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Still Learning Nothing

Posted by Mark Floegel on September 24th, 2009

Originally posted at http://markfloegel.org/

The best time to announce the worst news is late on Friday. The federal government and public relations firms have known this for years. So it was that the National Marine Fisheries Service (NMFS) scheduled its press conference last Friday for 3 p.m., Pacific Daylight Time or (even better!) 6 p.m. in the east.

As planned, the news that stocks of Bering Sea pollock – America’s largest fishery – have declined to a 30-year-low was reported only in the fishing trade press and the Seattle and Anchorage papers. Mission accomplished.

Every summer, NMFS technicians survey pollock. The amount of fish allowed to be caught in 2009 was based on the 2008 summer survey. The 2010 quota will be based on the 2009 survey and so on. On one hand, these surveys are about “environmental protection.” (Alas, we must us the dreaded quotation marks, because the environment has not been protected.) On the other hand, the surveys are a government-subsidized service for the industrial trawler fleet that pulls the pollock from the sea.

On the other, other hand (we’re playing three hands today), most people don’t know what a pollock is, but we eat enough of it. (As I mentioned two paragraphs ago, it’s America’s largest fishery.) All that imitation crabmeat in the supermarket wet case? Pollock. (And why must pollock imitate crabmeat? American fisheries management.)

Pollock is the whitefish in all those disgusting frozen fish sticks. Pollock is, or was, the fish in the sandwiches at the fast food restaurants. Now that pollock is in severe decline, McDonald’s is considering switching to hoki. This has nothing to do with environmental awareness; McDonald’s requires a steady supply of a consistent product at a predictable price. Hoki, a whitefish that’s overfished by industrial trawlers in New Zealand waters, will be a temporary fix, a few years at best. Thanks, Ronald.

Where was I? Oh right, severe decline. Three years ago, NMFS allowed the trawlers to take 1.5 million metric tons of pollock out of the Bering Sea. This year, because the decline was already evident in last year’s survey, the quota was set at 815,000 metric tons. The industry trade press headlines news like this as: “Pollock prices likely to rise.”

The At-Sea Processors Association, the trade group that represents the industrial trawlers, will try to convince the feds to keep the quota high and if the past is any evidence, they’ll do it. That’s why the fish population is crashing. What’s worse, they may bully the feds into continuing the pollock roe season. Roe, of course, is fish talk for eggs. The trawlers deliberately target the pregnant females, strip the eggs out of their bellies and sell them for big bucks on the Asian market.

What the Epicureans of Korea and Japan eat for dinner is what doesn’t become a fish in the Bering Sea, with tragic consequences for the sea and the other animals that live there. Pollock have traditionally been mighty breeders, the rabbits of the northern seas (one reason we fish them so hard). As such, they’ve provided much of the food for the rest of the animals in the ocean, like Steller sea lions and Pribilof fur seals. Because we humans got greedy with the trawlers and the roe, now those species (and more) are in trouble.

Yes, eating the eggs is a great way to deplete a population of fish (or any other wild creature) and yes, there’s more to it than that. Global warming plays a role, with warm water moving north into the Bering Sea, making conditions for pollock love less favorable than they’ve been in decades past. The pollock don’t cause global warming, though, nor do sea lions or fur seals. So yeah, we should stop burning so many fossil fuels, but until we do, we have to back off with the trawlers and give the pollock time to rebuild their numbers.

An irony here (not the irony, there’s too much irony for that) is that Bering Sea pollock are often referred to (by the industrial trawling people) as “the best-managed fishery in the world.” Sadder still is that the statement is not far from accurate. Look at Atlantic cod, that population crashed 15 years ago and has yet to come back.

And we learned nothing from it.

Tightening the Corporate Grip: The Stakes at the Supreme Court

Posted by Robert Weissman on September 18th, 2009

Originally posted on 9 September at http://www.commondreams.org/view/2009/09/09-11

Can things get still worse in Washington?

Yes, they can. And they will, if the Supreme Court decides for corporations and against real human beings and their democracy in a case the Court will be hearing today, Citizens United v. Federal Election Commission.

Until reaching the Supreme Court last year, this case has involved a narrow issue about whether an anti-Hillary Clinton movie made in the heat of the last presidential election is covered by restrictions in the McCain-Feingold campaign finance law. However, in a highly unusual move announced on the last day of the Supreme Court's 2008 term, the justices announced they wanted to reconsider two other pivotal decisions that limit the role of corporate money in politics.

The Court ordered a special oral argument on the issue, before the full start of their 2009 term in October.

The Court will today hear argument on whether prior decisions blocking corporations from spending their money on "independent expenditures" for electoral candidates should be overturned. "Independent expenditures" are funds spent without coordination with a candidate's campaign. The rationale for such a move would be that existing rules interfere with corporations' First Amendment rights to free speech.

Overturning the court's precedents on corporate election expenditures would be nothing short of a disaster. Corporations already dominate our political process -- through political action committees, fundraisers, high-paid lobbyists and personal contributions by corporate insiders, often bundled together to increase their impact, threats to move jobs abroad and more.

On the dominant issues of the day -- climate change, health care and financial regulation -- corporate interests are leveraging their political investments to sidetrack vital measures to protect the planet, expand health care coverage while controlling costs, and prevent future financial meltdowns.

The current system demands reform to limit corporate influence. Public funding of elections is the obvious and necessary (though very partial) first step.

Yet the Supreme Court may actually roll back the limits on corporate electoral spending now in place. These limits are very inadequate, but they do block unlimited spending from corporate treasuries to influence election outcomes. Rolling back those limits will unleash corporations to ramp up their spending still further, with a potentially decisive chilling effect on candidates critical of the Chamber of Commerce agenda.

The damage will be double, because a Court ruling on constitutional grounds would effectively overturn the laws in place in two dozen states similarly barring corporate expenditures on elections.

More than 100 years ago, reacting to what many now call the First Gilded Age, Congress acted to prohibit direct corporate donations to electoral candidates. Corporate expenditures in electoral races have been prohibited for more than 60 years.

These rules reflected the not-very-controversial observation that for-profit corporations have a unique ability to gather enormous funds and that expenditures from the corporate treasury are certain to undermine democracy - understood to mean rule by the people. Real human beings, not corporations.

In arguing to uphold the existing corporate expenditure restrictions, the Federal Election Commission has emphasized these common sense observations.

"For-profit corporations have attributes that no natural person shares," the FEC argues. Noting that corporations are state-created -- not natural entities -- the FEC explains that "for-profit corporations are inherently more likely than individuals to engage in electioneering behavior that poses a risk of actual or apparent corruption of office-holders." The FEC also notes that corporate spending on elections does not reflect the views of a company's owners (shareholders).

Although the signs aren't good, there is no certainty how the Court will decide Citizens United. There is some hope that the Court will decide that it is inappropriate to roll back such longstanding and important campaign finance rules, in a case where the issue was not presented in the lower courts, and where the litigants' dispute can be decided on much narrower grounds.

Public Citizen is organizing people to protest against a roll back of existing restrictions on corporate campaign expenditures. To join the effort, go to www.dontgetrolled.org. People are pledging to protest in diverse ways -- from street actions to letter writing -- today, and in the event of a bad decision, and also networking for solutions to corporate-corrupted elections.

Ours is a government of the people, by the people, for the people -- not the corporations and their money. Corporations don't vote, and they shouldn't be permitted to spend limitless amounts of money to influence election outcomes.

Robert Weissman is president of Public Citizen. Public Citizen attorney Scott Nelson serves as counsel to the original sponsors of the McCain-Feingold law, who have filed an amicus brief in the case, asking that existing restrictions on corporate election expenditures be maintained.

CorpWatch Bribery Report Helps Spark Dutch Inquiry

Posted by Anton Foek on August 20th, 2009

In July 2006, CorpWatch exposed evidence that a Dutch shipbuilding company, selling military equipment to Chile, was offering bribes to officials there. CorpWatch’s reporting is now fueling calls by anti-corruption activists and opposition politicians for a formal parliamentary investigation into the operations of the company, Rotterdamse Droogdok Maatschappij (RDM). 

The RDM case may become the first test for the Netherlands’ new anti-corruption legislation and for its will and ability to prosecute corporations for making foreign bribes.

The RDM bribery scandal dates back to 1998 when the company sold 202 Leopard tanks to the Chilean army. The Rotterdam-based company had purchased the tanks as scrap metal from the Dutch Department of Defense and rebuilt them. It then paid bribes to Chilean army officials facilitating the sale.

In early August this year, a high court in Santiago de Chile sentenced army General Luis Lobos and Brigadier General Gustavo La Torre to prison for accepting bribes of more than half a million dollars.

Joep van den Nieuwenhuyzen, the Dutch businessman, and officials of his company—who offered and facilitated the bribes—have never been prosecuted in relation to this case. The Dutch Public Prosecutor’s Office told CorpWatch that at the time of RDM’s bribes, the Netherlands had no laws against offering bribes to officials overseas. Legislation to make these practices illegal was introduced in 2001. Further muddying the waters, RDM went bankrupt in 2006, and Joep van den Nieuwenhuyzen, its owner, was jailed for fraud. He was released two years ago.

