Twelve years after a global campaign successfully advocated the cancellation of some of the world’s poorest countries’ public debt, developing economies are again facing unsustainable debt burdens. Only this time, it is the private sector’s debt in developing economies that is inflating dangerously.

Children in Otjivero, Namibia. Credit: Servaas van den Bosch/IPS

A recent report by the Jubilee Debt Campaign, a coalition of organisations supporting debt relief and increased transparency in global financial markets, highlights that foreign debt payments of the private sector in impoverished countries have increased from four percent of export earnings in 2000, to 10 percent on average in 2010.

“Some countries like Ethiopia, Niger or Mozambique continue to spend as much on debt service as before the rounds of debt cancellation in 2000,” Tim Jones, who authored the report, told IPS. The governments of El Salvador, the Philippines and Sri Lanka also continue to spend a quarter of government revenue on foreign debt payments.

Debt payments of the private sector are now double those of the public sector in many of the world’s most fragile economies, the ‘State of Debt’ report argues.

“Generally, public debt has decreased because of debt cancellation or better economic prospects, but the private sector has become dangerously indebted in many developing countries, threatening development achievements,” Jones explained. “Nothing has been done to prevent the build up of large debts in developing countries through a very liberalised global financial system,” he added.

Despite the international community agreeing to cancel up to 125 billion dollars for 33 countries since 2000 under the Heavily Indebted Poor Countries (HIPC) initiative, the International Monetary Fund and World Bank predictions foresee foreign debt payments in the least developed countries (LDCs) increasing by one-third over the next few years, the report argues.

The swelling of unsustainable debt, which has afflicted the South since the 1970s, is now causing panic in Europe as well. What is happening in Greece today mirrors what has been happening in the developing world, the Jubilee Debt Campaign argues, observing that history is repeating itself in a world where “lenders can go on lending with impunity and borrowers will always have to pay the price”.

The issue of unsustainable debt came to the world’s attention when Mexico first defaulted in August 1982. Mexico faced another debt crisis in the 1990s, followed by East Asia, Russia, Brazil, Turkey, and Argentina, due to excessive borrowing by the private sector.

The Campaign’s research estimates that “in the 1950s and 1960s, the number of governments defaulting on their debts averaged four every twenty years. Since the 1970s this has risen to four every year.”

“We now have a global financial crisis where people in the Western world are experiencing what many people across the global South have experienced for the last 30 years. It’s amazing how this ideology of liberalisation still holds so much sway,” Jones marveled.

“Some countries have tried to re-regulate international lending in recent years, like Brazil, which imposed a tax on short-term foreign money coming into the country; Iceland as well (whose entire banking system collapsed in 2008, the country’s three largest banks having accrued debt exceeding six times the national GDP) has had a very different response to the global financial crisis: its government refused to take on the banking sector’s foreign debt, largely because the people stood up and refused to do that. Iceland is now recovering far better than other countries from its debt crisis.”

“More countries have been backing regulations on how money flows in and out of their territory, but there are barriers in the system, such as World Trade Organisation (WTO) agreements,” Jones added.

Since 2000, 32 developing countries have qualified for debt relief, their debt payments reduced from an average of 20 percent of government revenue in 1998 to less than five percent in 2010, according to the report. In countries qualifying for debt cancellation, primary school enrolment has increased from 63 percent of children to 83 percent in ten years.

The Jubilee Debt Campaign has been advocating the creation of an international debt court able to cancel unsustainable debts, arguing, “Many developing countries have been, and continue to be, locked in a debtor’s prison.”

The increasing burden of debt is also strongly felt in developing countries that did not qualify for the HIPC scheme, such as Kenya.

“There isn’t enough thinking around debt management policies and development outcomes,” Kiama Kaara, who heads the Kenya Debt Relief Network programmes in Nairobi, told IPS.

“Loans and development financing must be tied to the national development agenda, otherwise we will end up with more useless, ‘white elephant’ projects that drain national resources,” he added.

Kenya’s public debt increased from 46.8 percent of GDP to 48.9 percent today, according to the Network.

“Borrowing makes economic sense, but the level of prudence should increase,” Kaara explained. “This is particularly worrying in countries where the political elite is the same as the economic elite; the appetite for increasing domestic debt benefits banks controlled by influential players, who profit from the private sector’s debt despite the obvious conflict of interest.”

At a national level, civil society is increasingly mobilising to have a stronger say on the level of debt incurred by governments. The Kenya Debt Relief Network has been drafting a ‘Responsible Borrowing Charter’ to gauge loans against the country’s macroeconomic indicators.

“The IMF has been seeking to create a new mandate on how to regulate the movements of money between countries, but it is still very weak,” Jones told IPS. “We are making the same mistake with the European debt crisis as with the Latin American debt crisis in the past, by thinking austerity is the answer, and it just creates further decline in the economy and suffering for the people on the ground.”

(END)

By Hilaire Avril
LONDON, Aug 17 2011 (IPS)

As several African governments examine the possibility of setting up their own “offshore” financial centres, the trade name for tax havens, campaigners are calling for transparency and fair tax regimes.

Alvin Mosioma, coordinator of the Tax Justice Network Africa, which advocates fair tax regimes to promote economic and social development. Credit: Tax Justice Network Africa

“The African Union has established a special panel on illicit financial flows, and the African Tax Administrators Forum meeting held in 2008 was also a promising start, but Africans have been too silent too long on the issue of financial transparency.”

“With the current preoccupations with terrorism and political instability on the continent, adding financial instability and sheltering corruption in local tax havens would be catastrophic,” Mosioma concludes.

“There is an emerging trend in Africa towards establishing our own offshore centres. One argument we hear is that it would modernise the African financial sector, and streamline the red tape in many countries,” says Mosioma.

The nefarious impact of tax havens on developing countries’ economies is increasingly well documented. Recent research establishes that secrecy jurisdictions in the British Isles or the Caribbean are a major conduit for billions of dollars siphoned out of low-income countries each year.

Africa is far from immune. The Isle of Jersey, one of the world’s most famous jurisdiction for “offshore finance”, announced in early August it would open negotiations with the government of Kenya over its share of the 10 million dollars in bribes recovered from bank accounts allegedly held by a former Kenyan cabinet minister and the former head of the national power company on the island.

Some African states have a long-standing tradition of ensuring banking and legal secrecy on their territory. Liberia is internationally famous for its lax shipping register, ensuring cheap and confidential registration of sea vessels regardless of their seaworthiness and ownership.

Mauritius has long been a tax haven, sheltering fortunes from the prying eyes of African tax authorities and facilitating “round tripping”, the discrete harbouring of funds from India later artificially re-invested under the very favourable guise of foreign direct investments. Djibouti and the Seychelles have also been qualified as tax havens in the past.

Botswana, in southern Africa, set up its International Finances Services Centre in 2003, facilitating the easy transfer and repatriation of funds to avoid withholding and capital gains tax, thus earning the moniker of “Switzerland of Africa” in an article of the Harvard International Review in 2010.

Much more recently, Ghana, a west-African country, which recently struck oil, contemplated the benefits of setting up its own offshore financial centre.

Kenya announced in March that it was considering establishing the Nairobi International Financial Centre. The project seems to be an attempt at competing with Johannesburg, in South Africa, the financial powerhouse of the continent, and Mauritius, already a secrecy jurisdiction.

“This is not yet official government policy, as far as we know,” Mosioma says. “But there are related concerns being raised regarding Kenya’s Special Economic Zones granting telecoms and banking operations special tax regimes,” he explains.

Financial advisor and international institutions have, until recently, been marketing Western economies’ deregulation as the successful path to economic growth throughout the world. The global financial meltdown of 2008 and current debt crises in Europe and the U.S.A. seem to have had little effect on this discourse so far.

“The global financial sector is still advocating the liberalisation of financial flows into and out of countries as a “best practice”, and increasingly so in developing countries,” says Mosioma.

But recent developments may have thwarted some African temptations to create regional fiscal paradises. Ghana’s proposed offshore centre was recently disavowed by the government, which withdrew the offshore banking license it had granted to Barclay’s bank.

The move was blamed by the financial group on Ghana’s inadequate legislative framework. But the Central Bank seems to have reacted to concerns regarding the possibility of regional money laundering. “It’s very heartening to see that Ghana seems to have come through in this regard,” says Nicholas Shaxson, author of the recently published “Treasure Islands: Tax Havens and the Men who Stole the World”, a history of the global offshore financial system.

“The specific risks of tax havens for African countries is that tax haven exacerbate the “resource curse”, the economic hardships hitting countries that rely mainly on commodities exports,” Shaxson explains.

“A country like Nigeria has billions in oil money flooding in, but the ordinary people tend not to be better off, as it sets off inflation and impedes exports of job-creating sectors, such as agriculture or manufacturing,” he says. “If a country’s financial sector were suddenly to cause a massive influx of money, it would undoubtedly have the same effect on its population.”

Despite the risks, the issue of offshore financial centres is not yet on most international organisations’ radars. The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes is one of the only institutions monitoring offshore finance. It narrowly spared Ghana a slot on its black list, in light of the recent development.

According to Shaxson: “Civil society is in its early phase of waking up to the importance of the issue: Brazil’s government is hosting an upcoming seminar on international tax justice, and India has its own drivers, with rising public anger at what they call ‘black money’.”

Excerpt:

“Eco-label fatigue” is setting in as green logging certification schemes are undermining proper government management of forest resources while “greenwashing” private ownership of these public resources, critics say.

The Forest Stewardship Council (FSC), created in 1993, is an internationally recognised scheme for the certification of the responsible management of forests.

It aims at ensuring that the exploitation of woods and plantations is sustainable, respectful of biodiversity and supportive of the social and economic development of its workers and neighbouring residents, particularly in Africa.

Many of the 13 African countries where forests were certified as FSC-compliant are low-income countries.

In Kenya, Madagascar or Tanzania, for instance, the benefits of responsible forest management could be massive for a mostly rural population.

Africa’s largest expanse of tropical forests covers the Congo Basin and Cameroon, where illegal or destructive logging practices threaten not only the environment but also local livelihoods.

These significant stakes explain why the surface of FSC-certified territory in sub-Saharan African countries has more than doubled, from three million ha in Apr. 2008 to 7,6 million ha in Apr. 2011.

Yet, African and international civil society organisations are increasingly wary of what some nongovernmental organisations (NGOs) call “eco-label fatigue”, and particularly of the FSC labelling scheme.

“Such certification weakens states’ resolve to properly manage their forests and wildlife,” warns Sylvain Angerand, who heads the forest campaign for the environmental NGO Friends of the Earth’s French section.

In order to be certified as FSC-compliant, a forest or plantation must satisfy environmental criteria ensuring proper conservation of the land, but it must also protect workers’ and indigenous people’s rights.

“Sites of special cultural, ecological, economic or religious significance to indigenous peoples shall be clearly identified in cooperation with such peoples, and recognised and protected by forest managers,” states criterion 3.3 of the FSC Principles.

The FSC additionally clearly states that it “intends to complement, not supplant, other initiatives that support responsible forest management worldwide”.

But, according to Angerand, “the scheme gives legitimacy to the industrial management of forests by shifting responsibility from public authorities to private outfits; it is largely used for its image value and ‘greenwashes’ many private ventures.”

As a consequence, “FSC certification is no guarantee that the poverty of people living off the forests will be alleviated”, he explains.

This has led to the withdrawal of some NGOs’ support for the scheme, explains Virginie Leroux, who authored a report surveying civil society positions on eco-labels.

“NGOs reckon that consumers get lost and are misled by the proliferation of eco-labelling initiatives. They point to the doubts one can have about the quality of the labels and the seriousness of the assessment procedures,” she wrote.

“A growing number of NGOs acknowledges that FSC is ‘the most credible’ forest certification system – but seemingly no longer credible enough to be associated with,” she concluded.

Friends of the Earth England, Wales and Northern Ireland stated back in Sept. 2008 that it would not recognise the value of FSC certification anymore, according to Leroux.

The debate has gained new impetus in the light of planned regulations in the European Union to ban the importation and sale of illegally source timber by 2013.

“One of the fundamental criteria for FSC certification is respect for existing laws,” explains Alison Kriscenski, communications director at the FSC.

“A strengthening of EU laws in this field is great news,” she adds, as importers are expected to rely even more on certification schemes to demonstrate that their timber was legally sourced.

But this prospect does not deter critics. “The debate of legally-sourced versus illegally-sourced timber misses the point,” retorts Angerand.

“What matters is how sustainable the exploitation of a forest or plantation is, and how it contributes to reducing poverty locally. In some certified forests, the rates of renewal are far from sufficient, and there is often a strong case for management by the community, as opposed to management by industry,” he insists.

This tension sometimes translates into conflicts on the ground. Angerand was himself briefly detained by police last November while trying to interview former employees of the Congolaise Industrielle des Bois in Pokola, Republic of Congo (Brazzaville).

Similarly, Greenpeace alleged in April that several residents were severely beaten and also incarcerated by police forces in Yalisika in the Democratic Republic of the Congo while demonstrating against what the environmental NGO describes as a lack of any zoning regulations delimiting the exploited areas.

Problematically, some of these ventures are FSC-certified.

Africa’s 7.5 million ha of certified forests are a small portion of the global total of 140 million FSC- certified ha. But the growth expected on the continent in months to come should, if anything, swell the controversy.

By Hilaire Avril
PARIS, Mar 15 2011 (IPS)

Tourism as a concern found its way onto the agenda of the 1992 Earth Summit in Rio de Janeiro because of its potential for development but also due to its adverse effects on some populations and natural resources, particularly in Africa.

The nonprofit Basecamp Foundation has facilitated the planting of over 20,000 trees in Masai Mara, Kenya. Credit: Ole Bernt Frøshaug, Basecamp Foundation

The many definitions of “responsible travel” all insist on the conservation of nature, of cultures, and on economic and social development. Meanwhile, the market has been booming.

Global figures are hard to come by. But “Responsible Travel”, a British tour operator that sells “travel which respect and benefits local people and the environment”, says it has sold 39,000 holidays since 2004.

ATES, the French Association for Fair Tourism, says it has sold holidays to 20,000 “responsible travellers” since 2006. Their annual numbers doubled between 2006 and 2009.

Tourism has indeed been hailed as the key to development in many countries. But its unintended consequences have included environmental degradation, as well as community factionalism and social stratification whenever communities do not enjoy a fair share of jobs and revenue.

“The history of tourism has been mostly negative for local communities and ecosystems,” says Amanda Stronza, an environmental anthropologist who teaches at the Texas A&M University.

“Cannibal Tours”, a 1988 anthropological documentary which follows bright- eyed, camera-laden tourists asking village elders when they last ate human flesh, and haggling over two dollars’ worth of wooden necklaces, is a vivid illustration of the underbelly of tourism.

