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Mongolian Nomadic Herders Worry About Impact of Rio Tinto's Gold Mine

Posted by Puck Lo on September 24th, 2012
CorpWatch Blog
Father and daughter, resettled by Oyu Tolgoi. Photo by CEE Bankwatch Network. Used under Creative Commons license

Mongolian livestock herders are worried that a series of massive gold and copper mining projects will dry up scarce water reserves and exacerbate desertification in the delicate Gobi Desert when operations begin next year to tap one of the world’s largest copper and gold deposits.

A landlocked country of 2.8 million caught between China and Russia, Mongolia is home to the first "cowboys" - nomadic herdsman. Even today, two out of five people in Mongolia still make their living herding livestock, and the same number live in poverty.

After the fall of the Soviet Union, Mongolia’s major former trading partner, the government encouraged free market development and expansion of mining in the gold, copper and uranium-rich country, on the advice of the World Bank. Last year the country’s economy grew 17 percent from mining alone - faster than any other in the world and twice as fast as China.

Eurasia Capital, a Hong Kong-based investment bank, estimates that Mongolia sits on $1.3 trillion worth of untapped mineral assets. They predict that the country’s gross domestic product could swell from $5 billion to $30 billion by 2020, based on its mineral resources alone.

The biggest project to date - the $6 billion Oyu Tolgoi gold and copper mine (“Turquoise Hill” in Mongolian) - is now nearly ready to open. Located just 50 miles north of the Chinese border, it is expected to be one of the world’s three largest mines when it reaches full production in 2018. Two thirds of Oyu Tolgoi is owned by Canadian-owned Turquoise Hill (formerly Ivanhoe Mines), which in turn is majority-owned by Rio Tinto, the world’s largest private mining company, based in London.

“This is the biggest agreement in the history of the country by a magnitude of a thousand,” Jim Dwyer, executive director of the Business Council of Mongolia, told the Global Mail in February.

Indeed, even while under construction Oyu Tolgoi accounted for 30 percent of Mongolia’s current economy, according to the mine’s spokesperson. Already thousands of young people in their 20s and 30s have flocked to the capitol, Ulan Bator, seeking jobs working for Oyu Tolgoi. The noveaux rich spend time at the new Irish pubs near the Louis Vuitton store and watch Hummers drive by alongside Soviet-era buses.

“When international investors make big decisions to employ their scarce capital, cutting-edge technology, management expertise, and marketing prowess, they look for responsible partners,” Oyu Tolgoi’s Australian CEO Cameron McRae, said. “Partners like Rio Tinto prefer to invest in countries when the government takes the long view, as we do.”

But critics say that the large-scale mining operations have dire social and environmental costs.

“We don’t need money from mining,” Battsengel Lkhamdoorov, a 40-year-old former herder, told the New York Times. “What we need is water and land.”

Sukhgerel Dugersuren, head of Oyu Tolgoi Watch, a Mongolian non-governmental organization that keeps tabs on the mine, says the agreement with Rio Tinto is a bad deal for Mongolia. Dugersuren said that the investment agreement the government signed with Rio Tinto is unfair and that World Bank leadership pushed too hard for the Mongolian government to sign on. She told the Bank Information Center in Washington DC that the World Bank extended  "too much credit to Mongolia” in support of mining “without implementing compliance monitoring mechanisms or impact assessments.”

Today, the Mongolian government owns just 34 percent of the mine under the deal that was signed with Rio Tinto in 2009. Mongolian members of parliament are now pressuring the government to push the mining companies to renegotiate for a majority 51 percent share but the company has refused - noting that the agreement only allows for the state to negotiate for a larger share after the project has been in operation for 30 years - and even then no more than 50 percent.

Even worse, the London Mining Network alleges that the Mongolian government signed the agreement “before a technical and economic feasibility study was accepted by the Mongolian government, as prescribed by law." Additionally, the London Mining Network notes that the mining company has failed to show that there is enough water for the 30 to 60-year project.

This is despite the fact that mining industries consume the largest part of the country's annual water consumption, says The RiverMovements, a Mongolian environmental group which points out that Oyu Tolgoi will use approximately 243 gallons of water a second.

Meanwhile nomadic herders, who comprise 40 percent of the country’s population, will be forced to wander further to find water for their flocks, a 2011 United States Agency of International Development report said.

“(Oyu Tolgoi) does not understand the dynamics of herding and the need to follow the livestock to adequate pasture and water sources,” the report stated. “It is economically and psychologically difficult for herder families to move from their traditional land.”

Rio Tinto says it is committed to having a “zero impact on community water sources.”

“The water source for Oyu Tolgoi is the Gunii Hooloi aquifer - a deep, non-drinkable water source that is separate from the shallow water sources used by households and animals,” the company states on its website. “Oyu Tolgoi is only allowed to use approximately 20 per cent of the water from Gunii Hooloi, so the aquifer can never be exhausted. We do not need to take water from any other source.”

But many local herders are skeptical.

"When we come to the well, we can see the level of the well water is 8 inches lower than it used to be," Mijiddorj Ayur, a 76-year-old who herds his camels near Oyu Tolgoi, told National Public Radio.

Oyu Tolgoi Watch believes that the country should invest instead in sustainable economic development that bolsters traditional livelihoods like cashmere production and organic beef ranching.

“If the same amount of credit was made available to developing world standards products and services from these sectors Mongolia could sit on its wealth until there is dire need to disturb the earth,” Dugersuren said. “Unfortunately, this does not coincide with the interest of the World Bank to support Western industries to extract and sell minerals to China.”

The government has made a major effort to ban mining in environmentally sensitive areas but ironically this has the heaviest economic impact on the 100,000 Mongolian self-employed miners rather than on Rio Tinto. By contrast, Oyu Tolgoi will employ about 3,500 workers when it is fully operational, according to the World Bank.


Cameroon Palm Oil Plantation Withdraws Sustainability Application

Posted by Pratap Chatterjee on September 6th, 2012
CorpWatch Blog
A bulldozer clears natural forest for the Fabe SGSOC oil palm nursery. Photo: Jan-Joseph Stok / Greenpeace.

A subsidiary of Herakles Capital, a New York based investment firm, has decided to cancel its application to join the Roundtable on Sustainable Palm Oil (RSPO) after environmental groups alleged that its 73,086 hectare project in southwestern Cameroon would threaten the sustainability of the local community.

In 2009, the SG Sustainable Oils Cameroon, Ltd. (SGSOC), which is wholly owned by Herakles Capital, acquired a 99 year lease to land in Ndian and Kupe-Manenguba divisions where it drew up plans for a $350 million palm oil plantation. (Herakles Capital has several other investments in Africa such as the Bujagali dam in Uganda, the Boke Alumina Project in the Republic of Guinea and an East African undersea fiber-optic project.)

“From its very name, American-owned SG Sustainable Oils Cameroon, Ltd. (SGSOC) presents a pro-environment, pro-resources image,” writes Frederic Mousseau, policy director of the Oakland Institute in California in a new report released this week. “(But it) is also part of a strategy to deceive the public into believing that there is logic to cutting down rainforests to make room for palm oil plantations.”

SGSOC has gone to great lengths to convince the public that it is socially responsible. “Our project, should it proceed, will be a big project with big impacts – environmentally and socially,” Herakles CEO Bruce Wrobel wrote to the Oakland Institute in July 2011. “The big question – and the real story – is whether it ends up strongly positive or strongly negative. I couldn’t be more convinced that this will be an amazingly positive story for the people within our impact area.”

In addition to Herakles, Wrobel operates a non-profit dedicated to poverty reduction named “All for Africa” that boasts board members like Nigerian-American actor Gbenga Akinnagbe who shot to fame in The Wire, a U.S. TV series, and the film: The Taking of Pelham 123.

And SGSOC also applied to join the international Round Table on Sustainable Palm Oil (RSPO), which has signed up 779 members and associates including almost every major industry player in the world, in an effort to burnish its social responsibility credentials.

Indeed RSPO was created in 2004 to address the numerous clashes over palm plantations around the world with the help of non-government organizations such as the World Wildlife Fund which helped set up the organization.
But the palm oil industry – which produces 50 million tons of edible oils and biofuels a year - remains deeply controversial.

As CorpWatch writer Melody Kemp noted in her recent article for us “Green Deserts: The Palm Oil Conflict” the plantation companies make money in two ways: First they clear cut and sell the existing high-value trees, burning the residue. The haze from those forest fires has interrupted regional air traffic and caused severe respiratory illnesses in countries like Indonesia, Malaysia as well as Singapore. Then the companies plant the spiky oil palms trees, creating vast, eerily silent monoculture plantations.

Activists have sparked a raging debate over the industry, faulting palm oil for contributing significantly to carbon dioxide and methane emissions, the loss of biodiversity and precious carbon sequestering forests, land subsidence, poverty, and for exacerbating starvation resulting from land appropriation.

The very same problems have been predicted in an Environmental and Social Impact Assessment (ESIA) conducted by SGSOC itself. The company assessment suggested that the negative impact of the plantation on livelihoods will be “major” and “long-term.”

Nor is the Herakles investment the most efficient way to support the local economy, according to a report by on the SGSOC deal by two Cameroonian NGOs, the Centre for Environment and Development (CED) and Réseau de Lutte contre la Faim (RELUFA). The groups calculated that the government of Cameroon could generate 13 times more employment and significantly larger tax revenue if it were to require local bread-makers to use 20 percent locally produced flour (derived from sweet potatoes, corn or cassava), using just 15,000 hectares of land.