The current Dutch government investigation will delve further into the extent and mechanics of the bribery scheme, and interview key politicians active at the time. A Dutch parliamentary team is following up on the case in the Netherlands and in Chile. Key targets of the investigation include Edmundo Perez Yoma, Chile’s former minister of defense and currently its interior minister, along with his then deputy Mario Fernandez, now member of the Constitutional Court. Both are suspected of facilitating the bribery. Chile has announced similar investigations.

One Dutch official at the time of the tank sales, then Minister of Defense Joris Voorhoeve, joined the call for parliament to undertake a broad investigation into RDM’s bribes. He defended his own role. While Voorhoeve acknowledges that he issued an export license for the 202 Dutch Leopard tanks, he maintains he is appalled and shocked by the allegations of bribery. “The Netherlands government would never agree to pay bribes to get a deal closed,” he said, “nor participate in any other form of corruption.” The sales were justified, he said, because when they took place in 1998, Chile had become a democracy and General Augusto Pinochet, who had ruled from 1973 to 1990, was no longer president. But in fact, the former dictator still wielded considerable influence as senator for life and commander-in-chief of the armed forces, positions he retained until his death in 2006.

The parliamentary investigation, while welcomed by many, is late in coming. For years politicians ignored requests by the Netherlands Socialist Party for a formal investigation—again, sparked in part by CorpWatch’s reporting on the money RDM paid to the former dictator and his entourage.

According to a Swiss newspaper, van den Nieuwenhuyzen, currently a Swiss resident, said that he was not aware that the company he once owned was under investigation for payments to Chilean army officials.

But former RDM workers and associates charged that the company paid millions to Chilean colonels and brigadier generals through a third party, with $1.6 million going to a private consultant to the late general Pinochet. RDM said the $1.6 million was a donation to the Pinochet Foundation, a Santiago-based organization that promotes the general’s legacy.

Chilean and cooperating Dutch private investigators that examined the Pinochet’s overseas bank accounts have found that the dictator had stashed almost $28 million overseas, mainly in European bank accounts. Dutch investigators will look for links between that money, the two recently jailed Chilean army officers, and Pinochet.

The spokesperson of the Dutch Socialist Party in Rotterdam told CorpWatch that there have been no successful prosecutions of corporations in the Netherlands for foreign bribes, because it is extremely difficult to secure evidence in foreign countries. Of the scores of cases under consideration, none have yet reached the courts. If RDM is charged, it will be the first time Dutch officials or businesspeople are prosecuted under the new regulations.

Corporations and the Amazon

Posted by Philip Mattera on August 16th, 2009


Originally posted on August 13, 2009 at http://dirtdiggersdigest.org/archives/746

These days just about every large corporation would have us believe that it is in the vanguard of the fight to reverse global warming. Companies mount expensive ad campaigns to brag about raising their energy efficiency and shrinking their carbon footprint.

Yet a bold article in the latest issue of business-friendly Bloomberg Markets magazine documents how some large U.S.-based transnationals are complicit in a process that does more to exacerbate the climate crisis than anything else: the ongoing destruction of the Amazon rain forest.

While deforestation is usually blamed on local ranchers and loggers, Bloomberg points the finger at companies such as Alcoa and Cargill, which the magazine charges have used their power to get authorities in Brazil to approve large projects that violate the spirit of the country’s environmental regulations.

Alcoa is constructing a huge bauxite mine that will chew up more than 25,000 acres of virgin jungle in an area, the magazine says, “is supposed to be preserved unharmed forever for local residents.” Bloomberg cites Brazilian prosecutors who have been waging a four-year legal battle against an Alcoa subsidiary that is said to have circumvented the country’s national policies by obtaining a state rather than a federal permit for the project.

Bloomberg also focuses on the widely criticized grain port that Cargill built on the Amazon River. Cargill claims to be discouraging deforestation by the farmers supplying the soybeans that pass through the port, but the Brazilian prosecutors interviewed by Bloomberg expressed skepticism that the effort was having much effect.

Apart from the big on-site projects, Bloomberg looks at major corporations that it says purchase beef and leather from Amazonian ranchers who engage in illegal deforestation. Citing Brazilian export records, the magazine identifies Wal-Mart, McDonald’s, Kraft Foods and Carrefour as purchasers of the beef and General Motors, Ford and Mercedes-Benz as purchasers of leather.

The impact of the Amazon cattle ranchers was also the focus of a Greenpeace report published in June. That report put heat on major shoe companies that are using leather produced by those ranchers.

Nike and Timberland responded to the study by pledging to end their use of leather hides from deforested areas in the Amazon basin. Greenpeace is trying to get other shoe companies to follow suit.

Think of the Amazon the next time a company such as Wal-Mart tells us what wonderful things it is doing to address the climate crisis.

Chipotle Grilled!

Posted by Denver Fair Food on July 31st, 2009

Originally posted on July 23 at http://denverfairfood.blogspot.com/2009/07/chipotle-grilled.html.

Chipotle is getting burned by the very scheme it cooked up as what it thought was a great public relations opportunity - sponsoring free screenings of Food, Inc. - is becoming a PR fiasco.

Food, Inc. director Robert Kenner and co-producer Eric Schlosser speak out and Chipotle has to answer tough questions in Tom Philpott's must-read article on Grist.org "Chipotle Grilled: Burrito chain’s Food, Inc. sponsorship generates off-screen drama over farm-worker issues."

Schlosser explains that while many of Chipotle's efforts are great, he nonetheless "cares more about human rights than any of those things." He continues: "If Taco Bell, Subway, Burger King, and McDonald’s can reach agreement with the CIW, I don’t see why Chipotle can’t."

Kenner likewise, the article states, "made clear that he disagreed with the company’s position on the CIW" even if he agrees with other things Chipotle is doing. Kenner explains: "I was hopeful that by associating itself with a film that promotes workers’ rights, [Chipotle] might be inclined to sign with the Coalition . . . And now I’m not confident they will.”

Our cameo in this unfolding fiasco is also noted: "Chipotle clearly resents such critical statements at events designed to demonstrate its sustainability cred. At one of its screenings in Denver, Chipotle employees barred people from the Campaign for Fair Food to speak after the screening—overturning an arrangement that had been made with Food, Inc’s public-education campaign. " After investigating the incident, the article decides: "In other words, people wanting to discuss the CIW issue aren’t to be given stage time at the Chipotle-sponsored Food, Inc. screenings."

Our story of Chipotle's eagerness to shut up members of Denver Fair Food has really made a splash on the internet, appearing on the websites of the Organic Cosumers Association, the Coporate Ethics Network, US Indymedia, and others.

Of course Denver wasn't the only city where Chipotle got heat from Fair Food activists while trying to bask in Food, Inc.'s glory. All over the country allies of the Coalition of Immokalee Workers took to the movies to deflate Chipotle's hot air about "food with integrity" with some sharp truths about farm labor in Chipotle's supply chain. See the great photo report from the nationwide "Battle of the Burrito" on the CIW website.

References to this PR fiasco are popping up in unforseen places such as thedailygreen or even more surprising the mainstream investor blog The Motely Fool. And the bed which Chipotle made for itself in which it now must lie can't be feeling any more comfortable.

The lesson for Chipotle to learn from its bungled Food, Inc. PR experiment? The ecorazzi blog has these fitting words: "you can’t have your 1000+ calorie burrito and eat it too."

Wal-Mart’s (Un)sustainability Index

Posted by Philip Mattera on July 24th, 2009

Originally posted on July 24 at http://dirtdiggersdigest.org/archives/703.

Wal-Mart has taken the latest in a long series of steps to make itself look good by imposing burdens on its suppliers. The mammoth retailer, which is thriving amid the recession, recently announced plans to require its more than 100,000 suppliers to provide information about their operations that would form the basis of a product sustainability index.

Rating products is a good idea. It’s already being done by various non-profit organizations that bring independence and legitimacy to the process. Wal-Mart, by contrast, brings a lot of negative baggage. In recent years, Wal-Mart has used a purported commitment to environmental responsibility to draw attention away from its abysmal record with regard to labor relations, wage and hour regulations, and employment discrimination laws. It also wants us to forget its scandalous tax avoidance policies and its disastrous impact on small competitors. The idea that a company with a business model based on automobile-dependent customers and exploitative supplier factories on the other side of the globe can be considered sustainable should be dismissed out of hand. Yet Wal-Mart is skilled at greenwashing and is, alas, being taken seriously by many observers who should know better.

On close examination, Wal-Mart’s latest plan is, like many of its previous social responsibility initiatives, rather thin. All the company is doing at first is to ask suppliers to answer 15 questions. Ten of these involve environmental issues such as greenhouse gas emissions, water use, waste generation and raw materials sourcing. The final five questions are listed under the heading of “People and Community: Ensuring Responsible and Ethical Production.”

Two of them involve “social compliance.” It is an amazing act of chutzpah for Wal-Mart, which probably keeps more sweatshops in business than any other company, to claim moral authority to ask suppliers about the treatment of workers in their supply chain.

The questions in this category seem to assume that suppliers don’t do their own manufacturing. This is a tacit acknowledgement of how Wal-Mart has forced U.S. manufacturers to shift production offshore, and often to outside contractors. Now Wal-Mart has to ask those companies to be sure they know the location of all the plants making their products and the quality of their output.