“During the height of modernisation in international development in the 1970s, large-scale tourism was heralded enthusiastically and often uncritically as a veritable ‘passport to development’,” argues Stronza.

“Entire nations advertised themselves as pristine paradises and promised plenty of sun, sand, sea, and sex. The goals of tourism investment, then, were almost purely macroeconomic,” she says.

Sustainable tourism, by contrast, aims at empowering local communities to manage and benefit from environmentally sound accommodation and tours.

“It’s a model in which the tourist encounters genuine inhabitants of a place, who benefit from and run tourism ventures,” says Julien Buot, coordinator of ATES.

“It’s at the crossroads between cultural travel, development economics, fair trade and international solidarity,” he says.

The San, from the Kalahari desert in southern Africa, have had first-hand experience of the virtues and drawbacks of tourism. Scattered across Botswana, Namibia and Zimbabwe, they have organised to benefit from the numerous tourists eager to meet “Bushmen”.

“One of the big problems with tourism in San communities was the problem of unfair distribution of tourism benefits,” says Robert Hitchcock, who chairs the department of anthropology at Michigan State University.

“Social costs include greater access to alcohol, with contributes to community tensions, and the spread of diseases, including HIV and AIDS and tuberculosis,” he explains.

In the 1970s, the Botswana government shifted to the position that the San should not be exploited as ‘‘tourism objects’’, and that Gaborone should not be engaged in what some felt to be the ‘‘exploitation of the San’’.

“In some communities, responsible operators have worked out agreements with local people to hire them as guides, to provide some benefits for development projects and to run social services like medical care and professional training,” Hitchcock says. “But this is rare.”

Most sustainable tourism ventures are too recent to assess the long-term benefits to locals. Responsible operators now know what doesn’t work. But successful sustainable tourism remains a tricky formula.

“Three-way partnerships between local communities, private companies, and nongovernmental organisations (NGOs) seem to be ideal for making ecotourism work for triple goals of conservation, development, and profit,” says Stronza.

“When all three actors participate, local people are able to contribute their knowledge and resources; tour operators can provide investment capital, business acumen, and managerial experience; and NGOs can help with networking, skills building and cultural brokering,” she explains.

There are dozens of sustainable tourism labels, many of which are not subject to a robust certification scheme.

“Ecotourism can never be a panacea for any community’s array of economic or social challenges,” Stronza says. “But NGO support may be ‘the secret ingredient’ for making ecotourism not just an end in itself, but also a catalyst for broader social, environmental, and cultural initiatives,” she believes.

However, some sustainable tourism operations are fragile, have failed in the past because of political instability or civil unrest in the region.

“This has happened to well-established operations, as in the Kenya safari industry a few years ago when violence over presidential elections erupted, or in northern Ecuador, where coca eradication is associated with guerrillas and terrorism,” Stronza points out.

Excerpt:

By Hilaire Avril
PARIS, Feb 18 2011 (IPS)

Bad governance and the persistence of the tax avoidance industry allow billions of dollars of profit to be siphoned out of Africa, untaxed, every year.

Bruno Gurtner, chair of Tax Justice Network's board, holding the report, next to Dereje Alemayehu, chair of the network's African steering committee. Credit: Tax Justice Network

Titled “Tax Us If You Can – Why Africa Should Stand up for Tax Justice”, the report places the blame mostly on bad governance, whether African or international, and on the tax avoidance industry. The Tax Justice Network is an international independent organisation doing advocacy on tax regulation.

“Today, 80 percent of Africa’s exports consist of primary commodities. African governments depend heavily on the resource rents from these commodities but many are exempt from taxation,” the report, released on Feb 14, points out.

Multinational companies operating in African economies, including those of least developed countries, are granted massive tax exemptions by under- resourced, inept or simply corrupt tax officials, according to Khadija Sharife, lead author of the report.

“Multinationals use the very same systems of secrecy that human and wildlife traffickers, arms dealers, dictators, and autocratic regimes depend on in order to survive and thrive,” she explained to IPS.

Tax exemptions, tax holidays and deferments; ridiculously low rates of royalty payments by companies exploiting the continent’s bountiful natural resources; and under-priced access to water, timber and land translate into money diverted away from the empty coffers of African states.

The Tax Justice Network gives the example of a deal concluded in the Ethiopian state of Benishangul Gumuz. A five-year exemption from corporate income tax resulted in an annual tax loss to the treasury estimated at 12 million dollars.

Similarly, by the Network’s estimate, in neighbouring Kenya the government only manages to collect 35 percent of the corporate income tax required by national law.

“The Kenyan Revenue Authority employs approximately 3,000 tax and customs officers to serve a population of 32 million. The Netherlands, as an example of an OECD country, employs 30,000 tax and customs officials for a population of 10 million,” the report observes.

The OECD is the Organisation for Economic Cooperation and Development, representing wealthy states.

African governments have a long history of granting fiscal concessions to the privileged, it claims. “Egypt’s famed Rosetta Stone, created in 196 BCE, was an agreement granting a tax exemption to priests, and certain reductions to the military and other ruling classes, including traders approved by the king,” according to the Network.

According to Global Financial Integrity, a programme of the U.S.-based Center for International Policy which studies cross-border flows of illegal money, the cumulative stock of illicit financial flows from Africa amounted to 854 billion dollars between 1970 to 2008, or about 22,5 billion dollars each year.

As a consequence, the burden of taxes falls on the African citizen. Because borders are one of the few effective tax collection points, tariffs are rigorously enforced, which holds back regional economic integration.

During the severe drought that struck the Horn of Africa in 2005, while the region’s governments were pleading for food assistance, it took some authorities more than three months to scrap the import tax on desperately needed foodstuffs.

“Data, figures and analyses are hard to come by, which keeps the issue out of the news and off African governments’ radar screens,” Alvin Mosioma, coordinator of Tax Justice Network Africa, told IPS from Nairobi, Kenya.

“African civil society took the matter to the African Union last August and we have lobbied the United Nations Economic Commission for Africa,” Mosioma says. “The need for better tax governance is identified, but it still needs sustained emphasis,” he adds.

The 16 countries, which compose the Economic Community Of West African States (ECOWAS), have begun working on minimum tax and royalty rates required for the mining and oil and gas industries. But the initiative has slowed down, according to Mosioma.

More worryingly, some African countries seem tempted to use or become tax havens themselves, which would facilitate the avoidance of profits even more.

“The use of Mauritius, a secrecy jurisdiction, by New Reclamation, a South African corporation exploiting diamonds in Zimbabwe as part of their joint venture with the Zimbabwe Mining Development Corporation, is very instructive,” argued Sharife.

“Notwithstanding the nature of the ruling ZANU-PF, whether or not the diamonds are classified as ‘blood diamonds’, corporations utilising Mauritius do so because they want to access services such as banking secrecy and tax exemption,” she explained.

“Governments commercialising sovereignty to act as tax havens have blood on their hands,” Sharife concluded.

Excerpt:

By Hilaire Avril
PARIS, Jan 29 2011 (IPS)

A half a century after U.S. president Dwight Eisenhower named and denounced the military-industrial complex’s ever-increasing influence on world affairs, the arms trade thrives more than ever, with African states frequently being the destination.

A gunsmith from the Sudan People's Liberation Army salvages guns seized in Juba, Sudan, in Jun 2010 during a government disarmament campaign. Credit: © Trevor Snapp/Small Arms Survey

Most governments have a legitimate need for some defence equipment.

However, “many exporters have no legal framework or control of any sort to regulate arms transfers to countries that do not have legal controls themselves,” says Nicolas Vercken, who heads Oxfam’s French campaign for a comprehensive arms trade treaty.

“Our problem is with some of the weapons being used to violate human rights and humanitarian law,” he says. Currently, only the Netherlands and Britain require advice from their development agencies before deciding on arms exports to developing countries.

“A global treaty is essential to even out the playing field among exporters, and to close the loopholes,” Vercken explains. “Its main objective would be to block sales when there is a clear risk that weapons might be used to violate human rights or to impede a country’s development.”

The campaign for an arms trade treaty has recently gathered momentum at the United Nations. In 2009, a U.N. resolution paved the way for negotiations, which started in July 2010. Campaigners hope for a treaty by 2012.

But many observers do not share this optimism.

“A treaty will be a reasonable monitor of new arms deals,” says Lauren Gelfand, Africa editor for Jane’s Defence Weekly. “But it would require a level of transparency that some international weapons manufacturers might be reluctant to accede to.

“Unfortunately, I do not think that a global treaty will do much to contain the flow of small arms, simply because of the numbers that are already in use or being traded,” she adds.

Small arms (any weapon an individual can carry, such as the ubiquitous AK-47 assault rifle) are the plague of many low-income African countries.

“They are easy to transport, smuggle and shift across borders; it is not beyond reasonable that a weapon used in Liberia or Sierra Leone may make its way to Nigeria and then possibly into the hands of rebels in Sudan,” Gelfand explains.

Sudan, which abstained from voting on the 2009 resolution and is currently on the verge of secession between the North and South after decades of civil war, exemplifies the problem of loosely regulated and weakly supervised arms transfers.

“The relative ease of access to arms in the region, coupled with Sudan’s chronic governance problems, mean that it is relatively easy to launch rebellions in marginalised areas,” says Claire McEvoy, who assesses security in Sudan for the Small Arms Survey.

The Small Arms Survey is an independent research project of the Graduate Institute of International and Development Studies in Geneva, Switzerland.

“The more weapons the governments in Khartoum and Juba acquire, the more we will see arms ‘seeping’ from their armed forces to proxies and non-state armed actors, via theft, sales, corruption, battle-field losses, and so forth,” she explains.

Even legitimately procured arms destined for governments run a strong risk of ending up in the wrong hands.

“Small arms are particularly difficult to track because they are so easy to conceal,” says Pieter Wezeman, a researcher with the Stockholm International Peace Research Institute (SIPRI), an independent institute researching arms and related issues.

“Many African countries have a strong culture of secrecy surrounding issues of security and defence, and their military is often reluctant to discuss arm deals,” he adds.

SIPRI estimates confirm that total military expenditure in sub-Saharan Africa in 2009 were close to 18 billion dollars. It is a drop in the ocean of the 1,531 billion dollars global arms trade.

“But in several cases, relatively small volumes of arms supplied to sub- Saharan African countries have had a major impact on regional conflict dynamics,” Wezeman says.

“It is important to be aware of the cumulative effect of these arms imports,” adds Corey Pein, editor of WarIsBusiness.com, a website which investigates arms deals. “The continent has accumulated so many firearms that smugglers often need go no farther than the country next door,” he explains.

Africa may not be the largest markets for arms manufacturers but it is one of the most vulnerable to weapons imports.

A global treaty regulating arms procurement could benefit least developed countries, which explains why only one sub-Saharan African country – Zimbabwe – voted against the U.N. resolution on negotiations for a global treaty.

However, “a meaningful treaty is still a far way to go, if it will ever be achieved,” says Wezeman.

“It is an important process if it leads to more regional or national agreements on arms exports but will it lead to a meaningful treaty restraining countries’ exports? Several major exporting countries have very different views on this,” according to him.

Still, campaigners believe nothing is set in stone. “Of course, not every state is in favour,” says Vercken, “but once a universal standard exists, even those who are not party to the treaty will be politically judged against these principles.

“A treaty will increase the pressure on reluctant exporters, just as happened with the Ottawa treaty banning landmines: the U.S. did not sign it but still applied most of its principles in the end,” he concludes.

Excerpt:

By Hilaire Avril
PARIS, Sep 8 2010 (IPS)

After weeks of rumours sparked by the leaking of a draft World Bank position paper on so-called land grabs in poor countries, the international financial institution has officially released its report on the surge in farmland purchases and leasing which have elicited controversy for over two years.

Acquisitions of vast tracts of fertile land in Africa by foreign governments and companies eager to secure affordable food resources in highly volatile commodity markets stirred public attention when the South Korean company Daewoo bought more than a million hectares of farmland in the east African island state Madagascar.

The World Bank report, titled “Rising Global Interest in Farmland. Can It Yield Sustainable and Equitable Benefits?” and released on Sep 8, cautions that “an astonishing lack of awareness of what is happening on the ground” exists — even by the public sector institutions mandated to control this phenomenon.

It estimates that 2009 saw 45 million hectares of farmland deals going through and predicts that, “given commodity price volatility, growing human and environmental pressures, and worries about food security, this interest will increase, especially in the developing world”.

At the beginning of Sep 2010, riots over steep increases in the price of bread left seven people dead and hundreds injured in Maputo, the capital of the southern African country Mozambique, sparking fears of another food crisis like the one that affected several African countries two years ago.

That same week, the United Nations’ Food and Agriculture Organisation announced that, “surging wheat prices drove international food prices up five percent (in Aug 2010) in the biggest month-on-month increase since November 2009.”

Several huge farmland investment deals have been decried for bringing uncertain benefits to recipient countries, and sometime for leading to smallholders’ eviction from their land and adversely affecting local livelihoods.

The World Bank report reckons that “one of the highest development priorities in the world must be to improve smallholder agricultural productivity, especially in Africa”.

But the report deems that “when done right, larger scale farming systems can also have a place as one of many tools to promote sustainable agricultural and rural development”. It then proceeds to detail many conditions for these deals to benefit developing countries.

“When assisted, family farmers have been able to compete in global markets. Many companies have successfully collaborated with local farmers,” Lorenzo Cotula, who researches the topic for the London-based International Institute for Environment and Development, told IPS. The non-profit IIED promotes sustainable development.

“But national laws in recipient countries need to be changed and better implemented, so local people can have more secure rights to their land,” he cautions.

The report states that farmland investments’ adverse effects on local development are often due to the fact that host countries’ governments “were ill-equipped and ill-prepared to deal with the sudden influx of interest”.

Indeed, many such deals have been rushed through, and several have brought minimal revenue to public coffers. “The fact that there appears to be significant interest in countries with weak governance implies that the risks associated with such investments are immense,” the report warns.

Cotula concurs and adds: “Governments must be able to regulate investment and skilfully negotiate with investors. Civil society should be able to scrutinise government and investor action, and farmers’ groups should be able to negotiate with government and investors.

“International agencies can play an important role in making these three conditions come true,” he suggests.

The World Bank report calls for global implementation of investment principles it drafted last year with other developmental institutions such as FAO.

But it acknowledges that the “effectiveness of these rules depends on the mechanisms for disclosure and enforcement that are available to assess whether actors comply with standards, and to deal with cases where they do not”.

Such enforcements mechanisms do not yet exist, and some observers are sceptical.

“Relying on voluntary enforcement of such principles would never work as investors would pay no heed to them. Many already hide behind governments and shell companies”, says Antoine Bouhey, who leads the campaign for farmers’ rights in developing countries as organised by the nongovernmental organisation (NGO) Peuples Solidaires in association with international NGO ActionAid.

