on the export of cereals then, according to the [International Centre for Trade and Sustainable Development] study.
The proposed exemption was not adopted by the WTO.”

Big fish
Agence France-Presse reports that the former head of French oil giant Elf has been extradited to Togo to face a charge of “accessory to fraud”:

“The former Elf CEO was questioned by a Togolese judge for about three hours Monday, following his lightning-fast extradition from Ivory Coast over the weekend.
His legal team had condemned the international transfer, which came the day after his arrest in Ivory Coast’s economic capital Abidjan on Friday as he tried to board an Air France flight to Paris.

[Loik] Le Floch-Prigent, currently an oil industry consultant, has already served jail terms in France for corruption which dated from his time as head of Elf from 1989 to 1993.”

High-frequency trading
The Bureau of Investigative Journalism reports that the UK is “trying to water down” efforts by European politicians to rein in a form of trading widely blamed for increasing volatility:

“Several influential MEPs are determined to clamp down on the use of sophisticated computer algorithms and fast connections to generate profits through huge numbers of high-speed trades, after seeing its role in the notorious 2010 US Flash Crash and the collapse of Knight Capital last month.

Fuelled by fears over potential market shocks and unease that markets appear dominated by speculators, the European parliament is cracking down on the industry through the revised Markets in Financial Instruments Directive (Mifid), which shapes financial markets across the European Union.”

Cookie-cutter justice
Wayne State University’s Peter Henning asks whether deferred and nonprosecution agreements make sense as “the new standard for how the [US] Justice Department deals with criminal conduct by corporations”:

“It seems as if we are coming perilously close to cookie-cutter justice in corporate criminal investigations. Everyone by now knows the drill: turn over the results of an internal investigation, highlight how damaging a conviction would be and then offer to pay the fine and put in place an enhanced compliance program. The press release almost writes itself, but it is the rare case in which senior management pays any price.
Deferred and nonprosecution agreements are here to stay because they give the Justice Department a means to police corporations while mitigating the full impact of the criminal law. They occupy a middle ground between the sledgehammer of criminal charges and giving a company a free pass.”

Asymmetrical delusions
Warwick University’s Robert Skidelsky argues that “current counter-insurgency orthodoxy” has not incorporated the lessons of Algeria and Vietnam:

“Even putting aside moral and legal questions – which one should never do – it is doubtful whether the strategy of torture and assassination can achieve its pacifying purpose. It repeats the mistake made in 1957 by [French General Jacques] Massu, who assumed that he faced a cohesive organization with a single command structure. Relative calm was restored to Algiers for a couple of years after his arrival, but then the insurgency broke out again with redoubled strength, and the French had to leave the country in 1962.
Today, the international community similarly misconceives the nature of the ‘war’ that it is fighting. There is no single worldwide terrorist organization with a single head. Insofar as Al Qaeda still exists at all, it is a Hydra that sprouts new heads as fast as the old ones are cut off. Trying to win ‘hearts and minds’ with Western goods simply corrupts, and thus discredits, the governments established by those intervening. It happened in Vietnam, and it is happening now in Iraq and Afghanistan.”

Latest Developments, December 7

In the latest news and analysis…

Climate loopholes
The Guardian reports that India is taking wealthy countries to task at the climate change talks in Durban, insisting they need to get serious about cutting emissions.
“To bolster its argument that rich countries must do more, India referred to a recent study by the Stockholm Environment Institute of the pledges made last year in Cancún by all countries. It shows that developing countries are pledging 30%-50% more cuts than the rich, and that the rich may be able to avoid taking any action whatever to meet their pledges by taking advantage of accounting loopholes.
Sivan Kartha and Peter Erickson of the Stockholm Environment Institute (SEI) said: ‘Developing countries pledges amount to more absolute mitigation than all developed countries. Unless accounting rules for Annex 1 countries are made more stringent, then Annex 1 countries will be able to formally comply with their pledges with very little actual mitigation and possibly none at all.’”

Climate debt
The Inter Press Service reports on opposition in Nepal to the government’s acceptance of millions of dollars in loans for climate change mitigation projects.
“‘Nepal has one of the lowest greenhouse gas emission levels in the world due to its low industrialisation,’ [secretary of the All-Nepal Peasants’ Federation, Hari] Parajuli adds. ‘It also has forests covering nearly 40 percent of its land. Yet, the developed countries that cause pollution are now seeking to make Nepal take loans and pay them interest.’
Parajuli says the protests are also against the involvement of the World Bank.
‘We don’t regard it positively,’ he says. ‘It is not service-oriented but works for profit.’”