The point about quality was one that CEO Mike Duke (photo) emphasized when announcing the rating system. This is also highly disingenuous. For years, Wal-Mart was notorious for pressing suppliers to reduce the quality of their goods to keep down prices. Now the behemoth of Bentonville is suddenly a proponent of proponent of products that “are more efficient, that last longer and perform better.” Will Wal-Mart pay its suppliers higher prices to cover the costs of improving quality?

goodguideI can’t bring myself to jump on Wal-Mart’s bandwagon. If I want product ratings I will turn not to Mike Duke but rather to someone like Dara O’Rourke, who founded a website called Good Guide that rates consumer products and their producers using independently collected data from social investing firms such as KLD Research and non-profits such as the Environmental Working Group. It uses criteria such as labor rights, cancer risks and reproductive health hazards that are unlikely to ever find their way into the Wal-Mart index.

Good Guide also rates companies, including Wal-Mart, which receives a mediocre score of 5.3 (out of 10), and it reaches that level thanks to its marks on p.r.-related measures such as charitable contributions and some but not all environmental measures. In the category of Consumers it gets a 4.1, Corporate Ethics 3.9, and for Labor and Human Rights 4.1 (which is generous).

Maybe Wal-Mart should focus on improving its own scores before presuming to rate everyone else.

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

Shell's Settlement Doesn't Hide Unsettling Reality in Nigeria

Posted by Stephen Kretzmann on June 11th, 2009

Originally posted June 10, 2009, on The Huffington Post.

After thirteen years and countless hours by lawyers, community members, and activists around the world, Royal Dutch Shell finally settled the Wiwa v Shell case in a New York court for $15.5 million.

Plaintiffs in the case, which included Ken Saro-Wiwa Jr., and the families of other Ogoni men hanged in November 1995, charged the Royal Dutch/Shell company, its Nigerian subsidiary, and the former chief of its Nigerian operation, Brian Anderson, with complicity in the torture, killing, and other abuses of Ogoni leader Ken Saro-Wiwa and other non-violent Nigerian activists in the mid-1990s in the Ogoni region of the Niger Delta.

Shell says they settled the case as a "humanitarian gesture" to the Ogoni. Does anyone really believe that after fighting for more than a decade to keep this out of court, Shell suddenly woke up and felt great compassion for the Ogoni? Please.

Shell settled because they were scared, and they knew the evidence against them was overwhelming. They publicly say they had nothing to do with the execution of Ken Saro-Wiwa and the other Ogoni, and yet there were documents and video that they fought hard to keep out of the public eye.

Evidence that was to be introduced in the case included an internal Shell memo where the head of Shell Nigeria offered to intervene on Saro-Wiwa's behalf, if only Saro-Wiwa and others would stop claiming that Shell had made payments to the military.

Then there was this memo, requesting payment to the Nigerian military for an incident in which at least one Ogoni man died.

Witness were set to testify that they saw Shell vehicles transporting Nigerian soldiers, that they saw Shell employees conferring with the military, that they saw money being exchanged between Shell employees and military officers, and that they heard military officers, including the brutal Major Okuntimo of the Rivers State Internal Security Task Force, make admissions regarding the work they were doing on behalf of Shell.

We have known some of Shell's involvement in this tragedy for a long time. In early May of 1994, Ken Saro-Wiwa Sr. faxed me a memo authored by Major Okuntimo which read "Shell operations still impossible unless ruthless military operations are undertaken for smooth economic activities to commence" and further called for "pressure on oil companies for prompt regular inputs."

I received that fax and immediately called Ken. He said "this is it. They're going to kill us all. All for Shell." It was the last time I talked with him. Several weeks later he was arrested on the trumped up charges for which he was ultimately hanged.

In the last day, lots of people have asked me if $15.5 million is enough to compensate for the hanging of nine men, the death of thousands more, and for the destruction of an ecosystem. No of course not. But was it on par with what a jury would have awarded in this case? Yes, lawyers tell me, for sure.

More importantly, does the settlement bring relief to Ken Wiwa Jr. and the families of the other men who were executed? If you read Ken's thoughtful and moving piece in the Guardian , the answer is clearly yes. That alone should be cause for celebration.

Ken Sr.'s famous last words from the gallows were "lord take my soul but the struggle continues." In this moment, perhaps more than ever before, we need to heed that call to action. The settlement in this case brings satisfaction to the plaintiffs for an event that happened 14 years ago. It in no way, shape or form excuses or absolves Shell of their ongoing destruction of the Niger Delta environment.

One of the central complaints of Niger Delta communities for forty years has been gas flaring, which sends plumes of toxic pollutants into the air and water of the Niger Delta. Gas flaring endangers human health, harms local ecosystems, emits huge amounts of greenhouse gases, wastes vast quantities of natural gas, and is against Nigerian law. Shell does it nowhere else in the world in volumes that are even remotely comparable to what they flare in the Delta.

But Shell is still flaring gas in Nigeria.

While there is no doubt that the settlement represented a significant victory for the plaintiffs' in this one human rights case against Shell, true justice will not be served as long as the people of Nigeria continue to suffer the terrible impact of Shell's operations. Shell estimates it would cost about $3 billion -- only 10% of just their last year's profits -- to end Shell's gas flaring in Nigeria once and for all.

But instead of putting their great "humanitarian concern" into action, Shell points the finger at the Nigerian government and demands that they pay to end this practice.

Send a message to Shell's CEO
Jeroen van der Veer, and let him know that if he really wants to prove his great concern for the Ogoni people, he'll end gas flaring once and for all.

The struggle continues.

What's not in Chevron's annual report

Posted by Cameron Scott on May 26th, 2009

Originally posted at http://www.sfgate.com/cgi-bin/blogs/green/detail?entry_id=40674

When people with strong ideological perspectives are often outraged by media coverage of their pet issues. When both sides are mad, you know you're doing something right. But how often do you hear corporations furious about they way they are covered in the business section? The section seems to lend itself to favor-currying and soft-shoeing.

In the lead-up to Chevron's annual shareholders meeting tomorrow in San Ramon, the company landed a puff piece on KGO focusing on its efforts to decrease its water usage. No mention of the Amazon controversy, and no mention of outside pressure on Chevron, EBMUD's largest water user.

I'm disappointed to say that a Chronicle interview with the company's top lawyer also softballs the issues, while giving Chevron the opportunity to present its side of the story with no opportunity for response from the company's many critics. [Update: Chron editors tell me there will be more coverage of Chevron later in the week.]

Well, Chevron's opponents, including San Francisco's Amazon Watch, have taken matters into their own hands, releasing an alternate annual report that presents the externalities not listed in the company's balance sheet, which shows a record profit of $24 billion, making the company the second most profitable in the United States.

Did you know that Chevron's Richmond refinery was built in 1902 and emitted 100,000 pounds of toxic waste in 2007, consisting of no less than 38 toxic substances? The EPA ranks it as one of the worst refineries in the nation. With 17,000 people living within 3 miles from the plant, you'd think the San Ramon-based company would take local heat from more than just a couple dozen activists.

Chevron has sought to brand itself an "energy" company, one eagerly pursuing alternatives to petroleum. Its aggressive "Will You Join Us?" ad campaign asked regular folks to reduce their energy consumption, suggesting that Chevron was doing the same. In actuality, the company spent less than 3 percent of its whopping capital and exploratory expenditures on alternative energy. And it has refused to offer better reporting on its greenhouse gas emissions, despite strong shareholder support for it. (The aggressive, and misleading, ad campaign seems to have ired the report's researchers as well: The report is decorated by numerous parodies, and some have been wheat-pasted around town.)

It's a very well researched report, written by the scholar Antonia Juhasz, clearly divided into regional issues, and it's a much needed counterbalance to the friendly coverage Chevron is otherwise getting. (Juhasz was interviewed on Democracy Now this morning.)

For information on protesting the shareholder meeting early tomorrow morning, click here.

The IDB—50 Years, Zero Reflection

Posted by Laura Carlsen on April 3rd, 2009
Americas Policy Program, Center for International Policy

At the end of March, the Inter-American Development Bank (IDB) celebrated its 50th anniversary in Medellin. The occasion presents an opportunity to revise concepts and move toward a fairer development model. It is logical to think that among the festivities, a process of evaluation and self-critique would begin regarding the bank's actions and work in the region.

The circumstances demand it. The continent has been plunged into a grave economic crisis, in part because of the string of structural reforms, deregulation, foreign market dependence, and privatization that the IDB has supported in the region. Limits on the use of non-renewable fuels have become more and more obvious while climate change threatens to affect the production of basic foods and increase the frequency of natural disasters. Forced migration characterizes modern life and growing inequality has become the most important challenge faced by all the countries in the region.

      Medellin: site of the 50th anniversary of the IDB. Photo: www.skyscraperlife.com.

In spite of this gray outlook, it seemed that until now everything suggested that the IDB would prescribe more of the same medicine. They predicted an increase in loans to the region for the record figure of US$18 billion for 2009 as a response to the crisis. This will generate a new wave of debt in the recipient countries, while at the same time the development model behind the loans faces a crisis of credibility due to its dubious results. For the IDB, development is seen as a process of ensuring the transnational mobility of capital, enabling foreign investment, the transfer of goods, and access to natural resources. In recent years, this model has been imposed on regions that were previously closed off due to their geographical location or because of little interest from big business. Now that the value of natural resources is increasing and national economies have opted for exports, mega-projects including transportation infrastructure and hydroelectric power plants, among others, have become attractive again. They generally target regions with a low population density, and, in many cases, significant indigenous populations. While these communities are often forgotten by their national governments and suffer high levels of marginalization, at the same time their territories are rich in both culture and biodiversity.