“What we need is constraining legislation, both in recipient countries and at home where the investing corporations are headquartered,” he argues.

“This will take a while. In the meantime a moratorium on these investments should be declared in developing countries that have not reached millennium development goal one (eradicating extreme poverty and hunger),” he adds.

While the World Bank report anticipates that demand for land may be increasing, it admonishes that, “at the same time, scarcity of information on what is happening encourages speculation on a large scale”.

But, in a hopeful conclusion, it observes that “these risks correspond to equally large opportunities”, as “increased productivity and effectiveness in the utilisation of (large areas of land currently not cultivated) could have far- reaching developmental impacts”.

Excerpt:

The United Nations declared 2010 the Year of Biodiversity. But 17 years after the Convention on Biological Diversity was adopted at the Earth Summit in Rio de Janeiro, the issue of biopiracy is still pitching North against South.

A worker at the African Centre for Biosafety’s Imingcangathelo Project in Alice, South Africa, shows the pelargonium plant. Credit: www.biosafetyafrica.org.za

Researchers and activists have coined the term biopiracy, “the theft of genetic resources”, to describe corporations’ practice of securing “profitable private monopolies by staking out patent claims on Africa’s genes, plants, and related traditional knowledge”, according to the African Centre for Biosafety (ACB), based in South Africa.

The new international regime on access to genetic resources and benefit- sharing, first proposed in 2002, will be on the agenda at the forthcoming 10th meeting of the Convention on Biological Diversity that is taking place in Nagoya, Japan, between Oct 18-29, 2010.

The controversy is not new. German pharmaceutical giant Bayer filed a patent in 1995 for the manufacture of Glucobay, a drug that treats type II diabetes and is based on a bacteria strain originating from Lake Ruiru in Kenya.

Merck, a competitor, patented an anti-fungal identified in Namibian giraffe dung in 1996. In 1999, Canada’s Biotech patented seeds from the ginger family that Congolese traditional healers have been using for ages to treat impotence. The list goes on.

According to Krystyna Swiderska, who researches biopiracy for the London- based International Institute for Environment and Development (IIED), “the problem is that there is no system to monitor biopiracy”. The non-profit IIED promotes sustainable development.

“Every now and again, NGOs (nongovernmental organisations) mount campaigns about particular examples of biopiracy, but it is difficult to know how often it occurs or how it affects industries such as pharmaceuticals, herbal medicines, agro-seeds, food, or industrial processes,” she explains.

The problem is not limited to Africa, but “indigenous communities such as those in Africa are the holders of traditional knowledge, whether about medicine or crop varieties,” says Swiderska.

In biopiracy cases remedies, long-identified and developed by traditional healers, are appropriated by North-based corporations that claim exclusive rights to their use through copyrighting ingredients or processes.

Africa’s indigenous peoples have little institutional and regulatory recourse to protect their knowledge in these cases.

In all, 192 states and the European Union have now signed the Convention on Biological Diversity, which aims among others at ensuring fair and equitable sharing of benefits arising from genetic resources. Most states have also ratified it.

“But the problem is that a lot of these resources have already been collected and are now in gene banks or botanical gardens in the North. Until the commercial patent is launched, it is difficult to know what is going on,” Swiderska points out.

In its 2009 report titled “Pirating African Heritage”, the ACB documented seven new cases of suspected biopiracy, including in African countries such as Ethiopia and Madagascar.

Affected resources even include viruses that have been identified in the Cameroonian Baka people’s blood and which are now “claimed as the exclusive intellectual property of corporations”.

The damage is hard to measure, states Swiderska, but “the financial estimates are usually based on the size of the markets for natural products, which are massive”.

Only in very rare instances are benefit-sharing agreements reached between traditional communities and corporations. Most indigenous people who have created or used such genetic resources for centuries never share in the profits.

“African countries are therefore potentially missing out on huge benefits”, according to Swiderska.

The case of the Hoodia cactus, which the San people have used as an appetite suppressant in the Kalahari desert in South Africa for generations, is infamous.

The marketing rights to the plant were sold to drug-maker Pfizer to develop a weight-loss product. After years of campaigning, a deal was struck according to which the San would receive royalties estimated at a mere 0.003 percent of retail sales, according to the ACB.

The closest thing to a success story was the repealing of a patent on a South African type of geranium, the pelargonium, to which a German company had claimed exclusive copyright to develop cough medicine.

“The second part of the story should be to get the traditional knowledge of the community recognised, to get them accepted as stakeholders,” declares Mariam Mayet, director of the ACB.

“We need governments to force companies to sign benefit-sharing agreements for communities to earn revenue”, she adds.

But Swiderska points out that, “the problem is that the Convention (on Biological Diversity) only requires benefit-sharing from the collection of new genetic resources after it has come into force. It does not apply to anything before, and most of these collections have been done in the last 200 years.

“The system aims at protecting industrial innovation, through treaties and conventions, but there is nothing mutually binding on traditional knowledge,” she adds.

With the 10th meeting on the Convention on Biological Diversity around the corner, Swiderska believes the international regime on access to genetic resources and benefit-sharing should include traditional knowledge.

But industrialised countries are “heavily opposed” to the inclusion of traditional knowledge in the regime, signalling another uphill battle for the South on the global terrain.

By Hilaire Avril
PARIS, Aug 24 2010 (IPS)

Despite its minuscule share of world trade, fair trade is a booming business, importing certified foodstuffs and products from all over the world to Northern supermarkets. But there is increasing concern that this growth is yet to benefit poor countries in Africa.

Workers of the Oromia Coffee Farmers Cooperative Union in Ethiopia sorting coffee beans. Credit: Ethiquable

But, according to the Fairtrade Labelling Organisations, one of its main promoters, “the sales of fair trade certified products have been growing with an average of almost 40 percent per year in the last five years”.

Between 2007 and 2008 worldwide sales grew with 22 percent and by 2009 the tiny sector’s sales notched 3.6 billion euro. That same year, despite the global financial and economic crisis, fair trade sales in France alone increased by 10 percent.

But fair trade’s expansion in terms of sourcing from poor countries in Africa has been much slower.

“It is obvious that fair trade does not focus enough on least developed countries,” says Christophe Eberhart, of Ethiquable, a cooperative that imports fair trade foodstuffs to France from African least developed countries (LDCs).

One of Ethiquable’s initiatives supports vanilla farmers in Comoros, an island state off the eastern coast of Africa. The cooperative buys their flavouring vanilla pods at 100 euro per kilo, instead of the market prices of 25 euro.

Fair trade statistics do not disaggregate production figures by region, or by countries’ income category, which makes it hard to see the extent to which fair trade benefits LDCs. Moreover, “it is much easier to implement fair trade in countries such as Costa Rica, Thailand or India than in many sub-Saharan countries”, Eberhart contends.

Fair trade is increasingly popular with European consumers. In France, the Platform for Fair Trade (“Plate-Forme pour le Commerce Équitable” in French) polled consumers and found that 95 percent of them have heard of fair trade. But most fair trade success stories hailing from the South are from South America and Asia, rather than Africa.

The Fairtrade Labelling Organisations’ 2009 report lists a growing number of consumer prizes awarded to fair trade products. Among an estimated 6,000 products, Bolivian vodka, Ecuadorian spicy banana chips and other niche delicacies were endorsed. But no African goods made the list.

“Fair trade importers such as ourselves work mainly with associations or cooperatives of producers,” Eberhart explains. “And these structures, which facilitate technical and financial assistance to farmers, are historically much more common in Latin America.”

“In Peru, for instance, the farmers’ cooperative running our jam manufacturing plant got help from local specialists to monitor quality,” he points out. “But in Mali, where we set up a unit to transform fonio (a grain variety), we have struggled to find local expertise to assist us with food safety processes.”

There are other structural challenges to trading with African LDCs. In order for fair trade to benefit a maximum number of people, decent prices and livelihood-sustaining wages have to be paid not only to producers but to workers throughout the entire production chain, including those working in packaging, transporting and shipping.

“Our approach to fair trade aims at working directly with producers’ organisations, and ensuring they export their own goods,” says Eberhart. “But, in Africa, we have observed that many producers rely on private exporters.”

Farmers thus lose the profits made on exports, which are generally much higher than those made merely on production.

“This does not help producers achieve greater capacity or autonomy,” Eberhart laments. “In Madagascar, for instance, very few producers and cooperatives export their products directly. Most of them rely on a few, very large exporters who hold all the bargaining power,” he adds.

As in all sectors of trade, size matters. Even producers benefiting from higher fair trade prices and expertise have to negotiate shipping fees. Larger producer organisations have more leverage.

“Ethiopian cooperatives producing coffee, for instance, tend to do well as they have larger volumes and better expertise,” says Eberhart.

The Fairtrade Labelling Organisations have developed a standard that applies not only to producers but also to traders. Its certification body, FLO-CERT, audits and certifies producers and traders before sales start. But limited resources and market structures make it almost impossible to check the entire chain from African fields to supermarket shelves.

Still, networks are expanding rapidly. The World Fair Trade Organisation now claims 600 member organisations in 70 countries. It is estimated that 1.5 million workers and producers participate in fair trade in Asia, Latin America and Africa.

“Our aim is for fair trade to be a real lever for development,” says Eberhart. “For that to happen, we need to help small farmers develop their own local capacity for the processing of their products and not to just facilitate sales.”

Excerpt:

By Hilaire Avril
PARIS, May 17 2010 (IPS)

The World Bank has described its recent increase of 3.13 percent in the voting power of emerging economies as a reform “to enhance voice and participation of developing and transition countries”. But the shift has actually decreased a third of African countries’ share of votes.

Sebastien Fourmy: "The fundamentals of decision-making at the Bank have been carefully preserved." Credit: Oxfam-Agir Ici

Only oil-rich Sudan – whose president has been indicted by the International Criminal Court on suspicion of war crimes – has seen its share of votes increase.

The World Bank, internationally mandated with financing development projects, has long been criticised by civil society and recipient countries as unrepresentative of those it claims to be helping. Sub-Saharan Africa, the target of many of its “poverty reduction” programmes, retains a total of less than six percent of the institution’s voting rights.

Finally responding to critics, the Bank has in recent years indicated some intention towards reforming its governance and making it more inclusive of its purported beneficiaries. Its Istanbul Declaration of October 2009 committed to “protect the voting power of the smallest poor countries”.

But on Apr 25, it shuffled voting rights to increase the share of China (by 1.64 percent), South Korea (0.58 percent), Turkey (0.55 percent), Mexico (0.5 percent), and Singapore (0.24 percent). According to the Bank’s own economic definitions, South Korea and Singapore are high-income countries, whereas Mexico and Turkey are upper middle-income countries.

Criticising the adjustments, head of research for anti-poverty campaigner Oxfam, Duncan Green, noted in a blog entry titled “The World Bank breaks its promises on Africa’s voting power” that “the reform reflects the shift in global GDP (gross domestic product), and so benefits the big emerging economies, not the slower growing economies in Africa”.

Adds Sebastien Fourmy, who follows global financial institutions at Oxfam’s French chapter: “This reform is an attempt at making nice with the main emerging world players, such as China and Brazil, in the hope that they will contribute a larger share of the Bank’s funding.

“This comes at a point where Europe has growing difficulties in meeting its financial commitments to development,” he explains. “European countries have therefore agreed to a minor reduction in their voting powers but most are still clinging to their chairs.”

“And, of course, the United States remains the only member with the power to veto the Bank’s decisions,” Fourmy confirms. This is because the Bank’s voting system weighs votes according to countries’ shares of the world’s GDP.

South Africa’s finance minister, Pravin Gordhan, reportedly said his country was disappointed with the reforms as sub-Saharan countries’ say was diminished despite ongoing pressure that the Bank should boost the voices of developing countries in decision-making at the Bank and the International Monetary Fund (IMF).

World Bank president Robert Zoellick admitted that, “the change in voting-power helps us better reflect the realities of a new multi-polar global economy where developing countries are now key global players”. Yet, endorsement of the shift in voting power was “crucial for the Bank’s legitimacy”, according to Zoellick.

The British watchdog initiative called the Bretton Woods Project, which monitors the World Bank and the IMF, said in a recent report that: “a closer look shows that the World Bank will continue to be overwhelmingly dominated by rich countries.

“Developing countries represent over 80 percent of the world’s population and the Bank’s membership. They are where almost all of the Bank’s activities take place” — and yet, “its governance remains illegitimate and outdated,” the report argued.

Fourmy agrees: “In the end, the fundamentals of decision-making at the Bank have been carefully preserved.”

Moreover, “even if votes were effectively reformed in favour of its poorest members, decisions will still be taken by consensus rather than votes. Out of the 24 administrator countries that usually craft consensus decisions at the Bank, only two are from sub-Saharan Africa,” explains Fourmy. “There was talk of including a third one but that idea has not been mentioned in a while,” he adds.

“We hope that emerging economies whose voting rights were increased are going to bear increasing responsibility in the funding of development but that remains to be seen,” says Fourmy. “So far, none of them have expressed clear commitment or a detailed vision of their approach to development assistance.”

Excerpt:

By Hilaire Avril
PARIS, Apr 20 2010 (IPS)

The African continent lost 854 billion dollars due to illicit financial flows during the 39-year period from 1970 to 2008.

Dev Kar: For every one dollar low income countries get in official development assistance, more than 10 dollars go out the back door. Credit:

The CIP is an independent organisation that promotes foreign policy for the U.S. that is based on international cooperation, demilitarisation and human rights.

The research report was co-authored by Dev Kar, lead economist at GFI and a former senior economist at the International Monetary Fund (IMF), and Devon Cartwright-Smith, an economist at GFI.

The report asserts that “the enormity of such a huge outflow of illicit capital explains why donor-driven efforts to spur economic development and reduce poverty have been underachieving in Africa”.

Illicit capital flight from Africa “drains hard currency reserves, heightens inflation, reduces tax collection, cancels investment, and undermines free trade,” according to the report.

The authors blame “a global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mispricing, and money laundering techniques”.

Despite increasing policy and academic attention being focused on corruption, the report estimates that bribery and theft by public officials accounts for only three percent of the total.

Criminal proceeds (including trafficking in drugs and counterfeit goods) amount to a third of the sum, whereas corporate tax evasion (mainly through trade mis-invoicing) totals 65 percent of the yearly illicit flows.

The authors applied standard economic models of the World Bank and the IMF in the study. Excerpts from the interview follow:

Q: The limited availability of economic data could significantly understate the problem. Could illicit financial flows out of low-income African countries be even more significant? A: Low-income countries (LICs) are typically very poor reporters of data. I have seen this at the IMF’s statistics department, where I worked for 13 years, as well as during many technical assistance missions in Africa.

The reason LICs tend to be poor reporters is that their statistical budgets are under heavy pressure. Many of these countries are barely able to meet their basic social and development expenditures for health, education, drinking water, and so forth.

