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
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
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.
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.
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.
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.
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
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.
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.
arguing to uphold the existing corporate expenditure restrictions, the
Federal Election Commission has emphasized these common sense
"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.
Citizen is organizing people to protest against a roll back of existing
restrictions on corporate campaign expenditures. To join the effort, go
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.
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
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.
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.
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.
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
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.
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."
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."
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
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,
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 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
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?
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
Maybe Wal-Mart should focus on improving its own scores before presuming to rate everyone else.
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.
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.
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
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
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 Chronicleinterview
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
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.
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
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.
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.”
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
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.
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
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
“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
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
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.
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.
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.
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.
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
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.)
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
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.
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
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.
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
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
Contract workers are paid under a quota system, and earn about $1.85 a day, according to ILRF.
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
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
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.
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
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.
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
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
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
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.
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 conferencesite. 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
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
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
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.
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."
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
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
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
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.
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.
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
Although it was enabled by deregulation, the financial meltdown merely
reflects these more profound underlying problems. It is, one might say,
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
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
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
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
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
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
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.