Local farmers and politicians are especially skeptical of SGSOC because palm oil plantations are not new to the region. Beginning in 1927, companies like Pamol have operated similar projects for decades. “Plantation jobs have always been modern day slavery,” says Joshua Osih of the Social Democratic Front, Cameroon’s main opposition party, in an interview for the film “The Herakles Debacle” just released by the Oakland Institute. “We’ve seen a lot of industrial plantations develop around this area and nothing, absolutely nothing, has happened positively to the population.”

“Everybody here is self employed,” Okie Bonaventure Ekoko, a cocoa farmer from Mboko village told the film maker Franck Bieleu. “There is no advantages that the people here will have (from Herakles investments). We don’t need them, we are fine.”

“And if they come and say they want to take this land from us, we are not ready for it,” says Esoh Sylvanus Asui, a farmer from Bombe Konye village. “We will fight and we will die for our land.”

In May 2011, some 50 local and international environmental and community groups wrote a letter to Wrobel expressing concern. In March 2012 a number of the same groups lodged a formal complaint against Herakles with the RSPO alleging that Herakles' project violated Cameroonian laws and noted that it "would disrupt the ecological landscape and migration routes of protected species." Meanwhile local farmers have begun to organize against the project. On June 6, 2012, villagers from Fabe and Toko held a protest against the plantation during the visit of the local governor.

On August 24 2012, Herakles withdrew its application to the RSPO.

“The RSPO regrets this withdrawal of membership by Herakles Farms,” the organization said in a brief statement posted to its website. “This action pre-empts recommendations from the RSPO Complaints Panel to further verify the allegations made by the complainants.”

The company did not respond to requests for comment from the media.

Gazprom Arctic Oil Rig Blockaded By Greenpeace

Posted by Pratap Chatterjee on August 28th, 2012
CorpWatch Blog
Greenpeace protest at Prirazlomnaya rig. Image courtesy Greenpeace.

Sailors working for Gazprom, the Russian oil giant, used water cannons to remove Greenpeace activists who were protesting their plans to drill in the Arctic. The environmental group took action to signal the potential for a catastrophic environmental disaster as well as the impact on climate change.

Gazprom is drilling in the Prirazlomnoye oil field located in the Pechora Sea off the northwest coast of Russia. It is the first company to attempt commercial extraction of the 526 million barrels of oil that are estimated to be located in the offshore fields. To date it has been impossible to work in the region because it is blocked by thick ice for eight months of the year. The Prirazlomnaya rig, a Russian all weather oil platform, was specially designed at the Severodvinsk shipyard, to overcome the harsh conditions.

Last Friday climbers from the environmental group scaled the Prirazlomnaya rig and spent 15 hours holding up a banner that read “Save the Arctic.” On Monday the Greenpeace activists used four speed boats to block the Anna Akhmatova ship from bringing workers to the rig. Sailors turned water cannons on the boats to force them out of the way.

“The force of the water was so intense it knocked my boots off!” tweeted one Greenpeace activist who attempted to block the Anna Akhmatova. “So much water, sometimes all you saw is white. Felt like we were in a hurricane,” tweeted another. (Watch a video of the Greenpeace boat being flipped over)

We climbed Gazprom's rusting oil platform backed by over a million people who have joined a new movement to protect the Arctic,” Kumi Naidoo, the executive director of Greenpeace international, said in a press release. (Naidoo was one of the climbers.) “(I)t’s not a question of if an Arctic oil spill will happen, but when. The only way to stop a catastrophic oil spill occurring in this unique region is to permanently ban all drilling now."

Gazprom received a permit to drill for oil in July 2007. The company submitted an official oil spill response plan that expired last month. The original document “shows that the company would be completely unprepared to deal with an accident in the Far North, and would rely on substandard clean-up methods — such as shovels and buckets — that simply do not work in icy conditions,” says Greenpeace.

“We can often observe conditions when the operating company will not be able to contain and recover (potential oil) spill(s),” says Valentin Ivanovich Zhuravel, the project manager at the Informatika Riska, a Russian consultancy, that was asked by Greenpeace and WWF Russia to comment on the response plan."This can lead to significant pollution in the Pechora Sea coast and protected areas.”

The company disagrees. "Last winter demonstrated the platform['s] safety and reliability in the Arctic environment," a Gazprom spokesperson told the Moscow Times in an e-mail. "A professional emergency response crew works night and day. Crews of the offshore ice-resistant stationary platform and support vessels were trained under a dedicated program for emergency response and first aid in case of sea accidents.”

Greenpeace has received support for its protest from the local indigenous community in the Komi Republic. “The peoples of the north will no longer be bought with dimes and cents to stand silently by while the oil companies destroy our native land,” says a support statement issued by the Save the Pechora River committee. “Our culture and history cannot be bought off and replaced with pipelines and drill rigs.”

Meanwhile, ice cover in the Arctic Ocean has thawed to a record low of less than 4.0 million square kilometers. The numbers could drop further given that ice cover typically continues to melt till the end of September.

"This is due to climate change," Nicolai Kliem, head of the ice service at Danish Meteorological Institute (DMI) told Reuters.

Gazprom is not the only company to be targeting the Arctic. In the Nenets autonomous district, also in northwestern Russia, Lukoil and Bashneft are currently drilling for oil in the Trebs oil field.

Cairn Energy, a Scottish company, is exploring off the coast of Greenland.  And in Alaska, Shell obtained authorization to drill for oil in the Chukchi sea, with the personal help of Barack Obama, the U.S. president.

Grupo San Jose Linked to Bulldozing of Land of Paraguayan Uncontacted Tribe

Posted by Pratap Chatterjee on August 27th, 2012
CorpWatch Blog
Ayoreo woman. Photo: Survival International

Grupo San Jose, a Spanish construction company, has been accused of bulldozing the forest home of the Ayoreo, one of the last uncontacted tribes outside the Amazon. The indigenous community lives in the Chaco forests, a semi-arid zone in northern Paraguay not too far from the borders with Brazil and Bolivia.

In late July, Paraguayan forestry officials caught workers for Carlos Casado SA “bulldozing forest, constructing buildings and reservoirs, and putting up wire fencing” on land that the Totobiegosode – a sub-group of the Ayoreo - are known to inhabit. The discovery was confirmed by a letter from the Paraguayan ministry of environment sent to Organizacion Payipie Ichadie Totobiegosode (OPIT)

Carlos Casado SA is a ranching subsidiary of Grupo San Jose. The president of both Carlos Casodo and Grupo San Jose is Jacinto Rey González, who is also the controlling shareholder of Grupo San Jose.

“It’s shocking to discover that one of Spain’s biggest companies is involved in such scandalous behavior. Perhaps they thought that as this is happening in a far-off corner of South America, no-one would notice,” Stephen Corry, director of Survival International, a UK-based NGO, said in a press release. “But if they continue, they will be directly responsible for the destruction of the Ayoreo’s heartland – in flagrant violation of Paraguayan and international laws.”

The Ayoreo are nomads who hunt wild pigs and large tortoises. They live in small communities of three to four families and shun the outside world. First contact was established by Mennonite farmers in the 1940s and 1950s, followed by the New Tribes Mission - a Florida-based evangelical group that attempts to spread the Bible by translating it to into other languages – who sponsored manhunts to track down the Ayoreo in 1979 and 1986.

Almost 70 years later, some of the members of the tribe have managed to elude all contact with others and environmentalists argue that this isolation needs to be maintained. One of the major reasons is that these tribes lack immunity to illnesses and diseases that are common elsewhere, and could die from exposure. 

This isolation has been threatened in recent years as three Brazilian companies have started clearing land in the area to set up ranches: BBC SA, River Plate SA and Yaguarete Porá SA. Survival was able to catch two of the companies doing illegal logging, using satellite imagery.

Guyra, an environmental group in Asunción, estimates that some 1.3 million acres of Chaco forest have been cleared in the last two years, for cattle ranches. http://www.guyra.org.py/index.php/reportes-de-cambios-de-uso-de-la-tierra-del-gran-chaco-americano Lucas Bessaire, a U.S. anthropologist told the New York Times that the rate of deforestation was so rapid that even during the day, the sky turns “twilight grey” from the forest fires. “One wakes with the taste of ashes and a thin film of white on the tongue,” he said.

Today the Mennonites farmers and Brazilian ranchers have coverted vast swathes of the Chaco region. Displaced Ayoreo live in poverty outside the new ranching boomtowns, sleeping under plastic bag tents under the trees.

“We are witnessing ethnocide in action,” Gladys Casaccia and Jorge Vera of Gente, Ambiente y Territorio (GAT), a Paraguayan NGO that supports environmental initiatives for the indigenous people of the Chaco. “This crime is a human tragedy, an embarrassment for Paraguay in the eyes of the world – and it will only stop if those responsible are caught and punished.”

Paraguay already has the sad distinction of being a deforestation champion,” José Luis Casaccia, a former environment minister, told the New York Times. “If we continue with this insanity, nearly all of the Chaco’s forests could be destroyed within 30 years.”

Chevron Face Opposition Over Eastern Europe Fracking Plans

Posted by Pratap Chatterjee on August 6th, 2012
CorpWatch Blog
Anti-fracking poster in Bulgaria. Photo: Пенка ГенадиеваБългария

Chevron - the Northern California-based oil and gas company – has been quietly acquiring rights to drill for natural gas in Eastern Europe using “fracking” technology – a controversial technique. However, grassroots opposition in Bulgaria and Romania has thwarted the companies plans so far.