The production of statistics tends to be very expensive for developing countries where budgets are under tremendous stress. We have adjusted for the missing data but the gaps are very substantial.

Q: According to your research, some of the countries worst affected by illicit capital flight are those experiencing conflicts, as in the Horn of Africa? A: Indeed. Some countries like Somalia and Sudan, which have had long-standing conflicts, or Eritrea, which fought Ethiopia, have not been exempt from illicit financial flows.

Q: The report mentions that the rate at which capital has left Africa illicitly has accelerated in the last decade? A: Yes, it is accelerating. One of the main reasons is that we have seen a pick-up in the economic growth rate, at least prior to the financial crisis (of 2008).

But the increase in growth was not matched by improvements in governance, or a strengthening of institutions, or commensurate improvements in economic policies and law and order.

So, economic growth may be due to robust oil prices or commodity prices but when income rises, it mostly goes into capital flight. Without proper economic governance, increased growth prospects merely fuel capital flight instead of stemming it.

Q: Did you observe anything specific regarding the ratio of development assistance compared to capital flight in African LICs? A: Yes. We have to consider this ratio cautiously because, on the one hand, LICs tend to be high recipients of official development assistance (ODA) but, on the other hand, their illicit financial flows tend to be understated. So your ratio of illicit flows compared to ODA is going to be equally misrepresented.

And in African LICs, that means your ratio will actually be much less than 10 to 1 overall: for every one dollar they get in ODA, more than 10 dollars go out the back door via illicit capital flight. And even that estimate is understated.

Q: The report seems to point to financial deregulation and liberalisation as a factor in the illicit flight of capital from LICs. A: Yes, the liberal(ised) organisation of financial markets has facilitated capital flight in many ways.

One is that all these years we have witnessed increasing integration of financial markets, without commensurate oversight of these transfers, which Western governments should have demanded from their financial institutions.

We have offshore centres, tax havens, and even traditional banks in developed countries which are only too happy to receive these illicit funds out of developing countries — no questions asked.

Another is that traditional banks such as UBS have even facilitated capital flight from the U.S. And this came to light because aggressive investigations were carried out by (U.S.) tax authorities. African countries can scarcely afford to pursue such infractions, so these occurrences do not come to light in LICs.

Excerpt:

By Hilaire Avril
PARIS, Apr 13 2010 (IPS)

A year after the purchases of vast swathes of farm land in Africa first drew public attention, transactions remain as opaque as ever.

Camilla Toulmin: "If I were a small farmer, I would be increasingly nervous, having limited access to water and markets." Credit: Mike Goldwater/IPS

The hunger riots witnessed in parts of the developing world in the past two years were the most visible and direct effect of sky-rocketing food prices. Simultaneously, international investors started purchasing agricultural land in some of the most fertile regions of the world, particularly Africa.

Often described by recipient governments as “agricultural investments”, many such ventures were decried by sections of African and western civil society as “land grabs”. Some of these million-dollar projects have pitted host countries and corporations against local subsistence farmers.

South Korean firm Daewoo’s announcement that it had leased some 1.3 million hectares of land in Madagascar in November 2008 sparked furious opposition, contributing to riots which toppled the government.

In 2009, the arguments in the raging controversy were soberly analysed by the London-based International Institute for Environment and Development (IIED), an independent organisation that aims at infusing national and international policy with the agendas of marginalised people.

In its report, titled “Land grab or development opportunity? Agricultural investment and international land deals in Africa”, the institute concluded that “these investments can either create new opportunities to improve local living standards, or further marginalise the poor”.

The deals could indeed work for development, it argued, as “increased investment may bring macro-level benefits (GDP growth, greater government revenues), and create opportunities for raising local living standards. Investors may bring capital, technology, know-how, infrastructure and market access”. (GDP stands for gross domestic product.)

But, “as governments or markets make land available to prospecting investors, local people could lose access to the resources on which they depend – not just land, but also water, wood and grazing,” the report cautioned.

Almost a year on, the debate persists. Non-governmental organisations insist there are few reasons to be optimistic.

“Tanzania, for instance, has declared a moratorium on investments in biofuel plantations last November, due to pressure from small tenure farmers,” says Antoine Bouhey, who follows the issue for Peuples Solidaires and ActionAid, two organisations campaigning for farmers’ rights in developing countries.

“But we still lack a binding regulatory framework compelling investors to account for local populations’ interests,” he adds.

The United Nations Food and Agricultural Organisation, the World Bank and other concerned institutions convened in New York last September to sketch principles for such agricultural investments.

But according to a close observer who spoke on condition of anonymity, “the topic is still very sensitive: some donor countries would like to draft a code of conduct, but the private sector has been very difficult to engage”.

The report by the IIED observed that “effective safeguards in national law, and skilfully and transparently negotiated contracts, are key to securing local land and water rights.”

But according to Camilla Toulmin, who heads the institute, “a lot of these contracts are being negotiated behind closed doors. Some are pathetically thin and a few grant substantial preferential rights to access water to the investors.”

Despite some national laws requiring investors to consult with local populations before land is allocated, as in Mozambique, “lack of transparency and of checks and balances in contract negotiations encourages corruption and benefits ending up with the rich and powerful,” says Toulmin.

Fatou Mbaye has monitored the issue in Senegal for ActionAid. She is disillusioned: “In theory, all land allocation is supervised by local officials, but in practice national authorities assign them to investors by means of all-powerful injunctions, without ever engaging with local residents,” she says.

“Some 320 thousand hectares have been assigned to the production of biofuels, mostly by foreign investors who sometimes use local shell-companies to navigate regulations,” she explains. “And yet, Senegal imports about 60 percent of its food, and these land purchases keep farmers from expanding their food production,” she says.

The issue regularly makes the headlines in many sub-Saharan countries. But figures are scarce and trends hard to quantify. “The reality on the ground is not as simple as some media reports would have it,” says Toulmin.

“There is evidence of speculative claims to agricultural lands, but many of these deals do not go through in practice,” she observes.

“Still, if I were a small farmer, I would be increasingly nervous, having limited access to water and markets as governments are gradually tempted to take land away from what they deem to be customary, traditional and unproductive use,” she adds.

The IIED recently published a guide detailing how to draw up contracts for fairer and more sustainable natural resource investments.

“Government capacity to negotiate and manage contracts and civil society capacity to scrutinise government dealings can make a real difference to getting a better deal from natural resource investment,” it argues.

“The real question is how we can persuade governments and the private sector that it’s in their best interest to have a broader social consensus as agricultural land is vulnerable to sabotage and, if the local population is not on board, it is not an easy asset to protect,” Toulmin concludes.

Excerpt:

By Hilaire Avril
PARIS, Mar 29 2010 (IPS)

Between 30 and 40 percent of taxes that should be collected by developing countries end up in countries operating as tax havens. Overall, these “clandestine passengers of globalisation” contribute to capital flight from developing countries to the tune of 1,000 billion dollars a year.

Xavier Harel: "Hairdryers are being sold to Nigeria for 3,800 dollars apiece or cassette players for 1,400 dollars" Credit: Copyright: DR

But the problem also affects Western countries, as in France only four of the largest 40 listed companies effectively pay the 33 percent tax on corporate profits.

In the United Kingdom, two-thirds of the largest 700 corporations paid less than 10 million pounds in taxes between 2005 and 2006, according to the National Audit Office. The remaining third did not pay any tax on their profits.

According to Harel, corporate tax “optimisation” schemes cost the European Union 200 billion euros (twice the EU budget) every year, and the U.S. government 100 billion dollars.

In an interview with IPS he explains how these often legal schemes constitute a major challenge for African tax collectors through the mispricing of transfer prices between different entities of global corporations. Transfer prices refer to the pricing of contributions in transactions between internal divisions of companies.

Harel also provides an update on last year’s campaign launched at the G20 summit against tax havens.

Q: Would capital flight out of Africa reach that extent (described above) without tax havens? A: Capital flight through the mispricing of transfer prices does not need tax havens to occur. However, for the subsidiary of a multinational producing, for instance, copper in Zambia, it is tempting to channel these payments through tax havens.

It allows (companies) to base profits in tax havens (where, by definition, they will hardly be taxed) and to leave costs in countries where the production is based (thus minimising taxable profits there).

A recent report by Raymond Baker (who heads the Global Financial Integrity think tank) estimates that the mispricing of transfer prices costs developing countries between 98 and 106 billion dollars in tax revenue loss.

Q: Most headlines that we read about capital flight from Africa relate to oil-rich countries but your book gives examples from all over the continent. A: Yes, I came across research by Simon Peck, an academic who researches capital flight and the mispricing of trade between Africa and the U.S. (for purposes of corporate tax evasion), and he lists a number of interesting cases.

He went through U.S. customs registries and found records for hairdryers being sold to Nigeria for 3,800 dollars apiece or cassette players for 1,400 dollars. He also found consignments of tires exported to Ghana for 3,300 dollars each.

Q: Are the World Bank and international donors involved in development aware of the problem? A: No, it doesn’t seem to be on their radars. Their mandate is to finance development, to fund projects, whether in infrastructure or health or other sectors. But the effective collection of taxes is not one of their worries.

Q: Your book makes it sound as if tax administrations in Africa are completely overwhelmed A: Yes, absolutely. It is totally beyond their technical and human resources to dig into multinational corporations’ accounting books.

This is hardly a surprise as even in France, for instance, the tax administration says they have a very hard time making any sense of the tax returns filed by companies listed on the Paris stock exchange.

Countries with limited resources to allocate to tax collection efforts can hardly be expected to spot the financial intricacies of multinationals’ tax evasion schemes. To my knowledge, no African country has ever investigated a company for mispricing transfer prices in order to dodge taxes.

Q: G20 members made quite a fuss of tax havens last year, repeatedly committing to shutting them down and ending tax evasion. In practice, what has happened since? A: There’s two ways of looking at it. One could say that the coordinated onslaught on tax havens by the 20 richest economies in the world was indeed unprecedented.

Momentum was built by scandals affecting Switzerland and Lichtenstein (where many European and American taxpayers were accused of hiding personal wealth), as well as public deficits ballooning with the global economic crisis.

Suddenly, tax evasion became politically unbearable for many governments, which vowed to terminate banks’ secrecy.

However, in order to be taken off the official list of tax havens, many such jurisdictions signed tax information exchanges treaties with other tax havens. In theory, signing cooperation agreements with 12 countries ensures a country is not labelled a tax haven.

But in practice, I have a hard time imagining Monaco’s fiscal services requesting information from, say, Lichtenstein in order to establish whether a person should be paying more tax.

One way of limiting corporate tax evasion would be to impose country-by-country reporting of companies’ gross revenue, profits and taxes paid.

But, when I recently asked the French minister of finance for his views on the matter, he looked at me, entirely puzzled, and said he had never heard the expression before. So, clearly, limiting “tax optimisation” of large corporations is not on the French government’s agenda.

Q: How has your book been received? A: Quite well, part of the press seems interested and I’ve been invited to talk on several occasions. I’m not sure the government shared that enthusiasm, but that really is not my concern.

However, there is a problem of “infusion”. The research and observations I quote, such as Raymond Baker’s work, are very recent. These are new concerns and most of our political leaders have never heard of them.

They also may have a hard time seeing what political benefits they could possibly gain from raising these topics. These questions need to spread to the public at large, which will take time.

Excerpt:

By Hilaire Avril
PARIS, Nov 11 2009 (IPS)

West Africa is one of the world’s regions most affected by pirate fishers. Illegal, unreported or unregulated fishing has been devastating local livelihoods and ecosystems for decades. National fisheries management authorities are often helpless to protect their maritime resources.

European Union (EU) enforcement mechanisms aimed at preventing the sale of “stolen” fish on the largest market in the world have so far been unable to stem the influx. And on the rare occasions when pirate fishers are caught, the real beneficiaries of this illicit trade are easily shielded from prosecution.

This is in large part due to the use of flags of convenience, according to a new report from Environmental Justice Foundation (EJF), primarily researched in West African coastal countries. The London-based EJF does advocacy work that makes the link between environmental abuses and human rights.

Ships flying flags of convenience are using flags of countries other than the ship owners’ countries.

International law requires that all vessels, including fishing boats, fly a country’s flag.

States are accountable for the activities of vessels flying their flags. But “many of these countries lack the resources or the will to monitor and control vessels flying their flag, allowing pirate fishing operations to avoid fisheries regulations and controls,” says the EJF report.

Unable, and sometimes unwilling, to enforce fishing regulations, labour law or environmental guidelines, these countries do not effectively control the fleet flying their state flags. But West African countries that unknowingly host pirate fishers are equally unable to police their own resources.

“West Africa in general is extremely vulnerable to illegal fishing, as several countries are either in a post-conflict situation, or suffer from political instability. They have very limited capacity to patrol their waters,” says Duncan Copeland, who conducted the research.

These deficiencies are not lost on pirate fishers. Disregarding regulations – which either delimit acceptable fishing areas and natural reserves, specify maximum catch quotas and minimum hygiene to transport the fish, or impose labour standards for crews – can be highly profitable to the real owners of these fishing boats.

“Backed by shell companies, joint ventures and hidden owners, flags of convenience reduce the operating costs associated with legal fishing and make it extremely difficult to identify and penalise the real owners of vessels that fish illegally,” the report reads.

“You have companies that are foreign-owned but have African subsidiaries or joint-venture agreements, and they are increasingly Asian companies,” explains Copeland.

In 2005, the World Wildlife Fund commissioned a landmark study titled “The Changing Nature of High Seas Fishing: How Flags of Convenience provide cover for illegal, unreported and unregulated fishing”.

Researched by fishing experts for a year, it claimed that “many, if not most, of these vessels deliberately register with flags-of-convenience countries to evade conservation and management regulations for high seas fisheries.

“The countries which issue flags of convenience are ultimately responsible for the activities of these vessels on the high seas but turn a blind eye and exercise little or no control over the vessels concerned.”

The study concluded that, according to Lloyd’s Register of Ships, more than 1,000 large-scale fishing vessels used flags of convenience, despite illegal fishing being “one of the most serious threats to the health of the world’s fisheries and oceans”.

The threat has not receded since. “Our report is largely based on research in West Africa in the past few years, investigating the extent of illegal fishing there and finding that many of the vessels were using flags of convenience to hide their identities, reduce their operating costs and avoid prosecution,” according to Copeland.

The International Transport Workers’ Federation (ITF), which monitors seafarers’ rights, has been waging a campaign against abusive labour practices on ships flying flags of convenience for more than 60 years. It lists 32 countries as delivering flags of convenience, four of which are in Africa.

According to ITF, these flags provide a means of avoiding labour regulation in the country of real ownership, and “become a vehicle for paying low wages and forcing long hours of work and unsafe working conditions”.

