Inter Press Service » Carey L. Biron http://www.ipsnews.net Turning the World Downside Up Wed, 24 Dec 2014 19:06:55 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.3 Changes to World Bank Safeguards Risk “Race to the Bottom”, U.N. Experts Warnhttp://www.ipsnews.net/2014/12/changes-to-world-bank-safeguards-risk-race-to-the-bottom-u-n-experts-warn/?utm_source=rss&utm_medium=rss&utm_campaign=changes-to-world-bank-safeguards-risk-race-to-the-bottom-u-n-experts-warn http://www.ipsnews.net/2014/12/changes-to-world-bank-safeguards-risk-race-to-the-bottom-u-n-experts-warn/#comments Fri, 19 Dec 2014 01:11:37 +0000 Carey L. Biron http://www.ipsnews.net/?p=138341 By Carey L. Biron
WASHINGTON, Dec 19 2014 (IPS)

An unprecedented number of United Nations special rapporteurs and independent experts are raising pointed concerns over the World Bank’s ongoing review of its pioneering environmental and social safeguards, particularly around the role that human rights will play in these revamped policies.

In a letter made public Tuesday, 28 U.N. experts raise fears that the Washington-based development funder could foster a “race to the bottom” if proposed changes go forward. The document accuses the bank of selective interpretation of its own charter and its obligations under international law.“The bank is not just any old actor in relation to these issues. It is the gorilla in the room.” -- U.N. Special Rapporteur Philip Alston

“[B]y contemporary standards the [safeguards revision] seems to go out of its way to avoid any meaningful references to human rights and international human rights law, except for passing references,” the letter, addressed to World Bank Group President Jim Yong Kim, states.

“[T]he Bank’s proposed new Safeguards seem to view human rights in largely negative terms, as considerations that, if taken seriously, will only drive up the cost of lending rather than contributing to ensuring a positive outcome.”

The World Bank says its safeguards constitute a “cornerstone of its support to sustainable poverty reduction”, and the institution is currently updating these policies for the first time in two decades. Yet when the bank released a draft revision of those changes in July, the proposal set off a firestorm of criticism across civil society.

Critics warn that the revisions would allow the World Bank to shift responsibility for adherence to certain social and environmental policies on to loan recipients, while prioritising self-monitoring over up-front requirements. The new guidelines could also exempt recipient governments from abiding by certain aspects of the policies.

The bank has since extended the period intended to gather response to the draft, which was supposed to end this month, through this coming spring.

“The bank is not just any old actor in relation to these issues. It is the gorilla in the room,” Philip Alston, the U.N. Human Rights Council’s special rapporteur on extreme poverty and human rights, told IPS. “What it does on safeguards, and what it doesn’t do on human rights, makes a huge difference in terms of setting global standards.”

The letter, which Alston spearheaded, is a rarity in multiple ways. Not only are formal missives from the U.N. human rights system to the World Bank uncommon, but close observers say that no such previous letter has garnered the support of so many U.N. rights experts.

Those who signed the letter “are deeply concerned that the bank is planning to turn the clock back 20 years or more,” Alston says, “and replace its existing standards with a system that will simply pass the blame for ignoring human rights considerations on to others, thus letting the bank off the hook.”

Competitive pressures

Since the 1970s, the World Bank has been a pioneer in working to ensure that its development assistance does not lead to or exacerbate certain forms of discrimination or environmental degradation.

Yet the institution has never mandated that the programmes it funds comply with international human rights standards, largely on the concern that politicising the bank’s lending could complicate its country-by-country anti-poverty focus. (Others, including Alston, maintain that human rights can no longer be considered a political issue.)

Consensus is growing, however, around the idea that sustainable development is impossible without a specific focus on human rights. Other multilateral institutions, including the U.N. Development Programme, have explicitly brought their assistance guidelines in line with international human rights obligations.

At the same time, the World Bank is experiencing greater competitive pressure. According to many analysts, including this week’s letter, this is due to the recent creation of several new multilateral development lenders, funded particularly by fast-rising economies including China, Russia and India.

These entities are widely expected to put less emphasis on prescriptive and at times laborious requirements such as the World Bank’s environmental and social safeguards. In such a context, however, Alston and others say the bank has an added responsibility to focus on the results that, they suggest, only core respect for human rights can bring.

The bank’s management counters that the institution has been a leader in highlighting the interdependence between respect for human rights and development outcomes for at least two decades. Today, officials involved with the safeguard review maintain that both human rights and non-discrimination principles have been expanded upon in the new draft.

“Our draft proposal goes as far or further than any other multilateral development bank in the degree to which it protects the vulnerable and the marginalized,” Stefan Koeberle, the bank’s director of operations risk, told IPS in a statement.

“We are currently engaged in extensive consultations on the draft, and we have received a variety of constructive proposals to strengthen the language further. We will continue to carry out our role as an organization charged with achieving poverty reduction and shared prosperity, through sound policies that achieve beneficial environmental, social, and economic outcomes for all concerned.”

U.S. leadership?

The concerns voiced by the U.N. experts come just after three U.S. lawmakers told the Obama administration that the World Bank’s safeguards revision were resulting in a “dilution of existing protections”.

In a letter to U.S. Treasury Secretary Jacob Lew, the lawmakers note that a November evaluation by an Asian Development Bank (ADB) auditor had “foreshadowed” some of these concerns. The trio urged U.S. intervention.

“The Department of Treasury has a history of successfully leading coalitions that call upon regional and national development banks to implement strong safeguards,” the letter states.

“We expect the Treasury to demonstrate similar leadership in this case, so that the World Bank’s safeguards are at least as strong as the strongest safeguards of the ADB and other multilateral financial institutions.”

The United States is the World Bank’s largest member, and watchdog groups say the new flurry of formal critical response is significant.

“U.N. human rights experts and the U.S. Congress have joined the chorus of voices trying to shake the World Bank into finally recognising that human rights should be central to all that it does, and particularly in safeguarding against harm,” Jessica Evans, a senior advocate with Human Rights Watch, told IPS.

If the bank refuses to institutionalise “rigorous human rights due diligence,” Evans continues, “the only conclusion that can be drawn is that the World Bank wants to retain an ability to finance violations of international human rights law while complying with its own policies.”

Bank officials say the next draft of the safeguards revision should be made public by mid-2015.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/12/changes-to-world-bank-safeguards-risk-race-to-the-bottom-u-n-experts-warn/feed/ 0
‘Record’ Illicit Money Lost by Developing Countries Triples in a Decadehttp://www.ipsnews.net/2014/12/record-illicit-money-lost-by-developing-countries-triples-in-a-decade/?utm_source=rss&utm_medium=rss&utm_campaign=record-illicit-money-lost-by-developing-countries-triples-in-a-decade http://www.ipsnews.net/2014/12/record-illicit-money-lost-by-developing-countries-triples-in-a-decade/#comments Tue, 16 Dec 2014 21:46:25 +0000 Carey L. Biron http://www.ipsnews.net/?p=138297 There is a broad spectrum of potential avenues for the illegal skimming from or shifting of profits in developing countries, carried out by criminal entities, corrupt officials and dishonest corporations.  Credit: epSos .de/cc by 2.0

There is a broad spectrum of potential avenues for the illegal skimming from or shifting of profits in developing countries, carried out by criminal entities, corrupt officials and dishonest corporations. Credit: epSos .de/cc by 2.0

By Carey L. Biron
WASHINGTON, Dec 16 2014 (IPS)

Developing countries are losing money through illicit channels at twice the rate at which their economies are growing, according to new estimates released Tuesday. Further, the total volume of these lost funds appears to be rapidly expanding.

Findings from Global Financial Integrity (GFI), a watchdog group based here, re-confirm previous estimates that developing countries are losing almost a trillion dollars a year through tax evasion, corruption and other financial crimes. Yet in a new report covering the decade through 2012, GFI’s researchers show that the rate at which these illicit outflows are taking place has risen significantly.“If we take [these] findings seriously, we can address extreme poverty in our lifetimes.” -- Eric LeCompte

In 2003, for instance, cumulative illicit capital leaving developing countries was pegged at around 297 billion dollars. That’s significant, of course, but relatively little compared to the more than 991 billion now estimated for 2012 – a record figure, thus far.

In less than a decade, then, these illicit outflows more than tripled in size, totalling at least 6.6 billion dollars. GFI reports that this works out to an adjusted average growth of some 9.4 percent per year, or twice the average global growth in gross domestic product (GDP).

One of the most common mechanisms for moving this money has been the falsification of trade invoices.

“After turning down following the financial crisis, global trade is going up again and so it’s increasingly easy to engage in misinvoicing – a lot more people are coming to understand how to do this and are willing to indulge,” Raymond Baker, GFI’s president, told IPS.

“These rates are not only growing faster than global GDP but also faster than the rate of growth of global trade.”

Further, these estimates are likely conservative, and don’t cover a broad spectrum of data that is not officially reported – cash-based criminal activities, for instance, or unofficial “hawala” transactions.

Baker emphasises that these capital losses are a problem affecting the entire developing world. Yet given that illicit outflows run in tandem with a country’s broader interaction with global trade, these rates are particularly strong in the world’s emerging economies, led by China, Russia, Mexico and India.

There are also significant differentials between regions, both is size and the rate at which they’re increasing. In the Middle East and North Africa, for instance, illicit financial flows are growing far higher than the global average, at more than 24 percent per year.

Even in sub-Saharan Africa, home to some of the world’s poorest communities, these rates are growing at more than 13 percent per year. Such figures eclipse both foreign assistance and foreign investment – indeed, the 2012 figure was more than 11 times the total development assistance offered on a global basis.

“If we take [these] findings seriously, we can address extreme poverty in our lifetimes,” Eric LeCompte, an expert to U.N. groups that focus on these issues, said Monday. “Countries need resources and if we curb these illicit practices, we can get the money where it’s needed most.”

Lucrative misinvoicing

There is a broad spectrum of potential avenues for the illegal skimming from or shifting of profits in developing countries, carried out by criminal entities, corrupt officials and dishonest corporations. And for the first time, certain of these key issues are receiving new and concerted international attention.

Multiple nascent multinational actions are now unfolding aimed at cracking down particularly on tax evasion by transnational companies. New transparency mechanisms are in the process of being rolled by several multilateral groups, including the Group of 20 (G20) industrialized nations and the Organisation for Economic Cooperation and Development (OECD), a Paris-based grouping of rich countries.

Such initiatives are receiving keen attention from civil society groups, and would likely constrict these illicit flows. Yet in fact, GFI’s research suggests that the overwhelming method by which capital is illegally leaving developing countries is far more mundane and, potentially, complex to tackle.

This has to do with simple trade misinvoicing, in which companies purposefully use incorrect pricing of imports or exports to justify the transfer of funds out of or into a country, thus laundering ill-gotten finances or helping companies to hide profits. Over the past decade, the new GFI report estimates, more than three-quarters of illicit financial flows were facilitated by trade misinvoicing.

And this includes only misinvoicing for goods, not services. Likely the real figure is far higher.

Experts say that stopping misinvoicing completely will be impossible, but note that there are multiple ways to curtail the problem. First would be to ensure greater transparency in the global financial system, to eliminate tax havens and “shell corporations” and to require the automatic exchange of tax information across borders.

Efforts are currently underway to accomplish each of these, to varying degrees. Last month, leaders of the G20 countries agreed to begin automatically sharing tax information by the end of next year, and also committed to assist developing countries to engage in such sharing in the future.

GFI’s Baker says that developing countries need to bolster their customs systems, but notes that other tools are already readily available to push back against trade misinvoicing.

“There is a growing volume of online pricing data available that can be accessed in real time,” he says. “This gives developing countries the ability to look at transactions coming in and going out and to get an immediate idea as to whether the pricing accords with international norms. And if not, they can quickly question the transaction.”

Development goal

There is today broad recognition of the monumental impact that illicit financial flows have on poor countries’ ability to fund their own development. Given the centrality of trade misinvoicing in this problem, there are also increasing calls for multilateral action to take direct aim at the issue.

In particular, some development scholars and anti-poverty campaigners are urging that a related goal be included in the new Sustainable Development Goals (SDGs), currently under negotiation at the United Nations and planned to be unveiled in mid-2015.

Under this framework, GFI is calling for the international community to agree to halve trade-related illicit flows within a decade and a half. The OECD is hosting a two-day conference this week to discuss the issue.

“We’re not talking about an aspirational goal but rather a very measurable goal. That’s doable, but it will take political will,” Baker says.

“We think the SDGs should incorporate very specific, targetable goals that can have huge impact on development and helping developing countries keep their own money. In our view, that’s the most important objective.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/12/record-illicit-money-lost-by-developing-countries-triples-in-a-decade/feed/ 1
Groups Push Obama to Clarify U.S. Abortion Funding for Wartime Rapehttp://www.ipsnews.net/2014/12/groups-push-obama-to-clarify-u-s-abortion-funding-for-wartime-rape/?utm_source=rss&utm_medium=rss&utm_campaign=groups-push-obama-to-clarify-u-s-abortion-funding-for-wartime-rape http://www.ipsnews.net/2014/12/groups-push-obama-to-clarify-u-s-abortion-funding-for-wartime-rape/#comments Wed, 10 Dec 2014 00:49:17 +0000 Carey L. Biron http://www.ipsnews.net/?p=138188 Survivors at a workshop in Pader, northern Uganda. Thousands of women were raped during Uganda’s civil war but there have been few government efforts to assist them. Credit: Rosebell Kagumire/IPS

Survivors at a workshop in Pader, northern Uganda. Thousands of women were raped during Uganda’s civil war but there have been few government efforts to assist them. Credit: Rosebell Kagumire/IPS

By Carey L. Biron
WASHINGTON, Dec 10 2014 (IPS)

Nearly two dozen health, advocacy and faith groups are calling on President Barack Obama to take executive action clarifying that U.S. assistance can be used to fund abortion services for women and girls raped in the context of war and conflict.

The groups gathered Tuesday outside of the White House to draw attention to what they say is an ongoing misreading by politicians as well as humanitarian groups of four-decade-old legislation. That law, known as the Helms Amendment, specifies women’s health services that can be supported by U.S. overseas funding."We want to prevent these acts but also, when that violence does occur, to make sure that organisations and government agencies are providing the necessary post-rape care, including legal and social services, as well as mental and physical health services. Abortion services need to be part of that package.” -- Serra Sippel

This mis-interpretation, advocates warn, results in ongoing mental suffering, social disgrace and even additional abuse for women who have been raped.

“For over 40 years, the Helms Amendment has been applied as a complete ban on abortion care in U.S.-funded global health programmes – with no exceptions,” Purnima Mane, the president of Pathfinder International, a group that works on global sexual health issues, said in comments sent to IPS.

“The result is that Pathfinder and other U.S. government-funded agencies are unable to provide critical abortion care services to those at risk even under circumstances upheld by U.S. law and clearly allowable under the Helms Amendment. With the stroke of a pen, President Obama can change the outcome for many of these women and start to reverse more than four decades of neglect of their basic human rights and harm to their health.”

Advocates say such an executive action would be in line with both the law and broader public opinion. Indeed, on the face of it, the Helms Amendment seems to be quite clear.

The amendment bans U.S. funding from being used to “pay for the performance of abortion as a method of family planning” or to “motivate or coerce any person to practice abortions.” While the law does not specifically bar U.S. assistance being used for abortion services in the case of rape, critics have long noted that this has been the impact since the start.

“No U.S. administration has ever implemented this correctly, in terms of making exemptions in certain instances,” Serra Sippel, the president of the Center for Health and Gender Equity (CHANGE) and a key organiser of Tuesday’s demonstration, told IPS.

“This comes down to politics and the political environment in Washington. But what we need is for the president to take leadership and direct USAID” – the federal government’s main foreign assistance agency – “and the State Department to say the U.S. government is taking a stand and supporting access to abortion in these cases.”

Misinterpretation, self-censorship

Abortion has been, and remains, one of the most divisive issues in U.S. politics. By many metrics, this polarisation has only worsened with time.