An interview with Ian MacDonald, vice-president of Chevron Europe, Eurasia and Middle East, in the Financial Times suggests that the company is getting ready for what it believes is the next fossil fuel extraction boom in the region.

“For years, it has been snapping up exploration acreage along a geological faultline that stretches from the Baltic to the Black Sea,” writes Guy Chazan. “A crucial piece of its jigsaw fell into place in May when it won the right to negotiate a big shale gas contract in Ukraine. That left it with an almost continuous arc of concessions stretching from Bulgaria in the south-east to Poland in the north. The blocks in Romania alone cover 2,700sq km.”

But the company faces an uphill political battle to the technology that has been blamed for contaminating local water supplies and even causing earthquakes. Bulgaria banned fracking in January after a major protest against Chevron’s plans to drill in Dobrudja, the most fertile farm region in the country in January.

Chevron is also running into fierce opposition in Romania which has a moratorium on the technology. The company has licenses in the north-east and south-east Dobrogea region near the southern border with Bulgaria as well as for the in north-eastern Romania near the border with Moldova.

“We examined the Chevron contract and… encountered suspicious secrecy at all levels,” says Nicolae Rotaru of Civic Platform in Romania. “We want a law to be worked out to regulate the drilling for shale gas in Romania … It is dangerous for human life.”

Others pointed out that the drilling would not even benefit the local people financially. “These royalties are so tiny that they cost almost nothing, the private operators who profit from the exploitation and give peanuts to the state,” wrote Ilie Serbanescu in “Romania Libera”

The Czech republic is also considering a ban.

Western European countries have been fighting fracking too. France banned fracking last July after environmentalists and wine producers raised alarms about water pollution. Fracking was also recently briefly banned in the UK.

Why the opposition to fracking? Greenpeace explains here: “To access these reserves, fluid is pumped down a drilled channel (well) into the gas-bearing rock at very high pressures. This causes the rock to fracture, creating fissures and cracks through which the gas can 'escape'. The fracturing liquid generally consists of mainly water, mixed with sand and chemicals. Numerous different chemical agents are used, many of which are flagged as dangerous to humans and the environment (carcinogens, acute toxins).

“The fracturing of a single well requires a huge volume of water: around 9,000 - 29,000 m3 (9 -29 million litres). Chemicals make up about 2% of the fracturing liquid, i.e. about 180,000 – 580,000 litres. Only 15 – 80% of the injected fluid is recovered, meaning that the rest remains underground, where it is a source of contamination to water aquifers.”

The contamination has shown up in unusual place. For example communities in the U.S. have seen tap water catch on fire in fracking areas. (Watch this YouTube video and this one from Time magazine)

Fracking can also dramatically increase the likelihood of earthquakes, according to recent research in Youngstown, Ohio, where residents were hit last Christmas Eve and again on New Year's Eve.

A new study from Cliff Frohlich, a seismologist at the University of Texas, Austin, just published in the Proceedings of the National Academy of Sciences, shows a high degree of correlation between local earthquakes and fracking. “Beginning in 2001, the average number of earthquakes occurring per year of magnitude 3 or greater increased significantly, culminating in a six-fold increase in 2011 over 20th century levels,” Frohlich wrote. “This suggests injection-triggered earthquakes are more common than is generally recognized.”

To learn more about the dangers of fracking, check out the film Gasland and the Drilling Down series in the New York Times.

Mystery Threats Dog Russian Activists Fighting Vinci Highway Joint Venture

Posted by Pratap Chatterjee on July 25th, 2012
CorpWatch Blog
Protestors in Khimki forest. Photo by Daniel Beilinson/Coalition "For the Forests of Moscow Region!" Used under Creative Commons license.

A mysterious fire and a missing activist have contributed to the concerns of Russian activists fighting a new highway between Moscow and St. Petersburg.  The highway is being built by a consortium that involves Vinci, a French company, and individuals rumored to be close to prime minister Vladimir Putin.

This past weekend, new automotive dump trucks and a hydraulic excavator were set on fire by unknown individuals, at a disputed site in the Khimki forest that the activists have been fighting to protect. Days later Pavel Shekhtman, who has been campaigning against the impact of the highway on the forest, temporarily disappeared from his flat. “Pavel managed to call a friend and tell him that his apartment was being searched. After that his phone was snatched out of his hand, and he no longer replied to any calls," fellow activist Yevgeniya Chirikova told Interfax news agency.

"The torching of the vehicles in the Khimki forest is a provocation aimed at smearing the Khimki forest campaigners who use only peaceful, legitimate and non-violent methods," Chirikova wrote on Twitter.

The 2,500 acre Khimki forest, just outside Moscow where the Czars of Russia once hunted, boasts 200-year-old oaks that the Washington Post described as “stand(ing) so thick and silent that traffic from the nearby highway sounds like the hum of a lazy mosquito, leaves fall to the ground with a veritable clatter.” It was designated a “forest park” - which protected it from development under Russian law - until November 2009.

A few months prior, in July 2009, "Severo-Zapadnaya Concessionnaya Kompaniya" (North-West Concession Company (NWCC) was awarded an $8 billion contract to build a 700 kilometer (437 mile) highway. NWCC is a joint venture between Vinci - the largest construction company in Europe with over €28.5 billion ($37 billion) in orders last year – which owns half of the venture and a secretive group of investors.

An investigation by CEE Bankwatch, published in April 2011, revealed “a complex web of offshore entities ending in the British Virgin Islands, and confirms the involvement of Arkady Rotenberg “a friend of prime minister Putin. It noted that the entities were “mainly based in the tax privileged jurisdiction of Cyprus and partially end up in tax haven companies based in Tortola, British Virgin Islands, and (possibly) in Nassau, the Bahamas.”

The NGO also noted that Igor Levitin, a former Russian minister of transport who is now a presidential advisor, was formerly deputy CEO of SeverstalTrans, one of the Russian partners. “Levitin is also a Chairman of the Board of Directors of the Sheremetyevo International Airport corporation,” writes CEE Bankwatch. “A considerable part of the first section of the motorway coincides with the route of another project, the MRAR (Moscow Ring Auto Road)- Sheremetyevo-3 toll road, which would bring direct economic advantages for the airport company.”

Violence has dogged the highway project. Mikhail Beketov, a local newspaper editor who supported the cause, was viciously beaten in November 2008 leaving him half paralyzed and unable to talk. Stanislav Markelov, his lawyer and a human rights activist, was shot and killed on a Moscow street in January 2009. In 2010 Khimki opposition activist Konstantin Fetisov had his skull fractured in an assault shortly after leaving a police station where he had been questioned about a protest. And Oleg Kashin, a reporter with the Kommersant newspaper, was savagely beaten with an iron bar and his fingers were smashed, after reporting on the project.

In August 2010 President Dmitry Medvedev called a temporary halt to construction pending an environmental review. An independent expert assessment published in February 2011 found that the planned routing was among the very worst among several alternative solutions.

A few months later, Pur Projet, a a French consultancy, was hired to advise on minimizing the environmental impact of the road.

Last month, Khimki activists traveled to Brussels to lobby the European Parliament to take action against the project. "This case is a powerful example of the need for a law banning European companies from involvement in corruption outside the EU," Satu Hassi, a green Member of the European Parliament and former Finnish environment minister who organized a hearing on the highway project, told The Moscow Times.

On July 20 the construction company made “a sudden attempt” to cut down an oak grove at the site. “In the morning, loggers with heavy machines started to cut down trees there (100-years-old oaks among them)” wrote the activists in a news flash, “Destruction of the forest was protected by few men with criminal appearance, presumably private security guards. Trees were also cut down near the mesotrophic bog – another piece of pristine wilderness heavily damaged by the project.”

“They destroyed many, but it’s far from destroying all. This time we were lucky enough to repel them,” Sergey Ageev, one of the activists, tweeted. That night, a mysterious fire destroyed the construction equipment and soon after Shekhtman disappeared.

“(T)he official pre-text for this action was Pavel’s participations in an anti-Putin rally on May 6 where our movement formed a “Green Column” demonstrate that Russian environmentalists oppose Putin’s course in both economics and politics,” an activist press release announced this morning. “Fortunately, he was ultimately released and returned to the Khimki Forest Camp.”

Rio+20 Ends in Failure, Corporate Capture

Posted by Pratap Chatterjee on June 27th, 2012
CorpWatch Blog
Image by Friends of the Earth International

The United Nations Rio+20 Conference on Sustainable Development in Brazil concluded this past weekend with no new government pledges. On the other hand, multinationals scored a public relations victory by claiming that they will implement $50 billion of sustainable changes to help save the environment, under an initiative led by UN Secretary-General Ban Ki-Moon.

The conference was supposed to take advantage of the 20th anniversary of the 1992 United Nations Conference on Environment and Development in Rio de Janeiro to commit to further efforts to save the global environment.

But the final inter-governmental declaration of the 2012 conference was widely panned. “The text was so anodyne there was nothing in it which could be disagreed. So the talks fell, in tumult, to a lifeless ocean,” writes Fiona Harvey at the Guardian.

“We’ve sunk so low in our expectations that reaffirming what we did 20 years ago is now considered a success,” said Martin Khor, executive director of the Geneva-based South Centre and a member of the UN Committee on Development Policy.