The IDB has been a major promoter of infrastructure mega-projects designed to drive this vision. Two mega-project master plans have been of particular interest to the IDB: The Plan Puebla-Panama (also known as the Mesoamerican Integration and Development Project) and the Initiative for the Integration of Regional Infrastructure in South America (IIRSA). These plans include the construction of super-highways, dams, electricity networks, and more. The projects signal a drastic change in the use of land and resources. Local, regional, and national markets—which generate more jobs and constitute the majority of food distribution—are seen as a hindrance, and natural resources—conserved by indigenous communities—are considered the spoils of transnational business.

Among its objectives, the IDB aims to generate development in these regions. However, a recent study revealed that the mega-projects financed by the IDB in many cases end up displacing thousands of people who are supposed to be the beneficiaries. The construction of dams is the clearest example because it entails the involuntary displacement through the flooding of vast areas which often include pre-existing communities. One example is the La Parota hydroelectric dam in Guerrero, Mexico which would displace around 25,000 people and has currently been halted due to popular resistance. A group of 43 grassroots organizations met prior to the IDB meeting in Medellin. They presented studies and testimonies on the impacts of these projects in an effort to change the IDB's policies. Through the campaign known as "The IDB: 50 years financing inequality," these groups argue that, rather than alleviate the issue of poverty, mega-projects channel the profits gained from natural resources into the hands of the private sector and destroy the social fabric and community networks necessary for indigenous survival.

The solution to poverty that the IDB fundamentally proposes would seem to be: reduce poverty by expelling the poor. The two meetings—that of the IDB authorities and that of the organizations which question its practices—present an opportunity to revise the concept of development and move toward a fairer development model.

Originally posted on April 1, http://americas.irc-online.org/am/6008.

Who Will Determine the Future of Capitalism?

Posted by Philip Mattera on March 13th, 2009

Amid the worst financial and economic crisis in decades, the U.S. business press tends to get caught up in the daily fluctuations of the stock market and, to a lesser extent, the monthly changes in the unemployment rate. By contrast, London’s Financial Times is looking at the big picture. It recently launched a series of articles under the rubric of The Future of Capitalism. In addition to soliciting varying views on this monumental question, the paper published a feature this week presuming to name the 50 people around the world who will “frame the way forward.”

Kicking off the series, the FT’s Martin Wolf was blunt in asserting that the ideology of unfettered markets promoted over the past three decades must now be judged a failure. Sounding like a traditional Marxist, Wolf writes that “the era of liberalisation [the European term for market fundamentalism] contained seeds of its own downfall” in the form of tendencies such as “frenetic financial innovation” and “bubbles in asset prices.”

An article in the series by Gillian Tett casually notes that “naked greed, lax regulation, excessively loose monetary policy, fraudulent borrowing and managerial failure all played a role” in bringing about the crisis. Richard Layard of the London School of Economics weighs in with a piece arguing that “we should stop the worship of money and create a more humane society where the quality of human experience is the criterion.” Did editorial copy intended for New Left Review mistakenly end up in the FT computers?

Wolf finished his initial article with the statement: “Where we end up, after this financial tornado, is for us to seek to determine.” Yet who is the “we” Wolf is referring to?

Following the damning critique of markets and poor government oversight, the last ones we should turn to for leadership are the powers that be. Yet that is exactly the group that dominates the list of those who, according to the editors of FT, will lead the way forward. The 50 movers and shakers include 14 politicians, starting with President Obama and Chinese Prime Minister Wen Jiabao; ten central bankers; three financial regulators; and four heads of multinational institutions such as the IMF and the WTO. Also included are six economists, including Paul Krugman and Obama advisor Paul Volcker, and three prominent investors, among them George Soros and Warren Buffett.

The list also finds room for three chief executives (the heads of Nissan, PepsiCo and Google) and, amazingly, the chiefs of four major banks: Goldman Sachs, JPMorgan Chase, HSBC and BNP Paribas. It even includes two talking heads: Arianna Huffington and Rush Limbaugh.

Except for Olivier Besancenot of France’s New Anticapitalist Party, who is included among the politicians in a way that seems a bit condescending, there is not a single person on the list directly involved in a movement to challenge corporate power or even to significantly alter the relationship between business and the rest of society. There is not a single labor leader, prominent environmental advocate or other leading activist. The editors at FT seem never to have heard of civil society.

Then again, the problem may not be thickheadedness among FT editors. Perhaps the voices for radical change have simply not been loud enough to earn a place on a list of those who will play a significant role in the shaping capitalism’s future. In fact, one of the articles in the FT series suggests that in Europe neither the Left nor the labor movement has taken a leadership role in responding to the crisis, even as spontaneous protests have erupted in numerous countries.

In the United States, where those forces are weaker, anger at the crisis has to a great extent been channeled into support for the Keynesian policies of the Obama Administration. That’s unavoidable in the short term, but it doesn’t address the need for fundamental alteration of economic institutions. If, as the Financial Times suggests, the future of capitalism is up for grabs, let’s make sure we all join the fray.

Originally posted at: http://dirtdiggersdigest.org/archives/341

The City Within

Posted by Mark Floegel on February 26th, 2009

Before his execution, Socrates was visited in prison by his friend Crito, who told him the bribes for the guards were ready and Socrates could escape whenever he wished. Socrates refused to go.

Crito, angered, argued Socrates would a) leave his children orphans and b) bring shame on his friends, because people would assume they were too cheap to finance his escape. (Apparently, this sort of thing was common in Athens in those days.)

Socrates replied that in his imagination, he hears the Laws of Athens saying, “What do you mean by trying to escape but to destroy us, the Laws, and the whole city so far as in you lies? Do you think a state can exist and not be overthrown in which the decisions of law are of no force and are disregarded and set at naught by private individuals?”

In short, either Socrates or the rule of law had to die. Socrates chose to die rather than diminish his city. Now, as then, he’d be a lonely guy. His notion that the city lay within him – that he was the city of Athens – is striking.

All failure to enforce law – or to work around it – is bad. This applies equally to speed limits, armed robbery and banking regulations. Failure to enforce our agreed-upon standards weakens our social bonds and undermines faith in both our justice system and our government. If the police will not apprehend or the courts will not prosecute or the legislatures draw protective circles around certain elements in society, then society as a whole suffers.

There is within all of us an affinity for justice. The majority of citizens have no training in law or political science, but we possess intuitive notions of right and wrong. We’re willing to tolerate some discrepancy on either margin of the page, but when things are pushed too far out of balance on either side, then the door to vigilantism, riot and revolution is opened.

This great imbalance – and we’re getting strong whiffs of it now – is a failure by our institutions to enforce the terms of the American social contract.

“America is a classless society.” “All citizens stand equal before the law.” Blah, blah, blah. It’s illegal to rob a convenience store. It’s illegal to defraud investors. The accused robber, who flashed a knife and made off with eighty or a hundred bucks, sits behind steel bars and waits for his overburdened public defender to get around to speaking with him.

The accused fraudulent investment fund manager, who flashed a phony set of books and made off with eight or fifty billion dollars, sits in his cosmopolitan penthouse and consults a million-dollar legal team, which he pays with ill-gotten dosh.

If we vigorously enforce laws on the working class and make only half-hearted attempts to do so with the managing class, then the class warfare Republican politician are always whining about comes closer to reality.

Worse, by allowing Ken Lays, Bernie Madoffs and Allen Stanfords to get off easy, it destroys real opportunity for people in the working classes to realize the American dream for themselves and their children. The crimes of the managing class – unlike the convenience store robber – have the real effect of depriving millions – both here and abroad - of their livelihoods and homes when the financial system crashes.

In the news and before Congressional committee, we hear that regulators were specifically warned for years that Bernie Madoff and Allen Stanford were violating regulations.

While the beltway talkers argue over whether Wall Street bankers should be allowed to keep their bonuses and exorbitant salaries, the discussion that had yet to start is: why were these highly leveraged instruments and securitized debt transactions legal in the first place? We’re told incessantly that the Wall Street banking transactions were so complicated that “no one really understands them.” There is, however, the easily understood principle that one’s debts should be balanced by one’s assets. Or one’s at least one’s assets should be within shouting distance of one’s debts.

We have speed limits not because driving 110 is inherently evil, but because it is unsafe and anyone who does shows reckless disregard for themselves and others. And yet, a legion of reckless drivers loosed on the interstate for a decade could not have wrought as much misery as this handful of bankers, brokers and hedge fund managers.

We will now suffer for years. These will be hard times, but within this hardship will be opportunities to rediscover the extent to which our society lives within in us, as Socrates would have said.

Originally published at:

http://markfloegel.org/2009/02/26/the-city-within/

Not Quite Beyond Petroleum

Posted by Philip Mattera on February 20th, 2009

For the past eight years, the oil giant formerly known as British Petroleum has tried to convince the world that its initials stand for “Beyond Petroleum.” An announcement just issued by the U.S. Environmental Protection Agency may suggest that the real meaning of BP is Brazen Polluter.

The EPA revealed that BP Products North America will pay nearly $180 million to settle charges that it has failed to comply with a 2001 consent decree under which it was supposed to implement strict controls on benzene and benzene-tainted waste generated by the company’s vast oil refining complex in Texas City, Texas, located south of Houston.  Since the 1920s, benzene has been known to cause cancer.