This came to the cultural and political forefront in 1973, when the U.S. Supreme Court ruled in a landmark decision that a state law banning abortion (except to save the mother’s life) was unconstitutional. The ruling resulted in a lasting moral outrage among broad sections of the U.S. public, though polls suggest that a majority of those in the United States support services following rape, incest or when a mother’s life is at risk.

The Helms Amendment was among the first legislative responses to the court’s ruling, passed just months later. Since then, the amendment has resulted in a discontinuation of U.S. assistance for all abortion services in other countries.

It is important to note that these procedures remain legal in the United States, as well as in many of the countries in which U.S.-funded entities, including government departments, are operating. Humanitarian groups often feel they cannot even make abortion-related information available to women, including those raped during conflict – even if the Helms Amendment doesn’t specifically proscribe doing so.

“These restrictions, collectively, have resulted in a perception that U.S. foreign policy on abortion is more onerous than the actual law … [leading to] a pervasive atmosphere of confusion, misunderstanding and inhibition around other abortion-related activities beyond direct services,” analysis published last year by the Guttmacher Institute, a sexual health-focused think tank here, reports.

“Wittingly or unwittingly, both NGOs and U.S. officials have been transgressors and victims alike in the misinterpretation and misapplication of U.S. anti-abortion law … whether through misinterpretation or self-censorship, NGOs are needlessly refraining from providing abortion counseling or referrals.”

Global statistics on conflict-time rapes and resulting pregnancies are hard to come by. Human Rights Watch points to 2004 research carried out in Liberia, where rape was used as a weapon of war, suggesting that around 15 percent of wartime rapes led to pregnancy.

“Human rights practitioners and public health officials from Bosnia, the Democratic Republic of Congo, Colombia, and other countries at war, have collected evidence from conflict rape survivors showing both that pregnancy happens and that it has devastating consequences for women and girls,” Liesl Gerntholtz, the executive director of a Human Rights Watch’s women’s rights division, wrote Tuesday.

“They are left to continue unwanted pregnancies and bear children they often cannot care for and who are daily reminders of the brutal attacks they suffered. This, in turn, makes these children more vulnerable to stigmatization, abuse, and abandonment.”

Global acknowledgment

On Tuesday, the groups participating in the White House demonstration also called on President Obama to clarify that the Helms Amendment does not apply to pregnancies resulting from incest or if the mother’s life is at risk. Yet the focus of the calls remains on rape in the context of war and conflict.

Advocates say public consciousness on this issue has risen significantly over the past year and a half. To a great extent, this has been driven by the conflict in Syria and the rise of the Islamic State, as well as the ongoing violence in the Democratic Republic of the Congo (DRC), and the centrality of sexual violence in each of these.

“We know that rape has been used as a weapon of war throughout history. What’s new is the attention from governments and advocates over the past 18 months,” CHANGE’s Sippel says.

“The prevention of violence cannot stand alone. We want to prevent these acts but also, when that violence does occur, to make sure that organisations and government agencies are providing the necessary post-rape care, including legal and social services, as well as mental and physical health services. Abortion services need to be part of that package.”

The United States has been a strong global advocate against sexual violence in recent years, including with regard to conflict situations. President Obama has created the first U.S. action plan on women’s role in peace-building, a White House strategy on gender-based violence, among other actions.

Advocates say that clarifying the Helms Amendment would be the next logical step. Although the White House was unable to comment for this story, organisers of Tuesday’s rally say President Obama’s aides did meet with advocates working on sexual violence in Colombia, the DRC and elsewhere.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/12/groups-push-obama-to-clarify-u-s-abortion-funding-for-wartime-rape/feed/ 0
Only Half of Global Banks Have Policy to Respect Human Rightshttp://www.ipsnews.net/2014/12/only-half-of-global-banks-have-policy-to-respect-human-rights/?utm_source=rss&utm_medium=rss&utm_campaign=only-half-of-global-banks-have-policy-to-respect-human-rights http://www.ipsnews.net/2014/12/only-half-of-global-banks-have-policy-to-respect-human-rights/#comments Tue, 09 Dec 2014 01:07:33 +0000 Carey L. Biron http://www.ipsnews.net/?p=138161 Children from one of the communities in Ocean Division, southern Cameroon, who lost much of their forestland after the government leased it to a logging company. Credit: Monde Kingsley Nfor/IPS

Children from one of the communities in Ocean Division, southern Cameroon, who lost much of their forestland after the government leased it to a logging company. Credit: Monde Kingsley Nfor/IPS

By Carey L. Biron
WASHINGTON, Dec 9 2014 (IPS)

Just half of major global banks have in place a public policy to respect human rights, according to new research, despite this being a foundational mandate of an international convention on multinational business practice.

Further, of the 32 global banks examined, researchers found that none has publicly put in place a process to deal with human rights abuses, if identified. None has even created grievance mechanisms by which those impacted by potential abuses can complain to the banks.“The findings of this report are quite sobering about what can be expected from self-regulatory principles.” -- Aldo Caliari

The findings, published by BankTrack, an international network of watchdog groups, come three and a half years after the adoption of the United Nations Guiding Principles on Business and Human Rights. These principles, unanimously endorsed by the U.N. Human Rights Council in 2011, specify a range of actions and obligations for all businesses, including the financial sector.

Yet banks have a unique role in underwriting nearly all of the business activity around the globe, even as they are typically shielded from the impacts of those investments.

“Banks covered in this report have been found to finance companies and projects involving forced removals of communities, child labour, military backed land grabs, and abuses of indigenous peoples’ right to self-determination,” the report, released last week, states.

“Policies and processes, open to public scrutiny and backed by adequate reporting, are important tools for banks to ensure that these kinds of abuses do not happen, and that where they do, those whose rights have been impacted have the right to effective remedy … If these policies and procedures are to be meaningful, the finance for such ‘dodgy deals’ must eventually dry up.”

One of the banks studied in the new report, JPMorgan Chase, is one of the leading U.S. financiers of palm oil, through loans and equity investments. While the bank does have a human rights policy, BankTrack’s researchers find this policy applies only to loans, not investments.

“When it comes to reporting on implementation, the bank falls flat, making the policy little more than window-dressing,” Jeff Conant, an international forests campaigner with Friends of the Earth U.S., a watchdog group that is working on palm-oil financing, told IPS.

“We’ve spoken with JPMorgan Chase about the need to give impacted people an opportunity to file complaints about the human rights impacts of its financing, with the belief that this is a first step towards accountability. Frankly, from the bank’s response, I don’t see them stepping up anytime soon.”

While private finance today facilitates almost the full range of corporate activity, Conant notes, “the finance institutions themselves are wholly unaccountable.”

Sobering results

According to the new study, a few banks appear to be well on their way to conformity with the Guiding Principles. The top-ranked institution, the Dutch Rabobank, received a score of eight out of 12, with Credit Suisse and UBS close behind.

These are the exceptions, however. Against a set of 12 criteria, the average score was only a three.

Many scored at or near zero. While those ranked at the very bottom include several Chinese institutions, they also include banks in the European Union and the United States.

Indeed, Bank of America, one of the largest financial institutions in the world, scored just 0.5 out of 12, receiving a minor bump for having expressed some commitment to carrying out human rights-related due diligence. (The bank failed to respond to request for comment for this story by deadline.)

“The findings of this report are quite sobering about what can be expected from self-regulatory principles,” Aldo Caliari, the director of the Rethinking Bretton Woods Project at the Center of Concern, a Washington think tank, told IPS.

“The Guiding Principles are the bare minimum of any human rights framework in the corporate sector, a framework that has the companies’ consent. So the fact that there is so little [adherence to] such a relatively weak tool, where every effort to court corporations’ support has been made, is, indeed, very telling.”

Despite the spectrum of findings on implementation, the financial services industry as a whole has taken note of the Guiding Principles.

In 2011, four European banks met to discuss the principles’ potential implications for the sector. Three more banks eventually joined what is now called the Thun Group, and in October 2013 the grouping released an initial paper on the results of these discussions, including recommendations for compliance.

A previously existing set of voluntary guidelines for the banking sector, known as the Equator Principles, were also updated in 2013 to reflect the new existence of the Guiding Principles. So far, the Equator Principles have been signed by 80 financial institutions in 34 countries.

“To date, banks’ efforts to implement the UN Guiding Principles have mainly revolved around producing discussion papers on the best way forward,” Ryan Brightwell, the new report’s author, said in a statement.

“BankTrack has welcomed these discussions, but some three and a half years on from the launch of these Principles, it is time to move onto implementation.”

Strengthening accountability

The new findings on lagging implementation will strengthen arguments from those who want to tweak or supplant the Guiding Principles. Some suggest, for instance, that the framework be changed to treat financial institutions differently from other sectors.

“[T]he financial sector requires an exceptional treatment when it comes to the application of the Guiding Principles,” the Center of Concern’s Caliari wrote last year in comments for the Working Group on Business and Human Rights.

“Financial companies, more than other companies, have the potential, with their change of behaviour, to influence the behaviour of other actors. That means they also should be upheld to a greater level of responsibility when they fail to do so.”

Caliari and others are also part of a movement to move beyond voluntary frameworks such as the Guiding Principles (at least in their current form), and instead to see through the creation of a binding mechanism.

This decades-long effort received a significant boost in June, when the U.N. Human Rights Council voted to allow negotiations to begin toward a binding treaty around transnational companies and their human rights obligations. (This same session also approved a popular second resolution, aimed instead at strengthening implementation of the Guiding Principles process.)

The new data on banks’ relative lack of compliance with the Guiding Principles, Caliari says, is one of the reasons the call for a legally binding treaty “has been gaining ground.”

He continues: “It is increasingly clear that mechanisms that rely on the consent of the companies cannot be the total of available accountability mechanisms. More is needed.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/12/only-half-of-global-banks-have-policy-to-respect-human-rights/feed/ 0
World Bank Calls for Development Policy “Redesign” around Human Behaviourhttp://www.ipsnews.net/2014/12/world-bank-calls-for-development-policy-redesign-around-human-behaviour/?utm_source=rss&utm_medium=rss&utm_campaign=world-bank-calls-for-development-policy-redesign-around-human-behaviour http://www.ipsnews.net/2014/12/world-bank-calls-for-development-policy-redesign-around-human-behaviour/#comments Thu, 04 Dec 2014 22:29:13 +0000 Carey L. Biron http://www.ipsnews.net/?p=138108 By Carey L. Biron
WASHINGTON, Dec 4 2014 (IPS)

The World Bank has taken an unusual but highly visible step away from traditional economics, encouraging policymakers and development implementers to place far more emphasis on research into local human behaviour when drawing up plans and projects.

Such a focus would strengthen understanding on the ways in which habits, biases and collective impulses impact on interventions in, say, health, education or encouraging personal savings. The bank emphasises that such a focus is important for understanding the behavioural peculiarities of not just poor communities but also policymakers, including those within the World Bank itself.“If you know lots of people who pay taxes, you are more likely to pay taxes. That may be as important or more important as the likelihood of getting caught.” -- Varun Gauri, a co-director of the new WDR

These new prescriptions come in the bank’s most high-profile annual study, the World Development Report (WDR), which was formally released here on Thursday.

“[D]evelopment policy is due for its own redesign based on careful consideration of human factors,” the report states, noting that the analysis draws from findings in behavioural economics, cognitive science, anthropology and other fields.

“Because human decision making is so complicated, predicting how beneficiaries will respond to particular interventions is a challenge. The process of devising and implementing development policy would benefit from richer diagnoses of behavioural drivers … and early experimentation.”

The World Development Report is a thematic study, and since its introduction in the late 1970s has generally focused on issues of traditional priority for development policy – jobs, gender, agriculture, etc. Members of the World Bank’s leadership admit that the focus of this year’s WDR – formally subtitled “Mind, Society, and Behaviour” – was a gamble.

Yet they also say that a greater focus on human behaviour throughout the process of creating development policy could have a landmark impact on efficacy, efficiency and other goals that ultimately make the difference between a successful versus middling intervention.

“The use of these methods in the development policy world is very minimal, and all of the motivations for doing this World Development Report were precisely because of that deficiency,” Kaushik Basu, a senior vice president and chief economist at the bank, told IPS.

“So there’s real a possibility of … a paradigm adjustment, whereby governments, development practitioners and others make use of this new range of instruments available to improve delivery to the doorstep. I feel the scope for that is huge.”

Private sector lessons

Traditional economics views human decision-making as straightforward and rational, based on a clean mix of self-interest and logic. Yet the WDR cites copious research over the past decade or more indicating that, in fact, humans arrive at decisions due to a variety of factors, many of which are immediate and unrelated to the broader issue under consideration.

On the one hand, for instance, the World Bank points to research suggesting that poverty and crisis situations make it increasingly difficult for many people to make rational or long-term decisions. On the other hand, the report notes that people can often be “unexpectedly generous”.

The private sector, of course, has known about and directly exploited approaches offered by the behavioural and cognitive sciences for years. Indeed, rarely is a new advertisement or product publicly offered before being extensively considered from a variety of such perspectives.

Yet this is new territory for the bank, and for much of the development world.

“The World Bank is quite dogmatically wedded to the idea of free markets, information about pricing, rational decision-making. So for them to take a step back and highlight the additional information out there that might help remove limitations – that’s very good,” Hans Bos, the vice president and director of the International Development, Evaluation, and Research (IDER) programme at the American Institutes for Research, told IPS.

“What this report didn’t do very well is to explain the practical implications of following these approaches. In order to really know what is working in a local context you need to keep testing things, but we can’t spend three-quarters of the development budget on research. So we need to come up with a better way to do research.”

The World Bank is now hoping that by putting its stamp of approval on this body of research, and by using its global influence, it can spur additional related research. It is also hoping to convince development policymakers to take human behaviour – particularly local behaviour – into account when designing with new projects.

“For example, can simplifying the enrolment process for financial aid increase participation? Can changing the timing of fertilizer purchases to coincide with harvest earnings increase the rate of use?” the report asks.

“Can marketing a social norm of safe driving reduce accident rates? Can providing information about the energy consumption of neighbours induce individuals to conserve?”

This latter issue, of the collective social impact on individual decision-making, is a key one, the WDR’s researchers note.

“If you know lots of people who pay taxes, you are more likely to pay taxes. That may be as important or more important as the likelihood of getting caught,” Varun Gauri, a co-director of the new WDR, told IPS.

“That increase in tax receipts would have a huge impact on development prospects in a number of countries [in terms of] law-abidingness and corruption or other areas where you could have large, paradigm-changing impact.”

Self-reflection

Gauri notes that many of the factors that need to be taken into consideration regarding communities receiving development interventions – their biases, their potential illogic – should also be applied to policymakers designing these interventions.

“A lot of the findings that have been conducted to date focus on households and consumers and their choices. But these findings apply to everybody, including to policymakers themselves,” Guari says.

“So to the extent that these findings can have a huge paradigm-shifting impact, it may be as a result of policymakers themselves thinking through their own biases, thinking through the cognitive illusions they’re under before they make policies for an entire country.”

This self-reflexive tone is welcome, the American Institutes for Research’s Bos says. Indeed, he suggests it should have been the report’s primary focus.

“I think this report would have been far more powerful if it had started with analysis of [the World Bank’s] own practices,” he says.

“Often it’s much easier for us rational donors to change how we do our business than it is to go into a poor country and tell them how to do things differently. Starting with ourselves would be a far better way of applying these lessons.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/12/world-bank-calls-for-development-policy-redesign-around-human-behaviour/feed/ 0
First Phase of Global Fracking Expansion: Ensuring Friendly Legislationhttp://www.ipsnews.net/2014/12/first-phase-of-global-fracking-expansion-ensuring-friendly-legislation/?utm_source=rss&utm_medium=rss&utm_campaign=first-phase-of-global-fracking-expansion-ensuring-friendly-legislation http://www.ipsnews.net/2014/12/first-phase-of-global-fracking-expansion-ensuring-friendly-legislation/#comments Mon, 01 Dec 2014 23:31:58 +0000 Carey L. Biron http://www.ipsnews.net/?p=138042 Fracking fluid and other drilling wastes are dumped into an unlined pit located right up against the Petroleum Highway in Kern County, California. Credit: Sarah Craig/Faces of Fracking

Fracking fluid and other drilling wastes are dumped into an unlined pit located right up against the Petroleum Highway in Kern County, California. Credit: Sarah Craig/Faces of Fracking

By Carey L. Biron
WASHINGTON, Dec 1 2014 (IPS)

Multinational oil and gas companies are engaged in a quiet but broad attempt to prepare the groundwork for a significant global expansion of shale gas development, according to a study released Monday.