They came, they talked, but they failed to act. Paralysed by inertia and in hock to vested interests, too many leaders were unable to join up the dots and solve the connected crisis of environment, equality and economy,” wrote Wisdom Mdzungari in of Zimbabwe.

Not so multinationals. Chad Holliday, chairman of the Bank of America and former president of DuPont, who co-chaired the the UN led Sustainable Energy For All initiative, was quoted in New Scientist saying: "Companies are here because they see opportunities."

“Microsoft has committed to going carbon neutral and will be rolling out an internal carbon fee that will apply to Microsoft’s business operations in over 100 countries. Italian energy company Eni has earmarked approximately $5 billion to achieve its gas flaring and carbon intensity reduction goals; and, the Renault-Nissan Alliance has committed approximately $5 billion to commercialize affordable zero-emission vehicles,” boast the United Nations in an official statement.

“Bank of America has set a ten year $50 billion environmental business goal. the World Bank Group has committed to doubling the leverage of its energy portfolio by mobilizing private, donor and public contributions to World Bank-supported projects."

Twenty years ago, at the original 1992 Earth Summit, similar pledges were made by the World Bank and a number of multinationals, yet today emissions of greenhouse gases in a number of countries exceeded worst case estimates.

For example at the Earth Summit in 1992, 170 nations agreed to voluntary reductions of greenhouse gas emissions to 1990 levels. At the Kyoto protocol meeting in 1997 countries agreed to cut emissions by an average of 5 percent by 2012.

However, in April 2012, the U.S. announced that its greenhouse gas emissions were 10.5 percent above 1990 levels. Canada was over by 17 percent and Spain by 30 percent. Not all did that badly - Germany cut emissions by 25 percent.

The new Sustainable Energy For All pledges represent just a drop in the bucket, say activists. Daniel Mittler, political director of Greenpeace noted: “The epic failure of Rio+20 was a reminder [that] short-term corporate profit rules over the interests of people…They spend $1 trillion a year on subsidies for fossil fuels and then tell us they don’t have any money to give to sustainable development,” he told the Guardian.

Some activists say that the initiative is just “greenwash” and that the Sustainable Energy For All initiative proves that the UN has sold out to corporate interests. “Governmental positions have been hijacked by corporate interests linked to polluting industries,” said Nnimmo Bassey, chairman of Friends of the Earth International.

Rio+20 Summit Weasels Out On Holding Corporations to Account

Posted by Daniel Nelson on June 20th, 2012
CorpWatch Blog
Rio+20 protest. Photo: youthpolicy. Used under Creative Commons license

The curtain rises Wednesday on the 20th anniversary of the “Earth Summit” in Rio de Janeiro in 1992. Once again environmental groups and global dignitaries will gather in Brazil to talk about saving the planet.

Last time the eyes of the world were upon the United Nations Conference on Environment and Development when George Bush (senior) joined 108 other heads of state, 172 countries, 2,500 official delegates, and about 45,000 environmentalists, indigenous peoples, peasants and industrialists came together.

“Helicopters thundered up and down the chic Copacabana and Ipanema beaches. Tanks guarded the bridges and tunnels. The favelas were in lockdown, schools closed and supermarkets stood empty,” remembers John Vidal in the Guardian. “The Dalai Lama meditated with Shirley MacLaine on the beach at dawn, Jane Fonda and Pelé turned up, as did Fidel Castro, train robber Ronnie Biggs, and an obscure US senator called Al Gore.”

The 2012 United Nations Rio+20 Conference on Sustainable Development that runs from 20-22 June event is a relatively tame affair but make no mistake, there have been major changes in the last two decades. One of the biggest differences is the enormous growth in corporate power.

Just before the first Rio Summit, the UN Code of Conduct on Multinational Corporations was abandoned, and just after the meeting, the UN Centre on Multinational Corporations was closed.  Subsequent deepening corporate involvement with UN agencies stems from their accreditation to the summit, alongside civil society groups. A decade later, the international environmental organisation Friends of the Earth commented, “Some people date the rise of corporate globalization” from this period.

Yet as Helena Paul of EcoNexus points out, greater corporate participation has not been accompanied by greater obligations.

“It is strange that there has been so little discussion about controlling corporate power and exploitation in the run-up to Rio+20,” she says.

That power and exploitation ranges from Olympic sponsor Dow Chemical’s continuing failure to address the long-lasting effects of the chemical plant disaster in Bhopal, India, to the case against Chevron, formerly Texaco, for toxic waste dumping and oil leaks in the Amazon, and from Asian Pulp and Paper’s forest destruction in Southeast Asia to Sun Biofuels’ landgrab in Tanzania.

One of the few initiatives is Convention on Corporate Social Responsibility and Accountability, promoted by the Stakeholder Forum and Vitae Civilis.

It is countered by a proposal for a Convention on Corporate Sustainability Reporting, pushed by UK-based multinational insurance company Aviva and the Aviva-convened Corporate Sustainability Reporting Coalition.

The proposal would commit states to develop regulations or codes to “encourage the integration of material sustainability issues” in large companies’ annual reports. There is an opt-out clause for companies, but they would have to explain their non-participation to shareholders or other stakeholders. The proposal says nothing about what shareholders could do if they didn’t accept the company’s explanation.

Use of the weasel word “encourage” is in line with the language of the Rio+20 documents. Lasse Gustavsson, the head of the WWF team at the conference, said on Sunday that “’encourage’ is used approximately 50 times in the negotiating text, while the word ‘must’ is used three times.”

The net result, in Paul’s view, is that “At present, serious debate on international regulation of corporations appears to have been effectively marginalized.”
A good beginning, Dr Alison Doig, Christian Aid’s senior adviser on sustainable development, said at an event on Sunday in the Rio Centro hosting the negotiations, would be for multinationals to pay the $160 billion a year which the charity estimates is lost every year to tax dodging by multinationals.

Fracking Billionaire Faces Shareholder Anger

Posted by Pratap Chatterjee on June 8th, 2012
CorpWatch Blog
Photo: Gasland still. From the film by Josh Fox.

Aubrey McClendon, the founder and CEO of Oklahoma-based Chesapeake Energy, who championed natural gas to the extent of paying environmental groups to oppose coal, is facing angry shareholders for his profligate ways. Chesapeake is one of the leading users of fracking - an environmentally questionable method of extracting natural gas by injecting fluids underground at high pressure.

Chesapeake Energy, a 23-year old oil and gas company with 2011 sales of $11.64 billion, has bought up rights to drill on millions of acres of land in the U.S. This past March Rolling Stone magazine described the company thus: “It’s not only toxic – it’s driven by a right-wing billionaire who profits more from flipping land than drilling for gas,” wrote Jeff Goodell. “McClendon's primary goal is not to solve America's energy problems, but to build a pipeline directly from your wallet into his.”

McClendon aggressively promoted natural gas as part of the solution to climate change. He gave over $25 million to the Sierra Club’s Beyond Coal campaign and in return former executive director Carl Pope even accompanied him to speak out in favor of natural gas. (The Sierra Club’s new director, Michael Brune, has returned the remaining money)

But in the last four years, the company’s share price has dropped from almost $67 in June 2008 to about $18 now because of the crash in natural gas prices as well as the company heavy debt load. Shareholders have forced McClendon to resign as chair and this Friday, they voted out a number of individuals that he appointed to the board of directors.

Well blow-outs and water contamination from fracking haven’t helped the company’s image or share prices either. Alarming incidents like tap water catching on fire started to bring national attention to the environmental impact of fracking in recent years. By 2011, even the New York Times started to investigate the matter. (CorpWatch raised these questions in 2005 in a partnership with the Oil and Gas Accountability Project)

Fracking uses a mix of water, sand and a variety of chemicals, many of which are dangerous to humans and the environment. A study by the U.S. Congress estimated that out of 2,500 hydraulic fracturing products "(m)ore than 650 of these products contained chemicals that are known or possible human carcinogens, regulated under the Safe Drinking Water Act, or listed as hazardous air pollutants.”

Then there is the problem of waste waters. "Since there were no laws covering the disposal of this stuff at first, they (fracking companies) just dumped it into rivers or hauled it off to sewage plants to be 'treated,' which they knew didn't work," Deborah Goldberg, a lawyer at Earthjustice, told Rolling Stone. "They just wanted to get rid of the stuff as quickly and as cheaply as possible."

McClendon also brought attention to his company by funding right-wing causes like the Swift Boat attacks against John Kerry in 2004 and contributing more than $500,000 to stop gay marriage.

The latest scandal to entwine McClendon are his spendthrift ways. He shot to fame when he paid himself $112 million in 2008. Now Reuters has uncovered documents on how McClendon fused his personal expenses with that of the company.

“In 2010, Chesapeake employees spent more than 15,000 hours working on McClendon's personal projects at a cost of about $3 million,” write John Shiffman, Anna Driver and Brian Grow. The journalists report that McClendon arranged for over $1.5 billion in personal loans using his interest in company-owned wells as collateral. He bought a house on Bermuda's so-called billionaire's row, which includes houses purchased by Michael Bloomberg, Ross Perot and Silvio Berlusconi.

He was generous with shareholder’s money too. “On one flight, nine friends of McClendon's wife took a Chesapeake-leased jet to Bermuda without any McClendons aboard,” Reuters reports.

Small wonder that Forbes magaine once called him “America’s Most Reckless Billionaire.” Today, it's a bit hard to shed a tear for his plunging fortunes.

