Latest Developments, February 1


In the latest news and analysis…

Legal letter
The Twittersphere has uncovered, seemingly thanks to the Globe and Mail’s Geoffrey York, a 2011 letter addressed by American law firm McKenna, Long & Aldridge to Senegalese President “His Excellency Maitre Abdoulaye Wade” who is currently facing mass protests over his decision to seek a third term in contravention of the country’s constitution.
“It is indeed an honor to consult with you and to provide representation for The Office of the President with respect to your efforts to seek a third term as President of The Republic of Senegal. I will lead a team of lawyers and professionals at McKenna Long & Aldridge (hereinafter “MLA”) who have been assembled to research and analyze your authority to seek a third term under the Senegalese Constitution and other relevant laws, create a white paper that discusses our conclusions, and develop and implement an agreed upon protocol for sharing these findings with appropriate officials and interested parties in the United States and in The Republic of Senegal.”

Drone suit
The Washington Post reports the American Civil Liberties Union has filed a suit against the US government in order to obtain documents pertaining to its use of drones, though only insofar as they involve the targeted killings of US citizens.
“The lawsuit, filed in the U.S. District Court for the Southern District of New York, charged the Justice and Defense departments and the CIA with illegally failing to respond to requests made in October under the Freedom of Information Act (FOIA). It cited public comments made by President Obama, Defense Secretary Leon E. Panetta and other officials in arguing that the government cannot credibly claim a secrecy defense.

‘The request relates to a topic of vital importance: the power of the U.S. government to kill U.S. citizens without presentation of evidence and without disclosing legal standards that guide decision makers,’ the complaint said.

Mining suit
The Montreal Gazette reports a group of NGOs has asked the Supreme Court of Canada to decide whether a Canadian mining company can be held liable for its alleged involvement in a massacre in the Democratic Republic of Congo eight years ago.
“The group says Anvil Mining Ltd. provided logistical assistance, such as planes, trucks and drivers, to the Congolese military during a rebel uprising in Kilwa, a town near the Dikulushi copper and silver mine the company owned in the Central African country until 2010.
That year, the five-member Canadian Coalition Against Impunity asked the Quebec Superior Court to approve a class-action suit on behalf of relatives of an estimated 100 victims.
Anvil Mining contested the court’s jurisdiction and lost – but that ruling was overturned last week by the Quebec Court of Appeal.”

Coronary capitalism
Harvard University’s Kenneth Rogoff uses the example of the food industry to suggest the “pathological regulatory-political-economic dynamic” of the financial sector is present throughout Western capitalism.
“Highly processed corn-based food products, with lots of chemical additives, are well known to be a major driver of weight gain, but, from a conventional growth-accounting perspective, they are great stuff. Big agriculture gets paid for growing the corn (often subsidized by the government), and the food processors get paid for adding tons of chemicals to create a habit-forming – and thus irresistible – product. Along the way, scientists get paid for finding just the right mix of salt, sugar, and chemicals to make the latest instant food maximally addictive; advertisers get paid for peddling it; and, in the end, the health-care industry makes a fortune treating the disease that inevitably results.”

Colonial plant policy
Jeune Afrique reviews a new book by Serge Volper that explores how colonial powers not only took resources from Africa but also imposed the forced production of cash crops with implications that are being felt to this day.
“But the most effective way to meet certain requirements rested on another form of constraint. ‘The colonial system imposed monedy,’ Volper explains. ‘The prevailing barter system – commodities for manufactured products – evolved when the colonizer introduced taxation. The people then had to work to obtain the money necessary to pay taxes…’ Obviously, the crops that would best feed the population were not on the list of priorities. Based on climate, workforce and land, the different regions under French control were pushed to develop specific crops. Cocao in Côte d’Ivoire, peanuts in Senegal, bananas in Guinea, vanilla in Madagascar. Only cotton production did not meet with success, which did not come until after independence.” (Translated from the French.)

Math problem
ECONorthwest’s Ann Hollingshead explains why a recent Global Financial Integrity report estimating illicit financial outflows from Mexico at $18.7 billion per year – of which $15.3 billion is attributable to transfer mispricing – used a non-traditional method for reaching that figure.
“[Author Dev] Kar does not net out ‘reversals’ or illicit inflows from his estimates. This diverges from more traditional models, where economists do subract illicit inflows from illicit outflows, resulting in a lower ‘net’ estimate of capital flight. But this gives a skewed picture. Illicit inflows [Editor’s note: I changed “outflows” to “inflows” here to correct what I believe is a typo], because they are illegal by definition, are not supplementing the domestic economy in the same way an illicit outflow is detracting from it.

Why should laundered money offset the damage of tax evasion?”

Raising the CSR bar
In light of the ongoing controversy over Dow Chemical’s association with the 2012 London Olympics, the Institute for Human Rights and Business’s Salil Tripathi argues future organizers should extend the ideal of excellence to corporate responsibility by subjecting prospective sponsors to a rigorous screening process.
“It is clear that a quick check of company reputation isn’t adequate. Reputation surveys are notoriously subjective. Nor can the existence of corporate sustainability policies be sufficient: there are many companies that have policies in place which commit them to respect human rights, to act in a responsible manner, to operate in a sustainable way, and to obey the law. And yet, many companies still end up committing or being associated with abuses. The new UN Guiding Principles on business and human rights – which provide the authoritative due diligence steps all companies need to take, including to track and monitor performance – are a promising yardstick to deploy. Companies that can effectively demonstrate they are acting in line with this international framework should in theory pass such a screening.”