Thus far, the hydraulic fracturing (or “fracking”) technologies that have upended the global gas market have been used primarily in North America and, to a lesser extent, Europe. With U.S. gas production in particular having expanded exponentially in recent years, however, countries around the world have started exploration to discern whether they, too, could cash in on this new approach.Argentina has put in place a new law guaranteeing a minimum price for fracked gas. Further, this minimum price is some 250 percent higher than the previous valuation – a sweetheart guard against the bottomed-out prices that are currently impacting on gas production in the United States.

According to an estimate published last year by the U.S. Energy Information Administration, some 90 percent of the world’s shale gas could be found outside of the United States – an incredibly lucrative potential. “It’s likely there will be a revolution,” Maria van der Hoeven, the executive director at the Paris-based International Energy Agency, has said.

Yet according to the new study, from Friends of the Earth Europe, a watchdog group, only Brazil has strengthened its regulatory regime in anticipation of this expansion. Of the nearly dozen countries the new report looks at, most are doing the opposite.

“Under pressure from the fossil fuel industry – which has deep pockets and promises employment and investment – several governments have already started to weaken their environmental legislation, alter their tax regimes and put in place industry-friendly mining licensing and production processes, in order to attract foreign investors and expertise,” the report states. “This is often at the expense of the public interest.”

In terms of production this remains a nascent industry. Nonetheless, neither governments nor companies appear to have undertaken efforts to guard against the complexities that will arise, including around the potential for social, environmental and even political tensions.

“The industry is trying to change the legislation in those places where they want to operate, to try to repeat as much as possible the favourable policies we’ve seen in U.S. energy policy,” Antoine Simon, a shale gas campaigner with Friends of the Earth Europe and lead author on the new report, told IPS.

“The key here is to ensure that the legal frameworks are as friendly for the industry as possible. That’s the first phase of this global strategy, and we’re seeing it in each country we studied.”

No safeguards

Outside of North America and Europe, Argentina has moved forward the quickest on shale gas development, and thus offers a key example on legislative action for which companies may be looking.

For instance, Argentina has put in place a new law guaranteeing a minimum price for fracked gas. Further, this minimum price is some 250 percent higher than the previous valuation – a sweetheart guard against the bottomed-out prices that are currently impacting on gas production in the United States.

Simon says this law has a telling nickname in Argentina – the “Chevron Decree”, a reference to the U.S. oil and gas company. The day after the law was passed, he notes, Argentina’s main state-backed oil and gas producer signed a long-term production deal with Chevron.

Other countries have put in place favourable new tax policies for oil and gas investors. In Morocco, for instance, producers will be exempt from corporate taxes for the first decade of operation, while Russia has created similar policies for oil production over the next 15 years.

Yet the lack of action to simultaneously put in place environmental or social safeguards in most countries runs a variety of risks, Friends of the Earth Europe and others warn. Hydraulic fracturing requires massive amounts of water, for instance – up to 26 million litres per drill site.

The new report finds that a significant proportion of shale gas reserves around the world are located in areas that are already experiencing significant water shortages and even related violence. Likewise, many of these shale basins are beneath major cross-border aquifers.

Even before these issues are addressed by national governments, then, the oil and gas industry could gain influence in setting policy on the notoriously contentious issue of freshwater use.

Alongside concerns about the local impact of shale gas development is a broader lack of clarity today on the extent to which developing countries would be able to benefit from any new gas-related revenues. Thus far, only Brazil has specifically addressed this issue.

“In our research, Brazil was the only exception in terms of passing legislation that ensured they would get some significant revenues,” Simon says. “Really that doesn’t seem to be happening in other countries, where instead we’re seeing a lot of legislation that offers state aid to push investors to come to their countries.”

Beyond a few notable exceptions in Latin America and South Africa, Simon suggests that this issue has not yet seen significant opposition by civil society. Still, advocacy groups do point to a growing trend of global understanding and mobilisation on fracking concerns.

“As more and more studies confirm the risks of air pollution, water contamination, increased earthquake activity and climate change impacts from fracking, the more people oppose this destructive and intensive process,” Wenonah Hauter, the executive director of Food & Water Watch, a U.S. watchdog group, told IPS.

“The movement to ban fracking has resulted in hundreds of local communities taking action to stop fracking, several states and countries instituting moratoriums, and the movement continues to grow.”

In October, Food & Water Watch organized an international day of action to ban hydraulic fracturing. Hauter notes that the event featured “over 300 actions in 34 countries, from Australia to Argentina, even Antarctica, calling for a ban on fracking”.

Food & Water Watch reports that France and Bulgaria have already banned hydraulic fracturing, while local moratoriums have also been passed by hundreds of communities across the Netherlands, Spain and Argentina.

U.S. government promotion

Meanwhile, the drivers behind fracking-related pressures are not simply multinational companies and national governments keen on investment. It was in the United States where hydraulic fracturing was invented and proved its potential, and today the U.S. government is reportedly taking a central role in promoting these techniques worldwide.

In almost all of the countries studied for the new report, researchers found the development of shale gas to be “closely linked” to a U.S. government agency, the U.S. Unconventional Gas Technical Engagement Program (UGTEP). Housed within the U.S. State Department, since 2010 the UGTEP has engaged in a wide variety of technical assistance around gas development.

“Governments often have limited capability to assess their own country’s unconventional gas resource potential or are unclear about how to develop it in a safe and environmentally sustainable manner,” UGTEP explains on its website. “The ultimate goals of UGTEP are to achieve greater energy security by supporting the development of environmentally and commercially sustainable frameworks.”

While U.S. diplomats are specifically tasked with strengthening U.S. business prospects abroad, critics say UGTEP’s activities constitute the broad promotion of hydraulic fracturing under the guise of U.S. diplomacy.

“UGTEP uses official government channels and US taxpayers’ money to promote high-volume horizontal hydraulic fracturing worldwide, opening doors for the main global players in the oil and gas industry,” the Friends of the Earth Europe report states.

“Through UGTEP, the US is also actively engaged in re-shaping existing foreign legal regulations to create the desired legal framework for the development of shale oil and gas in the targeted countries.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/12/first-phase-of-global-fracking-expansion-ensuring-friendly-legislation/feed/ 2
Jewellery Industry Takes Steps to Eliminate “Conflict Gold”http://www.ipsnews.net/2014/11/jewellery-industry-takes-steps-to-eliminate-conflict-gold/?utm_source=rss&utm_medium=rss&utm_campaign=jewellery-industry-takes-steps-to-eliminate-conflict-gold http://www.ipsnews.net/2014/11/jewellery-industry-takes-steps-to-eliminate-conflict-gold/#comments Tue, 25 Nov 2014 00:50:39 +0000 Carey L. Biron http://www.ipsnews.net/?p=137936 Gold from eastern Congo. The war in Congo is fueled by a thriving gold trade today, with armed groups controlling mines and earning an estimated 50 million dollars last year from selling gold and minerals. This gold is from a day's work at Kaniola mine. Credit: ENOUGH Project/cc by 2.0

Gold from eastern Congo. The war in Congo is fueled by a thriving gold trade today, with armed groups controlling mines and earning an estimated 50 million dollars last year from selling gold and minerals. This gold is from a day's work at Kaniola mine. Credit: ENOUGH Project/cc by 2.0

By Carey L. Biron
WASHINGTON, Nov 25 2014 (IPS)

Major U.S. jewellery companies and retailers have started to take substantive steps to eliminate the presence of “conflict gold” from their supply chains, according to the results of a year-long investigation published Monday.

Rights advocates, backed by the United Nations, have been warning for years that mining revenues are funding warlords and militia groups operating in the Great Lakes region of Africa, particularly in the eastern part of the Democratic Republic of the Congo (DRC). In 2010, such concerns resulted in landmark legislation here in the United States aimed at halting this trade, and those laws have since spurred similar legislative proposals in the European Union and Canada.“Just a few years ago, jewellery companies were pretty resistant to making progress on this, but today there is clearly interest in supporting peace and finding out more about the role they can play in this issue." -- Holly Dranginis of Enough Project

Three of the most problematic of these “conflict minerals” – tin, tantalum and tungsten, collectively known as 3T – are used primarily by the electronics industry. In recent years, that sector has made notable progress in certifying and otherwise regulating its use of these materials.

Yet forward movement has been slower on the fourth conflict mineral from the Great Lakes region – gold.

“Over two-thirds of the eastern Congo’s 3T mines are conflict-free today,” a new report from the Enough Project, a Washington-based watchdog group, states.

“Gold, however, remains a major financial lifeline for armed actors. Ninety-eight percent of artisanally mined gold … is smuggled out of the country annually, and much of that gold benefits armed commanders.”

Last year, the report estimates, some eight to ten tons of gold were smuggled out of eastern DRC. That would have been worth more than 400 million dollars.

Much of this smuggling is thought to take place through Congo’s neighbours, particularly Uganda and Burundi, and onwards to Dubai. From there, most of this gold is able to anonymously enter the global marketplace.

The jewellery industry, meanwhile, is the largest user of global gold supplies, constituting slightly less than half of worldwide demand. “Conflict gold thus taints the industry as whole,” the report warns.

Pledging to stay

According to the Enough Project’s new rankings, however, the industry is starting to respond to these concerns. Researchers looked at both past and pledged actions by 14 of the largest jewellery companies and retailers in the United States – part of an industry worth some five billion dollars a year – and found a spectrum of initiatives already underway.

On the one hand, some companies appear to have undertaken no conflict minerals-related initiatives whatsoever, at least as far as the new report’s metrics were concerned. Three companies scored zero points, while others – including major retailers such as Walmart, Sears and Costco – scored very low.

On the other hand, the researchers found a few key companies that have undertaken particularly notable responses. They say there is reason to believe that these leaders could now influence the rest of the industry.

“We really wanted to focus on the leading jewellery retailers in the U.S. because of their leverage over the industry – we wanted to take lessons from our experience with the electronics industry, that leading companies can move an entire industry,” Holly Dranginis, a policy analyst with the Enough Project and the lead author on the new report, told IPS.

“Just a few years ago, jewellery companies were pretty resistant to making progress on this, but today there is clearly interest in supporting peace and finding out more about the role they can play in this issue. We found two very clear leaders among the 14.”

Those are two of the most recognizable jewellery brands and retailers in the world, Signet Jewelers and Tiffany & Co. Three others highlighted for recognition in the rankings are the commercial retailers J.C. Penney Company, Target Corp. and Cartier.

The Enough Project researchers sent a broad questionnaire to these companies, and Signet and Tiffany received the highest overall rankings. Yet Dranginis notes that what differentiates these companies is merely the fact that they have put in place policies around the sourcing of gold from the Great Lakes region.

Perhaps more importantly, these companies have also started engaging on the ground in countries such as the DRC. Over the past three years, for instance, Signet has pledged to continue sourcing certified gold from the country, rather than simply moving on to another country entirely. The company is also making its sourcing strategies open to others in the industry.

“We see our involvement in industry guidance and standards in the gold sector and the development and implementation of the Signet Responsible Sourcing Protocols as part of a broader initiative of ensuring responsible business practices through the entire jewellery supply chain, for gold and for all other materials,” David A. Bouffard, a vice president for Signet Jewelers, told IPS in a statement.

“It is important to us that our SRSPs are open public protocols which can be used by anyone in our industry, and which Signet’s suppliers can use to their benefit in their relationships with other customers.”

Tiffany, meanwhile, is making a concerted effort to assist local communities, particularly small-scale miners and their families. Both companies reportedly have individual executives that have taken a particular interest in the issue.

“One of the concerns has been that compliance with [U.S. conflict minerals laws] has pushed some companies to think they should leave the region and source elsewhere,” the Enough Project’s Dranginis says.

“Supporting community initiatives in the region is critical, because a lot of communities are affected by major market changes. We also need to ensure that gold miners and their families are supported in a comprehensive way, looking into sustainable projects, alternative livelihoods, financial inclusion and related issues.”

Certification capacity

Action by major brands is, of course, a key component in driving the global response to the impacts of conflict gold. Yet an important collection of multistakeholder and trade mechanisms has also sprung up in recent years, directly facilitating these initiatives.

Central to any attempt at tracking and regulating raw commodities, for instance, is a system of certification. And just as the electronics industry has been able to use metals smelters as an important lynchpin in this process, so too has the gold industry been able to start certifying gold refiners.

According to the new report, in 2012 just six gold refiners had been certified as “conflict free” by one such initiative, the Conflict Free Smelter Program. Two years later, that number has risen to 52 – though “there are still many refiners outside the system,” the study notes.

Advocates are also calling for stepped-up and coordinated action by governments. While the United States, European Union and Canada could all soon have legislation on the use of conflict minerals, some are increasingly pushing for action from the government of the United Arab Emirates aiming to constrict the flow of conflict gold through Dubai.

Likewise, India, Pakistan and China are among the most prominent consumers of gold worldwide, and thus constitute key sources of demand.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/11/jewellery-industry-takes-steps-to-eliminate-conflict-gold/feed/ 0
Proposal for International Anti-Corruption Court Seeing “Significant” Momentumhttp://www.ipsnews.net/2014/11/proposal-for-international-anti-corruption-court-seeing-significant-momentum/?utm_source=rss&utm_medium=rss&utm_campaign=proposal-for-international-anti-corruption-court-seeing-significant-momentum http://www.ipsnews.net/2014/11/proposal-for-international-anti-corruption-court-seeing-significant-momentum/#comments Fri, 21 Nov 2014 01:28:00 +0000 Carey L. Biron http://www.ipsnews.net/?p=137864 By Carey L. Biron
WASHINGTON, Nov 21 2014 (IPS)

The key U.S. advocate of a proposal to create a multilateral body mandated to investigate allegations of political corruption says the idea is receiving significant interest from civil society, politicians and major business leaders.

Mark L. Wolf, a U.S. federal judge, first proposed the idea of an International Anti-Corruption Court (IACC) in two articles this summer (available here and here). Since that time, Wolf told a recent briefing at the U.S. Congress, the proposal has seen “remarkable progress”.“In the developed world we can make the mistake of seeing corruption as merely stealing money, but in fact political corruption kills more people than war and famine put together – 140,000 children a year, by our estimates.” -- Akaash Maharaj of GOPAC

“There are, of course, challenges to refining the concept of an IACC,” Wolf told a House of Representatives committee last week. “However, since July 2014 significant support has developed for meeting these challenges.”

Wolf reported ongoing meetings with U.S. officials and the World Bank, and reported that the new United Nations high commissioner for human rights, Zeid Ra’ad Hussein, has made the IACC proposal a “personal priority”. Hussein was a key force in the creation of the International Criminal Court, a potential model for the IACC.

This week, Wolf is addressing representatives of major global companies.

“American companies generally want to behave ethically and, in addition, are significantly deterred by the threat of prosecution,” Wolf stated. “They know they would benefit from the more level playing field an IACC would provide.”

Indeed, many say the speed with which the congressional committee moved to hold last week’s briefing is remarkable. It underscores a uniquely broad consensus, both domestically and internationally, around the need to crack down on what is referred to as “grand corruption” – the abuse of political office for personal gain.

Increasingly, this issue is being seen as less one of theft than of basic human rights.

“Today’s briefing seeks to foster an understanding that human rights and anti-corruption efforts are inseparable,” James McGovern, the member of Congress who chaired the committee’s discussions, stated in opening remarks.

“Currently, there is a lack of reference to human rights in international anti-corruption commitments and, conversely, the lack of reference to corruption in international human rights instruments.”

140,000 children a year

Grand corruption is today thought to eat up more than five percent of global gross domestic product. According to estimates cited by Judge Wolf, illicit financial flows out of developing countries are 10 times larger than the foreign assistance those countries receive – losses that have direct human consequences.