Beef from Brazil: JBS Faces Allegations of Amazon Deforestation

Posted by Pratap Chatterjee on June 6th, 2012
CorpWatch Blog
Broken Promises video footage from Todd Southgate, Greenpeace.

The Xavante tribe in western Brazil and the Parakana tribe in the north-east are separated by a thousand miles of the Amazon basin but they face a common threat: the sprawling global beef export empire controlled by the Batista family from the state of Goiás.

JBS S.A. was founded in 1953 by Jose Batista Sobrinho as a small slaughterhouse in the town of Anapolis. In the last decade, JBS expanded to Argentina, acquired Smithfield and Swift Foods in the U.S. and Tasman in Australia, to make it a $33 billion multinational. Today JBS slaughters 90,000 head of cattle a day, employs 125,000 workers and exports to 150 countries, according to company statistics.

The company has benefited from loans from the World Bank and generous support from the government of President Luiz Inacio Lula da Silva who helped turn the country into the world’s largest beef exporter. Much of this has come at the expense of the environment: One out of three of the 200 million cattle in Brazil graze on land cleared from the Amazon rainforest.

In an admiring article describing how the company now supplies beef from “farm to fork” to “feed ... the middle class” a Washington Post reporter described the efficiency of company operations in Lins, Brazil, in April 2011: “(T)he animal is rendered unconscious by a captive bolt pistol. It is hoisted up by its hind legs. A worker then slices the carotid artery and jugular vein, and the steer bleeds to death in seconds.”

“A processing line of workers, all in hard hats and white aprons, then skin, debone, slice, can and package the meat … The final product: rump roasts or tenderloins, corned beef or beef jerky, to be exported as far away as London.”

But behind this tale is another story tracked by environmental researchers from Greenpeace who uncovered “numerous new cases of JBS purchasing cattle directly and indirectly from farms involved in illegal deforestation, invasion of protected areas and indigenous lands, and also of farms using slave labour.”

Over a couple of months in 2011, Greenpeace researchers traced 834 cattle raised on illegal farms with names like Panorama and Fortoleza (fortress) inside the Maraiwatsede reserve that were sent for slaughter to the Água Boa plant in Mato Grosso (financed by the International Finance Corporation, an arm of the World Bank). The reserve is the home of the Xavante people.

“The Xavantes can no longer fish because the rivers have run dry or are contaminated due to the destruction of forests, landfills invading river systems in an effort to expand pastoral areas, plus extensive use of agrochemicals. Now 85 percent of the forest has been cut down and the Xavante people’s reports to the authorities describe substantial conflict with farmers accused of attempted murder and destruction of property,” write the authors of JBS Scorecard, the new Greenpeace report.

The situation is similar for the Parakana tribe in the Apyterewa Indigenous Reserve. In 2009, a Reuters reporter told the story of Tamakware, a tribal elder daubed in black pigment who brandished an arrow, and “made a plaintive appeal to foreign visitors to tell President Lula to move the farmers out.”

Two years later, Greenpeace found that a JBS unit in Tucuma, Para was still buying animals from a farm located within the Apyterewa indigenous land.

The beef from these operations were exported by JBS to the UK where activists were able to identify them by serial numbers on “100 tins of beef chunks, mince and corned beef” at outlets run by Tesco, Britain’s biggest grocery chain.

The new Greenpeace report has had an immediate effect on JBS sales. Tesco announced today that it would stop buying JBS beef. “We started to cut back our supplies from JBS a year ago and have now ceased sourcing any canned beef products from JBS. Ethics and sustainability remain an important part of our dialogue with suppliers,” a spokesman told the Telegraph newspaper.

For its part, JBS wrote to Greenpeace claiming that it was "fully committed to sourcing livestock from farms that are not involved in any illegal activities, including illegal deforestation, the invasion of indigenous lands or the use of any form of slavery.” It did not confirm or deny the NGO’s research.

Coral Before Coal: Great Barrier Reef Projects Halted

Posted by Pratap Chatterjee on June 5th, 2012
CorpWatch Blog
Great Barrier Reef. Photo: PhOtOnQuAnTiQuE. Used under Creative Commons license.

A $6.3 billion coal mine project in the Galilee Basin in Queensland that could impact the Great Barrier Reef, has been halted by Tony Burke, Australian environment minister. The Alpha project is the first of several major coal projects in the northern Australian state that are being pushed by Campbell Newman, the state premier, who gave it the go-ahead in late May.

‘‘I don’t have the level of trust in the Queensland government which I wish I had,’’ Burke told reporters. ‘‘I cannot trust them with Queensland jobs. I cannot trust them with the Great Barrier Reef and that’s why I’ll be taking the action I’ve described.’’

The Alpha project is being developed by Hancock Prospecting, which is owned by Gina Rinehart, an Australian billionaire and sponsor of anti-climate change scientists. Rinehart has previously come under fire for her plan to import 1,700 workers to develop the Roy Hill iron mine in Western Australia under an Enterprise Migration Agreement (EMA).

Rinehart has teamed up with GVK Power & Infrastructure, an Indian multinational from Secunderabad in Andhra Pradesh, which owns 79 percent of the Alpha coal project. Other Indian companies eyeing coal projects in Queensland include Adani Enterprises from Ahmedabad, Gujarat, which is planning a A$10.9 billion (U.S. $10.55 billion) coal and rail project at Abbot Point. Also hoping to cash in on the Queensland coal boom is Clive Palmer, another Australian billionaire, whose company Waratah Holdings has a contract to sell 30 million tons of coal to China over the next 20 years.

Environmentalists say that the project will have a major detrimental impact on the Great Barrier Reef which is a United Nations Educational Scientific and Cultural Organisation (UNESCO) designated World Heritage Site. The Reef, which is the world’s largest coral ecosystem, provides nesting grounds to dugongs, green turtles and seabirds which live off the prawns, crayfish, and crabs that inhabit the seagrass meadows. One species that is likely to be impacted is the rare snub nose dolphin.

“Boom Goes the Reef”
– a new report issued by Greenpeace Australia in March 2012 – notes that current plans for coal mining and export expansion call for 10,150 ship journeys out of Queensland ports by 2020, up from 1,722 in 2011. The environmental group noted that a number of accidents have already threatened the delicate corals such as the grounding of the Shen Neng 1 coal cargo ship in April 2010.

Just two weeks ago another ship – the ID Integrity from Hong Kong – broke down off Cairns, provoking a warning from activist group GetUp! which is also campaigning against the coal mining. "The incident should be of concern to all Australians. It's more likely to occur in the future as we see more and more ships use the Great Barrier Reef to export coal," GetUp! national director Simon Sheikh told ABC Radio.

The Australian Green party is also opposed to the coal developments in Queensland. “(We) are calling on the Australian Government to end this shambolic state of affairs, compel a real and comprehensive strategic assessment of the coal export developments for the Reef, and stop trying to give away their environmental responsibilities,” said Senator Larissa Waters, the party’s environment spokesperson. “Campbell Newman’s response … “We’re in the coal business”, could leave no shred of doubt that Queensland will not hesitate to allow the destruction of the environment, even our World Heritage icons, to boost the profits of mining billionaires.”

The coal projects are just the latest of major industrial expansion project proposed for the region. In 2008, CorpWatch wrote about plans for a $3 billion bauxite refinery to be developed by the Aluminum Corporation of China Limited (Chalco) in the Keela wetlands. That project was shelved in late 2009.

Footnote:

“Banjo Rinehart” fancies herself as a poet and a champion of the downtrodden. Here’s a ditty that she had inscribed on a rock from the Roy Hill mine and installed just outside Perth to prove it!

“The globe is sadly groaning with debt, poverty and strife
And billions now are pleading to enjoy are better life
Their hope lies with resources buried deep within the earth …

Develop North Australia, embrace multiculturalism
and welcome short term foreign workers to our shores
To benefit from the export of our minerals and ores
The world’s poor need our resources: do not leave them to their fate”


Ikea Furniture Made From Ancient Russian Trees

Posted by Pratap Chatterjee on May 31st, 2012
CorpWatch Blog
Swedwood pine lumber from Karelia. Age range approx. 200-600 years old. Photo: Protect the Forest Sweden.

Kalevala, a 19th century epic poem from Finland, is often considered the heart of the Finnish national identity. It was inspired by traditional verses from the ancient forests on the border of central Finland and Russia. Today some of the 600 year old trees around the Kalevala national park are being chopped up to make cheap furniture for Ikea, the Swedish home furnishing chain, according to activists.

Ikea, which is based in Delft, Netherlands, sells €23.5 billion ($30 billion) worth of goods every year from shelves to entire kitchens through its 300 shops around the world. Wood is used in roughly 60 percent of the products that it stocks – according to IPS news agency - and one of the company’s slogans is: "We Love Wood"

Critics are now questioning what this love for wood really represents.

In 2010 and 2011 activists from Protect the Forest Sweden took photos of lumber being hauled out of high conservation value forests just outside Kalevala national park in Russia by a company named Swedwood Karelia.

Protect the Forest immediately sent a letter of complaint to Nikolay Tochilov, the director of NEPCon, a Danish NGO that helps monitor sustainable forestry projects for Ikea. “Swedwood Karelia and their owner Ikea … state that they do not log primeval forests and that they do not cut hundred of years old trees,” wrote Viktor Säfve and Daniel Rutschman of Protect the Forest in a September 21, 2011 letter. “They … are clearly misleading their customers through marketing and through media, stating that their forestry is ecologically, socially and economically sustainable.”