Among BP’s self-proclaimed corporate values is to be “environmentally responsible with the aspiration of ‘no damage to the environment’” and to ensure that “no one is subject to unnecessary risk while working for the group.” Somehow, that message did not seem to make its way to BP’s operation in Texas City, which has a dismal performance record.

The benzene problem in Texas City was supposed to be addressed as part of the $650 million agreement BP reached in January 2001 with the EPA and the Justice Department covering eight refineries around the country. Yet environmental officials in Texas later found that benzene emissions at the plant remained high. BP refused to accept that finding and tried to stonewall the state, which later imposed a fine of $225,000.

In March 2005 a huge explosion (photo) at the refinery killed 15 workers and injured more than 170. The blast blew a hole in a benzene storage tank, contaminating the air so seriously that safety investigators could not enter the site for a week after the incident.

BP was later cited for egregious safety violations and paid a record fine of $21.4 million. Subsequently, a blue-ribbon panel chaired by former secretary of state James Baker III found that BP had failed to spend enough money on safety and failed to take other steps that could have prevented the disaster in Texas City. Still later, the company paid a $50 million fine as part of a plea agreement on related criminal charges.

In an apparent effort to repair its image, BP has tried to associate itself with positive environmental initiatives. The company was, for instance, one of the primary sponsors of the big Good Jobs/Green Jobs conference held in Washington earlier this month. Yet as long as BP operates dirty facilities such as the Texas City refinery, the company’s sunburst logo, its purported earth-friendly values and its claim of going beyond petroleum will be nothing more than blatant greenwashing.

Originally posted at:

http://dirtdiggersdigest.org/archives/327

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

Norway finds Canada's largest publicly-traded company, Barrick Gold, unethical

Posted by Sakura Saunders on February 2nd, 2009
protestbarrick.net

Norway's Ministry of Finance announced Friday that it would exclude mining giant Barrick Gold and U.S. weapons producer Textron Inc from the country's pension fund for ethical reasons.  This is an especially significant judgment for Canada, as Barrick Gold is currently Canada's largest publicly traded company.

While the Norwegian Council of Ethics full recommendation mentions conflicts involving Barrick in Chile, Tanzania, and the Philippines, the panel acknowledged that, "due to limited resources," it restricted its investigation of Barrick to the Porgera mine in Papua New Guinea.  The Porgera mine has been a prime target for criticism for its use of riverine tailings disposal, a practice banned in almost every country in the world.

"It's unbelievably embarrassing," admitted Green Party deputy leader Adriane Carr. "It's got to be bad news for Canada when a foreign government says it's going to sell its shares in a Canadian company they figure is unethical."

This isn't the first time that Norway's Fund has divested from a gold mining company. In fact, looking at a list, the fund – with the notable exception of Walmart – divests exclusively from mining (primarily gold mining) corporations and corporations that produce nuclear weapons or cluster munitions... an interesting juxtaposition highlighting the comparable nature of mining to the production of weapons of mass destruction, especially in terms of long-term environmental consequences.

Compare that to Canada's treatment of gold mining companies. Just this last December, Peter Munk, the chairman and founder of Barrick Gold, received the Order of Canada, Canada's highest civilian honor. Additionally, within Toronto he is honored as a philanthropist, with the Peter Munk Cardiac Center and the Munk Centre for International Studies at the University of Toronto both adorning his name. Similarly, Ian Telfer, the chairman of Goldcorp, the world's second largest gold miner behind Barrick, has the Telfer School of Management at the University of Ottawa bearing his name.

These symbolic gestures, along with the fact that several Canadian Pension funds and even Vancouver-based "Ethical Funds" are still heavily invested in Barrick Gold, show that Canada has a long way to go in demanding that its companies honor human rights and halt its colonial-style, exploitative economic regime. In fact, by its own admittance, Canada's Standing Committee on Foreign Affairs and International Trade stated that "Canada does not yet have laws to ensure that the activities of Canadian mining companies in developing countries conform to human rights standards, including the rights of workers and of indigenous peoples." Since the date of that landmark confession, Canada has yet to adopt any intervening structures (like an ombudsperson) or develop any mandatory regulations for Canadian companies operating abroad.

Gold mining produces an average of 79 tons of waste for every ounce of gold extracted, 50 percent of it is carried out on native lands, and about 80 percent of it is used for jewelry, according to the "No Dirty Gold" campaign, a project of Oxfam and Earthworks. It is no wonder that in a portfolio with plenty of human rights abuses, the Norwegian Pension Fund decided to concentrate on gold miners, cluster munition manufacturers and nuclear weapon producers first. It is time that the rest of the world catch up.

The 10 Worst Corporations of 2008

Posted by on January 9th, 2009

What a year for corporate criminality and malfeasance!

As we compiled the Multinational Monitor list of the 10 Worst Corporations of 2008, it would have been easy to restrict the awardees to Wall Street firms.

But the rest of the corporate sector was not on good behavior during 2008 either, and we didn't want them to escape justified scrutiny.

So, in keeping with our tradition of highlighting diverse forms of corporate wrongdoing, we included only one financial company on the 10 Worst list.

Here, presented in alphabetical order, are the 10 Worst Corporations of 2008.

AIG: Money for Nothing

There's surely no one party responsible for the ongoing global financial crisis. But if you had to pick a single responsible corporation, there's a very strong case to make for American International Group (AIG), which has already sucked up more than $150 billion in taxpayer supports. Through "credit default swaps," AIG basically collected insurance premiums while making the ridiculous assumption that it would never pay out on a failure -- let alone a collapse of the entire market it was insuring. When reality set in, the roof caved in.

Cargill: Food Profiteers

When food prices spiked in late 2007 and through the beginning of 2008, countries and poor consumers found themselves at the mercy of the global market and the giant trading companies that dominate it. As hunger rose and food riots broke out around the world, Cargill saw profits soar, tallying more than $1 billion in the second quarter of 2008 alone.

In a competitive market, would a grain-trading middleman make super-profits? Or would rising prices crimp the middleman's profit margin? Well, the global grain trade is not competitive, and the legal rules of the global economy-- devised at the behest of Cargill and friends -- ensure that poor countries will be dependent on, and at the mercy of, the global grain traders.

Chevron: "We can't let little countries screw around with big companies"

In 2001, Chevron swallowed up Texaco. It was happy to absorb the revenue streams. It has been less willing to take responsibility for Texaco's ecological and human rights abuses.

In 1993, 30,000 indigenous Ecuadorians filed a class action suit in U.S. courts, alleging that Texaco over a 20-year period had poisoned the land where they live and the waterways on which they rely, allowing billions of gallons of oil to spill and leaving hundreds of waste pits unlined and uncovered. Chevron had the case thrown out of U.S. courts, on the grounds that it should be litigated in Ecuador, closer to where the alleged harms occurred. But now the case is going badly for Chevron in Ecuador -- Chevron may be liable for more than $7 billion. So, the company is lobbying the Office of the U.S. Trade Representative to impose trade sanctions on Ecuador if the Ecuadorian government does not make the case go away.

"We can't let little countries screw around with big companies like this -- companies that have made big investments around the world," a Chevron lobbyist said to Newsweek in August. (Chevron subsequently stated that the comments were not approved.)

Constellation Energy: Nuclear Operators

Although it is too dangerous, too expensive and too centralized to make sense as an energy source, nuclear power won't go away, thanks to equipment makers and utilities that find ways to make the public pay and pay.

Constellation Energy Group, the operator of the Calvert Cliffs nuclear plant in Maryland -- a company recently involved in a startling, partially derailed scheme to price gouge Maryland consumers -- plans to build a new reactor at Calvert Cliffs, potentially the first new reactor built in the United States since the near-meltdown at Three Mile Island in 1979.

It has lined up to take advantage of U.S. government-guaranteed loans for new nuclear construction, available under the terms of the 2005 Energy Act. The company acknowledges it could not proceed with construction without the government guarantee.

CNPC: Fueling Violence in Darfur

Sudan has been able to laugh off existing and threatened sanctions for the slaughter it has perpetrated in Darfur because of the huge support it receives from China, channeled above all through the Sudanese relationship with the Chinese National Petroleum Corporation (CNPC).

"The relationship between CNPC and Sudan is symbiotic," notes the Washington, D.C.-based Human Rights First, in a March 2008 report, "Investing in Tragedy." "Not only is CNPC the largest investor in the Sudanese oil sector, but Sudan is CNPC's largest market for overseas investment."

Oil money has fueled violence in Darfur. "The profitability of Sudan's oil sector has developed in close chronological step with the violence in Darfur," notes Human Rights First.

Dole: The Sour Taste of Pineapple

A 1988 Filipino land reform effort has proven a fraud. Plantation owners helped draft the law and invented ways to circumvent its purported purpose. Dole pineapple workers are among those paying the price.

Under the land reform, Dole's land was divided among its workers and others who had claims on the land prior to the pineapple giant. However, wealthy landlords maneuvered to gain control of the labor cooperatives the workers were required to form, Washington, D.C.-based International Labor Rights Forum (ILRF) explains in an October report. Dole has slashed it regular workforce and replaced them with contract workers.

Contract workers are paid under a quota system, and earn about $1.85 a day, according to ILRF.