For well-hidden, anonymous ship owners, the financial incentives to skirt labour and environmental law remain substantial.

The EJF report argues that “globally, pirate fishing accounts for 10 to 23.5 billion dollars a year, representing between 11 and 26 million tons of fish. It is a highly profitable activity being driven by the enormous global demand for seafood, threatening the future of world fisheries.”

Despite their dubious reputation, obtaining a flag of convenience for one’s ship can be done with a few clicks on the internet. Numerous firms located in Panama, Equatorial Guinea or Liberia, for instance, will register the ship on their websites for a few hundred dollars a year.

The practice breaches the United Nations Convention on the Law of the Sea (UNCLOS), which requires a genuine link between the real owner of a ship and its flag, according to the ITF.

Attesting to the sheer financial logic of open registries, some of the countries granting flags of convenience are themselves landlocked. Slovakia, Mongolia and Bolivia – all listed by the report as states deriving revenue from flags of convenience – have access to the sea.

But even for those states which do have shorelines, a paradox remains. “One of the things we found interesting was that there are several developing countries who, while being victims of illegal fishing themselves, also have open registries and give flags of convenience,” says Copeland.

“They’re seeing very little income from this, compared to the losses caused by illegal fishing,” he says, as “annual revenues are estimated at three to four million dollars from flagging fishing vessels, a tiny amount when compared to the millions of dollars lost by individual countries and the billions lost globally to such fishing.”

Excerpt:

By Hilaire Avril
PARIS, Sep 16 2009 (IPS)

Illegal capital flight in the form of corrupt, criminal and illicit commercial proceeds out of developing economies could be as high as one trillion dollars a year.

Raymond Baker: The poor are the hardest hit by illegal capital flight. Credit:

This is according to Raymond Baker, the director of Global Financial Integrity, a Washington D.C.-based think tank that campaigns against corruption and money laundering. He is the author of a new book called "Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System".

He has also acted as an advisor to several African countries.

Hilaire Avril spoke to him about the recent Group of 20 (G20) decision to curb capital secrecy jurisdictions — in response to the global economic crisis — and concerns about political elites’ possible backsliding on corruption in certain African countries.

IPS: You wrote that "criminal, corrupt and commercial dirty money transferred out of developing and transitional economies is the biggest loophole in the global free-market system and the most damaging economic condition hurting the poor". What makes dirty money the biggest obstacle to poverty reduction? RAYMOND BAKER: I know of no other economic condition that is so damaging to the poor. The only other obstacle of this magnitude to poverty reduction is hyperinflation. But hyperinflation is always a short-term phenomenon. It may go on for several years, but it’s nothing like illegal flight capital, which goes on for generations.

Illicit outflows from developing countries have moved cumulatively trillions of dollars abroad. In the long scope of my 48 years in developing countries, I know of nothing that is so harmful to them.

Another reason is that this phenomenon is a one-way flow. This money never comes back from abroad. It has been a massive one-way transfer of wealth — out of developing countries and into Western economies.

IPS: Your figures are staggering: 500 billion dollars of dirty money leave developing countries every year, whereas international aid amounts to a 10th of that. And yet, development professionals and institutions rarely mention this problem? RB: The figures I used in my book are actually lower than the ones we posted on the Global Financial Integrity (GFI) website.

We have recently done a study using standard economic models and came up with an even bigger figure (for illicit financial flows from developing countries between 2002 and 2006): 850 billion to a trillion dollars a year of illicit money draining out of developing countries. We still think that is a conservative estimate.

IPS: Why hasn’t the development community addressed this issue? RB: I think it’s because, firstly, we are dealing with data that is difficult. There is no place where you can look up "flight capital" and find statistics. You have to go through fairly interesting analytical exercises in order to arrive at these numbers. For my book, I used a survey method, that is, I interviewed people.

At GFI, we employ an economist from the International Monetary Fund (IMF), who’d been with the IMF 32 years, and we use economic models that have been used by many economists.

But it just happens that we were the first people to apply these models to the whole of the developing world, to the data available from the World Bank and the International Monetary Fund that is relevant. Economists have been hesitant to deal with this because the data is a little bit dodgy. You have to massage it a little to get intelligible results.

But I think there is a second reason why the development community hasn’t examined this issue, and that’s because it’s been far too focused on the foreign aid component of development. That is, the money that goes into developing countries. We don’t pay attention to the money that comes out.

That’s part of the reason GFI was established: to draw attention to the fact that this business of development is two-way street. It must also consist of what we in our Western economies need to do to foster development in poor countries.

IPS: Are you optimistic that recent initiatives to recover assets diverted from developing countries, such as the World Bank’s Stolen Assets Recovery (StAR) programme, will succeed? RB: I think the StAR initiative is primarily focused on helping developing countries themselves figure out how to recover their stolen assets. The problem with that strategy is that there are a lot of developing countries that do not want to do that, or are afraid to do that.

There are a lot of countries where the group in power doesn’t want to dig up the transgressions of the group that is out of power, because the situation could easily be reversed at another point in time. The question of motivation is not addressed in initiatives such as StAR.

However, given that it is an effort to help developing countries pursue those stolen assets, it is a very good initiative.

IPS: You have advised a number of governments in developing countries, including in Africa. What were your most frequent recommendations? RB: We lead the Task Force on Financial Integrity and Economic Development, which believes that much more could be accomplished through transparency than through regulation.

While regulation simply tries to provide a tighter set of rules governing financial transactions, transparency requires that the shadow financial system itself be largely dismantled.

So we advocate curtailing the mispricing of trade imports and exports; accounting faithfully for sales, profits and taxes paid by multinational corporations in all countries; disclosing ownership of all bank accounts; setting up automatic cross-border exchanges of tax information on personal and business accounts; and harmonising anti-money laundering laws internationally.

A lot of people think that it is difficult to do. But it is not. It’s only a matter of political will. The outflow of illicit money can be substantially curtailed, to the benefit of developing countries. But it does take a regime that wants to accomplish that goal.

You cannot approach this kind of problem thinking that you only want to prevent multinational corporations from extracting hidden wealth out of developing countries. Whatever you apply to those entities, you probably ought to apply to your own domestic citizens as well. And that is where the political will breaks down.

IPS: The G20 (summit held in London in April 2009) proclaimed a number of measures to limit tax and judicial havens. Is this cause for optimism, or just more promises? RB: We are happy with the forward movement, but there’s a great deal of distance left to go.

I think in fact the recent Liechtenstein case (in which hundreds of German nationals have been accused of owning secret accounts for tax-evasion purposes) and the UBS case (similarly affecting U.S. account holders in Switzerland) have been even more important than G20 pronouncements as to the curtailment of tax havens.

Having said that, there is a movement trying to minimise the harm they do around the globe, which is encouraging. But there still is a lot of distance to go.

IPS: Do you feel there is increasing momentum from governments to tackle these issues? RB: Yes, I think there is growing momentum from governments. You can see this in G8 or G20 announcements, and in the new tax information exchange agreements that are being signed between countries.

But another factor to consider is the effect of the market itself. Investors are pulling their money out of Switzerland and tax havens. Lots of capital has passed back to the United States over the past several months, and additional sums are now going to Dubai and Singapore.

Two things are happening. Those who are frightened of being caught are bringing their money back and trying to handle it responsibly. And those who are continuing to seek secrecy are taking it to other jurisdictions. So these changes are not only brought about by pressure from governments, but also by fear in the marketplace.

IPS: Several initiatives against capital flight have been launched in Africa in recent years, but they seem mostly due to civil society rather than governments. Why is that? RB: I think that is a fair comment, and the hope is that NGOs (non-governmental organisations) will keep up the pressure. But there has been a lot of backsliding on the part of governments on this issue, in Nigeria and in Kenya. There is also concern that there may be some backsliding in South Africa and other places.

The anti-corruption agenda cannot be said to be moving forward in all countries, by any means.

Excerpt:

By Hilaire Avril
PARIS, Aug 21 2009 (IPS)

The European Commission is demanding that the French government pays back 500 million euros spent on aid to French farmers. The scheme is in breach of European competition law as it financed competition with France’s neighbours by providing vegetable and fruit producers with hefty subsidies for more than a decade.

Europe is the world's largest exporter of agricultural products, accounting for 519 billion dollars in 2007 alone, according to World Trade Organisation figures. That year, 15 billion dollars' worth of agricultural products was exported exclusively to Africa, a continent where agriculture provides for the livelihoods of most Africans.

France, with its ex-colonial ties to many African countries and a lion's share of European farm subsidies, is often decried for "dumping" crops in African markets which are unable to compete. Now it transpires that, besides the perennial global controversy, these subsidies did not even comply with the EU’s own rules.

Bruno Le Maire, France’s recently-appointed minister for agriculture, caused an uproar when he announced on Aug 3 that farmers would have to reimburse the subsidies granted from 1992 to 2002. Failure to comply might mean the French government would face an even heftier penalty from Brussels.

Faced with collapsing revenues despite years of assistance, French farmers are up in arms. Weighed down by some of Europe’s highest costs of labour, French fruits and vegetables struggle to compete with cheaper produce from Spain, Italy and other European Union member states.

Producers’ unions have categorically rejected all calls to refund any of the aid, pointing the finger at the consecutive governments which supported them.

Coordination Rurale, one the largest unions of producers who benefited from the scheme, has stated it is "out of the question for producers to be stuck with even part of a bill (which is the result of) inconsistency in French and European agricultural policies".

The ensuing blame game, avidly reported by the press, is a vivid illustration of the consternation that has afflicted French agricultural policy for decades. France is one of the main beneficiaries of European agricultural funds, netting close to 10 billion euros from Brussels every year.

The minister’s call to refund the aid before Brussels slaps France with a fine has also met with undisguised contempt from his peers and predecessors. Former agriculture minister Jean Glavany, who supported the system in his time, has frowned upon Le Maire’s declarations and publicly derided it as a "youthful mistake".

Strangely enough, most accusations end up on Brussels’ doorstep, as a French agricultural policy expert, who does not wish to be named, points out. "No one, in the press or otherwise, has bothered mentioning these are millions in taxpayer’s money," he deplores.

"Once again, farmers are posing as victims, the European Commission is portrayed as the villain, and the taxpayer is left holding the bill.

"The problem remains that our political class is not ready to face the fact that some agricultural sectors cannot compete with foreign products. This simple reality is not politically acceptable in France, and so we keep fire-fighting, instead of tackling the long-term structural problems," he adds.

This year has already qualified as an annus horribilis for the embattled ministry of agriculture, confronted with strikes and riots by struggling fishers in April and with mass protest by milk producers in June. There are concerns that other sectors benefited from similar schemes and may be next in the Commission’s crosshair.

Despite the vociferous protest, several documents show the government was aware that the scheme was in serious breach of European competition law by unduly favouring French producers over their European counterparts.

According to the European Commission, some trade associations also insisted that their members maintain "discretion" and refrain from publicising the million-Euro scheme, as was recorded in meeting minutes.

Under the scheme, public funds were channelled, ironically, to the body responsible for implementing European regulations and managing European credits for the French produce sector.

It then directed funds to "agricultural committees", which cluster farmers for each produce. The committees, although theoretically supervised by the ministry of agriculture, disbursed the sums largely as they saw fit.

The subsidies were aimed at lowering French produce prices (by paying farmers for the difference), in order for French produce prices to remain competitive despite some of the highest labour costs in Europe.

They also aimed at "correcting" oversupply: instead of flooding France’s markets with too many fruits and vegetables, causing prices to crash and farmers’ revenues to collapse, the subsidies compensated producers for destroying part of their crops.

Tipped off by an anonymous complaint, the Commission addressed a letter to the French government requesting explanations on these so-called "countryside plans" in July 2002. Assistance was discreetly terminated after the Commission’s request, and Europe’s statutes of limitation of ten years prevented the investigation from covering subsidies prior to 1992.

The Commission stated last January that the scheme was "not aimed at developing the economy of regions afflicted with abnormally low standards of living or exceptional unemployment." The subsidies therefore provided an unfair advantage to France’s produce farmers, distorting competition with their Europe colleagues.

But, as producers’ syndicates are fond of pointing out, should the illegal subsidies ever be reimbursed, their precise amount is very hard to establish. The ministry claims 330 million Euros were disbursed between 1992 and 2002, totalling 500 million with interests.

Although Le Maire claims this sum is grossly overestimated, Brussels has hinted the total may be closer to 700 million Euros as produce farmers have benefited from additional subsidies from their trade associations.

It may take years to settle the real figure. Given their dubious nature with regard to European law, many subsidies were never properly recorded. Some archives have been destroyed, some registries "misplaced". Many beneficiaries have since gone out of business or retired.

"Establishing who should reimburse what would be horrendously complex, and the system was precisely designed to make such restitutions near impossible," says the French agricultural policy expert.

"What’s more, with regional elections looming in a few months (March 2010), no reimbursement scheme will ever be forced upon such a sensitive constituency as produce farmers," he adds.

Revenues of the French produce sector were once again dropping in 2008 and farmers are demanding more assistance.

Coordination Rurale has released scarcely veiled threats to the government, claiming that "French agriculture, stricken with distress, expects its government to demonstrate support if we are to grant any credit to our political representatives. Otherwise, reactions to such contempt and lack of understanding will rapidly grow unpredictable and incontrollable in the countryside."

Predictably, the ministry of agriculture is now working on a new financial support plan for the sector.

"Direct assistance is now ruled out, but debts can be cancelled and producers’ taxes lowered," says the policy expert. "These are measures which are typically funded by raising more taxes," he adds.

Excerpt:

By Hilaire Avril
PARIS, Aug 5 2009 (IPS)

For years, fishing communities along Africa’s 30,000 km-long coastline have been raising the alarm on the depletion of their fish stocks, to no avail. Over- fishing by foreign vessels has been wiping out the livelihood of West African fishers, contributing to desperate migration attempts into Europe.

But this could only be the tip of the iceberg. Emerging evidence suggests current fishing practices increasingly threaten global fish stocks, not just African ones, with complete extinction.

“The End of The Line”, Rupert Murray’s recent British documentary addressing the impact of industrial fishing, shows how catastrophically unsustainable the current trend is. Quoting research by Dalhousie University in Canada, the film warns that at the current pace all the planet’s fish will have been caught by 2050.

“Fish stocks have a biological threshold beyond which they are not able to reconstitute, and we are only beginning to understand how important it is to have fish in the sea,” says Murray.

“In addition to the issues of food and livelihoods, it was discovered in January that oceans need fish excrement otherwise they are too acidic to process carbon dioxide and limit global warming,” he explains.

According to the United Nations Food and Agriculture Organisation, 80 percent of the planet’s fish stocks are already fully exploited or in decline.

Although fishing is a regulated industry, supervision systems are weak and inadequately enforced.