Just 10 percent of the ancient old-growth forests remain in Karelia, according to the forest department of SPOK, the Karelia Regional Nature Conservancy, a Russian NGO. Swedish public service television recently estimated that Swedwood is further depleting that stock by cutting down about 1,400 acres of forest a year.

Protect the Forest say that the Kalevala forests hosts a number of red-list species, notably a number of lichen and fungi such as Antrodia crassa and Antrodia infirma (fungi), Bryoria Fremontii (black tree lichen), Hydnellum gracilipes (tooth fungus) and , Lobaria Pulmonaria (lungwort).

Earlier this week the forest activists launched a campaign against the company. "During our field visits to Russian Karelia, we have documented the reality of IKEA's forestry, and it's a far cry from the fine words in their advertising," Säfve wrote in the press release. "You must immediately stop logging old-growth forests, and you must stop lying! Those are two of the demands we make of IKEA."

“We believe the future of forestry in Russia lies in sustainably managing the vast areas of secondary forests – not in destroying the last intact areas of primeval forests,” Säfve and Rutschman wrote. “There are excellent conditions in Karelia to implement selective cutting methods in unmanaged, naturally regenerated secondary forests.”

Ikea disputes the charges. "Swedwood has played an important role in the advancement of forestry in Karelia. Our goal is to develop and improve forest management," Anders Hildeman, forest manager at Ikea told IPS. “We will continue to work according to the principles that we agreed on together with Russian environmental organisations like SPOK.

How Obama Helped Authorize Shell’s Drilling the Arctic

Posted by Pratap Chatterjee on May 23rd, 2012
CorpWatch Blog
Protestor dressed as Grim Reaper outside Shell annual meeting in London. Photo: rikki (indymedia). Used under Creative Commons license.

President Barack Obama personally helped Shell obtain authorization to drill for oil in Alaska, according to a 4,678 word front page article in the New York Times. This is a startling break from decades long U.S. policy which regarded the environment in the Arctic region too fragile to tamper with.

“(T)he president concluded that the reward was worth the risk, and created an unusual interagency group, overseen by a midlevel White House aide, to clear Shell’s path through the often fractious federal regulatory bureaucracy,” write John Broder and Clifford Krauss.

In November 2010, almost two years after he was elected, Obama told William K. Reilly and Carol M. Browner, two former heads of the Environmental Protection Agency, what he wanted them to do. “Where are you coming out on the offshore Arctic?” he asked. “What that told me,” Reilly told the New York Times, “was that the president had already gotten deeply into this issue and was prepared to go forward.”

The article describes the clash between two powerful men, Edward Itta, the former mayor of Inupiat North Slope Borough, and Pete Slaiby, Shell Alaska vice president. The story is already the basis of a new book, “The Eskimo and the Oil Man: The Battle at the Top of the World for America’s Future,” by Bob Reiss.

Shell spent over $35 million lobbying for the permission during the Obama adminstration. Marvin Odum, president of Shell North America, and Sara B. Glenn, a lobbyist, visited the White House 19 times to meet with Obama’s staff.

Some environmental groups are astonished at Obama’s role. “We never would have expected a Democratic president — let alone one seeking to be ‘transformative’ — to open up the Arctic Ocean for drilling,” Michael Brune, executive director of the Sierra Club told the New York Times.

Protests against Shell’s plan have been ongoing for years. On Wednesday, activists launched two reports at the company’s annual meeting in the Hague. “Risking Ruin : Shell’s dangerous developments in the Tar Sands, Arctic, and Nigeria report” by the Indigenous Environmental Network (IEN) and “Out in the Cold – Investor Risk in Shell’s Arctic Exploration” from Platform, Greenpeace and FairPensions.

“Our village has been there 4000 years. Our biggest concern is spilled oil getting into the ocean and affecting the marine mammals that we depend upon. Your clean-up ability is not adequate,” Robert Thompson, a village of Kaktovik on the edge of the Arctic Ocean in Alaska, told shareholders.

Others indigenous activists spoke out also about Shell’s impact in other countries. “Shell has failed to address our concerns in Canada’s tar sands, by not meeting environmental standards and past agreements, and refusing to address their impacts on our constitutionally-protected treaty rights, leaving us with no option but to sue them,” said Eriel Deranger from Athabasca Chipewyan First Nation (ACFN). “Our Chief has said ‘Enough is enough!’ We fully intend to challenge all Shell’s future projects until they can demonstrate a true willingness to implement our rights.”

According to a report from the UK Tar Sand Network, five protestors wearing masks that combined Shell’s logo with a skull stood silently throughout the meeting reminding the shareholders of the grave human rights and environmental injustices Shell has brought to communities in Nigeria, Rossport (Ireland), the Arctic and Canada.

Enbridge, Bank of America CEOs Targeted for Extreme Energy Impacts

Posted by Pratap Chatterjee on May 10th, 2012
CorpWatch Blog
Yinka-Dene Alliance newspaper ad.

War has been declared on Enbridge, a Canadian oil company, by a chief from the Nadleh Whut'en in British Columbia. Chief Martin Louie was attending the company annual general meeting in Toronto where he spoke out Wednesday against the environmental impact of the company’s tar sands operations.

"How far are they willing to go to kill off the human beings of this country? Enbridge and the government are going to go on fighting us," said Louie. “The war is on."

Some 700 miles directly south of the Enbridge meeting, on the very same day, Bob Kincaid of Coal River Mountain Watch leveled similar charges against Brian Moynihan, the CEO of Bank of America at their annual general meeting in Charlotte North Carolina, for the impact of mountaintop removal mining.

"You are part of the poisoning of Appalachia and so is every one of your directors and so is every one of your shareholders," Kincaid said. "You are part of the destruction of an entire region of the country."

These two new and unconventional fossil fuel sources –tar sands and mountain top coal together with shale rock –  have been dubbed “extreme energy” sources by Professor Michael Klare of Hampshire College, to signify the extraordinary and expensive technology needed to extract energy from them. The rush to exploit these source - from rural North Dakota (see “North Dakota Shale Boom Displaces Tribal Residents”) to the deserts of South Africa (see “Fracking South Africa”) that has sparked angry protests because of the devastating environmental consequences.

This week the battle against extreme energy was taken to the company annual meetings by environmental and social justice groups. The Nadleh Whut'en were part of the Yinka-Dene Alliance which is protesting Enbridge’s $5.5-billion project that would pipe crude from tarsands in Alberta over 1,100 kilometres to the West coast where the fuel is to be loaded on supertankers to take to Asia.

The protestors brought with them a declaration that read in part:

“We are the Indigenous nations of the Fraser River Watershed. We are many nations, bound together by these waters. Enbridge wants to build pipelines to pump massive amounts of tar sands crude oil through the Fraser’s headwaters. An oil spill in our lands and rivers would destroy our fish, poison our water, and devastate our peoples, our livelihoods, and our futures. Enbridge has many pipeline oil spills every year, including this year’s large spill into Michigan’s Kalamazoo river. We refuse to be next.”

The company claims it is doing a good job. "We wouldn't be proposing this project if we didn't have utmost confidence that we could both construct and operate the project with utmost safety and environmental protection," Enbridge spokesman Todd Nogier told CBC TV.

Brian Moynihan responded the same way to the activists in North Carolina who told him that Bank of America was poisoning Appalachia. "Sir, our environmental team will take a look at it. We look at it all the time,” he told the shareholders who booed him.

Coal River Mountain Watch activists disagreed. “A human health crisis is exploding in Appalachia and Bank of America lights the fuse every day," said Bob Kincaid, noting that as much as five million pounds of explosives are used every day in Appalachia to extract coal. Kincaid estimated that the practice caused 4,000 deaths a year in West Virginia: "That's a newborn who never knows a clear breath, a 4-year-old who never gets to be a 5-year-old, a mother who never gets to be a grandmother.”

At the same annual general meeting on Wednesday, Bank of America also saw a number of protestors speak out against the company’s mortgage practices. For example Sister Barbara Busch, a Catholic social justice worker who runs a Cincinnati-based homeowner advocacy group called Working In Neighborhoods, told Moynihan that his bank was the hardest to deal with (41 percent of her customers have their loans managed by Bank of America)  “(W)we have no one to talk to. They do not call us back,’ she said of the loan officers. “I understand, Mr. Moynihan, that you really believe that you've done something, but ... you've got to do something about your mortgage servicing."

The North Carolina protests were coordinated by the Unity Alliance which brought together groups like Grassroots Global Justice Alliance, Jobs with Justice, the National Day Laborers Organizing Network, the National Domestic Workers Alliance, the Pushback Network, and the Right to the City Alliance.

Although the Bank of America protests are now over, the activists plans to be back – for the Democratic National Convention slated to take place in the city this coming September.

North Dakota Shale Boom Displaces Tribal Residents

Posted by Pratap Chatterjee on April 25th, 2012
CorpWatch Blog
Bakken gas flare. Anonymous photo submitted to BakkenWatch

Heather Youngbird and Crystal Deegan used to live in a trailer at the Prairie Winds Mobile Home Park in the Fort Berthold Indian Reservation in North Dakota. Last week Leroy Olsen, their landlord, removed their front door and cut off the electricity and the propane supply. The reason? New homes to be constructed for out of town oil workers coming to take part in the shale exploration boom.