GE: Creative Accounting

In June, former New York Times reporter David Cay Johnston reported on internal General Electric documents that appeared to show the company had engaged in a long-running effort to evade taxes in Brazil. In a lengthy report in Tax Notes International, Johnston reported on a GE subsidiary's scheme to invoice suspiciously high sales volume for lighting equipment in lightly populated Amazon regions of the country. These sales would avoid higher value added taxes (VAT) in urban states, where sales would be expected to be greater.

Johnston wrote that the state-level VAT at issue, based on the internal documents he reviewed, appeared to be less than $100 million. But, he speculated, the overall scheme could have involved much more.

Johnston did not identify the source that gave him the internal GE documents, but GE has alleged it was a former company attorney, Adriana Koeck. GE fired Koeck in January 2007 for what it says were "performance reasons."

Imperial Sugar: 14 Dead

On February 7, an explosion rocked the Imperial Sugar refinery in Port Wentworth, Georgia, near Savannah. Days later, when the fire was finally extinguished and search-and-rescue operations completed, the horrible human toll was finally known: 14 dead, dozens badly burned and injured.

As with almost every industrial disaster, it turns out the tragedy was preventable. The cause was accumulated sugar dust, which like other forms of dust, is highly combustible.

A month after the Port Wentworth explosion, Occupational Safety and Health Administration (OSHA) inspectors investigated another Imperial Sugar plant, in Gramercy, Louisiana. They found 1/4- to 2-inch accumulations of dust on electrical wiring and machinery. They found as much as 48-inch accumulations on workroom floors.

Imperial Sugar obviously knew of the conditions in its plants. It had in fact taken some measures to clean up operations prior to the explosion. The company brought in a new vice president to clean up operations in November 2007, and he took some important measures to improve conditions. But it wasn't enough. The vice president told a Congressional committee that top-level management had told him to tone down his demands for immediate action.

Philip Morris International: Unshackled

The old Philip Morris no longer exists. In March, the company formally divided itself into two separate entities: Philip Morris USA, which remains a part of the parent company Altria, and Philip Morris International. Philip Morris USA sells Marlboro and other cigarettes in the United States. Philip Morris International tramples the rest of the world.

Philip Morris International has already signaled its initial plans to subvert the most important policies to reduce smoking and the toll from tobacco-related disease (now at 5 million lives a year). The company has announced plans to inflict on the world an array of new products, packages and marketing efforts. These are designed to undermine smoke-free workplace rules, defeat tobacco taxes, segment markets with specially flavored products, offer flavored cigarettes sure to appeal to youth and overcome marketing restrictions.

Roche: "Saving lives is not our business"

The Swiss company Roche makes a range of HIV-related drugs. One of them is enfuvirtid, sold under the brand-name Fuzeon. Fuzeon brought in $266 million to Roche in 2007, though sales are declining.

Roche charges $25,000 a year for Fuzeon. It does not offer a discount price for developing countries.

Like most industrialized countries, Korea maintains a form of price controls -- the national health insurance program sets prices for medicines. The Ministry of Health, Welfare and Family Affairs listed Fuzeon at $18,000 a year. Korea's per capita income is roughly half that of the United States. Instead of providing Fuzeon, for a profit, at Korea's listed level, Roche refuses to make the drug available in Korea.

Korean activists report that the head of Roche Korea told them, "We are not in business to save lives, but to make money. Saving lives is not our business."

Originally posted on December 29, 2008, at:

http://www.multinationalmonitor.org/editorsblog/index.php?/archives/105-The-10-Worst-Corporations-of-2008.html#extended

Robert Weissman is managing director of the Multinational Monitor.

Satyam’s Fraudulent “Maquiladora of the Mind”

Posted by Philip Mattera on January 8th, 2009

It was only a few years ago that a group of offshore outsourcing companies based in India seemed poised to take over a large portion of the U.S. economy. Business propagandists insisted that work ranging from low-level data input to skilled professional work such as financial analysis could be done faster and much cheaper by workers hunched over computer terminals in cities such as Bangalore. The New York Times once described one of these offshoring companies as “a maquiladora of the mind.”

Among the most aggressive of the Indian firms was Satyam Computer Services Ltd., which signed up blue-chip clients such as Ford Motor, Merrill Lynch, Texas Instruments and Yahoo. In a 2004 report I wrote for the U.S. high-tech workers organization WashTech, I found that Satyam was also among the offshoring companies that were doing work for state government agencies. It was hired, for example, as a subcontractor by the U.S. company Healthaxis to develop a system for handling applications for medical insurance services provided by the Washington State Health Care Authority. As it turned out, Healthaxis’s contract was terminated, allegedly because of late delivery and poor quality in the work done by Satyam.

The Washington State fiasco may have been an early omen of things to come. Satyam has just admitted that for years it cooked its books and engaged in widespread financial wrongdoing. The revelation came in a letter sent to the company’s board of directors by Satyam founder and chairman B. Ramalinga Raju (photo), who simultaneously tendered his resignation.

Raju wrote that what started as “a marginal gap between actual operating profit and the one reflected in the books” eventually “attained unmanageable proportions” as the company grew. The fictitious cash balance grew to more than US$1 billion. “It was like riding a tiger,” Raju colorfully wrote, “not knowing how to get off without being eaten.”

While admitting that he engaged in very creative accounting, Raju insisted he did not personally benefit from the fraud, denying for instance that he had sold any of his shares in the company. I guess it is meant to be some consolation that among his sins Raju is not guilty of insider trading.

Apart from Raju, the party most on the hot seat is the company’s auditor, PriceWaterhouseCoopers, whose Indian unit gave Satyam’s financial reports a clean bill of health. The Satyam scandal is being called India’s Enron. It should probably also be called India’s Arthur Andersen as this seems to be another case in which an auditor was either oblivious to widespread accounting misconduct by one of its clients or complicit in it.

Some soul-searching is probably also in order for the many large U.S. corporations that have not hesitated to take jobs away from American workers and ship the work off to Indian companies such as Satyam. The revelation that much of the work has been going to a crooked company is all the more galling.

http://dirtdiggersdigest.org/archives/297

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

Hemispheric Conference against Militarization Says No to Merida Initiative, U.S. Military Bases

Posted by Laura Carlsen on December 30th, 2008
Americas Policy Program, Center for International Policy

More than 800 representatives from organizations throughout the Americas made their way to the northern city of La Esperanza, Honduras to take a strong stand against the militarization of their nations and communities. Following three days of workshops, the participants read their final declaration in front of the gates of the U.S. Army Base at Palmerola, Honduras, just hours from the conference site. The first demand on the list was to close down this and all U.S. military bases in Latin America and the Caribbean. By the end of the demonstration, the walls of the base sported hundreds of spray-painted messages and demands that contrasted sharply with their prison-like austerity.

Palmerola, formally called the Soto Cano Air Base, brought back some very bad memories among the hundreds of Central American participants. The U.S. government installed the base in 1981 and used it to launch the illegal contra operations against the Nicaraguan government. The base was also used to airlift support to counterinsurgency operations in Guatemala and El Salvador and train U.S. forces in counterinsurgency techniques during the dirty wars that left over 100,000 dead, and is now used as a base for the U.S.-sponsored "war on drugs."

The demilitarization conference also called for an immediate halt to the recently launched "Merida Initiative," the Bush administration's new Trojan horse for remilitarization of the region. The resolution asserts that the measure "expands U.S. military intervention and contributes to the militarization of our countries" and representatives from the Central American nations and Mexico included in the military aid package committed to a process of monitoring the funds and defeating further appropriations.

The Merida Initiative was announced by President Bush as a "counter-narcotics, counter-terrorism, and border security" cooperation initiative in October 2007. The model extends the Bush administration's infamous national security strategy of 2002 to impose it as the U.S.-led security model for the hemisphere. The approach relies on huge defense contracts to U.S. corporations, and military and police deployment to deal with issues ranging from drug trafficking to illegal immigration and seeks to extend U.S. military hegemony in foreign lands. It has been proven in Colombia and other areas where it has been applied to have the effect of increasing violence, failing to decrease drug flows, and leading to extensive human rights violations.

Among the 14 resolutions of the conference, three others reject aspects of the Initiative: the repeal of anti-terrorist laws that criminalize social protest and are a direct result of U.S. pressure to impose the disastrous Bush counter-terrorism paradigm; the demand to replace the militarized "war on drugs" model with measures of citizen participation, community heath, etc.; and the demand for full respect for the rights of migrants.

Although on the surface, Latin America is experiencing a period of relative calm after the brutality of the military dictatorships and the dirty wars, grassroots movement leaders from all over the continent described a context of increasing aggression. The indigenous and farm organizations that occupy territories coveted by transnational corporations have become targets of forced displacement. Social movements that protest privatization and free trade agreements have been dubbed terrorists and attacked and imprisoned under new anti-terrorist laws that are a poor legal facade for outright repression. The use of the military troops in counter-narcotic activities has become commonplace and often hides other agendas of the powerful. Police forces have come to deal with youth as if being young itself were a crime.

In viewing the threats of militarization in their societies, participants use a broader definition than just the presence of army bases and troops. "Militarism," states the Campaign for Demilitarization of the Americas, is " the daily presence of the military logic in our society, in our economic forms, in our social links, and in the logic of gender domination and the supposed natural superiority of men over women." Using this concept, the conference covered the profound need to change the educational system and social norms, to work from within communities, as well as making demands for changes in the external conditions that affect them.