Ever-larger industrial fishing trawlers take to the seas for months at a time, sailing thousands of miles from their national waters and authorities. Many evade international and local regulations, fishing inside protected Inshore Exclusion Zones and exceeding authorised catch quotas.

The European Union (EU) negotiates fishing agreements with other countries, compensating nations which grant access to their territorial waters to EU- certified trawlers.

Certification demands that fishing vessels abide by the terms of fishing agreements (catch quotas, designated fishing zones) and EU regulations on hygiene. Only certified vessels can export fish to the EU, the world’s largest seafood market.

But a recent investigation in West Africa shows that over-fishing is largely due to “pirate” fishers which are EU-certified but abuse the system.

The Environmental Justice Foundation (EJF), a London-based non- governmental organisation, has documented how weak enforcement of European regulations allows vessels to continue depleting the waters of Sierra Leone and the western coast of Africa.

“In sub-Saharan Africa, where illegal, unregulated and unauthorised fishing comprises an average 37 percent of catches, the total value of illegal fish caught is estimated at one billion dollars per year but the true figure could be far higher,” according to the EJF report.

“Trawlers over-fishing under European licenses take advantage of the weak enforcement capacity of some governments,” Duncan Copeland, who researched the report, explains.

“The Sierra Leone authorities, for instance, have a single boat capable of inspecting trawlers off-shore and it was recently docked, missing spare parts,” he says.

Many trawlers exceed their licenses and disregard health standards. EJF has published evidence of vessels, whose markings were carefully concealed, fishing within wildlife reserves and zones restricted to local artisanal fishermen, sometimes running them over.

Crews work in unsafe conditions and are paid a pittance, occasionally in fish.

Inspections in European harbours are sometimes evaded by trans-shipping the fish to other vessels while at sea, or by off-loading them in ports of convenience. Las Palmas, on the Spanish island of Gran Canaria, is a port known for lax controls allowing such fish to enter the EU.

“The EU is therefore perpetuating a situation whereby virtually none of the economic benefits of fisheries actually accrue in Sierra Leone, while simultaneously enabling illegally-caught fish to enter the EU,” according to Copeland.

“Even when the system is enforced, there are few deterrents to over-fishing. Sierra Leone recently caught a Korean ship registered with the EU and fined it 30,000 dollars, but this amounts to confiscating the fishing gear. It doesn’t impair the vessel’s fishing capacity in a lasting way,” he explains.

“The ship’s real owners are rarely known, let alone prosecuted; their local agent might be brought to court but in some West African countries these proceedings sometimes run into governance issues,” he adds.

Several EU member states, where many vessels are based, are less than eager to monitor illegal fishing outside Europe.

“Spain, with the largest fishing fleet in the world and substantial influence on E.U. fishing policy, has a history of turning a blind eye to pirate fishing,” says Copeland. “Italy has also made very little effort and is notorious for over- fishing, even in its national waters,” he adds.

The Pew Environment Group and EU Transparency, two European policy watchdogs, launched fishsubsidy.org in June, a website that tracks the largest recipients of European fishing subsidies.

Spain consistently tops the charts, raking in almost half of all subsidies between 1994 and 2006. Despite excess capacity, most of these subsidies have gone towards building new ships.

“Brussels (home to the European Commission) limits the number of boats allowed to fish in foreign waters and import their catch in the EU,” says a French fisheries policy expert who declined to be named.

“If the fish is caught in violation of European environmental and hygiene standards, the EU can ban their import. It has happened in the past. But the system is bypassed by private, often Spanish interests.

“Some Galician ship-owners have been known to commission South American boats to fish over the maximum quotas their own vessels have to respect,” he explains.

Copeland points out that a “the other big issue is flags of convenience, where European owners register their vessels in foreign countries with looser regulations. The Spanish and Taiwanese are the largest owners of ships using flags of convenience.”

But despite increasingly alarming figures, “it is not too late to turn the tide,” says film director Rupert Murray, whose documentary was mentioned several times in the recent House of Commons debate on the new British Marine Bill.

“Supermarkets in the United Kingdom have started changing their sourcing policy, and labels now appear on fish products,” he argues.

The EU plans on reforming its fishing standards for 2010. But even if the promising new regulation EC 1005/2008 is adopted, its effect on “pirate” fishing will depend on enforcement efforts.

“This is a problem we can and must solve. We have the tools to turn it around,” insists Murray.

Excerpt:

By Hilaire Avril
PARIS, Jul 14 2009 (IPS)

In 2007, the French corruption watchdog Catholic Committee against Hunger and for Development (known by its French acronym CCFD) issued a first report on the colossal sums stolen by corrupt heads of states and hidden in mostly Western secret bank accounts. Figures are hard to come by, given the secrecy that shrouds such looting of public funds.

But CCFD’s research came up with assets worth between an estimated 105 to 180 billion dollars, stolen by 30 corrupt regimes.

CCFD recently published a second report, signalling a massive discrepancy between ambitious recovery targets and embezzled sums effectively retrieved to date. Despite numerous legal proceedings, less than five percent of assets stolen have so far been recovered.

“Dirty money doesn’t acknowledge borders, whereas justice systems still function according to strict geographic boundaries,” says Jean Merckaert, CCFD’s lead campaigner in France. The report says 4,4 billion dollars has been recovered, and a further 2,7 billion dollars frozen.

“In some cases, Western governments are in no hurry to divulge misappropriated assets located on their territory. They would rather not disclose their support to some of these corrupt leaders, even after their deaths,” Merkaert explains.

The sums diverted are so considerable that it has a direct negative impact on many countries’ development. The World Bank and the United Nations Office on Drugs and Crime, which launched the stolen assets recovery initiative (STaR) in 2007, say corruption is draining between 20 and 40 billion dollars a year from developing countries. Such amounts dwarf development assistance.

Beyond the depletion of precious public funds, such looting of the public treasury often generates mounting public debt. Mobutu Sese Seko, former leader of Zaire (now the Democratic Republic of Congo), not only diverted an estimated six billion dollars from his state’s coffers, he left the country with international debt of 13 billion dollars.

In comparison, the country’s total health budget for 2009 amounts to 41 million dollars, states CCFD.

The publication of the initial report in 2007 helped a number of civil society groups to launch legal proceedings in France’s courts to recover some of these assets located on French soil. Complaints were lodged against specific leaders, among who are Denis Sassou-Nguesso of Congo and the late president of Gabon, Omar Bongo.

“It was astonishingly easy to track some of these ill-acquired properties. Several of these names are listed openly in the French phone book,” according to Merkaert. “Some of these corrupt leaders are so used to utter impunity they do not bother with discretion.”

A large part of diverted public funds is never properly accounted for in their country of origin in the first place. Some are undeclared proceeds from mining and oil concessions, a practice the multilateral Extractive Industries Transparency Initiative is currently struggling to limit.

According to CCFD, Sassou-Nguesso’s regime “forgot” to account for billions of dollars worth of oil revenue between 2003 and 2005.

Once abroad, funds are hard to trace. Most sums end up in tax havens and countries which allow opaque legal practices, such as trusts or foundations never compelled to reveal their true owners. Many recovery procedures have bumped into banking confidentiality, with local authorities turning down victims’ requests to assist them in identifying accounts where the assets have been hidden.

Some assets are also laundered and “recycled”. The Bongo family is said to own a mansion on avenue Foch, one of central Paris’s most expensive addresses, among other prime items of real estate.

The 2007 legal proceedings have not yet yielded results. Despite confirming the existence of the suspicious assets and even adding new ones to the list, French courts have declared the plaintiffs had “insufficient cause”.

“We are now waiting for the Court of Appeals to decide on Sept 17, 2009 if it is qualified to hear these cases,” says Merkaert. Such delays have sometimes allowed the culprits or their descendants to move the funds to other accounts and countries. The partial restitution of the Marcos funds to the Philippines happened after a 17-year campaign.

Jean-Marc Bikoko, from Cameroon, has been trying to tackle the problem from the other end, in Yaoundé. The public sector union leader campaigns to recover funds looted by former Cameroonian ministers — an uphill battle. “All civil society can do is investigate and urge the administration to take action,” he explains.

“But the Cameroonian National Commission against Corruption has consistently been staffed with tainted characters, themselves accused of corruption, and the president reserves the right to approve its reports,” he laments.

“Campaigning for the recovery of stolen funds exposes you to endless harassment. As a civil servant, you are systematically vilified, often sued and sometimes jailed,” he adds.

But raising awareness of the cost of corruption has led some international organisations to pay more attention to embezzlement by corrupt politicians. The United Nations Convention Against Corruption, signed in 2003, built on that momentum.

“Although not every country has signed the convention, this is a major step: five years ago, we had no legal avenues to retrieve stolen assets. Now, their recovery by the country of origin is a recognized principle in international law,” indicates Merkaert.

But only national governments can enforce such principles. “Many of Mobutu’s assets (including one of Belgian colonialist king Leopold’s castles near Brussels) have been located but the current Congolese administration does not seem keen to recover them. Is that because one of Mobutu’s sons sits in the current government?” Merkaert asks.

“The recent commitment against tax havens taken at the London G20 summit is a good sign but we increasingly face the problem of ‘legal havens’, countries which make recovery proceedings exceedingly hard,” says Merkaert.

“In the past, France has turned down a request by Nigeria for legal assistance in retrieving funds stolen by former president Sani Abacha, stashed in French bank accounts, on the grounds that the official request was written in English, not French.”

Excerpt:

By Hilaire Avril
PARIS, May 11 2009 (IPS)

The food crisis in African states will not be solved by investment to spur agricultural production because the problem is not food output but poverty that is making food unaffordable for urban Africans.

Gilles Saint-Martin: IMF policies have destroyed African research capacity. Credit: CIRAD/IPS

Saint-Martin talks to Hilaire Avril about the dire need for investment in African agricultural research; the effects that the economic partnership agreements will have on food production; and whether the African Union should adopt its own Common Agricultural Policy (CAP).

IPS: You recently wrote that, despite last year’s food riots in many developing countries, ‘‘African agriculture is not disaster-stricken, and […] agricultural production has steadily increased across Africa since the 1960s, picking up even more speed since the 1980s.’’ How do you explain the food crisis currently affecting several African countries? Gilles Saint-Martin (GSM): First and foremost, the problem is poverty. Last year’s food riots were mainly urban crises, affecting city-dwellers who could not afford to buy basic food anymore. The problem is not agricultural output, which is sufficient, but poverty, which makes it unaffordable.

The solution to the crisis is to tackle both issues, that is, to increase agricultural production and to decrease poverty by fostering rural economic activity.

The problem is that, for several years now, the traditional solidarity system between the African countryside and the cities has been severely undermined by repeated crises and that it has now broken down. Therefore, city-dwellers bear the full brunt of rising food prices.

Several CIRAD studies show that agricultural production has significantly risen in several African countries. Cassava outputs in Central and West Africa, for instance, have increased. But the problem is that the demographic increase is faster.

We, at CIRAD, do not believe massive foreign investments will solve the problem of African food security. We’re still waiting to see what the outcome of investments such as those made in Senegal last year will be.

For the moment all the examples we’ve seen are geared towards ensuring food security for rich countries, which invest in agriculture for their own food security (and) not to share the production with the African country hosting the investment.

However, there are some under-reported but interesting initiatives – mainly in the Indian Ocean. Mauritius, for instance, which faces significant food supply challenges, says it would consider investing in countries with a high agricultural potential such as Mozambique, and sharing the production between investors, producers and the global market.

But, again, the main problem remains that of urban populations accessing affordable food. It’s going to get worse as migrants send fewer remittances back home to urban Africans because of the global economic downturn.

IPS: The African Development Bank, the International Fund for Agricultural Development and other organisations recently created an ‘‘Investment Fund for African Agriculture’’. Are such funds the solution to the food crisis? GSM: There is currently a trend towards increasing agricultural output rather than implementing regional policies that foster rural activity to help urban populations access affordable food while regulating prices on a regional level. What worries us is that, whether public or private, these funds’ position seems to be ‘‘let’s simply produce more, and we’ll all be fine’’.

IPS: How do you expect the proposed EPAs (the trade liberalisation deals that the European Union is pressing African, Caribbean and Pacific countries to sign) to affect this situation? GSM: We at CIRAD tend to think these agreements should be signed with caution. But many countries have signed them anyway, as they would otherwise have lost access to European markets.

Our partners in Cote d’Ivoire and Cameroon recently told us ‘‘if we hadn’t signed the agreement, we would not have been able to keep selling our bananas in the European Union’’. Several countries signed these agreements essentially under the pressure of producers’ associations, who were afraid they would lose access to markets.

I haven’t followed the latest developments but, as they were proposed two years ago, EPAs seemed based on an outmoded model.

IPS: What is CIRAD’s answer to the food crisis? GSM: We’re very preoccupied with innovation, which is a key element in solutions for the North as well as the South. CIRAD focuses on research, so we naturally invest in innovation, whether in urban or rural environments, to mitigate poverty and to enhance food security and a more efficient use of resources.

Unfortunately, supporting innovation and research has never been considered a priority. Many donors tell us ‘‘we want immediate results, so you must implement innovating ideas urgently’’. But the period of time needed to implement innovating ideas in real social settings, with tangible objectives, are not compatible with the expected response time to a food crisis.

Our African research partners have been entirely de-structured by the (International Monetary Fund’s) structural adjustment policies in the 1980s and 90s. Most have still not recovered. We work mainly with young African scholars and researchers, but young recruits are scarce in Africa.

This is our main warning call. African research capacities need to be rebuilt, created or consolidated in order to foster innovations allowing us to cope with evolving societies, to preserve limited resources and to secure food supply.

Also, after several years of soul-searching, we have identified the development of the rural sector, by intensifying ecological production, as a priority. That means not relying on more fertilizers or herbicides, but optimising the use of ecosystems’ natural cycles and learning more about the way plants and soil work.

IPS: Should Africa adopt its own version of the European Union’s (EU) Common Agricultural Policy? GSM: Some versions of it already exist. In West Africa, the Economic Community of West African States and the West African Economic and Monetary Union have adopted regional agricultural policies which are not structured like the CAP but resemble it in that they harmonise national policies, including tariffs.

The Southern African Development Community and East African Community are also thinking of similar schemes. I think it’s unavoidable. Solutions can’t be found on a national level, they have to be regional.

The 2005 food crisis in Niger, for instance, was not a national but a regional emergency, which could have been solved if regional procedures had been put in place to share resources between Niger, Nigeria and Mali. This must be the priority for food security policies.

IPS: What role could Europe play in constructing these regional clusters? GSM: Europe’s organisational model for regional agriculture cannot be replicated but the EU could assist in setting up African region-wide systems.

But these regions’ agricultural products must also be protected, from time to time. The European CAP was built on these principles and still protects European farmers to some degree. The CAP so far focuses on markets, resources and consumer protection. In 2013, when the CAP is to be reformed, I think it should include food security as one of its main objectives.