“This oil boom has divided the Mandan, Hidatsa and Arikara people and pitted them against each other in a negative way,” says Kandi Mossett, a tribal member and organizer with the Indigenous Environmental Network.

In 2010, WPX Energy of Oklahoma paid $925 million for the right to explore for oil on the 86,000 acres of the Fort Berthold Indian Reservation. The company plans to squeeze oil out of shale, the most abundant form of sedimentary rock. Until recently such exploration was prohibitively expensive, but with the evolution of technology and the rise in the price of oil, many rural communities from England to the Ukraine, from Argentina to North Dakota, have become targets for the shale oil boom.

Another company profiting from the Bakken boom, which has been described as the biggest oil find in North America in four decades with an estimated 4.3 billion barrels of recoverable oil, is Continental Resources, also from Oklahoma.

Fort Berthold – the center of the oil boom - has long suffered from crumbling roads and the lack of good housing and proper sewage facilities on the reservation. The companies plan to invest in housing and infrastructure for their workers and plants, but not for local residents.

“Right now, anything that’s available that has water and sewer on it is very attractive to anybody that’s trying to continue to grow their business,” says John Reese, the CEO of the United Prairie Cooperative company, which has taken over the trailer park.

“We were not even given a formal 30 day eviction notice and now that we have been kicked out of our home we are currently homeless,” said Heather Youngbird. The remaining residents of Prairie Winds Mobile Home Park have been told that they had to leave their trailers by May 1, but the eviction date has now been postponed until August 31.

More trouble is expected for the tribal community: Environmental groups note that residents may also soon see problems with their drinking water. “Information posted hydraulic fracturing fluid chemicals on the FracFocus web site indicates that Bakken Shale oil wells may contain toxic chemicals such as hydrotreated light distillate, methanol, ethylene glycol, 2-butoxyethanol (2-BE), phosphonium, tetrakis(hydroxymethyl)-sulfate (aka phosphonic acid),  acetic acid, ethanol, and napthlene,” writes EarthWorks, a Washington DC based group.

Then there is the air pollution: the oil companies are not even bothering to capture the natural gas that is generated by the drilling, partly because there are no state regulations to force them to and partly because it is expensive. Instead the gas is being “flared” or burnt off, the same way Shell does in the Niger delta with similar environmental consequences.

“Across western North Dakota, hundreds of fires rise above fields of wheat and sunflowers and bales of hay. At night, they illuminate the prairie skies like giant fireflies,” wrote Clifford Krauss in the New York Times last September. “Every day, more than 100 million cubic feet of natural gas is flared this way — enough energy to heat half a million homes for a day.”

Perhaps the greatest irony is that North Dakota has the greatest wind resource of almost any state in the country, says Mossett. She says that North Dakota could supply 1.2 trillion kilowatt-hours (kWh) of annual electricity.

Lukoil Threatens Arctic Reindeer

Posted by Pratap Chatterjee on April 23rd, 2012
CorpWatch Blog
Photo: Denis Sinyakov, Greenpeace

An oil spill in northern Russia from a joint venture between Lukoil and Bashneft has damaged fragile reindeer pastures in yet another blow to the indigenous Nenets people. Environmental activists have warned about such disasters for decades but few precautions have been taken by the oil companies.

Lukoil, which is now Russia’s largest oil company, and Bashneft are currently drilling for oil in the Trebs oil field in the Nenets Autonomous District which is estimated to hold 153 million tons of oil.

Vladimir Bezumov, chief of the local office of the Russian Environmental Agency, estimates that some 2,000 tons of oil gushed out of an exploratory well in the oil field this past weekend damaging as much as 14,000 square meters of land.

Oil exploration started in the region in the 1960s and expanded after the collapse of the Soviet Union. Activists warned that environmental problems were bound to get worse. "Western Siberia is already an ecological disaster area because of its many oil mishaps. Any oil accident would have serious consequences, that could reach upriver to the North Polar Sea," Ellen Schmidt wrote in a 1996 report for the World Wide Fund for Nature and a German environmental group called the Association for World Economy, Ecology and Development (AWEED) at the time.

Gail Osherenko, a Vermont-based anthropologist who works with the Nenets peoples, told IPS at the time that the idea oil drilling in the region would have only minimal impact was "wishful thinking."

And Russian and indigenous groups sent out an appeal in 1996 to ask the public to lobby the World Bank not to finance projects in the region. "We ask everyone to help us prevent an environmental nightmare. We ask you not to allow the use of your tax dollars, marks or kronor to facilitate further destruction of the environment," wrote Alexei Grigoriev of the Socio-Ecological Union in Russia in Taiga News.

The warnings were mostly ignored.

An Associated Press investigation by Nataliya Vasilyeva in late 2011 described some of the damage caused by the estimated half a million tons of oil spilled every year that make their way into the Arctic ocean, roughly two-thirds of the quantity of oil spilled in the Deepwater Horizon in the Gulf of Mexico. “On the bright yellow tundra outside this oil town near the Arctic Circle, a pitch-black pool of crude stretches toward the horizon. The source: a decommissioned well whose rusty screws ooze with oil, viscous like jam,” she wrote.

The indigenous communities say their traditional way of life has been devastated by the oil industry. “There is no future for us. People are dying. If oil companies behaved correctly, they would ask us, where drilling is possible and where not, which river is spawning, where fish comes for winter cabin. Fish comes to this bog in the autumn. And now all the rivers are blocked here, and fish has nowhere to go,” Valdimir Vello, a reindeer herder told Greenpeace recently for a report titled “Is there a life after oil?” “I think that there is no future. If the oil companies leave us, we can manage to save something here, to recover this place.”

Politicians are starting to pay attention. Last week, Yuri Trutnev, Russia’s minister for natural resources and ecology threatened to sue Lukoil rival, Anglo-Russian oil producer TNK-BP (owned jointly by British Petroleum and a consortium of the Alfa, Access and Renova groups) for numerous oil spills in Siberia. Trutnev said the company has 784 accidents last year.

"The land is practically flooded with oil," he said after a recent trip to the Khanty-Mansiisk region, according to a report by Gazeta.ru. "We didn't have to look for polluted places, we had to look for places that hadn't been touched by pollution."

The drilling ventures are hugely profitable so they are unlikely to be stopped but there is more than enough money to minimize some of the worst impacts. Since 2003, British Petroleum has paid out an estimated $19 billion in dividends, more than ten times more than it would cost to repair the aging infrastructure, according to an estimate by Gazprombank.

Peru’s Illegal Hardwood Timber Trade

Posted by Pratap Chatterjee on April 11th, 2012
CorpWatch Blog
GPS record of felled tree within the Amazon basin. Photo: Hans Berninzon, Environmental Investigation Agency

Francesco Mantuano, an Italian living in Peru with a timber concession in Loreto region, was puzzled when he got a request in July 2010 from a merchant named Mauro Paredes Sandoval to certify hundreds of trees harvested after just eight days of logging. The wood was to be exported by Madrera Bozovich, a Peruvian company, to its sister company in Alabama.

"After putting two and two together, Mantuano concluded that Paredes was only interested in obtaining (his forest transport permits) in order to launder timber which had already been illegally extracted from other areas, ," write the authors of a new report“The Laundering Machine” just published by the Environmental Investigation Agency (EIA), a Washington DC NGO. "The average harvest operation lasts months - but the low water levels and lack of rain at that time of year in Loreto make it difficult to transport timber on the rivers.

The biggest culprit that EIA uncovered is Grupo Bozovich, a family business set up in the late 1940s by Batrich Bozovich when he arrived from former Yugoslavia and set up business in Oxapampa, in central Peru. The group – which now includes Maderera Bozovich in Peru, Bozovich Timber Products in Alabama and a third company in Mexico – is the biggest exporter of hardwoods from Peru and the biggest importer of such hardwoods into the U.S.

The report alleges that at least 45 percent of shipments made Grupo Bozovich “included wood of illegal origin” such as big leaf mahogany and cedar, which are protected under the under the Convention on International Trade in Endangered Species of Flora and Fauna (CITES)

Surveys of forestry concessions used by Grupo Bozovich by the Supervisory Body for Forest and Wildlife Resources (OSINFOR) found some astonishing discrepancies: In the Productores Forestales Atacuaric concession, just one tree was actually cut down but its “extraction” yielded 311 cubic meters of wood. (The harvested tree in question measured just over 12 cubic meters and was found abandoned in the forest)  In the Oroza Wood S.A.C. concession, government investigators found 14 cedar stumps that turned out to be “disks of roundwood cut from logs and planted in the ground for the benefit of the supervisors.”

“Sometimes intentionally, sometimes through sheer negligence, each of the actors and agencies involved in this system are working as gears in a well-oiled machine that is ransacking Peru's forests and undermining the livelihoods and rights of the people that depend on them," write the EIA investigators. The cost to Peru is estimated to be $250 million a year.

The company denies the allegation. "Bozovich's exports to USA comply with the terms and condition of Lacey Act and the Convention on International Trade in Endangered Species of Wild Fauna and Flora," a U.S. spokesman told Inter Press Service.  (The 2008 Lacey Act requires buyers to practice "due care" to make sure that their products are legal. This is typically done by examining the export certificates)

Experts say that the problem is global. "Justice for Timber" - a March 2012 World Bank report explains the extent of the problem: “Every two seconds, across the world, an area of forest the size of a football field is clear-cut by illegal loggers. In some countries, up to 90% of all the logging taking place is illegal. Estimates suggest that this criminal activity generates approximately US $10-15 billion annually worldwide-funds that are unregulated, untaxed, and often remain in the hands of organized criminal gangs.”