“In the developed world we can make the mistake of seeing corruption as merely stealing money, but in fact political corruption kills more people than war and famine put together – 140,000 children a year, by our estimates,” Akaash Maharaj, the executive director of the Global Organization of Parliamentarians Against Corruption (GOPAC), told IPS.

“If a political actor were to kill that many people, there would be very few people who wouldn’t say that we have to deal with this problem. But those who bring about human suffering through political corruption are no less guilty.”

GOPAC, which includes legislators from almost every country, has been mobilising around the need for concerted international action against corruption for the past three years. Maharaj says that his organization’s membership has lost faith in the ability of many countries to deal with political corruption at the national level.

While there are international mechanisms that threaten penalties for egregious human rights abuse, for the most part corruption continues to fall into a nebulous zone of national responsibility. Existing multilateral agreements, including the United Nations Convention Against Corruption, which came into effect in 2003, lack substantive enforcement mechanisms.

Yet while anti-corruption legislation exists in almost every country, advocates note that many of the most corrupt officials are often able to use their wealth and power to subvert these laws. These figures are typically the least likely to face domestic justice, and thus can come to expect impunity.

“There are certain crimes so beyond the pale and beyond state capacity to prosecute that it becomes appropriate for the international community and for international law to become engaged. Certainly the harm grand corruption causes in many developing countries is enormous,” Zorka Milin, a legal adviser with Global Witness, a watchdog group, told IPS.

“An international court would be a good mechanism for trying to translate that momentum into meaningful accountability, which we haven’t really seen so far. It’s important to frame the discussion in terms of ending impunity, and this court would be one piece of that, together with other legal anticorruption tools at the domestic level.”

Under Wolf’s proposal, an IACC would be mandated to investigate and prosecute officials from countries that are unable or unwilling to undertake such actions on their own. He suggests making acceptance of the proposed court’s jurisdiction a pre-condition for membership under the Convention Against Corruption or at the World Trade Organisation, or for obtaining loans from multilateral banks.

Inevitable, unclear action

The global discussion today is increasingly conducive to some sort of concerted global action against political corruption. In part, this trend is driven by strengthened concern around the effects that tax evasion is having on public coffers in both developed and developing countries.

“Unquestionably, there is today more momentum and awareness on the issue of grand corruption, and that’s the major reason these issues are rising on the international agenda,” Milin says.

GOPAC’s Maharaj agrees. “I’m struck by the extraordinary level of consensus across the world,” he says. “This is absolutely inevitable. It’s not a matter of if, but when.”

Exactly what should be done about the issue, however, remains highly contentious. There are multiple potential options, after all, with an international court being just one.

Others include expanding the purview of the International Criminal Court or other regional human rights courts. Likewise, the jurisdiction of national judicial systems could be enlarged to be able to deal with allegations of corruption in other countries.

Another possibility could be to coordinate national legislation – and priority – in developed countries, aimed at seizing the assets of or denying visas to corrupt officials. While this would not result in jail time, it would make it harder to spend ill-gotten wealth while simultaneously emphasising international disapproval.

Importantly, some countries have become increasingly aggressive in this regard in recent years, particularly the United States and Switzerland. Watchdog groups say these nascent initiatives are important and already having impact.

“Over the last eight years there’s been growing official action against kleptocracy in the U.S. and elsewhere,” Arvind Ganesan, the head of the business and human rights programme at Human Rights Watch, told IPS.

“Strengthening those efforts now – meaning fully resourcing and expanding them, and pushing other countries to put in place similar policies – will build momentum towards an International Anti-Corruption Court.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/11/proposal-for-international-anti-corruption-court-seeing-significant-momentum/feed/ 2
G20 Seeks to Streamline Private Investment in Infrastructurehttp://www.ipsnews.net/2014/11/g20-seeks-to-streamline-private-investment-in-infrastructure/?utm_source=rss&utm_medium=rss&utm_campaign=g20-seeks-to-streamline-private-investment-in-infrastructure http://www.ipsnews.net/2014/11/g20-seeks-to-streamline-private-investment-in-infrastructure/#comments Tue, 18 Nov 2014 02:00:43 +0000 Carey L. Biron http://www.ipsnews.net/?p=137803 Water pouring through the sluice gates at Gariep Dam in Port Elizabeth, South Africa. Credit: Bigstock

Water pouring through the sluice gates at Gariep Dam in Port Elizabeth, South Africa. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Nov 18 2014 (IPS)

Industrialised countries have agreed to collaborate on a new programme aimed at funnelling significant private-sector investment into global infrastructure projects, particularly in developing countries.

The Global Infrastructure Initiative, agreed to Sunday by governments of the Group of 20 (G20) countries, will not actually be funding new projects. But it will seek to create investment environments that are more conducive to major foreign investors, and to assist in connecting governments with financiers.In developing countries alone these needs could require up to a trillion dollars a year of additional investment, though currently governments are spending just half that amount.

The initiative’s work will be overseen at a secretariat in Australia, the host of this weekend’s G20 summit and a government that has made infrastructure investment a key priority. This office, known as the Global Infrastructure Hub, will foster collaboration between the public and private sectors as well as multilateral banks.

“With a four-year mandate, the Hub will work internationally to help countries improve their general investment climates, reduce barriers to investment, grow their project pipelines and help match investors with projects,” Australian Prime Minister Tony Abbott and Treasurer Joe Hockey said Sunday in a joint statement. “This will help improve how infrastructure markets work.”

Some estimate the undertaking could mobilise some two trillion dollars in new infrastructure investment over the next decade and a half. This would be available to be put into electrical grids, roads and bridges, ports and other major projects.

The G20 has emerged as the leading multilateral grouping tasked with promoting economic collaboration. Together, its membership accounts for some 85 percent of global gross domestic product.

With the broad aim of prompting global economic growth, the Global Infrastructure Initiative will work to motivate major institutional investors – banks, pension funds and others – to provide long-term capital to the world’s mounting infrastructure deficits. In developing countries alone these needs could require up to a trillion dollars a year of additional investment, though currently governments are spending just half that amount.

In recent years, the private sector has turned away from infrastructure in developing countries and emerging economies. Between 2012 and last year alone, such investments declined by nearly 20 percent, to 150 billion dollars, according to the World Bank.

“This new initiative very positively reflects a clear-eyed reading of the evidence that there are infrastructure logjams and obstacles in both the developing and developed world,” Scott Morris, a senior associate at the Center for Global Development, a Washington think tank, told IPS. “From a donor perspective, this indicates better listening to what these countries are actually asking for.”

Still, Morris notes, it remains unclear what exactly the Global Infrastructure Initiative’s outcomes will be.

“The G20 clearly intends to prioritise infrastructure investment,” he says, “but it’s hard to get a sense of where the priorities are.”

Lucrative opportunity

The Global Infrastructure Initiative is the latest in a string of major new infrastructure-related programmes announced at the multilateral level in recent weeks.

In early October, the World Bank announced a project called the Global Infrastructure Facility, which appears to have a mandate very similar to the new G20 initiative. At the end of the month, the Chinese government announced the creation of a new Asian Infrastructure Investment Bank (AIIB).

Many have suggested that the World Bank and G20 announcements were motivated by China’s forceful entry onto this stage. As yet, however, there is little clarity on the G20 project’s strategy.

“With so many discreet initiatives suddenly underway, I wonder if the new G20 project doesn’t cause confusion,” Morris says.

“Right now it’s very difficult to see any division in responsibilities between the G20 and World Bank infrastructure projects. The striking difference between them both and the AIIB is that the Chinese are offering actual capital for investment.”

The idea for the new initiative reportedly came from a business advisory body to the G20, known as the Business 20 (B20). The B20 says it “fully supports” the new Global Infrastructure Initiative.

“The Global Infrastructure Initiative is a critical step in addressing the global growth and employment challenge, and the business community strongly endorses the commitments of the G20 to increase quality investment in infrastructure,” Richard Goyder, the B20 chair, said Monday.

“The B20 estimates that improving project preparation, structuring and delivery could increase infrastructure capacity by [roughly] 20 trillion dollars by 2030.”

Goyder pledged that the business sector would “look to be heavily involved in supporting” the new projects.

Poison pill?

Yet if global business is excited at the prospect of trillions of dollars’ worth of new investment opportunities, civil society is expressing concern that it remains unclear how, or whether, the Global Infrastructure Initiative will impose rules on the new projects to minimise their potential social or environmental impacts.

“Private investment in infrastructure is crucial for closing the infrastructure funding gap and meeting human needs, and the G20 initiative is an important move by governments to catalyse that private investment,” Lise Johnson, the head of investment law and policy at the Columbia Center on Sustainable Investment at Columbia University, told IPS.

“It is key, however, that the initiative and the infrastructure hub develop procedures and practices not only to promote development of infrastructure, but to ensure that projects are environmentally, socially and economically sustainable for host countries and communities.”

Prominent multilateral safeguards policies such as those used by the World Bank are typically not applied to public-private partnerships, which will likely make up a significant focus of the G20’s new infrastructure push. Further, regulatory constraints could be too politically thorny for the G20 to forge new agreement.

“In the 2013 assessment of the G20’s infrastructure initiative by the G20 Development Working Group, only one item of the whole infrastructure agenda ‘stalled’ – and that was the work on environmental safeguards,” Nancy Alexander, director of the Economic Governance Program at the Heinrich Boell Foundation, a think tank, told IPS.

“I’ve always gotten the feedback from the G20 that such policies are matters of national sovereignty.”

The G20 is now hoping that trillions of dollars in infrastructure spending will create up to 10 million jobs over the next 15 years, spurring global economic growth. Yet Alexander questions whether this spending will be a “magic bullet” or a “poison pill”.

“Some of us are old enough to remember how recklessly the petrodollars of the 1970s and 1980s were spent – especially on infrastructure … Then, reckless lenders tried to turn a quick profit without regard to the social, environmental and financial consequences, including unpayable debts,” she says.

“Seeing the devastation wrought by poorly conceived infrastructure, many of us worked to create systems of transparency, safeguards and recourse at the multilateral development banks – systems that are now considered too time-consuming, expensive and imperialistic.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/11/g20-seeks-to-streamline-private-investment-in-infrastructure/feed/ 0
U.S. Proposes Major Debt Relief for Ebola-Hit Countrieshttp://www.ipsnews.net/2014/11/u-s-proposes-major-debt-relief-for-ebola-hit-countries/?utm_source=rss&utm_medium=rss&utm_campaign=u-s-proposes-major-debt-relief-for-ebola-hit-countries http://www.ipsnews.net/2014/11/u-s-proposes-major-debt-relief-for-ebola-hit-countries/#comments Thu, 13 Nov 2014 22:16:07 +0000 Carey L. Biron http://www.ipsnews.net/?p=137752 An Ebola treatment centre in Kenema, Sierra Leone, on the day of a visit from Anthony Banbury, Special Representative of the Secretary-General and Head of the UN Mission for Ebola Emergency Response (UNMEER). Credit: UN Photo/Ari Gaitanis

An Ebola treatment centre in Kenema, Sierra Leone, on the day of a visit from Anthony Banbury, Special Representative of the Secretary-General and Head of the UN Mission for Ebola Emergency Response (UNMEER). Credit: UN Photo/Ari Gaitanis

By Carey L. Biron
WASHINGTON, Nov 13 2014 (IPS)

The United States proposed Tuesday that the international community write off 100 million dollars in debt owed by West African countries hit hardest by the current Ebola outbreak. The money would be re-invested in health and other public programming.

U.S. Treasury Secretary Jack Lew will be detailing the proposal later this week to a summit of finance ministers from the Group of 20 (G20) industrialised countries. If the idea gains traction among G20 states, that support should be enough to approve the measure through the International Monetary Fund (IMF), where the United States is the largest voting member."The plan is for that money to be re-invested in social infrastructure, including hospitals and schools … to deal with the short-term problem of Ebola but also the long-term failure of the health systems that allowed for this outbreak.” -- Jubilee USA’s executive director Eric LeCompte

“The International Monetary Fund has already played a critical role as a first responder, providing economic support to countries hardest hit by Ebola,” Lew said in a statement to IPS.

“Today we are asking the IMF to expand that support by providing debt relief for Sierra Leone, Liberia and Guinea. IMF debt relief will promote economic sustainability in the worst hit countries by freeing up resources for both immediate needs and longer-term recovery efforts.”

These three countries together owe the IMF some 370 million dollars, according to the U.S. Treasury, with 55 million dollars due in the coming two years. Yet there are already widespread fears over the devastating financial ramifications of Ebola on Guinea, Liberia and Sierra Leone, in addition to the epidemic’s horrendous social impact.

Last month, the World Health Organisation warned that the virus now threatens “potential state failure” in these countries. The World Bank, meanwhile, estimates that the virus, which has already killed more than 5,000 people and infected more than 14,000, could cost West African countries some 33 billion dollars in gross domestic product.

Of course, much of the multilateral machinery is often too cumbersome to respond to a fast-moving viral outbreak. Yet there is reason to believe that the U.S. plan could have both immediate and long-term impacts.

That’s because the plan would see the IMF tap a unique fund set up in the aftermath of the 2010 Haiti earthquake, which facilitated the cancellation of nearly 270 million dollars of Haitian debt to the IMF. Called the Post-Catastrophe Debt Relief (PCDR) Trust, it is aimed specifically at responding to major natural disasters in the world’s poorest countries.

Originally, the PCDR Trust was capitalised with more than 420 million dollars. Today, a U.S. Treasury spokesperson told IPS, the trust has some 150 million dollars in it – money that would be available almost immediately.

“Our proposal is for the IMF to provide debt relief for these Ebola-affected nations from this trust,” the spokesperson said. “The U.S. would like to see around 100 million dollars put toward this effort, however the precise amount will need to be determined in consultations with the IMF and its membership.”

The IMF, meanwhile, says it is preparing to consider the proposal. In September the Washington-based agency made available 130 million dollars in immediate support to Guinea, Liberia and Sierra Leone.

“We are very glad that some donors have expressed an interest in increasing support for the Ebola-affected countries. We are reaching out to all donors to see how we might be able to take this forward … using all the tools available to us,” an IMF spokesperson told IPS.

“[Debt relief] decisions are made according to the merits of the particular case and this would be approached in the same way. We would expect the Board to be briefed soon on this topic.”

Ebola’s “natural disaster”

For development and anti-poverty advocates, debt obligations on the part of poor countries constitute a key obstacle to a government’s ability to respond to critical social needs, both in the short and long term.

In the West African epicentre of the current Ebola outbreak, many analysts have held chronic low national health spending directly responsible for allowing the epidemic to spiral out of control. And when looking at feeble public sector spending, it is impossible not to take into account often crushing debt burdens.

For instance, Guinea spent a little more than 100 million dollars on public health in 2012 but paid nearly 150 million dollars that same year on internationally held debt, according to World Bank figures provided by Jubilee USA, an anti-debt advocacy network that has spearheaded the push for the United States to make the current proposal.

“As bad as Ebola has been, some of these countries have far greater challenges with deaths from malaria than from Ebola,” Eric LeCompte, Jubilee USA’s executive director, told IPS.

“The amount is incredibly important because it cancels a significant portion of the debt completely. And the plan is for that money to be re-invested in social infrastructure, including hospitals and schools … to deal with the short-term problem of Ebola but also the long-term failure of the health systems that allowed for this outbreak.”

LeCompte was also involved in the creation of the Post-Catastrophe Debt Relief Trust, in the aftermath of the Haitian earthquake. His office has advocated for the fund’s monies to be used since then – for instance, to react to flooding in Pakistan and Typhoon Haiyan in the Philippines.

But he says these and other proposals have been rejected by the IMF’s membership, on the rationale that these countries were developed enough to be able to mobilise financing in other ways. (The IMF says PCDR funds are for response to “the most catastrophic of natural disasters” in “low-income countries”, when a third of a country’s population has been affected and a quarter of its production capacity destroyed.)

Not only are Guinea, Liberia and Sierra Leone among the poorest countries in the world, but the Ebola outbreak there has a potentially direct impact on the rest of the globe.