Naming land grabbers
A new Oakland Institute report argues that at while the EU and US give food and emergency aid to victims of famine and war, their development and energy policies harm Africa’s people and environment.
“Development agencies including USAID and the World Bank Group are often the architects of these [unregulated land] deals that promise benefits for Africans but fail to deliver. Furthermore, the research shows that US and EU energy policies that tout the benefits of agrofuels and carbon credits–key elements of these land deals–are actually making climate change a bigger problem.

[The Oakland Institute’s Anuradha] Mittal noted that people can follow the supply chain to identify the bad actors–who claim benefits for Africa but seldom deliver: so-called developers who determine how land will be used (such as Iowa-based based AgriSol Energy and Texas-based Nile Trading Development), companies that grow non-food crops on the land (including Sun Biofuels and Addax Bioenergy), and groups that buy up agrofuels and timber (including major western airlines such as Lufthansa).”

Food speculation
A new report by the Centre for Research on Multinational Corporations (SOMO) argues for regulation of “purely financial speculation in commodity derivatives markets” that has spiralled out of control in recent years and is contributing to soaring food prices.
“SOMO calls on European governments to respect the precautionary principle enshrined in the Lisbon Treaty and to act decisively to bring back financial speculation in commodity derivatives markets. The European Parliament currently has an opportunity to do just this by strengthening the proposed Markets in Financial Instruments Directive and Regulation (MiFID and MiFIR).”

Calling out Soros
The FCPA Professor, the alter ego of Butler University’s Mike Koehler, accuses billionaire philanthropist George Soros of not walking his talk on foreign bribery.
“If the Soros funded Open Society Foundations believe that all corporations involved in [a Foreign Corrupt Practices Act] enforcement action have a “bad or wrongful purpose,” that current standards “simply do not permit successful prosecution of innocent, mistaken or unknowing persons” and that companies involved in an FCPA enforcement action are corrupt, then why does Soros Fund Management LLC invest in so many FCPA violators or companies subject to FCPA scrutiny?
The Fund’s recent 13F filing (in a 13F filing institutional investment managers disclose fund holdings) indicates substantial investments in the following companies that have recently resolved FCPA enforcement actions or are otherwise the subject of current FCPA scrutiny:  Alliance One International, El Paso, Flowserve, Halliburton, Hewlett-Packard, KBR, Motorola Solutions, Parker Drilling, Pfizer, Tidewater, Weatherford International, Tyco International, and Lyondellbasell Industries.”

Drone boom
The Electronic Frontier Foundation’s Trevor Timm argues that, with the unmanned aircraft market worth nearly $100 billion across more than 50 countries, the debate about drones needs to extend well beyond their use or misuse by the US military.
“Whether they are being used for surveillance or all-out combat, drones will soon pose serious risks for all of the world’s citizens. They can offer governments, police departments, or private citizens unprecedented capabilities for spying, and given their security vulnerabilities, the potential consequences could be endless.”

Treating symptoms
Dean Chahim, a University of Washington student and co-founder of the Critical Development Forum, calls on young people to engage in more political activism at home in order to change the global order.
“My generation has been sold a dogma of the individual as the solution to inequality and poverty. The older generation glorifies our individual achievements as “social entrepreneurs” while brushing the total failure of our economic system under the rug. Is it any wonder our youth think that if they start enough NGOs, go abroad two weeks at a time, design a new widget, or send a few bras – all will be well in the world?”

Spam tax
Oxfam’s Duncan Green mines the comments section of a Financial Times blog to provide a “lovely analogy” for a proposed financial transaction tax (Tobin/Robin Hood tax).
“Think of spam email: when sending emails is essentially free, sending out millions of spam emails can be profitable even if a fraction of respondents would take the bait. But if you had to pay even a nominal charge, even less than a penny, per email sent, that ‘business model’ would essentially become loss making in many cases. The Tobin tax would have a similar effect on a lot of this ‘phantom liquidity’ we get across many markets through high frequency traders – who, after all, are playing a zero sum game mostly, with their profits essentially being losses for a lot of other players. A small transaction cost might just be enough to discourage a lot of this socially useless activity.”