European farmers, when you talk to them, are preoccupied by their production and purchasing power, of course. But they are also conscious of the food security problems the world faces. Incorporating world food security in the CAP’s objectives would be a positive evolution. It would help decompartmentalise the EU from global agriculture.

Excerpt:

By Hilaire Avril
PARIS, Apr 19 2009 (IPS)

Earlier in the decade, biofuels were hailed as the energy panacea, the silver bullet to solve oil shortages and abide by environmental concerns. The European Union recently took the lead in imposing the use of these liquid or gaseous fuels made from plants.

But the green credentials of biofuels have since been disputed. The total amount of energy needed to transform biomass into ‘‘green’’ fuels offsets most of the energy biofuels save when the entire process or life-cycle is considered.

Soils must be fertilised. American corn and soybeans, French sugar beet, Brazilian sugar cane or peanuts from Benin must undergo heavy, water-intensive industrial processes to become fuel, and the final product has to be transported, mostly by truck.

These steps dramatically increase biofuels’ overall carbon footprint, and has spurted a worrying new surge of deforestation in many developing countries.

But this is not the reason why a coalition of French development activists is furiously campaigning against biofuels.

The French chapters of Friends of the Earth, Oxfam, Catholic Committee against Hunger and for Development (CCFD) and others have joined forces under a single watchword: ‘‘Biofuels won’t feed the planet.’’

Friends of the Earth is an international network of non-profit organisations campaigning for sustainable societies and Oxfam France is engaged in a global non-governmental movement working for a just world.

According to the coalition, the figures speak for themselves: 232 kilos of maize are needed to produce 50 litres of ethanol – roughly enough to fill an average car tank, or enough to provide the amount of calories a child needs in a year.

But last December, the 27 EU countries agreed on Brussels’ ‘‘Biofuels Directive’’ and made filling car tanks with biofuels much more profitable than feeding the hungry.

Part of the EU’s comprehensive ‘‘Climate and Energy Package’’ aimed at cutting greenhouse gases and cutting energy consumption, the directive requires all EU members to rely on biofuels for 10 percent of their transport fuel needs by 2020.

‘‘We have won the battle of ideas, but lost the legal battle,’’ Ambroise Mazal, who heads CCFD’s side of the campaign against biofuels, told IPS. ‘‘Many European officials have realised the adverse effects of biofuels but nobody dared amend the ‘Package’ the 27 EU member states had agreed to.

‘‘It would have amounted to opening Pandora’s Box in the course of what they dubbed ‘the negotiation of the century’, given its complexity,’’ he explains.

‘‘The problem remains that, as of today, the EU can produce a mere two percent of the required total. European agriculture could potentially account for half of the required ten percent, but the rest will have to be imported from outside the EU,’’ Mazal says.

This artificial bloating of demand is now widely acknowledged as responsible for the 2008 upsurge in food prices, much more so than ‘‘the speculators’’ that many politicians lambasted last year for diverting food from the dinner table to the fuel tank. Subsidies and tax incentives have already made it irresistibly profitable for European agriculture to turn to ethanol or bio-diesel crops.

Responding to European hunger for biofuel, many African countries have expanded single-crop farming surfaces. But only large businesses have the resources and capital to reach the critical size that allows for economies of scale which make the venture profitable.

Smallholders, which in countries like Benin account for the majority of land use, and up to 80 percent of employment opportunities, do not benefit from the biofuel windfall. In addition, land, water and other limited resources are being diverted from scarce food-producing crops.

Several international institutions, including the International Monetary Fund and the Food and Agriculture Organisation, have acknowledged in recent years that the increasing demand for biofuel crops has catastrophic social, economic and nutritional impacts on developing countries and their already tense food resources.

Despite this, several African states have drafted policies in favour of biofuel crops.

In Senegal, which was affected by food riots a year ago, up to 200,000 hectares (10 percent of the country’s arable lands) might be set aside for jatropha crops for biofuels.

Second and third generation biofuels are supposed to limit environmental and social impacts because of either the use of non food-producing crops or biomass such as algae and fungus.

‘‘That’s a sham,’’ insists Mazal, ‘‘because second generation fuels made from non-edible crops still take up arable lands and the research is far from developing sustainable biomass in laboratories.’’

According to him, ‘‘the only remaining lever is on how the EU’s directive will be transposed into national law. France had initially set targets even more ambitious than those of the EU, aiming for ten percent of biofuels to be used by 2015 but these have now been revised to seven percent by 2010 in order to save existing investments.

‘‘Still, that has consequences: in 2007, 65 percent of French rapeseed oil was used for biofuels, and we’ve had to import rapeseed oil for food consumption, generally from countries which can’t afford to spare it,’’ Mazal argues.

A growing trend towards the environmental and social certification of biofuels aims at insuring that they have limited adverse effects on soils and farmers. But these criteria do not take into account the rising food prices or the structural bias of biofuels towards large landholders.

‘‘The next step announced by the EU is the commissioning of a study on the comprehensive impacts of biofuels in developing countries, to be handed in by 2014,’’ states Ambroise Mazal. ‘‘But it doesn’t seem like the European Commission has any corrective actions in mind, even by then.’’

Excerpt:

By Hilaire Avril
PARIS, Mar 26 2009 (IPS)

Experts agree the current financial crisis is largely due to economic deregulation. But despite the downturn’s dramatic effects on developing countries, the European Union (EU) is still pushing for the trade liberalisation deals called economic partnership agreements (EPAs) to be signed by African governments.

In their proposed form, these agreements would open these countries to the full brunt of international competition. For African countries, the timing could not be worse.

Dominique Strauss-Kahn, who heads the International Monetary Fund (IMF), recently told African leaders gathered in Dar Es Salaam that ‘‘even though the crisis has been slow in reaching Africa’s shores, we all know that it is coming – and its impact will be severe’’.

According to IMF figures, growth in sub-Saharan Africa is expected to slow to three-and-a-quarter percent in 2009, from five percent in 2008.

‘‘The threat is not only economic. There is a real risk that millions will be thrown back into poverty,’’ Strauss-Kahn warned from the Tanzanian capital.

For many African countries, the pendulum is already swinging.

Global demand for many commodities has plummeted in recent months, depriving many African countries of much-needed export revenue.

According to Oxfam France, which campaigns for development, foreign direct investment in African countries and the African diaspora’s remittances to the homeland (estimated at 251 billion dollars for 2007) have both been decreasing since the end of last year.

Bilateral development assistance has also started diminishing, as developed countries’ purses shrink with the growing recession.

Regardless, ‘‘the European Commission is pressing for the (economic partnership) agreements to be signed into full force by the East African Community, the Southern African Development Community and West African states before the end of its current mandate in September 2009’’, writes Oxfam.

Signing and implementing EPAs is their current embodiment could deepen the economic and social crisis affecting many African nations since food prices started skyrocketing in 2008.

EPAs would further weaken local agricultural production and markets, by exposing them to increased competition from stronger, larger and heavily subsidised European farmers.

Tearing down protective tariffs, as EPAs require, would also cause ‘‘a drastic fall in customs revenues, and further tighten African states’ budgets,’’ according to Oxfam.

Some African leaders have decided to take their views to European parliaments themselves.

At the beginning of this month, political and labour union representatives from Burkina Faso, Cameroon, Chad, Ethiopia, Kenya and Zambia have set on a tour of the French, Belgian, British, German and Spanish capitals to meet with government officials and farmers’ unions.

The delegation – among which were Catherine Kimura, chairperson of the trade committee of the East African legislative assembly, and Mary Sakala who represents the Eastern and Southern Small Scale Farmers in Zambia – had a simple message: in Africa, the economic and financial crisis has already turned into a food crisis, and EPAs will make it worse.

Talking to French, German and European members of parliament, the delegates reminded them of the previous trade regime’s fundamental principle: the now-defunct Lomé agreements were based on the rule of equality between countries, whether from the North or South.

‘‘Most African parliaments have not been included in these negotiations,’’ says Jean-Denis Crola, responsible for the economic justice campaign with Oxfam France. ‘‘There is also a strong demand for larger involvement of civil society in these negotiations, as in some countries, 80 percent of the labour force are agricultural workers,’’ he adds.

Some sectors have already been devastated. In Burkina Faso, tomato puree imports have almost quadrupled between 1994 and 2002. Cheap EU-subsidised preserves have flooded markets, leaving tens of thousands of local producers bankrupt or unemployed.

Consequently, in 2007 60,000 tonnes of Burkina Faso’s tomatoes were left to rot, as consumers bought from the European competition, according to Oxfam figures. Togo and Ghana are facing a similar threat.

According to Catherine Kimura, ‘‘rather than maintaining Africa’s dependency on developed countries’ benevolence, the current food crisis highlights the need for a fair agreement, focusing on development’’.

The crisis’ effects could prove to be even more catastrophic on the long term.

‘‘Tighter global finance will restrict private investments and trade credits. The global downturn will see lower export demand, commodity prices and remittance flows for poor countries, and is threatening social sector provisions and social stability,’’ writes the British Foreign Office, ahead of the Group of 20 summit to be held in London on April 2.

Some Western leaders have started acknowledging the urgency of the crisis publicly.

Douglas Alexander, British Secretary of State for International Development, recently forecast that ‘‘the prospects for achieving the Millennium Development Goals face serious threats, as the global economic crisis undermines progress in developing countries and erodes support within developed countries’’.

And yet, support within developed countries, if often fragile, is vital. Olivier de Schutter, the United Nations’ Special Rapporteur on the Right to Food, stated that ‘‘the decades-long liberalisation of agricultural trade has led to the strengthening of a globalised food system where prices are fixed by dominant players with excessive market power, a situation which is detrimental to the majority of farmers and countries’’.

EPAs, by further extending the liberalisation of agricultural trade, would reinforce this dominance.

‘‘The idea of a ‘level playing field’, even after the removal of trade-distorting measures, is meaningless given the huge differences of productivity levels between least developed countries and developed countries,’’ de Schutter added.

‘‘These differences are the result of more than 150 years of planned protection in industrialised countries, followed by subsidised liberalisation,’’ he acknowledged, concluding the United Nations meeting on food security held in Madrid in January.

Now, African representatives are requesting similar protection, at least while they weather the storm.

Excerpt:

By Hilaire Avril
PARIS, Dec 1 2008 (IPS)

Just like humanitarian relief, fair trade is a field that attracts passionate individuals with complex world views. Most are not in it for the money. But it is also rife with controversy, as personalities driven by conviction often clash over principles and practice. No two fair traders are alike, which probably explains many of their arguments.

The French Platform for Fair Trade (called Plate-Forme pour le Commerce Équitable in French) is one of France’s largest collectives, representing 39 organisations.

To find the Platform’s offices, one must reach the outer limits of Paris’s northern ring road, cross a disused train yard covered in weeds, locate the railroad workers’ union building (easily made out with its broken windows and bright red posters calling for strikes) and climb up the flights of dusty stairs to a corridor with mostly empty offices.

This is where Julie Maisonhaute, an agronomic engineer, heads a team of women in their thirties who coordinate and promote fair trade in France. Maisonhaute and her colleagues are quite representative of the younger generation of French fair trade activists.

‘‘No one is here for the money, given the modest wages the PFCE pays,’’ she says. ‘‘But they are still incredibly competitive positions to get, because few jobs allow you to work for something you feel strongly about.’’

All members of her team have a similar story. ‘‘We come from different backgrounds – economics, agronomy or international relations – and most of us have graduate degrees. We have all lived a few years in the South,’’ she explains.

Maisonhaute was ‘‘a traveller with a conscience’’, backpacking in-between semesters at her French university. When she graduated, she was already involved with several non-governmental organisations, eventually joining one working in fair trade.

Further up the northern Paris subway line are the offices of Minga, a federation which has been representing 80 small fair trade producers, farmers and importers for the past 20 years. The federation’s offices are a ten-minute walk from the train stop, along the banks of a Seine tributary, across the grey streets of a working-class and largely immigrant suburb.

Michel Besson, the founder of Minga and a long-time Fair Trade activist who is in his fifties, has a rather different story. A former factory worker in the a small town in the centre of France, he decided to follow his partner, a nurse, when she moved to Colombia to assist rural villages in developing health care structures in 1983.

‘‘We spent two years in the mountain, in a village in the province of Cauca, until the guerrillas kicked us out,’’ Besson recalls. ‘‘We had to move to Bogota, and that’s where I met craftspeople who couldn’t find an outlet for their pottery in the hillside slums.’’

‘‘When we got back to France in 1987, we founded an association to promote crafts from developing countries, and that’s how Minga was eventually created,’’ he reminisces with a smile.

‘‘Historically, fair trade in France was a religious initiative,’’ Besson says, alluding to Catholic Church committees which first started buying goods from small cooperatives in poor countries in the 1950s rather than simply donating money.

But those were the old days. According to Besson, fair trade now has everything to do with politics. ‘‘Citizens must reclaim the economy,’’ he says between two cigarette puffs. ‘‘Trade is not a subject taught in school, which is a shame because the way trade is organised determines the lives of so many of us around the planet.

‘‘We should start by making sure the peasants who feed us get a fair deal,’’ he adds.

Putting philosophy into practice, the Minga offices house a documentation centre where the association helps prospective fair traders develop their operation.

As Besson walks in to pick up a copy of their latest publication – a slim paperback summarising the history of ethics and trade from Aristotle to the present day – a tall Senegalese in his twenties and his blonde girlfriend are explaining their business plan to import biologically grown nuts from northern Senegal to France.

Minga helps them to navigate customs and to find outlets for their products. But rather than holding a hard-nosed business discussion, everyone trades news about the state of the coming harvests in West Africa, which is threatened by the latest bout of drought affecting the region.

However, the professionalisation of fair trade, using the latest marketing and consumer survey techniques, is a rather recent trend.

Nicolas Messio, the head of the Alter Mundi network of Parisian fair trade shops, spearheads the movement. Now in his thirties, he graduated from a business school. But the careers his classmates were choosing did not appeal to him. ‘‘Fair Trade was a personal choice, as far as I’m concerned,’’ he remembers.

‘‘I took this class on corporate social responsibility and that sparked a lingering interest in ethical commerce,’’ he explains, sporting trendy black, fair trade sweater and jeans and relaxing over a cup of fair trade espresso in Alter Mundi’s fashionable Bastille shop.

‘‘Fair trade needs to get with the programme,’’ Messio argues, alluding to the bitter and ongoing debate between operators who favour stacking supermarket shelves with ‘‘ethical’’ products and those critical of retailing multinationals’ labour practices.

‘‘Our approach is closer to the ‘Anglo-Saxon’ way of doing business. We start by looking at the market, not the producer,’’ he adds. Under his direction, Alter Mundi carefully studies its market. ‘‘Seventy-five percent of our clients are women, typically in their twenties, educated and with a social conscience.’’