“This is a very clear opportunity to point to the 150 million dollars left in that fund and to note that Ebola is every bit the same as the Haitian earthquake in terms of being a regional calamity,” LeCompte says.

“The difference is that this is also a long-term investment in the very problems that allow Ebola to spread. So we’d be not only addressing the current issue, but also the next disease outbreak in that region.”

It is unclear whether there is a mechanism in place to top up the PCDR Trust in the future. The IMF states that “Replenishment of the Trust will rely on donor contributions, as necessary.”

But for his part, LeCompte says the fund has the potential to fill a significant gap: offering a pot of money, immediately available, that could be quickly mobilised to deal with true crises afflicting the world’s poorest countries, from hurricanes to major financial defaults.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/11/u-s-proposes-major-debt-relief-for-ebola-hit-countries/feed/ 0
As TPP Trade Talks Miss Third Deadline, Opponents Claim Momentumhttp://www.ipsnews.net/2014/11/as-tpp-trade-talks-miss-third-deadline-opponents-claim-momentum/?utm_source=rss&utm_medium=rss&utm_campaign=as-tpp-trade-talks-miss-third-deadline-opponents-claim-momentum http://www.ipsnews.net/2014/11/as-tpp-trade-talks-miss-third-deadline-opponents-claim-momentum/#comments Tue, 11 Nov 2014 00:53:49 +0000 Carey L. Biron http://www.ipsnews.net/?p=137691 Rally outside the TPP talks in Sydney, Oct. 25, 2014. Credit: SumOfUs/cc by 2.0

Rally outside the TPP talks in Sydney, Oct. 25, 2014. Credit: SumOfUs/cc by 2.0

By Carey L. Biron
WASHINGTON, Nov 11 2014 (IPS)

For the third year in a row, government negotiators for 12 Pacific Rim countries have missed an internal deadline to reach agreement on a controversial U.S.-led trade deal.

And though negotiators for the accord, known as the Trans Pacific Partnership (TPP), say the process is nearing completion, critics of the deal are expressing optimism that both public opinion and political timing are increasingly against the deal.“TPP proponents know they’re under the clock. The resistance against the TPP is as strong as it’s ever been, and is only growing stronger.” -- Arthur Stamoulis of the Citizens Trade Campaign

“The reason the Obama administration keeps missing deadline after deadline, year after year, is that it’s pushing an extremely unpopular agenda that benefits a handful of big corporations at the expense of the economy, environment and public health in each TPP country and beyond,” Arthur Stamoulis, executive director of the Citizens Trade Campaign, an advocacy group that opposes the TPP, told IPS.

“People and parliaments across the Pacific Rim are starting to realise that the TPP would be bad news for their countries. That includes here in the U.S.”

TPP negotiators confirmed the news on Monday at a regional summit in Beijing. President Barack Obama’s administration, which has been spearheading the TPP talks, had set the meeting of the Asia-Pacific Economic Cooperation (APEC) grouping as a key target for agreement.

President Obama has made the TPP a central part of his attempt to reorient the United States towards Asia – and to economically circumscribe China, which isn’t party to the talks. On Monday, the president himself was in Beijing, where he acknowledged that the TPP process now needed additional political pressure.

“During the past few weeks, our teams have made good progress in resolving several outstanding issues regarding a potential agreement. Today is an opportunity at the political level for us to break some remaining logjams,” the president told trade ministers in Beijing.

“To ensure that TPP is a success, we also have to make sure that all of our people back home understand the benefits for them – that it means more trade, more good jobs, and higher incomes for people throughout the region, including the United States.”

The president said the TPP talks have the possibility of resulting in a “historic achievement”. A statement released by the 12 countries party to the talks suggested that “the end” of the negotiations is “coming into focus”.

Yet disagreements remain, with media reports pointing to agricultural protectionism as proving to be particularly thorny. Others say that substantive frustration remains over a raft of disparate issues, many far from traditional trade concerns – including environmental impact, labour safeguards, medicinal pricing, patent rules and investors’ ability to circumvent national law, among other concerns.

In many ways, it is the broad scope of issues on which the TPP touches that is responsible for strengthening public concern. Now, with President Obama down to his final two years in office, critics are increasingly confident in their ability to stave off agreement.

With the U.S. 2016 president elections likely to heat up as early as the middle of next year, passage of any major trade agreement by U.S. lawmakers would be improbable until 2017 at the earliest.

“TPP proponents know they’re under the clock,” the Citizen Trade Campaign’s Stamoulis says. “The resistance against the TPP is as strong as it’s ever been, and is only growing stronger.”

Corporatist concerns

Last week’s national election here in the U.S. did change the discussion around one issue that would be key for any eventual TPP agreement: whether President Obama is allowed to negotiate unilaterally, or whether he would need Congress’s point-by-point approval of a proposed accord.

Because trade agreements typically touch on so many domestically sensitive issues, U.S. presidents in the past have asked for approval to negotiate without input from lawmakers. Such “fast track” authorities then allow Congress only a single up-or-down vote at the end of the process.

Yet due to concern among U.S. constituents over the potential impact of the TPP on the domestic economy, both houses of the U.S. Congress has been reluctant to approve President Obama’s requests for these authorities. Still, last week’s election some have suggested that this could change.

The issue could now come down to a debate that is taking place within the Republican Party, which increased its majority in the House of Representatives and in January will take over control of the Senate. Yet while the House has consistently opposed passage of fast track authorities for President Obama, the new Republican Senate leadership has suggested that such legislation could now be a key priority early next year.

“Most of [President Obama’s] party is unenthusiastic about international trade. We think it’s good for America,” Mitch McConnell, the top Republican in the Senate and the figure who will set the body’s agenda this coming year, said at a press conference following last week’s election.

“And the president and I discussed that … and I think he’s interested in moving forward. I said, ‘Send us trade agreements. We’re anxious to take a look at them.’”

The new potential movement on fast track authorities has sparked a furious debate among conservatives, particularly between those who have traditionally supported big business and those increasingly concerned about globalisation’s impact on U.S. workers. This division has strengthened since the 2008 economic downturn.

“It’s only in the past few years that we’ve seen a small cabal of internationalist, Big Business-allied Republicans emerge, and it is this corporatist wing that has pushed for free trade,” Curtis Ellis, a spokesperson with the American Jobs Alliance and executive director of ObamaTrade.com, a conservative watchdog site, told IPS.

“If we’re going to move all of our factories overseas, the American people are going to get stuck with the short end of stick. And really, even supporters of the TPP admit that it’s not about trade but rather about investment – about securing overarching global governance rules on investment.”

Indeed, of the TPP’s 29 proposed chapters, just five deal directly with trade, according to Public Citizen, a consumer interest group here.

“[T]he non-trade provisions would promote lower wages, higher medicine prices, more unsafe imported food, and new rights for foreign investors to demand payments from national treasuries over domestic laws they believe undermine the new TPP privileges they would gain,” Lori Wallach, the head of the group’s Global Trade Watch programme, said Monday.

“Despite the intense secrecy of the negotiations … many TPP nations have woken up to the fact that the deal now on offer would be damaging to most people, even if the large corporations pushing the deal might improve their profit margins.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/11/as-tpp-trade-talks-miss-third-deadline-opponents-claim-momentum/feed/ 0
Extractives Companies “Not Ready” for Transparency Requirementshttp://www.ipsnews.net/2014/11/extractives-companies-not-ready-for-transparency-requirements/?utm_source=rss&utm_medium=rss&utm_campaign=extractives-companies-not-ready-for-transparency-requirements http://www.ipsnews.net/2014/11/extractives-companies-not-ready-for-transparency-requirements/#comments Thu, 06 Nov 2014 22:12:45 +0000 Carey L. Biron http://www.ipsnews.net/?p=137641 Children playing in mining tailings in Morococha, Peru. Credit: Milagros Salazar/IPS

Children playing in mining tailings in Morococha, Peru. Credit: Milagros Salazar/IPS

By Carey L. Biron
WASHINGTON, Nov 6 2014 (IPS)

The world’s largest corporations continue to publicise scant information about their global operations, according to new analysis that warns that extractives companies in particular are unprepared for pending disclosure requirements.

The findings come from the global watchdog Transparency International, which looked at 124 of the world’s largest companies. Using publicly available information, the researchers ranked each corporation based on three concerns: anti-corruption measures, transparency around global operations and subsidiaries, and disclosure of country-by-country and project-level finances.“Industry resistance to this kind of regulation has been pretty strong, so it’s not surprising that companies aren’t voluntarily disclosing this information and instead waiting until they’re forced to do so.” -- Alexandra Gillies

While the level of anti-corruption activities is relatively high and growing, the current state of the latter two metrics is far weaker. Indeed, the average score for country-by-country reporting, seen as a transparency lynchpin, is a dismal six percent – and 50 companies have scored zero.

In introducing the study on Wednesday, Transparency International’s chair, Jose Ugaz, noted that the power of multinational companies in today’s global economy rivals even the biggest countries.

“With greater economic power comes greater responsibility,” he said. “Bad corporate behaviour creates the corruption that causes poverty and instability.”

In general, British companies fare best in the new index, Chinese and Asian companies more broadly fare worst, and the U.S. technology sector receives special criticism for its lack of transparency. Transparency International has been reporting on corporate governance since 2008, with the last such study being released in 2012.

The weak results for country-by-country reporting, in particular, will worry anti-poverty advocates and proponents of public sector spending. Such disclosure would, for instance, allow governments to efficiently compare crossborder information with the aim of cutting down on tax evasion as well as outright theft of revenues.

Developing countries may have lost an estimated six trillion dollars in the decade before 2011 due to tax evasion and other shady financial dealings, according to the Washington watchdog group Global Financial Integrity.

“Domestic resource mobilisation is seen as key to unlock economic development,” Koen Roovers, the E.U. advisor for the Financial Transparency Coalition, a global network that funded the new Transparency International report, told IPS.

“Publicly available [country-by-country reporting] information would enable citizens of developing nations to determine whether the taxes paid by the transnational companies that trade in their countries is in line with their activities. The apparent absence of this information gives reason for suspicion.”

Industry resistance

With the aim of ensuring that lucrative natural resources-related revenues are safeguarded in developing countries, the global extractives industry has been a special focus for disclosure requirements.

The United States, European Union and Canada in recent years have all passed project-by-project disclosure requirements, mandating reporting on all payments made by extractives companies to foreign governments.

And while the U.S. legislation is currently held up in court due to a lawsuit brought by the oil industry, the E.U.’s requirements are set to go into effect by the middle of next year. Canada’s new rules could be implemented even sooner.

Yet Transparency International warns that extractives companies are “not ready” to comply with these new rules.

“Even though country-by-country reporting was first introduced in the extractive sector, the 19 oil and gas companies in the study only scored an average of 10 per cent,” the report states. “Six companies in this industry scored zero.”

Not all of these companies did poorly on country-by-country reporting. For instance, the Norwegian oil company Statoil scored highest of all of the 124 companies on this metric, with a score of 66 percent.

Other strong performers included the Indian companies Oil & Natural Gas Corporation and Reliance, as well as the Australian-headquartered BHP Billiton, by certain calculations the world’s largest mining company.

Yet overall the sector still appears to be biding its time until the new requirements in the U.S., E.U. and Canada go into effect. For supporters of stricter disclosure, the findings underscore just how transformative those new legal regimes will be.

“Industry resistance to this kind of regulation has been pretty strong, so it’s not surprising that companies aren’t voluntarily disclosing this information and instead waiting until they’re forced to do so,” Alexandra Gillies, the head of governance at the Natural Resources Governance Institute (NRGI), a think tank, told IPS.

“While there are a few smaller companies that have taken this step, the big players certainly haven’t. Nonetheless, it will be interesting to see how the same data looks in another two years.”

Indeed, the U.S. and E.U. disclosure requirements alone would cover an estimated 65 percent of the global extractives sector in terms of value, according to Publish What You Pay, a global advocacy group. And the new Canadian rules, formally tabled late last month with the aim of implementation by April, would likewise affect the world’s largest national mining industry.

Further, at a summit next week, the Group of 20 (G20) industrialised countries are expected to approve a new country-by-country reporting standard that would cover all multinational companies. The Financial Transparency Coalition’s Roovers says the new findings from Transparency International will “up the ante” for the G20 discussions.

Still, he notes that, as currently envisioned, the G20 reports would likely not be made public due to concerns over commercial “sensitivities”.

On to contracts

For many advocates, non-public disclosure would defeat an important purpose of stricter transparency requirements: empowering citizens and civil society to engage in local-level oversight.

“The real innovation around project-level data is that citizens or journalists or parliamentarians would be able to understand the deals that their government has entered into. Right now all we have are highly aggregated figures,” NRGI’s Gillies says.

“If someone is dealing with, say, a huge mine in their community, that data can help them to understand how much money the government is collecting for that project – and whether the disruption they’re facing is worthwhile.”

Nonetheless, with country-by-country reporting requirements now on the horizon, Gillies and others are already turning their attention to a corollary data set: contract-level disclosure. Indeed, certain countries – including Liberia, Guinea, the Democratic Republic of Congo and others – as well as some companies are already making all information on contracts related to natural resource extraction publicly available.

“If you have good revenue or payment data, it’s still difficult to understand what those figures mean unless you know what agreements have been signed,” Gillies says.

“But contract disclosure is already becoming more widely accepted, with a few countries and companies taking the lead. It hasn’t yet become standard practice and what is being done remains piecemeal, but it’s enough to show that this activity isn’t commercially dangerous.”

Within a few years, advocates hope to see the disclosure of both payments and agreements signed with foreign governments become standard procedure.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/11/extractives-companies-not-ready-for-transparency-requirements/feed/ 0
Global Tax-Evasion Crackdown Sidestepping Poorest Countrieshttp://www.ipsnews.net/2014/11/global-tax-evasion-crackdown-sidestepping-poorest-countries/?utm_source=rss&utm_medium=rss&utm_campaign=global-tax-evasion-crackdown-sidestepping-poorest-countries http://www.ipsnews.net/2014/11/global-tax-evasion-crackdown-sidestepping-poorest-countries/#comments Tue, 04 Nov 2014 01:17:05 +0000 Carey L. Biron http://www.ipsnews.net/?p=137565 By Carey L. Biron
WASHINGTON, Nov 4 2014 (IPS)

While a major global campaign to cut down on tax evasion is picking up momentum, anti-poverty advocates say the initiative overlooks the world’s poorest countries.

Last week, 51 countries from four continents agreed to systematically exchange tax information by 2017, with the aim of allowing authorities to quickly register any disparities. Several dozen additional countries – 89 in total – said they would follow suit by the following year, according to the Organisation for Economic Cooperation and Development (OECD), a grouping of wealthy countries that is spearheading the project."Do we really think that there are many Brits or Americans with money in, say, Nigeria? Probably not. But is there likely a lot of Nigerians with money in the U.S. or U.K.? Yes.” -- Heather Lowe, senior counsel with Global Financial Integrity

Global tax evasion has risen to the top of the global agenda in the aftermath of the 2007-08 financial crisis and the resulting financial constrictions felt by governments around the world. Though last week’s pledges will still need to be underpinned by separate bilateral agreements, the new accord is being lauded as a major step forward on the issue.

“This great success in the fight against international tax evasion would have been unthinkable only a few years ago,” Wolfgang Schauble, Germany’s finance minister, wrote Monday for a newspaper here. “We need to make sure that creative tax planning in the form of profit-shifting and artificial profit reduction is no longer a lucrative business model.”

The new pledges were made at the annual meeting of an OECD-organised grouping known as the Global Forum on Transparency and Exchange of Information for Tax Purposes. At the meeting, in Berlin, the forum’s 123 members also formally endorsed a new OECD blueprint, known as the Common Reporting Standard, detailing what information will be collected, by whom, and how it will be exchanged.

Yet the list of those asked to participate in the new pledging includes almost solely developed countries or known tax havens, which rich governments have been particularly keen to address. This is cause for concern for some, given that the impact of illegal financial dealings is felt particularly by weaker economies.