Fracking South Africa

Posted by Pratap Chatterjee on March 29th, 2012
CorpWatch Blog
Karoo, South Africa. Photo: flowcomm. Used under Creative Commons license

The Karoo is not as well known as Kruger National Park with its elephants, leopards and lions. Located in the Western Cape region of South Africa, it is a desert area that is home to tortoises and eagles, and has been the subject of recent experiments to resettle the black rhino and resurrect the quagga, an unusual zebra like creature that went extinct in 1998. But today the people, flora and fauna of the Karoo are threatened by companies like Shell, the Anglo-Dutch oil company, which wants to drill for natural gas.

Like many ancient lands, the Karoo has fossil fuels trapped underground. Royal Dutch Shell, Falcon Oil & Gas and Bundu Oil & Gas want to explore 90,000 square kilometres for the natural gas using a controversial new technology called “fracking”

Bonang Mohale, the chairman of Shell South Africa, recently described the business potential as “bigger than the discovery of gold in Gauteng

However, a coalition of concerned citizens - Treasure the Karoo Action Group (TKAG) – has sprung up to oppose the plan. Their mission to their fellow citizens is simple: “South Africa cannot afford to gamble with your water supply, food security, the health of your family, and the heritage of your children in pursuit of a short-term gain for foreign oil companies and our government.”

TKAG is supported by Greenpeace, who attempt to explain what this technology does: “To access these reserves, fluid is pumped down a drilled channel (well) into the gas-bearing rock at very high pressures. This causes the rock to fracture, creating fissures and cracks through which the gas can 'escape'. The fracturing liquid generally consists of mainly water, mixed with sand and chemicals. Numerous different chemical agents are used, many of which are flagged as dangerous to humans and the environment (carcinogens, acute toxins).

“The fracturing of a single well requires a huge volume of water: around 9,000 - 29,000 m3 (9 -29 million litres). Chemicals make up about 2% of the fracturing liquid, i.e. about 180,000 – 580,000 litres. Only 15 – 80% of the injected fluid is recovered, meaning that the rest remains underground, where it is a source of contamination to water aquifers.”

Chris Hartnady, a well known geologist, says that fracking could have a huge impact on the Karoo desert especially because it will deplete the dwindling water supply. “Shale gas production would become a serious competitor for water, requiring as much as four times the current annual usage of the groundwater in all three of the Shell exploration areas,” he said at the Shale Gas Southern Africa conference in Cape Town earlier this week.

Hartnady noted that surface water might also become contaminated with fracking fluids and waste water. Indeed, communities in the U.S. have seen tap water catch on fire in fracking areas. (Watch this YouTube video and this one from Time magazine) Fracking can also dramatically increase the likelihood of earthquakes, according to recent research in Youngstown, Ohio, where residents were hit last Christmas Eve and again on New Year's Eve.

To learn more about the dangers of fracking, check out the film Gasland and the Drilling Down series in the New York Times.

Chevron & Transocean Back in the Dock Over Oil Spills

Posted by Pratap Chatterjee on March 22nd, 2012
CorpWatch Blog
Chevron Spoof Ad. Photo: The Yes Men. Used under Creative Commons license

Brazil has demanded that 17 Chevron and Transocean executives surrender their passports while they await the outcome of criminal charges brought against them for a spill that took place off the coast of Rio de Janeiro last November. The company has also been sued for $11 billion in damages by a Brazilian federal prosecutor.

Chevron has issued a statement claiming the charges are "outrageous and without merit.”  “We have sought to perform our operations in full compliance with Brazilian laws and industry practices and to comply with all applicable licenses and authorizations,” says a company press release issued Wednesday.

The jury is still out on the facts of the case. But it is hard to sympathize with a company that has played fast and loose with national justice systems in order to avoid paying compensation for toxic spills of immense proportions in the Ecuador by Texaco, a company that Chevron merged with in 2001.

Between 1964 to 1992 Texaco admitted to dumping more than 16 billion gallons of toxic “water of formation” into the streams and rivers used by local inhabitants for their drinking water, decimating indigenous groups and causing dramatically increased rates of cancer, according to a summary from Rainforest Action Network.

In 2002, Chevron asked for a trial in Ecuador to avoid a U.S. court battle. Eight years and 220,000 pages of evidence later, the courts ordered the company to pay $18.2 billion in damages. Chevron appealed but the Ecuadorean appellate court ruled against them on January 3, 2012. Now the company is attempting to have the judgement thrown out by a secret arbitration panel under a provision in the U.S. Ecuador Bi-Lateral Trade Agreement.

“Chevron won’t pay to clean up the toxic oil waste it deliberately dumped in the Ecuadorian Amazon, which has resulted in a human health crisis for the people living in the region. But it will pay thousands to lobby state leaders and ambassadors to extend its extreme investor rights, and continue to evade justice elsewhere,” said Ginger Cassady, campaign director at Rainforest Action Network.

Transocean, which is one of the largest offshore drilling contractors, has also been in trouble over oil spills. The U.S. company, which is headquartered in Switzerland was implicated in the Deepwater Horizon explosion that killed 11 men on April 10, 2010. Approximately 4.9 million barrels of oil were spilled into the Gulf of Mexico which caused major damage to the local marine environment and the fishing and tourism industries.

A Wall Street Journal review found that the company was involved in “three of every four incidents that triggered federal investigations into safety and other problems on deepwater drilling rigs in the Gulf of Mexico since 2008.” The newspaper noted that Transocean has accounted for 24 of the 33 incidents investigated by the U.S. Minerals Management Service despite during that time owning fewer than half the Gulf of Mexico rigs operating in more than 3,000 feet of water.

Oil companies rank among the most profitable in the world. Chevron pulled in $26.9 billion in profits last year and Transocean made close to a billion dollars. Surely they could spare some of that money to pay for the clean-up of the mess they leave behind?

Bad Karma in the Gulf of Mexico Oil Disaster

Posted by Phil Mattera on May 10th, 2010

Originally posted on May 7 at Dirt Digger's Digest.

http://dirtdiggersdigest.org/wordpress/wp-content/uploads/2010/05/deepwaterhorizon1.jpg

British Petroleum is, rightfully, taking a lot of grief for the massive oil spill in the Gulf of Mexico, but we should save some of our vituperation for Transocean Ltd., the company that leased the ill-fated Deepwater Horizon drilling rig to BP. Transocean is no innocent bystander in this matter. It presumably has some responsibility for the safety condition of the rig, which its employees helped operate (nine of them died in the April 20 explosion).

Transocean also brings some bad karma to the situation. The company, the world’s largest offshore drilling contractor, is the result of a long series of corporate mergers and acquisitions dating back decades. One of the firms that went into that mix was Sedco, which was founded in 1947 as Southeastern Drilling Company by Bill Clements, who would decades later become a conservative Republican governor of Texas.

In 1979 a Sedco rig in the Gulf of Mexico leased to a Mexican oil company experienced a blowout, resulting in what was at the time the worst oil spill the world had ever seen. As he surveyed the oil-fouled beaches of the Texas coast, Gov. Clements made the memorable remarks: “There’s no use in crying over spilled milk. Let’s don’t get excited about this thing” (Washington Post 9/11/1979).

At the time, Sedco was being run by Clements’s son, and the family controlled the company’s stock. The federal government sued Sedco over the spill, claiming that the rig was unseaworthy and its crew was not properly trained. The feds sought about $12 million in damages, but Sedco drove a hard bargain and got away with paying the government only $2 million. It paid about the same amount to settle lawsuits filed by fishermen, resorts and other Gulf businesses. Sedco was sold in 1984 to oil services giant Schlumberger, which transferred its offshore drilling operations to what was then known as Transocean Offshore in 1999.

In 2000 an eight-ton anchor that accidentally fell from a Transocean rig in the Gulf of Mexico ruptured an underwater pipeline, causing a spill of nearly 100,000 gallons of oil. In 2003 a fire broke out on a company rig off the Texas coast, killing one worker and injuring several others. As has been reported in recent days, a series of fatal accidents at company operations last year prompted the company to cancel executive bonuses.  It’s also come out that in 2005 a Transocean rig in the North Sea had been cited by the UK’s Health and Safety Executive for a problem similar to what apparently caused the Gulf accident.

Safety is not the only blemish on Transocean’s record. It is one of those companies that engaged in what is euphemistically called corporate inversion—moving one’s legal headquarters overseas to avoid U.S. taxes. Transocean first moved its registration to the Cayman Islands in 1999 and then to Switzerland in 2008. It kept its physical headquarters in Houston, though last year it moved some of its top officers to Switzerland to be able to claim that its principal executive offices were there.

In addition to skirting U.S. taxes, Transocean has allegedly tried to avoid paying its fair share in several countries where its subsidiaries operate. The company’s 10-K annual report admits that it has been assessed additional amounts by tax authorities in Brazil and that it is the subject of civil and criminal tax investigations in Norway.

In 2007 there were reports that Transocean was among a group of oil services firms being investigated for violations of the Foreign Corrupt Practices Act in connection with alleged payoffs to customs officials in Nigeria. No charges have been filed.

An army of lawyers will be arguing over the relative responsibility of the various parties in the Gulf spill for a long time to come. But one thing is clear: Transocean, like BP, brought a dubious legacy to this tragic situation.