Despite days of testimonies that sometimes included tears and anger, delegates to the conference expressed hope above all else. Ecuador's new constitution and decision to kick out the U.S. army base at Manta was cited as proof of progress.

Both concrete plans for action and an encouraging consensus emerged: the breadth of the challenge can be overwhelming but the dream of lasting peace provides an irresistible light at the end of the tunnel.

The declaration concludes on this note: "... through these campaigns and actions on the grassroots level, organized within each nation and throughout the continent, we can reach a day not long from now when we fulfill the dream of living free of violence, exclusion, and war."

Originally posted on October 17, 2008. Read the full declaration:
http://americas.irc-online.org/am/5605

Popular Uprising Against Barrick Gold in Tanzania sparked by killing of local

Posted by Sakura Saunders on December 14th, 2008
ProtestBarrick.net

Why would "criminals" set fire to millions worth in mine equipment?

How was it that these "intruders" had an estimated 3,000 - 4,000 people backing them up?

In what appears to be a spontaneous civilian movement against Barrick Gold, the world's largest gold miner, thousands of people invaded Barrick`s North Mara Gold Mine this week in Tarime District and destroyed equipment worth $15 million. Locals say that the uprising was sparked by the killing of a local, identified as Mang'weina Mwita Mang'weina.  According to a Barrick Public Relations officer (as reported by the Tanzanian Guardian newspaper), "the intruders stoned the security personnel relentlessly until they overpowered them. The guards abandoned their posts and retreated to safety."

While Barrick implies that "high levels of crime" are the cause of this recent outbreak, recent reports suggest a different picture.

Allan Cedillo Lissner, a photojournalist who recently documented mine life near the North Mara mine, explains:

Ongoing conflict between the mine and local communities has created a climate of fear for those who live nearby. Since the mine opened in 2002, the Mwita family say that they live in a state of constant anxiety because they have been repeatedly harassed and intimidated by the mine's private security forces and by government police. There have been several deadly confrontations in the area and every time there are problems at the mine, the Mwita family say their compound is the first place the police come looking. During police operations the family scatters in fear to hide in the bush, "like fugitives," for weeks at a time waiting for the situation to calm down. They used to farm and raise livestock, "but now there are no pastures because the mine has almost taken the whole land ... we have no sources of income and we are living only through God's wishes. ... We had never experienced poverty before the mine came here." They say they would like to be relocated, but the application process has been complicated, and they feel the amount of compensation they have been offered is "candy."

Evans Rubara, an investigative journalist from Tanzania, blames this action on angry locals from the North Mara area who are opposed to Barrick's presence there. "This comes one week after Barrick threatened to leave the country based on claims that they weren't making profit," comments Evans after explaining that Barrick does not report profit to avoid taxes in the country. "This is a sign to both the government of Tanzania and the International community (especially Canada) that poor and marginalized people also get tired of oppression, and that they would like Barrick to leave."

Only one week prior, Barrick's African Region Vice President, Gareth Taylor threatened to leave Tanzania due to high operating costs, claiming that the company did not make profits there. Barrick's Toronto office quickly denied this report, stating that "the company will work with the government to ensure the country's legislation remains 'competitive with other jurisdictions so that Tanzanians can continue to benefit from mining.'"

Interestingly, Taylors threat came shortly after he attended a workshop to launch the Extractive Industries Transparency Initiative (EITI) in Dar es Salaam.

One thing is clear, though; these reports of hundreds, backed by thousands, of villagers attacking mine infrastructure reflects a resentment that goes beyond mere criminal action. And this surge in violence should be examined in the context of the on-going exploitation and repressive environment surrounding the mine.

James Bond Takes on the Corporate Water Privateers

Posted by Jeff Conant on December 10th, 2008

Spoiler Alert!

Back in the good old days of the Cold War, everybody’s favorite secret agent, James Bond, fought villains like Dr. No, an evil scientist out to sabotage U.S. missile tests, and Mr. Big, a Soviet agent using pirate treasure to finance espionage in America. But as Bond’s friend Mathis tells him in Quantum of Solace, released this month, “When one is young, it’s easy to tell the difference between right and wrong. As one gets older, the villains and heroes get all mixed up.”

The reference is to a shady new Bond villain, agent of the Quantum organization – one Dominic Greene. In public, Greene is a leading environmentalist whose organization, Greene Planet, buys up large tracts of land for ecological preserves. But behind the scenes, Greene has another agenda. As he says to his co-conspirators, “This is the most valuable resource in the world and we need to control as much of it as we can.”

The film makes a number of plays on the assumption that the resource in question is oil – but oil is so…twentieth century.

By the time Bond has pursued Greene from Italy to Haiti, from Haiti to Austria, and crash-landed his plane in a sinkhole in the high, barren desert of Bolivia, we make the discovery that this vital resource is – surprise! – water.

Colluding with Greene is a cast of evil characters taken straight from the history books. We have General Medrano, the ex-dictator of Bolivia, to whom Greene says, “You want your country back? My organization can give it to you.” We have the U.S. Ambassador, myopically sticking to the familiar program: “Okay, we do nothing to stop a coup, and you give us a lease to any oil you find.” And we have the British foreign office, continually wrangling with M15, Bond’s spy agency. When Bond’s boss, M, tells him that Greene is not an environmentalist but a villain, the Foreign Minister says, “If we refused to do business with villains, we’d have almost no one to trade with.”  Ain’t it the truth.

The fact that Quantum of Solace makes water the villain’s object of greed, replacing oil, gold, diamonds, and mutually assured destruction, is telling of the point we’ve reached. More telling still is the fact that our villain’s cover has him acting as an environmentalist, the ultimate corporate greenwasher. The fact that the action winds up in Bolivia – the country where, in real life, both Bechtel and Suez have tried and failed to take control of community water resources during and shortly after the reign of former-dictator-turned-neoliberal President Hugo Banzer – brings the plot frighteningly close to reality. The privatization of water in Bolivia back in 2000, and the massive popular response that turned out rural water stewards and urban ratepayers to riot for months until the multinational transgressor was ousted, was the spark that set social movements worldwide on red alert. Since then, numerous private water companies have been refused contracts on the grounds that popular movements, and, increasingly, governments, recognize the need to treat water as a human right and a public good – not a commodity.

If only the water movement had a few organizers with the physique, the gadgets, and the, er, style of Bond.

While we have many great documentaries telling the story of the global water wars, including this year’s Flow and Blue Gold, one is forced to wonder if 007 does a greater service to the water movement than even our most highly talented documentarians. After all, who better than Hollywood to characterize the greenwashing corporate water profiteers as straight up evil, sans the need to justify the hyperbole?

Matieu Amalric, the actor who played Dominic Greene, wanted to wear make-up for the role, but director Marc Forster “wanted Greene not to look grotesque, but to symbolize the hidden evils in society.” Similarly, the original screenplay had Greene having some “hidden power.” But in the final cut, the director seems to have decided that corporate power was power enough.

One wonders if Dominic Greene – had he not died drinking motor oil to quench his thirst in the Bolivian desert – might give the keynote speech at the upcoming World Water Forum in Istanbul (WWF). After all, the World Water Council (WWC) that puts on the forum is presided over by Loïc Fauchon, a former executive at one of the French subsidiaries of Suez, the world’s largest private water corporation.

As we learn from the WWF website, “One of the benefits of joining the WWC is the Council's ability to influence decisions related to world water management that affect organizations, business, and communities.” Perhaps their secret meetings will also be attended by executives of the Worldwide Fund for Nature, whose recent partnership with Coca-Cola aims to help the global soft-drink giant become “the most efficient company in the world in terms of water use,” with “every drop of water it uses…returned to the earth or compensated for through conservation and recycling programs.” And, with this blending of fact and fiction, it would hardly be surprising to find Greene’s signature on the CEO Water Mandate, which has companies with such devastating environmental track records as Dow Chemical, Shell Oil, Unilever, and Nestlé pledging to “help address the water challenge faced by the world today.”

When M, Bond’s overweening boss at M15, finds out about Quantum, she demands, “What the hell is this organization, Bond? How can they be everywhere and we know nothing about them?”

Well, my darling M, the answer is simple: like transnational corporations, and like the large NGO’s that work with the private sector to reform its practices and green its reputation, and like the International Finance Institutions whose interests are increasingly endangering the United Nations’ mandate to defend and protect human rights, they can be everywhere because their particular form of villainy works best when hidden in plain sight.

Thankfully, the world’s water is safe, because, behind the scenes, secret agent 007 is on the job.

Well, not true. But countless people and organizations worldwide, from the Red Vida to the African Water Network, from the People’s Health Movement to the Reclaiming Public Water Network, are vigilant in the defense of the human right to water. With the recent placement of water warrior Father Miguel D’Escoto, a Nicaraguan liberation theologian, in the presidential seat at the UN General Assembly, and his selection of Maude Barlow as a senior advisor on water, we are witnessing a tidal change in the highest levels of international cooperation.

They may not have the brutal take-no-prisoners attitude or the classy cocktail swagger of Mister Bond, but they represent a lot of people, and they’re on the right side.

So, corporate evil-doers, and your greenwashing NGO henchmen, beware. The forces of good are on the loose.