“The new OECD standard on automatic information exchange is a big first step towards tackling illicit financial flows,” Andres Knobel, an analyst with the Tax Justice Network, a British advocacy group, said in a statement.

“However, serious obstacles to the inclusion of developing countries and a number of unresolved loopholes will prevent its effectiveness, allowing rich individuals with plenty of options to avoid reporting.”

Select invitations

While the Global Forum on Transparency includes 123 members, just 95 of these were asked to take part in the new automatic exchanges. And just one of those, the Pacific island nation of Vanuatu – widely known as a tax haven – is considered by the United Nations to be a least developed country.

OECD officials say that many developing countries weren’t invited to take part in this initial round of pledging due to concerns over institutional capacity.

“The developing countries which do not have financial centres have indicated their difficulties on account of low capacity to implement [the automatic exchange of tax information] on such an ambitious timeline,” Monica Bhatia, the head of the Global Forum secretariat, told IPS.

“These countries were nevertheless encouraged to participate with a more flexible timeline and support was offered to facilitate their participation … by way of pilot projects. Already six developing countries have requested pilot projects and the Global Forum is committed to helping other developing countries who come forward as well.”

Yet others suggest that, capacity notwithstanding, all countries should be able to receive tax information about whether their own citizens have undeclared overseas bank accounts.

“Under the current agreement, tax-haven countries that don’t have an income tax for their own people don’t have to reciprocate this information,” Heather Lowe, senior counsel with Global Financial Integrity (GFI), a Washington-based watchdog group, told IPS.

“That makes some logical sense, but the organisers won’t even consider a similar phase-in period for the least developed countries. Do we really think that there are many Brits or Americans with money in, say, Nigeria? Probably not. But is there likely a lot of Nigerians with money in the U.S. or U.K.? Yes.”

GFI has published pioneering data estimating that developing countries could be losing a trillion dollars a year from a variety of shady financial dealings. While all such activities contribute to crippling public-sector coffers, the new plan covers only tax evasion.

“While a portion of illicit financial flows is driven by tax evasion, much of it is also propelled by other crimes such as drug trafficking, sex slavery, corruption and fraud,” Lowe says. “The current framework risks either missing these other major forms of crime, or keeping that information locked up by tax authorities and away from government investigators and prosecutors.”

Starting with Africa

The Global Forum says it wants to bring as many developing countries as possible into the new exchange system, and maintains that multiple initiatives are currently underway to do so. Last week, the grouping announced the most significant of these, a project aimed at strengthening outreach and capacity on the issue in Africa.

The African Initiative, overseen by the Global Forum, the World Bank Group and others, will initially focus on 17 countries, around a third of the continent. Yet an OECD factsheet says this number could be “significantly increased” through the three-year programme.

As yet, there is no parallel initiative in Asia or Latin America, though the Global Forum says such projects could still be created.

“The impetus for the Africa Initiative came from our African member countries … in the wake of increased focus on the problem of illicit financial flows from African countries of which tax evasion forms a significant component,” Kathryn Dovey, a tax policy analyst with the Global Forum, told IPS in an e-mail.

“The Global Forum is committed to working with all developing countries and would be happy to seed and support similar initiatives in other regions. If countries and organisations from the region and relevant international organisations come forward to collaborate, the Africa Initiative could be replicated in other key geographies over time.”

Still, GFI’s Lowe says that capacity-building could be a secondary goal after bringing in poorer countries on a non-reciprocal basis.

“Africa is a strong place to start, because investment in Africa has been growing significantly over the past few years and there are many governments in the continent that are really starting to engage on this issue,” she says.

“But I don’t see why we can’t start with non-reciprocal information for least-developed countries and then work on these capacity-building programmes to allow for reciprocation to happen later. Let’s start with the practical.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/11/global-tax-evasion-crackdown-sidestepping-poorest-countries/feed/ 0
Canada Accused of Failing to Prevent Overseas Mining Abuseshttp://www.ipsnews.net/2014/10/canada-accused-of-failing-to-prevent-overseas-mining-abuses/?utm_source=rss&utm_medium=rss&utm_campaign=canada-accused-of-failing-to-prevent-overseas-mining-abuses http://www.ipsnews.net/2014/10/canada-accused-of-failing-to-prevent-overseas-mining-abuses/#comments Fri, 31 Oct 2014 00:09:17 +0000 Carey L. Biron http://www.ipsnews.net/?p=137497 By Carey L. Biron
WASHINGTON, Oct 31 2014 (IPS)

The Canadian government is failing either to investigate or to hold the country’s massive extractives sector accountable for rights abuses committed in Latin American countries, according to petitioners who testified here Tuesday before an international tribunal.

The Inter-American Commission on Human Rights (IACHR) also heard concerns that the Canadian government is not making the country’s legal system available to victims of these abuses.“Far too often, extractive companies have double-standards in how they behave at home versus abroad.” -- Alex Blair of Oxfam America

“Canada has been committed to a voluntary framework of corporate social responsibility, but this does not provide any remedy for people who have been harmed by Canadian mining operations,” Jen Moore, the coordinator of the Latin America programme at MiningWatch Canada, a watchdog group, told IPS.

“We’re looking for access to the courts but also for the Canadian state to take preventive measures to avoid these problems in the first place – for instance, an independent office that would have the power to investigate allegations of abuse in other countries.”

Moore and others who testified before the commission formally submitted a report detailing the concerns of almost 30 NGOs. Civil society groups have been pushing the Canadian government to ensure greater accountability for this activity for years, Moore says, and that work has been buttressed by similar recommendations from both a parliamentary commission, in 2005, and the United Nations.

“Nothing new has taken place over the past decade … The Canadian government has refused to implement the recommendations,” Moore says.

“The state’s response to date has been to firmly reinforce this voluntary framework that doesn’t work – and that’s what we heard from them again during this hearing. There was no substantial response to the fact that there are all sorts of cases falling through the cracks.”

Canada, which has one of the largest mining sectors in the world, is estimated to have some 1,500 projects in Latin America – more than 40 percent of the mining companies operating in the region. According to the new report, and these overseas operations receive “a high degree” of active support from the Canadian government.

“We’re aware of a great deal of conflict,” Shin Imai, a lawyer with the Justice and Corporate Accountability Project, a Canadian civil society initiative, said Tuesday. “Our preliminary count shows that at least 50 people have been killed and some 300 wounded in connection with mining conflicts involving Canadian companies in recent years, for which there has been little to no accountability.”

These allegations include deaths, injuries, rapes and other abuses attributed to security personnel working for Canadian mining companies. They also include policy-related problems related to long-term environmental damage, illegal community displacement and subverting democratic processes.

Home state accountability

The Washington-based IACHR, a part of the 35-member Organisation of American States (OAS), is one of the world’s oldest multilateral rights bodies, and has looked at concerns around Canadian mining in Latin America before.

Yet this week’s hearing marked the first time the commission has waded into the highly contentious issue of “home state” accountability – that is, whether companies can be prosecuted at home for their actions abroad.

“This hearing was cutting-edge. Although the IACHR has been one of the most important allies of human rights violations’ victims in Latin America, it’s a little bit prudent when it faces new topics or new legal challenges,” Katya Salazar, executive director of the Due Process of Law Foundation, a Washington-based legal advocacy group, told IPS.

“And talking about the responsibility for the home country of corporations working in Latin America is a very new challenge. So we’re very happy to see how the commission’s understanding and concern about these topics have evolved.”
Home state accountability has become progressively more vexed as industries and supply chains have quickly globalised. Today, companies based in rich countries, with relatively stronger legal systems, are increasingly operating in developing countries, often under weaker regulatory regimes.

The extractives sector has been a key example of this, and over the past two decades it has experienced one of the highest levels of conflict with local communities of any industry. For advocates, part of the problem is a current vagueness around the issue of the “extraterritorial” reach of domestic law.

“Far too often, extractive companies have double-standards in how they behave at home versus abroad,” Alex Blair, a press officer with the extractives programme at Oxfam America, a humanitarian and advocacy group, told IPS. “They think they can take advantage of weaknesses in local laws, oversight and institutions to operate however they want in developing countries.”

Blair notes a growing trend of local and indigenous communities going abroad to hold foreign companies accountable. Yet these efforts remain extraordinarily complex and costly, even as legal avenues in many Western countries continue to be constricted.

Transcending the legalistic

At this week’s hearing, the Canadian government maintained that it was on firm legal ground, stating that it has “one of the world’s strongest legal and regulatory frameworks towards its extractives industries”.

In 2009, Canada formulated a voluntary corporate responsibility strategy for the country’s international extractives sector. The country also has two non-judicial mechanisms that can hear grievances arising from overseas extractives projects, though neither of these can investigate allegations, issue rulings or impose punitive measures.

These actions notwithstanding, the Canadian response to the petitioners concerns was to argue that local grievances should be heard in local court and that, in most cases, Canada is not legally obligated to pursue accountability for companies’ activities overseas.

“With respect to these corporations’ activities outside Canada, the fact of their incorporation within Canada is clearly not a sufficient connection to Canada to engage Canada’s obligations under the American Declaration,” Dana Cryderman, Canada’s alternate permanent representative to the OAS, told the commission, referring to the American Declaration of the Rights and Duties of Man, the document that underpins the IACHR’s work.

Cryderman continued: “[H]ost countries in Latin America offer domestic legal and regulatory avenues through which the claims being referenced by the requesters can and should be addressed.”

Yet this rationale clearly frustrated some of the IACHR’s commissioners, including the body’s current president, Rose-Marie Antoine.

“Despite the assurances of Canada there’s good policy, we at the commission continue to see a number of very, very serious human rights violations occurring in the region as a result of certain countries, and Canada being one of the main ones … so we’re seeing the deficiencies of those policies,” Antoine said following the Canadian delegation’s presentation.

“On the one hand, Canada says, ‘Yes, we are responsible and wish to promote human rights.’ But on the other hand, it’s a hands-off approach … We have to move beyond the legalistic if we’re really concerned about human rights.”

Antoine noted the commission was currently working on a report on the impact of natural resources extraction on indigenous communities. She announced, for the first time, that the report would include a chapter on what she referred to as the “very ticklish issue of extraterritoriality”.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/10/canada-accused-of-failing-to-prevent-overseas-mining-abuses/feed/ 1
Panama Regulators Could Slow U.S. Approval of GM Salmonhttp://www.ipsnews.net/2014/10/panama-regulators-could-slow-u-s-approval-of-gm-salmon/?utm_source=rss&utm_medium=rss&utm_campaign=panama-regulators-could-slow-u-s-approval-of-gm-salmon http://www.ipsnews.net/2014/10/panama-regulators-could-slow-u-s-approval-of-gm-salmon/#comments Wed, 29 Oct 2014 00:01:07 +0000 Carey L. Biron http://www.ipsnews.net/?p=137439 Some 60 major U.S. food retailers have already pledged not to sell GE salmon. Credit: Kevin Galens/cc by 2.0

Some 60 major U.S. food retailers have already pledged not to sell GE salmon. Credit: Kevin Galens/cc by 2.0

By Carey L. Biron
WASHINGTON, Oct 29 2014 (IPS)

Officials in Panama have fined the local facility of a U.S. biotechnology company for a series of permitting and regulatory failures around a pioneering attempt to create genetically modified salmon.

The experiments are being carried out by researchers for AquaBounty Technologies, which currently has an application with the U.S. government to sell genetically modified (GM) salmon filets in this country. If regulators approve that application, AquaBounty’s salmon would be the first genetically modified meat sold for human consumption anywhere in the world."There are about 35 other genetically modified species in the development pipelines in other companies." -- Dana Perls of Friends of the Earth

Further, companies in the United States and around the globe are said to be actively watching U.S. regulators’ response to AquaBounty’s application as a critical indication of whether to proceed with other GM meat projects.

“AquaBounty is really out front on this – the current case will set an important precedent,” Dana Perls, a food and technology campaigner at Friends of the Earth, a watchdog group, told IPS.

“From what we know, there are about 35 other genetically modified species in the development pipelines in other companies. So depending on what happens in this case, we’ll likely either see a flow of other permits or this will demonstrate that there isn’t room on the market for GM meat or seafood.”

AquaBounty’s application with the U.S. government would involve getting filets of the new GM salmon from the company’s breeding facility in Panama and into the U.S. market. Advocates are now pointing to the Panamanian authorities’ findings of regulations violations as an indication that the U.S. regulatory process is proceeding too quickly in considering the salmon application.

“The impacts GM foods will have on health and the environment have not been sufficiently assessed to approve human consumption of this salmon,” Luisa Arauz Arredondo, an attorney with the Panama Centre for Environmental Advocacy, which filed the administrative complaint against AquaBounty, told IPS.

She notes that while AquaBounty’s facilities in Panama have permission to run experiments on the salmon, the country has not approved anything further.

“The salmon would not be sold to Panamanian consumers,” she says, “since the human consumption of GM salmon has not been approved by Panama or the U.S.”

Repeat violations

The Panamanian regulatory decision, which was made public on Tuesday, actually stems from a 2012 investigation of AquaBounty’s facilities and was decided in July of this year. It found that the company had failed to secure necessary permits, particularly around its use of water and pollution of the local environment – potentially important, advocates say, given the possibility of contamination of natural systems.

The authorities noted their view that the company had “repeatedly violated” these regulations, and stated that these problems persisted into 2013. They deemed the transgressions significant enough to levy almost the maximum fine allowable against the company.

AquaBounty Technologies suggests that the concerns outlined by Panama’s government were largely administrative in nature and notes that any problems have all been dealt with already.

“It is important to emphasize that none of the issues in the Resolution questioned the containment, health of the fish, or the environmental safety of the facility,” the company said in a statement sent to IPS.

“When AquaBounty was informed of issues at our Panama facility, we immediately contacted ANAM, the Panamanian agency for the environment. We initiated a program to remedy the deficiencies and the issues were formally resolved in August of 2014.”

The company notes that its Panama facility “continues to operate with no sanctions or restrictions.”

Whether the actions on the part of Panama’s government will impact on the ongoing consideration of AquaBounty’s application by the U.S. Food and Drug Administration (FDA) remains to be seen.

A spokesperson for the FDA likewise pointed out that AquaBounty’s violations were based on a 2012 inspection, but also said the agency would “consider all relevant information as part of the decision-making process.”

The spokesperson noted that the agency is in the process of completing its review of the company’s application, but declined to provide a timeline on what that decision will be made.

Shoehorning regulation

For environmentalists, public interest groups and anti-GMO advocates, the Panama findings underscore a potential weakness in the FDA’s regulatory process.

“This decision is also even further proof that FDA is dangerously out of touch with the facts on the ground, advancing AquaBounty’s application based on its promises, not reality,” George Kimbrell, a senior attorney with the Center for Food Safety, a Washington-based advocacy group, said Tuesday.

Friends of the Earth’s Perls says that the FDA’s current regulatory review of the GM salmon application is based solely on the single AquaBounty facility in Panama.

“The FDA is going forward with its review based on the premise that this facility will be in compliance with regulations, yet now we’re seeing it’s not,” she says. “It is increasingly clear that there is inadequate regulation: the FDA is trying to shoehorn this new genetically engineered animal into a completely ill-fitting regulatory process.”

Much of the concern here revolves around the potential for genetically modified hybrids to escape into the wild, potentially outcompeting wild populations or introducing new diseases. Yet the issue also runs up against the scepticism that continues to colour consumer response to genetically modified foods – and the sense that regulators are moving too quickly to approve these products.

When the FDA in 2012 asked the public to weigh in on the AquaBounty salmon application, it received some 1.8 million comments expressing overwhelming opposition. Members of the U.S. Congress have likewise expressed their concern, and legislation has been proposed that would require the labelling of genetically modified fish.

As yet, there is no legal requirement in the United States to label any genetically modified food or ingredient, though the state of Vermont could soon impose such a mandate. According to a media poll conducted last year, some 93 percent of people in the U.S. support the labelling of genetically modified foods, and three-quarters said they would not eat GM fish.

Yet perhaps the most significant indication of public sentiment on this issue has come from the retailers that have pre-emptively stated that they would not sell genetically modified fish and seafood – regardless of whether the FDA approves its sale. According to data compiled by Friends of the Earth, some 60 major U.S. food retailers have already pledged to do so, including several of the country’s largest grocery chains.