Latest Developments, January 20


In the latest news and analysis…

The value of nature
The Guardian reports on a new study that argues some of the world’s poorest people should be paid $500 billion a year for the service they provide by preserving natural habitats.
“Many of the benefits of conservation, so-called ‘ecosystem services’, are invisible – for instance, maintaining wooded land can help to prevent mudslides during heavy rainfall, and provides valuable watersheds that keep rivers healthy and provide clean drinking water, as well as absorbing carbon dioxide from the air. These benefits are not assigned an economic value, however, so that chopping down trees or destroying habitats appears to deliver an instant economic return, when in fact it is leading to economic losses that are only obvious when it is too late.”

Hunger games
The World Development Movement’s Innocent Sithole writes about a new report on the role of European banks and private finance in food speculation and “land grabbing.”
“Our report identifies the biggest culprits in food speculation as Deutsche Bank, Barclays, the Dutch pension fund ABP, the German financial services group Allianz and French banking group BNP Paribas. We have since nominated Barclays for the 2012 Public Eye ‘shame’ awards for its financial speculation in food prices. Barclays is estimated to make up to £340 million a year from speculating in food ‘futures’ markets, making it the biggest UK player in the markets.”

Politics of xenophobia
Yahoo! News reports on the “hard line” taken by Republican presidential hopefuls on both legal and illegal immigration in the lead-up to the South Carolina primary.
“In talking about reducing legal immigration, Santorum–intentionally or not–aligned himself with the group NumbersUSA, which is spending up to $150,000 in South Carolina to run TV ads that criticize the federal government for admitting what the group considers to be too many legal immigrants each year.

Both legal and illegal immigration streams to America have fallen sharply since the recession began in 2008, even as state legislatures have increasingly passed immigration-related laws over the same period.”

Lethal policy
The University of Notre Dame’s Mary Ellen O’Connell argues America’s increasing use of “targeted killings” – a tactic it publicly opposed in the early years of the George W. Bush administration  – runs counter to its stated goal of promoting a “just and sustainable international order where the rights and responsibilities of nations and peoples are upheld, especially the fundamental rights of every human being.”
“The US did not support such killing for fundamental reasons of law and morality. Fundamental principles of law protect the human right to life and due process of law. Unlike torture, which is never permitted, states are permitted to allow designated authorities to carry out the use of lethal force in certain limited situations. In situations of armed conflict hostilities, lawful combatants will not be prosecuted for killing that complies with international humanitarian law. Today, under the international legal definition of armed conflict, the United States is involved in such hostilities in one country only: Afghanistan.
Beyond Afghanistan, any use of lethal force by designated authorities of the United States must follow the normal human rights limits on peacetime resort to lethal force. Authorities may engage in lethal force when necessary to save a human life immediately, if there is no alternative. In other cases, an attempt to arrest is required, followed by a fair trial within a reasonable period.”

Green growth
Oxfam’s Kate Raworth looks into the extent to which G20 countries have succeeded in decoupling economic growth and resource use.
“The vast majority of high-income countries in the G20 have so far provided no evidence that they can make economic growth environmentally sustainable. Of course, most have barely started to put in place the policies required to make it happen – but delay will only make it harder. So what does the G20 evidence show? That absolute decoupling is possible (we’ve seen it!), at least for some of the countries, for some resources, for some of the time. But that’s a far cry from believing that environmentally sustainable GDP growth is possible everywhere, all the time, indefinitely.”

The Institute of Development Studies’ Alex Shankland writes about the “subversive ruliness” of Occupy the London Stock Exchange.
“The Occupiers are fully committed to non-violence, but also to using direct action and surprise tactics that may or may not involve breaking the law.
So far, so unruly. But I would argue that paradoxically the real significance of the model of contestation provided by the camp lies not in law-breaking, but in rule-making. Transparent, rule-bound behaviour is absolutely central to the political practices that characterise OccupyLSX. This, in turn, is central to the unique power of the challenge that it poses to the intermingled political and financial interests whose unruly, untransparent and often downright illegal practices have left their disastrous mark both on London and on communities across the world.”

Ecuadorean example
Jawaharlal Nehru University’s Jayati Ghosh argues that in the space of a few short years, Ecuador has gone from a “basket case” to a development example for the world.
“All this may sound too good to be true, and certainly the process of transformation has only just begun. There are bound to be conflicts with those whose profits and power are threatened, as well as other hurdles along the way. But for those who believe that we are not condemned to the gloomy status quo, and that societies can do things differently, what is happening in Ecuador provides inspiration and even guidance. The rest of the world has much to learn from this ongoing radical experiment.”

Fear of debt
Robert Skidelsky, a member of the British House of Lords, argues there are a number of logical flaws to the prevailing thinking that debt reduction through “fiscal consolidation” is necessary for countries to enjoy healthy, sustainable economies.
“Third, the national debt is not a net burden on future generations. Even if it gives rise to future tax liabilities (and some of it will), these will be transfers from taxpayers to bond holders. This may have disagreeable distributional consequences. But trying to reduce it now will be a net burden on future generations: income will be lowered immediately, profits will fall, pension funds will be diminished, investment projects will be canceled or postponed, and houses, hospitals, and schools will not be built. Future generations will be worse off, having been deprived of assets that they might otherwise have had.”