Originally posted at Food & Water Watch:

http://www.foodandwaterwatch.org/blog/archive/2008/11/20/james-bond-takes-on-the-corporate-water-privateers/view

Public Ownership -- But No Public Control

Posted by Rob Weissman on October 21st, 2008

Originally posted Tuesday, October 14. 2008 -- It is an extraordinary time. On Friday, the Washington Post ran a front-page story titled, "The End of American Capitalism?" Today, the banner headline is, "U.S. Forces Nine Major Banks to Accept Partial Nationalization."

There's no question that this morning's announcement from the Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) is remarkable.

It was also necessary.

Over the next several months, we're going to see a lot more moves like this. Government interventions in the economy that seemed unfathomable a few months ago are going to become the norm, as it quickly becomes apparent that, as Margaret Thatcher once said in a very different context, there is no alternative.

That's because the U.S. and global economic problems are deep and pervasive. The American worker may be strong, as John McCain would have it, but the "fundamentals" of the U.S. and world economy are not. The underlying problem is a deflating U.S. housing market that still has much more to go. And underlying that problem are the intertwined problems of U.S. consumer over-reliance on debt, national and global wealth inequality of historic proportions, and massive global trade imbalances.

Although it was enabled by deregulation, the financial meltdown merely reflects these more profound underlying problems. It is, one might say, "derivative."

Nonetheless, the financial crisis was -- and conceivably still might be -- by itself enough to crash the global economy.

Today, following the lead of the Great Britain, the United States has announced what has emerged as the consensus favored financial proposal among economists of diverse political ideologies. The United States will buy $250 billion in new shares in banks (the so-called "equity injection"). This is aimed at boosting confidence in the banks, and giving them new capital to loan. The new equity will enable them to loan roughly 10 times more than would the Treasury's earlier (and still developing) plan to buy up troubled assets. The FDIC will offer new insurance programs for bank small business and other bank deposits, to stem bank runs. The FDIC will provide new, temporary insurance for interbank loans, intended to overcome the crisis of confidence between banks. And, the Federal Reserve will if necessary purchase commercial paper from business -- the 3-month loans they use to finance day-to-day operations. This move is intended to overcome the unwillingness of money market funds and others to extend credit.

But while aggressive by the standards of two months ago, the most high-profile of these moves -- government acquisition of shares in the private banking system -- is a strange kind of "partial nationalization," if it should be called that at all.

Treasury Secretary Henry Paulson effectively compelled the leading U.S. banks to accept participation in the program. And, at first blush, he may have done an OK job of protecting taxpayer monetary interests. The U.S. government will buy preferred shares in the banks, paying a 5 percent dividend for the first three years, and 9 percent thereafter. The government also obtains warrants, giving it the right to purchase shares in the future, if the banks' share price increase.

But the Treasury proposal specifies that the government shares in the banks will be non-voting. And there appear to be only the most minimal requirements imposed on participating banks.

So, the government may be obtaining a modest ownership stake in the banks, but no control over their operations.

In keeping with the terms of the $700 billion bailout legislation, under which the bank share purchase plan is being carried out, the Treasury Department has announced guidelines for executive compensation for participating banks. These are laughable. The most important rule prohibits incentive compensation arrangements that "encourage unnecessary and excessive risks that threaten the value of the financial institution." Gosh, do we need to throw $250 billion at the banks to persuade executives not to adopt incentive schemes that threaten their own institutions?

The banks reportedly will not be able to increase dividends, but will be able to maintain them at current levels. Really? The banks are bleeding hundreds of billions of dollars -- with more to come -- and they are taking money out to pay shareholders? The banks are not obligated to lend with the money they are getting. The banks are not obligated to re-negotiate mortgage terms with borrowers -- even though a staggering one in six homeowners owe more than the value of their homes.

"The government's role will be limited and temporary," President Bush said in announcing today's package. "These measures are not intended to take over the free market, but to preserve it."

But it makes no sense to talk about the free market in such circumstances. And these measures are almost certain to be followed by more in the financial sector -- not to mention the rest of economy -- because the banks still have huge and growing losses for which they have not accounted.

If the U.S. and other governments are to take expanded roles in the world economy -- as they must, and will -- then the public must demand something more than efforts to preserve the current system. The current system brought on the financial meltdown and the worsening global recession. As the government intervenes in the economy on behalf of the public, it must reshape economic institutions to advance broad public objectives, not the parochial concerns of the Wall Street and corporate elite.

http://www.multinationalmonitor.org/editorsblog/index.php?/archives/99-Public-Ownership-But-No-Public-Control.html#extended

Robert Weissman is managing director of the Multinational Monitor.

Getting Wall Street Pay Reform Right

Posted by Robert Weissman on September 30th, 2008

There's mounting talk on Capitol Hill that a Wall Street bailout will include some limits on executive compensation, as well as contradictory reports about whether a deal on controlling executive pay has already been reached.

Four days ago, such a move seemed very unlikely. But the pushback from Congress -- from both Democrats and Republicans -- has been surprisingly robust, thanks in considerable part to a surge of outrage from the public.

Will restrictions on CEO pay just be a symbolic retribution, as some have charged?

The answer is, it depends.

Meaningful limits not just on CEO pay, but also on the Wall Street bonus culture, could significantly affect the way the financial sector does business. Some CEO pay proposals, by contrast, would extract a pound of flesh from some executives but have little impact on incentive structures.

There are at least five reasons why it is important to address executive compensation as part of the bailout legislation.

First, there should be some penalty for executives who led their companies -- and the global financial system -- to the brink of ruin. You shouldn't be rewarded for failure. And while reducing pay packages to seven digits may feel really nasty given Wall Street's culture of preposterous excess, in the real world, a couple million bucks is still a lot of money to make in a year.

Second, if the public is going to subsidize Wall Street to the tune of hundreds of billions of dollars, the point is to keep the financial system going -- not to keep Wall Street going the way it was. Funneling public funds for exorbitant executive compensation would be a criminal appropriation of public funds.

Third, the Wall Street salary structure has helped set the standard for CEO pay across the economy, and helped establish a culture where executives consider outlandish pay packages the norm. This culture, in turn, has contributed to staggering wealth and income inequality, at great cost to the nation. We need, it might be said, an end to the culture of hyper-wealth.

Fourth, as Dean Baker of the Center for Economic and Policy Research says, the bailout package must be, to some extent, "punitive." If the financial firms and their executives do not have to give something up for the bailout, then there's no disincentive to engage in unreasonably risky behavior in the future. This is what is meant by "moral hazard."

If Wall Street says the financial system is on the brink of collapse, and the government must step in with what may be the biggest taxpayer bailout in history, says Baker, then Wall Street leaders have to show they mean it. If they are not willing to cut their pay for a few years to a couple of million dollars an annum, how serious do they really think the problem is?

Finally, and most importantly, financial sector compensation systems need to be changed so they don't incentivize risky, short-term behavior.

There are two ways to think about how the financial sector let itself develop such a huge exposure to a transparently bubble housing market. One is that the financial wizards actually believed all the hype they were spreading. They believed new financial instruments eliminated risk, or spread it so effectively that downside risks were minimal; and they believed the idea that something had fundamentally changed in the housing market, and skyrocketing home prices would never return to earth.

Another way to think about it is: Wall Street players knew they were speculating in a bubble economy. But the riches to be made while the bubble was growing were extraordinary. No one could know for sure when the bubble would pop. And Wall Street bonuses are paid on a yearly basis. If your firm does well, and you did well for the firm, you get an extravagant bonus. This is not an extra few thousand dollars to buy fancy Christmas gifts. Wall Street bonuses can be 10 or 20 times base salary, and commonly represent as much as four fifths of employees' pay. In this context, it makes sense to take huge risks. The payoffs from benefiting from a bubble are dramatic, and there's no reward for staying out.

Both of these explanations may be true to some degree, but the compensation incentives explanation is almost certainly a significant part of the story.

Different ideas about how to limit executive pay would address the multiple rationales for compensation reforms to varying degrees.

A two-year cap on executive salaries would help achieve the first four objectives, but by itself wouldn't get to the crucial issue of incentives.

One idea in particular to be wary of is "say on pay" proposals, which would afford shareholders the right to a non-binding vote on CEO pay compensation packages. These proposals would go some way to address the disconnect between executive and shareholder interests, reducing the ability of top executives to rely on crony boards of directors and conflicted compensation consultants to implement outrageous pay packages. But while they might increase executive accountability to shareholders, they wouldn't direct executives away from market-driven short-term decision making. Shareholders tend to be forgiving of outlandish salaries so long as they are making money, too, and -- worse -- they actually tend to have more of a short-term mentality than the executives. So "say on pay" is not a good way to address the multiple executive compensation-related goals that should be met in the bailout legislation.

The ideal provisions on executive compensation would set tough limits on top pay, but would also insist on long-term changes in the bonus culture for executives and traders. Not only should bonuses be more modest, they should be linked to long-term, not year-long, performance. That would completely change the incentive to knowingly participate in a financial bubble (or, more generously, take on excessive risk), because you would know that the eventual popping of the bubble would wipe out your bonus.

Four days ago, forcing Wall Street to change its incentive structure seemed pie in the sky. Today, thanks to the public uproar, it seems eminently achievable -- if Members of Congress seize the opportunity.

http://www.multinationalmonitor.org/editorsblog/index.php?/archives/98-Getting-Wall-Street-Pay-Reform-Right.html

Robert Weissman is managing director of the Multinational Monitor.

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