“Should GE salmon come to market, we are not considering nor do we have any plans to carry GE salmon,” Safeway, the second-largest grocer in the United States, said in a policy statement released in February. “Safeway’s [policy] calls for all of our fresh and frozen seafood to be responsibly sourced and traceable or be in a time-bound improvement process by the end of 2015.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/10/panama-regulators-could-slow-u-s-approval-of-gm-salmon/feed/ 2
Global South Brings United Front to Green Climate Fundhttp://www.ipsnews.net/2014/10/global-south-brings-united-front-to-green-climate-fund/?utm_source=rss&utm_medium=rss&utm_campaign=global-south-brings-united-front-to-green-climate-fund http://www.ipsnews.net/2014/10/global-south-brings-united-front-to-green-climate-fund/#comments Fri, 24 Oct 2014 00:29:03 +0000 Carey L. Biron http://www.ipsnews.net/?p=137357 By Carey L. Biron
WASHINGTON, Oct 24 2014 (IPS)

The United Nations’ key mechanism for funding climate change-related mitigation and adaptation in developing countries is now ready to receive funds, following a series of agreements between rich and poor economies.

The agreements covered administrative but potentially far-reaching policies that will govern the mechanism, known as the Green Climate Fund (GCF). This forward momentum comes just weeks ahead of a major “pledging session” in Berlin that is meant to finally get the GCF off the ground.“One thing that was different in this meeting was the willingness of developing countries to take a stand for certain principles.” -- Karen Orenstein of Friends of the Earth

“The fund now has the capacity to absorb and programme resources that will be made available to it to achieve a significant climate response on the ground,” Hela Cheikhrouhou, the GCF’s executive director, said Saturday following a series of board meetings in Barbados.

The GCF constitutes the international community’s central attempt to help developing countries prepare for and mitigate climate change. The undertaking thus includes an implicit acknowledgment by rich countries that the developing world, although the least responsible for climate change, will be the most significantly impacted.

At the Copenhagen climate summit in 2009, donors agreed to mobilise 100 billion dollars a year by 2020, in an undefined mix of public and private funding, to help developing countries. The GCF is to be a cornerstone of this mobilisation, using the money to fund an even split between mitigation and adaptation projects.

The GCF opened a secretariat last year, in South Korea, but pledges have since come in slowly. Currently, the aim is to get together 15 billion dollars as starter capital, much of which will have to be achieved at the November pledging session.

The fund’s capitalisation did get a fillip last month, when France and Germany pledged a billion dollars each and lesser amounts were promised by Norway, South Korea and Mexico. On Wednesday, Sweden pledged another half-billion dollars, aimed at setting “an example to … other donors.”

Still, that brings the total funding for the GCF to less than three billion dollars, under a fifth of the goal for this year alone.

“The good news is that this meeting finished laying a strong foundation for the fund,” Alex Doukas, a sustainable finance associate with the World Resources Institute, a think tank here, told IPS. “It’s now nearly ready to go – but it can’t get far without ambitious pledges in November.”

Significant attention is now shifting to the United States and European Union, which have yet to announce pledges. Anti-poverty campaigners have estimated that fair pledges would be around 4.8 billion dollars for the United States and six billion dollars for the European Union.

Country ownership

The GCF now has the institutional capacity to receive the funding around which its operations will revolve, but important decisions remain regarding how the fund will disburse that money.

“There’s now more clarity on how the fund will invest, but little guidance on exactly what it will invest in,” Doukas, who attended last week’s board meeting in Barbados, says. “The board has serious homework between now and its next meeting in February to ensure that it has rules in place to prioritise high-impact climate solutions that also deliver development benefits.”

Still, some important initial headway was made in Barbados around how these projects will be defined. Indeed, development advocates express cautious optimism the new agreements will put greater control over these decisions in the hands of national governments.

For instance, projects green-lighted by the GCF will now be required to have a “no objection” confirmation from the government of the country in which the project will be based.

“If you do not have the no-objection [requirement], the funding intermediaries will be able to impose their own conditionalities, even their own programmes, on a country,” Bernarditas Muller, the GCF representative from the Philippines, said during negotiations, according to a civil society summary.

Observers say this agreement came about because developing countries banded together and pushed against demands from rich governments. (The GCF board includes 24 members, half from poor and half from rich countries.)

“One thing that was different in this meeting was the willingness of developing countries to take a stand for certain principles,” Karen Orenstein, an international policy advisor with Friends of the Earth who attended the Barbados discussions, told IPS.

“The no-objection procedure in particular is something we’ve been fighting for, for a long time. If an active no-objection is not provided within 30 days, a project is suspended – that is quite important.”

Still, Orenstein, too, worries that significant decisions have against been pushed off to future meetings of the GCF board.

“The fund still leans too heavily towards multilateral development banks and the private sector,” she says.

“It’s not that the GCF shouldn’t be appealing to the private sector, but we want to sure that the priorities are being driven by developing countries. Even though we have these new agreements, there’s still not nearly enough emphasis on having priorities be set at the country level and below.”

New development discourse

At the same time, under this weekend’s agreements developing countries will now be able to access funding directly from the GCF, rather than having to go through an intermediary. In addition, monies pledges to the fund will not be able to be “earmarked” for particular uses by the donor government.

“Traditionally, a lot of funds for climate change have been delivered through multilateral organisations. They haven’t necessarily done a bad job, but in many cases there’s a trade-off between a country’s priorities versus that of the organisation’s,” Annaka Carvalho, a senior programme officer with Oxfam America, a humanitarian and advocacy group, told IPS.

“Making sure that countries are in the driver’s seat in directing where these resources are going is really important. Ultimately, only national governments are accountable to their citizens for delivering on adaptation and investing in low-emissions development.”

Carvalho, who was also at the Barbados negotiations, says that the opportunity once the GCF gets off the ground isn’t only about reacting to climate change. She says the fund can also help to bring about a new development paradigm.

“We’ve been hoping the fund will act as a catalyst for shifting the development discourse away from the forces that have caused climate change and instead towards clean energy and resilient livelihoods,” she says.

“A core part of the fund is supposed to realise sustainable development, but there’s always this line between climate and development. In fact, disconnecting these two issues is impossible.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/10/global-south-brings-united-front-to-green-climate-fund/feed/ 1
U.S. Revisiting “Broken” Workplace Chemicals Regulation Processhttp://www.ipsnews.net/2014/10/u-s-revisiting-broken-workplace-chemicals-regulation-process/?utm_source=rss&utm_medium=rss&utm_campaign=u-s-revisiting-broken-workplace-chemicals-regulation-process http://www.ipsnews.net/2014/10/u-s-revisiting-broken-workplace-chemicals-regulation-process/#comments Wed, 22 Oct 2014 01:05:25 +0000 Carey L. Biron http://www.ipsnews.net/?p=137309 Of the tens of thousands of chemicals thought to be in regular use in the United States today, the government’s main labour regulator oversees fewer than 500. Credit: Bigstock

Of the tens of thousands of chemicals thought to be in regular use in the United States today, the government’s main labour regulator oversees fewer than 500. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Oct 22 2014 (IPS)

The U.S. government will soon begin receiving public suggestions on how federal regulators should update their oversight of toxic chemicals in the workplace.

The new information-gathering process, which began last week and will continue for the next six months, could result in the first major overhaul of related regulations in more than four decades. Of the tens of thousands of chemicals thought to be in regular use in the United States today, the government’s main labour regulator oversees fewer than 500."Many workers are currently being exposed to levels of chemicals that are legal but not safe … The process through which OSHA issues new exposure limits or updates old ones is broken.” -- OSHA chief David Michaels

“New chemicals are being introduced into worksites every year, and we are struggling to keep pace with the potential hazards,” David Michaels, the top official at the Occupational Safety and Health Administration (OSHA), an office within the Labour Department, told journalists while unveiling the new request for information.

“As a result, 40 years after the creation of OSHA, thousands of American workers are still becoming ill and dying from exposure to hazardous chemicals.”

The agency is now in the early stages of what could be a landmark attempt to expand this oversight. While the current move applies solely to workers, if successful it could mark a new phase for U.S. chemicals regulation in general – long criticised for having essentially ceded control to the chemicals industry.

The key laws on chemical safety in the United States date back to the 1970s, and are almost universally seen as so weak as to be nearly worthless. Yet while momentum among lawmakers to update these laws has picked up recently, the replacement proposals have been fiercely derided by public health and environmental groups.

Now, the chemicals industry suggests that it supports OSHA’s plan to revisit its regulatory regime, though sector has ardently fought stricter regulation in the past. Indeed, one its main lobby groups intimates that current efforts are already successful.

“We share OSHA’s commitment to protect the safety of workers and to keep regulatory programs up-to-date,” a spokesperson for the American Chemistry Council, a trade association, told IPS. “Our companies have reduced their recordable injury and illness incidence rates by 80 percent since 1990.”

Yet the spokesperson also warned against government overreach.

“As the administration moves forward,” he noted, “we urge them to continue to engage stakeholders and to pursue a clear, workable approach that will focus on workplace exposures that represent a significant risk of harm and that will yield the greatest safety benefits.”

Dangerously outdated

In regulating hazardous chemicals that workers come in contact with while on the job, the crux of OSHA’s oversight mechanism is a list of what are known as permissible exposure limits (PELs). These set caps on the amount of specific airborne chemicals – for instance, formaldehyde, asbestos or lead – beyond which would be considered unhealthy.

Understandably, these figures are haggled over by public health experts, labour representatives and business owners. However, far more concerning than the specifics of the PELs is how difficult – indeed, near impossible – it has been to add new compounds to this list.

As OSHA’s Michaels noted, of the tens of thousands of chemicals in regular use in the United States today, the agency’s PELs number only around 500 compounds. Further, this list has seen almost no change since it was created in 1971, with updates or additions for only some 30 chemicals.

“Many of these PELs are dangerously out of date and do not adequately protect workers,” Michaels stated.

“As a result, many workers are currently being exposed to levels of chemicals that are legal but not safe … The process through which OSHA issues new exposure limits or updates old ones is broken.”

Any major rewrite of OSHA’s chemicals oversight could have an inordinate impact on marginalised communities across the United States. Immigrants, racial minorities and the poor are all overrepresented in a spectrum of sectors that tend to see the highest use of hazardous chemicals.

Further, while U.S. labour regulations for the most part do not extend overseas, including at U.S.-owned ventures in other counties, significant regulatory changes in Washington could have important knock-on effects throughout certain sectors.

“This process does have the potential to improve working conditions abroad,” Matt Shudtz, the acting executive director at the Center for Progressive Reform, a watchdog group here, told IPS.

“Many multinational companies have safety departments. So if they have a plant in the United States where they’re addressing these hazards, they could choose to apply that same principle across the board.”

A spokesperson for OSHA likewise told IPS: “Hopefully the updated PELs will encourage employers all over the world to protect their workers from chemical hazards.”

Selective enforcement

Shudtz’s office is strongly supporting the new moves from OSHA as well as an eventual expansion of the agency’s PELs. But he also notes that a new rulemaking process is not the only way to deal with the current problem.

The legislation that governs OSHA gives it the power to write regulations for specific hazards. But this process is significantly constrained by a requirement, from the early 1990s, that the agency engage in a cost-benefit analysis for any regulatory action.

Such an approach has been a top priority for U.S. businesses and industry, and is reflected in the warning from the American Chemistry Council quoted at the beginning of this article.

But Shudtz and others point to a “catchall” provision, called the General Duty Clause, that allows OSHA to cite a company for hazardous behaviour if there exists both general industry agreement that the behaviour is dangerous and an obvious alternative.

“In the chemicals industry there are consensus-based standards that a lot of employers follow because they protect workers fairly well. And in general, those standards are more up to date than OSHA’s,” Shudtz says.

“The General Duty Clause says that OSHA can use those consensus standards as the basis for its enforcement. Unfortunately, they rarely take that opportunity.”

This is likely due to limited resources, as companies can challenge negative citations and thus drag out the process significantly and expensively. Yet Shudtz says that strong but selective enforcement under the General Duty Claus could achieve an important goal.

“If OSHA were to choose a chemical where there’s widespread exposure and a clear standard that could be applied, and engage in a few enforcement cases and really stick to their guns,” he says, “that would send an important message to other employers that they ought to be abiding by stricter standards.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/10/u-s-revisiting-broken-workplace-chemicals-regulation-process/feed/ 0
Pressure Building on Obama to Impose Ebola Travel Banhttp://www.ipsnews.net/2014/10/pressure-building-on-obama-to-impose-ebola-travel-ban/?utm_source=rss&utm_medium=rss&utm_campaign=pressure-building-on-obama-to-impose-ebola-travel-ban http://www.ipsnews.net/2014/10/pressure-building-on-obama-to-impose-ebola-travel-ban/#comments Fri, 17 Oct 2014 01:27:23 +0000 Carey L. Biron http://www.ipsnews.net/?p=137228 Children in the town of Gueckedou, the epicentre of the ebola outbreak in Guinea. Credit: ©afreecom/Idrissa Soumaré

Children in the town of Gueckedou, the epicentre of the ebola outbreak in Guinea. Credit: ©afreecom/Idrissa Soumaré

By Carey L. Biron
WASHINGTON, Oct 17 2014 (IPS)

President Barack Obama is under significant pressure to impose a range of restrictions on travellers coming to the United States from West African countries affected by the current Ebola outbreak.

Yet public health experts and development advocates warn that such restrictions would harm the already reeling economies of Ebola-hit countries in the region, and squeeze the international community’s ability to get health workers and goods into these countries.“If we get this wrong and just hunker down and hide, we will make this problem worse both in West Africa and in the United States.” -- Charles Kenny of the Center for Global Development

“An accelerated mobilisation of personnel and resources is necessary to control the Ebola epidemic in West Africa and care for patients, through the establishment of new Ebola management centres,” Tim Shenk, a press officer with Medecins Sans Frontieres, the humanitarian group that has been at the core of the international response to the epidemic, told IPS.

“For this reason, it is crucial that airlines continue flying to the affected region.”

Calls for halting flights and imposing visa restrictions have been floating around Washington since the virus’s spread caught the world’s attention over the summer. Yet these have strengthened substantially in recent days, following the confirmation of three cases of Ebola in the United States.

The first of those was unknowingly carried by a man from Liberia. He died last week after infecting two of the health workers attending to him, and the case has prompted an intense and at times vitriolic response.

“A temporary ban on travel to the United States from countries afflicted with the virus is something that the president should absolutely consider,” John Boehner, the leader of the U.S. House of Representatives and one of the most powerful figures in Washington, said Wednesday.

In fact there are no direct air connections between the United States and any of the three countries most affected by the current outbreak. Further, it would be extremely complex to impose such a ban in tertiary transit countries.

On the other hand, it would be possible to create additional hurdles for those applying for U.S. visas in West Africa. But this would do nothing to deal with, for instance, the many U.S. passport holders living in these countries, and would likewise be logistically complex.

Nonetheless, Boehner was echoing a clear tide of U.S. support for the imposition of travel restrictions. According to a poll released Tuesday, two-thirds of people in the United States would support “restricting entry” of incoming travellers from Ebola-afflicted countries.

The federal government’s response to Ebola has suddenly become a defining issue in the U.S. midterm elections, slated for next month.

Dangerous isolation

The current Ebola outbreak has now killed more than 4,000 people, almost all in Guinea, Liberia and Sierra Leone. On Thursday, United Nations Secretary-General Ban Ki-moon urged the international community to make available a billion dollars to allow those combating the disease to meet a target of reducing the virus’s transmission rates by the beginning of December.

In the United States, meanwhile, the public support for travel restrictions has risen by six percentage points since just last week. And lawmakers, many of whom are currently in the last stages of political campaigns, are responding.

Though Congress is currently on recess, lawmakers held a rare hearing on Ebola Thursday. By Thursday evening, members of Congress who supported some sort of travel restrictions outnumbered those who didn’t by 56 to 13, according to a list compiled by a Washington newspaper.

While those who do not support a travel ban were all Democratic, the support for such restrictions stretches across both parties.

“I’ve been struck by just how intense this political pressure has become, and the pressure is bipartisan,” J. Stephen Morrison, the director of the Global Health Policy Center at the Center for Strategic and International Studies (CSIS), a Washington think tank, told IPS.

“While the arguments made against travel bans have been solid, they don’t win the day with the public. Further, if the base population carrying the virus continues to grow, the threat won’t ease and neither will this pressure.”

Even as lawmakers increasingly funnel – and perhaps fuel – concern over Ebola in this country, the Obama administration remains adamant that it is not considering any travel restrictions beyond health scans and interviews at international airports.

“Shutting down travel to that area of the world would prevent the expeditious flow of personnel and equipment into the region,” Josh Earnest, the White House press secretary, told journalists Wednesday. “And the only way for us to stop this outbreak and to eliminate any risk from Ebola to the American public is to stop this outbreak at the source.”

Earnest did not reject the possibility completely, however, noting that a travel ban is “not on the table at this point.”

Yet many of those closest to the Ebola response warn that travel restrictions would be not only unfeasible but outright dangerous, exacerbating the outbreak.

“You don’t want to do something that inadvertently accelerates the economic collapse of these countries or impedes the flow of health workers and critically needed commodities,” CSIS’s Morrison says. “Our ability to get ahead of this crisis necessitates the flow, back and forth, of thousands of health-care workers and commodities.”

Indeed, such concerns have already been borne out. African Union aid workers, for instance, were recently delayed for a week getting into Liberia due to travel restrictions imposed in a number of African countries.

“It has been quite challenging over the last several months, because there have been a reduction in commercial flights … a reduction in shipping that comes into the country,” Debra Malac, the U.S. ambassador to Liberia, told journalists Thursday. “[That’s made it] very difficult to get things like food as well as supplies in that are critically needed in order to help address this epidemic.”

Devastating economies

U.S. travel restrictions could also pose significant economic risks, both to Ebola-hit countries and Africa as a whole.

“There’s a lot of air traffic between Africa and the U.S. that’s very important for trade and investment, the tourism industry, for the diaspora,” CSIS’s Morrison says. “All of that is reliant on air links, so how do you make sure you’re not kicking the pins out of those economic processes?”

Already there are widespread fears over the financial impacts of Ebola on Guinea, Liberia and Sierra Leone.

Earlier this week, the World Health Organisation warned that the virus now threatens “potential state failure” in these countries. Last week, the World Bank estimated that the epidemic could cost West African countries some 33 billion dollars in gross domestic product.

“If we get this wrong and just hunker down and hide, we will make this problem worse both in West Africa and in the United States,” Charles Kenny, a senior fellow at the Center for Global Development, a think tank here, told IPS.

“Imposing any kind of travel ban would tank the economy of these three countries, and that will have knock-on effects on dealing with the disease – increasing the suffering and the number of people with the disease.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/10/pressure-building-on-obama-to-impose-ebola-travel-ban/feed/ 0
Ahead of Myanmar Trip, Obama Urged to Demand Extractives Transparencyhttp://www.ipsnews.net/2014/10/ahead-of-myanmar-trip-obama-urged-to-demand-extractives-transparency/?utm_source=rss&utm_medium=rss&utm_campaign=ahead-of-myanmar-trip-obama-urged-to-demand-extractives-transparency http://www.ipsnews.net/2014/10/ahead-of-myanmar-trip-obama-urged-to-demand-extractives-transparency/#comments Wed, 15 Oct 2014 00:33:47 +0000 Carey L. Biron http://www.ipsnews.net/?p=137175 Myanmar now has three years in which to put in place a series of transparency standards and publicly report on government extractives revenues, payments from mining and drilling companies, and related issues. Credit: Bigstock

Myanmar now has three years in which to put in place a series of transparency standards and publicly report on government extractives revenues, payments from mining and drilling companies, and related issues. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Oct 15 2014 (IPS)

Lawmakers here are urging President Barack Obama to put transparency in the extractives sector at the centre of an upcoming trip to Myanmar.

While the government of Myanmar has recently engaged in a series of bilateral and multilateral pledges to make its lucrative but highly opaque mining and oil and gas industries more transparent, advocates increasingly warn that officials are failing to keep these promises."The real heart of the issue for civil society in Burma is the details of these contracts. They also want to start talking about the tremendous amount of money the Burmese government makes off of these oil and gas deals, and how most of that doesn’t benefit the people of Burma.” -- Jennifer Quigley

The U.S. government has been a key sponsor in facilitating these pledges, and many now see President Obama’s visit, slated for next month, as an important opportunity to prompt legal change in Myanmar, also known as Burma. Myanmar officials are currently revising related legislation, although little is known about these secretive talks.

Supporters say reforms, particularly around public information on extractives deals and revenues, could help to ensure that Myanmar’s significant natural resources wealth is used for development rather than simply enriching businesses close to the regime.

“Despite commitments to transparency and good governance, decision-making over the management of Burma’s national resources remains largely hidden from public scrutiny … the gap between the Burmese government’s promises and its delivery is widening,” 16 members of the U.S. Congress warned President Obama in a letter sent Tuesday.

“We therefore urge you, during your visit to Burma, to call on the Burmese government to ensure provisions on transparency and accountability are incorporated into revised laws, regulations and policies governing the extractives sector, and negotiated into new contracts and licenses.”

The letter, a copy of which was seen by IPS, includes backing from both Republicans and Democrats. Last year, the United States initiated a partnership between the Myanmar extractives industry and the Group of 8 (G8) rich countries, which could offer Obama additional leverage in demanding new transparency measures.

The lawmakers’ call comes not only a month ahead of President Obama’s planned trip to Myanmar (his second), but also as a global summit on extractives transparency begins in the country’s capital, Naypyidaw. The two-day meeting of the Extractives Industries Transparency Initiative (EITI), which promotes guidelines that are currently followed by 46 countries, comes just three months after Myanmar became one of the EITI’s newest candidate countries.

Under these guidelines, Myanmar now has three years in which to put in place a series of transparency standards and publicly report on government extractives revenues, payments from mining and drilling companies, and related issues.

Just a month after its EITI candidature was accepted, Myanmar signed several dozen contracts with domestic and international oil and gas companies. Yet according to Tuesday’s letter, the terms of those contracts remain secret, as are ongoing revisions to policies overseeing the extractives sector.

“The laws and regulations governing the extractive industries are currently being revised behind closed doors, with no public consultation,” the lawmakers state.

“Drafts of the first of these new pieces of legislation contain no provisions on public disclosure of data and do not reflect any of the promises of greater transparency made by the government through the EITI process.”

Beneficial owners

The contracts signed in August were for 36 oil and gas blocks, both on land and offshore, auctioned off to 46 local and global companies over the past year. While the details of those contracts remain under wraps, until recently almost nothing was known even of these companies’ owners.

Around the country’s EITI application, an international watchdog group called Global Witness began focusing on what’s known as ultimate beneficial ownership – information on who, ultimately, controls and benefits from a company’s activities. In June, the group had such information on the companies involved in just three of the blocks.

Yet after requesting information directly from the companies, Global Witness last week reported that many more companies had come forward with these details. The companies were also asked whether any of their beneficial owners were politically powerful individuals in Myanmar.

“In total, 28 companies have now participated in Global Witness’ ownership review, and we have been provided with full beneficial ownership details of all partners in 17 oil and gas blocks,” the group says in a new report, published Friday. “This shows that businesses can and will provide such information if they have an incentive, such as protection of their reputation, to do so.”

Global Witness says the information remains unverified and that a “hard core” of 18 companies continue to refuse to provide any information. Still, the group says this corporate response has already set a surprising international example.

“Not only is this significant locally, but it puts Myanmar in the unlikely position of setting a global precedent on transparency, as it’s the first time anywhere in the world that companies have systematically declared their ultimate ownership,” Juman Kubba, an analyst at Global Witness, told IPS.

“Our findings show that companies can reveal their owners if they’re pushed to do so. It’s now up to the Myanmar government with the support of the U.S. and other backers to make that push so that all oil, gas and mining company ownership in the country is public.”

Outside the framework

Still, some worry that the recent corporate disclosure wasn’t actually carried out through the EITI framework, thus suggesting that the government’s transparency pledges remain weak. They also dispute whether beneficial ownership is of foremost importance in the Myanmar context.

“This disclosure is incredibly important on the global scale, but when it comes to Burma the real concern has never been about ownership but rather about conflict related to resources,” Jennifer Quigley, the president of the U.S. Campaign for Burma, an advocacy group, told IPS.

“This wasn’t done through the EITI in this instance, and the real heart of the issue for civil society in Burma is the details of these contracts. They also want to start talking about the tremendous amount of money the Burmese government makes off of these oil and gas deals, and how most of that doesn’t benefit the people of Burma.”

Quigley says that Myanmar’s government has long been comfortable making pledges it has no intention of keeping, and she see little prospect of that changing in the near term. Still, she says the United States has linked itself so closely to extractives transparency in Myanmar that President Obama will need to broach the subject during his trip next month.

“This is really an area in which the U.S. has married itself to the Burmese government,” she says. “So they need to be paying more attention to the fact that the Burmese government isn’t living up to its EITI promises.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/10/ahead-of-myanmar-trip-obama-urged-to-demand-extractives-transparency/feed/ 0
World Bank Pushes Private Sector for Major Investments in Infrastructurehttp://www.ipsnews.net/2014/10/world-bank-pushes-private-sector-for-major-investments-in-infrastructure/?utm_source=rss&utm_medium=rss&utm_campaign=world-bank-pushes-private-sector-for-major-investments-in-infrastructure http://www.ipsnews.net/2014/10/world-bank-pushes-private-sector-for-major-investments-in-infrastructure/#comments Thu, 09 Oct 2014 23:58:56 +0000 Carey L. Biron http://www.ipsnews.net/?p=137095 A new road is built near Victoria Falls on the Zimbabwe-Zambia border. Credit: David Brossard/cc by 2.0

A new road is built near Victoria Falls on the Zimbabwe-Zambia border. Credit: David Brossard/cc by 2.0

By Carey L. Biron
WASHINGTON, Oct 9 2014 (IPS)

The World Bank has initiated a major call to action for private sector investors around infrastructure projects in developing countries.

World Bank Group President Jim Yong Kim on Thursday launched a new initiative, worth some 15 billion dollars, aimed at motivating banks, pension funds and other institutional investors to turn their focus to the pressing, and growing, infrastructure needs in developing countries.“Institutional investors have deep pockets – insurance and pension funds have some 80 trillion dollars in assets.” -- World Bank President Jim Yong Kim

In announcing the new Global Infrastructure Facility (GIF), Kim estimated these needs would require up to a trillion dollars of additional investment each year through the end of this decade. That’s twice as much as these countries are currently spending.

The private sector has turned away from infrastructure in developing countries and emerging economies in recent years, the bank reports. Between 2012 and last year alone, such investments declined by nearly 20 percent, to 150 billion dollars.

“Given the scale of infrastructure financing needs in developing countries, we definitely welcome an initiative like this,” Marilou Uy, the incoming director of the Group of 24 (G24) developing countries and a former bank official, told IPS.

“The private sector’s role here is especially important: to find good models to work with, so that private investment in developing countries can start to rise again and grow to levels even higher than before.”

In a surprise to many, the bank’s sister organisation, the International Monetary Fund (IMF), this week came out forcefully in favour of public spending, particularly on infrastructure. The IMF and World Bank are currently holding semi-annual meetings here in Washington.

The GIF will start a number of pilot ventures later this year, reportedly with a focus on climate-friendly projects and those that can promote trade. But it will not be financing these initiatives directly.

Rather, it will aim to turn the private sector’s attention back towards the road, bridges, energy production and other large-scale physical projects that make up the foundation of any country’s economic and social development.

“Institutional investors have deep pockets – insurance and pension funds have some 80 trillion dollars in assets,” Kim said Thursday, speaking with reporters.

“But less than 1 percent of pension funds are allocated directly to infrastructure projects, and the bulk of that is in advanced countries. The real challenge is not a matter of money but a lack of bankable projects – a sufficient supply of commercially viable and sustainable infrastructure investments.”

Fundamental bottleneck

The World Bank is hoping the GIF will function as a conduit through which major investors, together with the development institution’s own experts, can advise governments how to structure infrastructure projects in order to entice investors looking for long-term opportunities. Kim said a “massive infrastructure deficit” in developing countries today constitutes a “fundamental bottleneck” in addressing poverty, the bank’s key mandate.

Perhaps in response to past criticisms, the bank also notes that the GIF will not simply try to move as much money into these projects as possible.

“We know that simply increasing the amount invested in infrastructure may not deliver on the potential to foster strong, sustainable and balanced growth,” Bertrand Badre, the institution’s managing director, said in a statement. “A focus on the quality of infrastructure is vital.”

The GIF will focus on fostering particularly complex partnerships between the public and private sectors, known as PPPs. In anticipation of Thursday’s announcement, the World Bank Group’s private-sector arm, the International Finance Corporation (IFC), has reportedly been ramping up its PPP units around the world.

Yet the growing dependence on the private sector in development aims continues to spark concern among many development advocates and anti-poverty campaigners, who worry that the goals of for-profit entities are often at odds with the public good.

“While the bank’s new infrastructure facility is welcome, we are concerned that any sudden push into new big-ticket infrastructure deals must improve the lives of ordinary people,” Nicolas Mombrial, the head of the Washington office of Oxfam International, a humanitarian and advocacy group, said Thursday.

“Therefore, the World Bank must ensure that new infrastructure lending comes fitted with proper safeguards in place to protect the poorest and most vulnerable communities from clients that might be more interested in profit over development. We need safeguards for people and not just for investors.”

The head of the GIF, meanwhile, cautions that the initiative is still in its very early days.

“I have been meeting with civil society organisations who were really interested in engaging with us on the GIF,” Jordan Schwartz, the official in charge of the new programme, told IPS.

“Like them, we want to ensure that decisions around infrastructure investment are sensitive to a wide range of environmental, social and economic considerations, so that not only is there benefit for the poor and for economic activity generally but so the investments are sustainable. We look forward to continuing that dialogue.”

PPP worries

Concerns around public-private partnerships are particularly notable around public water systems. In recent years, private companies around the world have shown growing interest in stepping into partnerships to resuscitate public water infrastructure that has often been underfunded for decades.

The World Bank’s IFC has been a major proponent of such deals. Yet some of these have sparked powerful backlash from critics who note that water privatisation has often resulted in higher costs and inequitable service.

This week, for instance, activists in Nigeria stepped up a campaign to urge the government to pull out of discussions with the IFC around a potential water project in Lagos. They say the scheme’s details are being kept from the public.

“Around the world, the IFC advises governments, conducts corporate bidding processes, designs complex and lopsided water privatisation contracts, dictates arbitration terms, and is part-owner of water corporations that win the contracts it designs and recommends, all while aggressively marketing the model to be replicated around the world,” Akinbode Oluwafemi, with Environmental Rights Action, a Nigerian advocacy group, told reporters Wednesday in Lagos, according to prepared remarks.

“Not only do these activities undermine democratic water governance, but they constitute an inherent conflict of interest within the IFC’s activities in the water sector, an alarming pattern seen from Eastern Europe to India to Southeast Asia.”

According to World Bank estimates, public money makes up some two-thirds of PPP financing around the world today. Watchdog groups say this underscores the heavy government subsidies that these projects have typically required, especially for important improvements.

“The GIF is part of a larger, renewed push for big infrastructure, which is troubling in part because of the history of human rights and environmental abuses associated with these projects,” Shayda Naficy, director of the International Water Campaign at  Corporate Accountability International, an advocacy group, told IPS.

“But it is also troubling because even where infrastructure is a dire need, as it is in the water sector, the emphasis being placed on the private sector is leading us in pursuit of illusory solutions. At least in the case of water, the private sector is not interested in making these investments in infrastructure.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

]]>
http://www.ipsnews.net/2014/10/world-bank-pushes-private-sector-for-major-investments-in-infrastructure/feed/ 0