‘‘This is true of all our shops, but particularly so in this neighbourhood (Paris’s 11th arrondissement, or municipal division), which is very ‘bobo’,’’ Messio explains, using the French diminutive for ‘‘bourgeois-boheme’’ (Parisian slang for trendy and lefty) with self-deprecating irony.

Alter Mundi thinks diversity is not only a matter for producers, but for retailers as well. ‘‘We hire most of our staff from vulnerable backgrounds, many are disabled, ex-convicts or former addicts who need a helping hand to get back on their feet,’’ he says.

Whatever their ethics and economics, fair traders are as unique as the coffee beans they import. It almost makes one wish they would, once in a while, drink from the same cup.

Excerpt:

By Hilaire Avril
PARIS, Sep 26 2008 (IPS)

The idea of making trade fair is as old as ethics itself.

French fair trade literature is fond of referring to Aristotle’s ‘‘Nicomachean Ethics’’, in which the Greek philosopher emphasises that ethics depend on context. The same can be said about fair trade, a concept which constantly evolves.

In Europe and the United States, several 19th century ideologies inspired communities to build self-sustaining villages around principles such as the count of Saint Simon’s utopian brand of socialism, which advocated equitable commercial relations as a pillar of social harmony. Most were short-lived.

After World War II, many of those who proffered a 20th century vision of ethical commerce were inspired by religion.

In the United States, the Christian Mennonites’ Central Committee started selling handicrafts from developing countries in charity shops in 1946.

Similarly, in France, l’Abbé Pierre, a French Catholic priest and a tireless campaigner of homeless people’s rights, set up the first network of Emmaüs shops, which sold used clothes and fair trade products to benefit his many causes.

However, this moral incarnation of trade was more akin to benevolent donations and charity than to business. Just as for humanitarian relief, the 1960s were the decade that made fair trade secular.

The term itself was coined after the 1968 United Nations Conference on Trade and Development (UNCTAD), which was set out to ‘‘maximise the trade, investment and development opportunities of developing countries’’ under the slogan ‘‘trade, not aid’’.

Non-governmental organisations, such as the UK’s Oxfam and France’s Artisans du Monde (Artisans of the World) started buying, distributing and selling fair trade goods through their own networks of shops to Western consumers.

The profile of the typical fair trade consumer changed dramatically. There was a departure from the religious goodwill of the post-World War II period. In an era of increasing independence from colonial powers, buying goods that guaranteed a decent price to poor farmers from developing countries became a political act.

But fair trade sale volumes did not take off until the last decade, growing almost ten-fold since 2000 (according to figures from the Fairtrade Labelling Organisations International, a non-profit multi-stakeholder organisation that develops fair trade standards) to exceed three billion dollars in 2007.

‘‘In France, fair trade sales have increased by close to 30 percent a year,’’ says Julie Maisonhaute, who coordinates the French Platform for Fair Trade, a group of 39 organisations.

Although modern fair trade started with Latin American coffee, a commodity which still accounts for most of the volumes, several new trends account for this boom. But many are highly controversial.

According to Nicolas Messio, the CEO of Alter Mundi, a Parisian chain of glamorous fair trade shops, the recent development of new ranges of fair trade products accounts for the sector’s expansion.

‘‘Fair trade has moved away from Peruvian Piccolos; we launched prêt-à-porter collections for young consumers which now account for about half of the 2,000 product references in our shops,’’ he says.

‘‘Following the sweat shops scandals that affected many multinational clothing corporations, people became sensitive to the labour conditions their clothes are made in,’’ he explains. ‘‘But they still want to wear fashionable trainers and t-shirts – from young designers with a conscience,’’ he adds.

Fair trade’s increasing fashion-consciousness accounts for the recent boom in ‘‘fair’’ cotton trade from West Africa, a region historically lagging behind Latin America and Asia. Fair trade in coffee and crafts produced in Africa has picked up in recent years.

‘‘Fair and ‘green’ cosmetics sales are also growing fast,’’ says Messio. ‘‘That’s because it affects people’s self-image: nobody wants to put randomly sourced stuff on their face,’’ he says.

Fair trade is not only expanding its range of products, but is also changing the way it does business. Mainstream retail chains and supermarkets are increasingly stocking their shelves with products labelled ‘‘ethical’’.

In what many saw as the final move away from traditional socially conscious trade and towards professional distribution, Max Havelaar, one of the largest distributors of fair trade products, struck distribution deals with several of France’s largest supermarket chains.

The decision sparked a harsh and ongoing argument within the fair trade movement.

‘‘Fair trade in supermarkets is a contradiction in terms,’’ says Michel Besson, who heads Andines, a French online distributor of fair trade goods. ‘‘Structurally, a large distribution chain’s motive is to maximise profits and minimise costs. That goes against guaranteeing small producers a fair price for their labour – decent wages,’’ he argues.

‘‘This new trend is a world away from the initial ideals of self-management, transparency and fairness,’’ he says.

But Elodie Martin of Max Havelaar disagrees. ‘‘Specialised distribution in exclusively fair trade shops has a limited impact, as it only reaches activist consumers,’’ she says. ‘‘In order to achieve volume and make a difference, we need to go through mainstream distributors and supermarkets.’’

In the face of the heated debates between fair trade organisations, French authorities convened a round table to try to establish a legal standard. But three years of rowdy discussion yielded no agreement.

‘‘A government-backed standard would be in everyone’s interest,’’ argues Maisonhaute. ‘‘It would reassure consumers and open access to public tenders, but everyone has different standards and criteria for what constitutes fair trade,’’ she explains.

In the absence of a consensus, the French ministry for the economy created a national commission for fair trade in 2005. But so far, this fair trade watchdog exists on paper only.

The persisting lack of public regulation may precisely be the reason why fair trade in France is growing exponentially, even though it fuels an increasingly bitter controversy.

Excerpt:

By Hilaire Avril
PARIS, Sep 15 2008 (IPS)

Fair trade is held up as promoting fair prices for producers and guaranteeing social and environmental standards. These ideas are neither new nor controversial. But the recent boom in fair trade has drawn attention as standards and models multiply while authentication mechanisms lag behind.

Women weaving baskets for a fair trade export business in Kampala, Uganda. Credit: Wambi Michael/IPS

In 2007 the figure jumped to eight out of 10. In 2006, 42 percent of French consumers in fact purchased a fair trade product.

According to the French Platform for Fair Trade (Plate-Forme pour le Commerce Équitable, or PFCE), a collective of 39 organisations, the sector’s European turnover amounted to 1.25 billion euros in 2006, and fair trade sales have jumped by 20 percent every year since 2000.

At the other end of the chain, Artisans du Monde estimates that fair trade benefits 1.5 million small producers, the vast majority of whom are from developing countries. But what makes fair trade so fair to them?

Most fair trade organisations, whether buyers, importers, distributors or certifiers, operate under a self-imposed charter. Respecting a number of criteria will earn producers the right to use a network’s label and grant their product access to a fair trade distributor’s shelves.

But charters are as diverse as operators. Umbrella organisations such as the International Fair Trade Association, which claims 300 members, have a hard time unifying operational standards.

For Julie Maisonhaute, coordinator of the PFCE, trade is fair when it abides by three principles: paying a fair price for the product, assisting producers’ communities and advocating a more equitable form of international trade.

‘‘A fair price is a price which allows artisans and farmers to make a decent living from their work,’’ says Maisonhaute. Fair trade buyers and importers thus commit to paying a fixed price, regardless of the product’s current price on often volatile world markets.

According to the PFCE, producers who sell to fair trade operators earn 20 to 30 percent more than their product would normally fetch on the market.

Some critics argue that guaranteeing a minimum price is useless if buyers do not ensure the purchase of a certain volume every year.

Although PFCE buyers do not guarantee volumes to be purchased, they commit to buying over a period of time from the same producers. ‘‘It doesn’t work if it’s a one-shot thing, if we place a single order and reconsider everything next year,’’ Maisonhaute believes.

Part of the price is paid in advance: ‘‘Importers commit to pre-paying a part of their order, so that small producers have something to live on during the year of production,’’ she adds.

This also helps covering the costs of adjusting production to the importers’ standards of quality. The process is sometimes long and costly but necessary for importers to be able to sell their products in the West.

The PFCE’s second principle is to assist producers by helping them organise their community. ‘‘Fair trade seeks to work in priority with producers who are organised into farmers’ cooperatives, artisans’ unions and even private companies, as long as their employees have a say in governance,’’ Maisonhaute explains.

‘‘We also help them getting organised by bringing lone producers into such structures.’’

Finally, the PFCE insists on a more political aspect: ‘‘Our members pledge to advocate this different conception of international trade to consumers, institutions and elected officials. Otherwise this is only a business,’’ she argues.

Minga, the other major fair trade network in France, also insists on the political side of fair trade. ‘‘Transparency is of the essence. If you can’t prove to the public and the media that it’s fair, then it’s not,’’ says Michel Besson, Minga’s president.

Minga differs from PFCE by insisting on ‘‘North to North’’ trade within developed countries. It promotes ‘‘local solidarity partnerships between producers and consumers’’ which bypass major distribution chains and supermarkets.

It also advocates fairness of the entire supply chain and does not apply its charter exclusively to the production phase. ‘‘There is no such thing as fair trade yet because it’s a constant struggle to make the entire chain fair,’’ Besson admits.

‘‘For instance, most goods are shipped and we insist on transporters guaranteeing their sailors decent social conditions in line with the International Labour Organisation’s guidelines,’’ Besson explains.

‘‘We also pay attention to the environmental impact of transporting goods. What is the benefit of buying a fair trade tomato in France, if it comes from, say, Poland and burns a litre of diesel for each unit?’’ Besson asks.

But, whatever the definitions, the charters and the organisations’ role in the chain, both the PFCE and Minga admit that certification is the weakest link in ensuring that trade is indeed fair.

Both networks rely on self-evaluation. There is no independent verification that producers do in fact abide by a network’s charter and principles.

In order to join Minga and have its products sold by the association’s outlets, a producer must fill in a questionnaire with about 400 questions.

‘‘We also encourage a participatory system of verification where a member organisation visits another and evaluates economic, social and environmental practices,’’ says Besson.

For Maisonhaute, it is unthinkable to systematically verify production standards on the ground in developing countries: ‘‘Given the number of producers and the distances to cover, the cost of travelling to each location would be unbearable.’’

This allows the Adam Smith Institute, a British think tank that promotes free trade and is one of fair trade’s harshest critics, to denounce what it sees as a marketing initiative rather than a new model for economic justice.

‘‘Just 10 percent of the premium consumers pay for fair trade actually goes to the producer. Retailers pocket the rest,’’ the Institute claims in a report titled ‘‘Unfair Trade’’.

Trying to cut the debate short, fair trade operators in France called on public authorities to lay down a set of standards acceptable to all in 2005.

But the proposed norms never made it into law as the different networks have not, so far, agreed on a definition of ‘‘fair trade’’.

Excerpt:

By Hilaire Avril
PARIS, Aug 11 2008 (IPS)

According to a recent report by the nongovernmental organisation ActionAid, West African seas are being devastated by legal and illegal overfishing, while local fishing industries decline. Moreover, the economic partnership agreements in their currently proposed form only exacerbate this problem.

The overfishing of West African coastal waters, often by large European trawlers and sometimes by ‘‘fishing pirates’’ who trawl without any authorisation, has largely depleted local fish stocks.

This has a direct impact on the rising rate of unemployment and on the ever- increasing flow of West Africans who embark on perilous journeys to Europe, in search of a better life.

‘‘The largest numbers of unemployed fishers ever are trying to emigrate to Europe, using their small fishing boats and pirogues, which leads to a number of people dying on the high seas,’’ says Moussa Demba Dembele, a Senegalese economist who coordinates the Forum for African Alternatives’ research on development.

The ActionAid report is titled ‘‘Selfish Europe: How the Economic Partnership Agreements would further contribute to the decline of fish stocks and exacerbate the food crisis in Senegal’’.

It indicates that one in six of the working population is in the fishing industry and that fishing generates over 600,000 direct and indirect jobs.

Nevertheless, many West African countries have agreed to grant European fishing vessels access to their territorial waters in exchange for fees, as set out by Fishery Access Agreements initiated in 1979.

According to ActionAid, ‘‘the European Union can satisfy only 50 percent of its internal demand for fish from its own fish resources. The deficit has been filled for years through access” to the fishing waters of the African, Caribbean and Pacific (ACP) countries.

Especially West African coastal waters, relatively close to Europe, has been plundered in recent years.

Senegal’s catch volumes have fallen from 95,000 tons to 45,000 tons between 1994 and 2005, according to an estimate of the Senegalese department of maritime fishing.

‘‘European fishery operators present in Senegalese waters contribute significantly to the overexploitation of fishing stocks and provide little long term gains for the industry,’’ the ActionAid report argues.

Senegalese fishers, like most of their West-African counterparts, fish from pirogues which do not allow them to go far out at sea, where large-haul trawlers operate.

As a consequence of the depletion of stocks, ‘‘from a peak of 10,707 pirogues in 1997, the fleet declined to a mere 5,615 in 2005”, the report indicates.

‘‘Many fishing companies are only operating part time due to the severe supply deficits of high value species and the average volume of fish exports has fallen by a total of 32 percent over the course of the past 15 years. This has led to companies laying off 50-60 percent of their staff,’’ it adds.

Dembele estimates that those Senegalese fisheries which have not gone bankrupt now operate at less than 50 percent of their capacity.

This has led the Senegalese government to decline renewing its fishing agreements with the European Commission in 2006 in an attempt to limit access to its fish and protect its industry.

Similarly, this was a factor in the Senegalese government’s decision not to sign the economic partnership agreement (EPA) the EU proposed, as according to ActionAid ‘‘the full economic partnership agreements proposed by the European Commission, which include services and investment provisions, are likely to lock in and worsen such practices”.

But putting the proposed EPA on hold has not stemmed the problem, as many European trawlers catch more fish than they are allowed to.

‘‘Companies which fish with a proper licence routinely exceed the quotas they are granted, as Senegal doesn’t have enough resources to patrol its waters,’’ Dembele explains.

Additionally, many industrial vessels routinely fish in areas reserved for small-scale fishing, which extends to six miles (9.65 km) off the coast.

‘‘Fishing authorities also have problems controlling boats that move from one fishing zone to another while crossing borders,’’ the report adds.

‘‘Trawler owners play with different licenses and, if they can’t get a license from Senegal, they have no problem obtaining one from a neighbouring country,’’ the report quotes Dame Mboup, director of Senegal’s fishing protection and surveillance agency, as saying.

Many large trawlers also fish without any form of authorisation license.

According to the Environmental Justice Foundation (EJF), a London-based nongovernmental organisation that monitors illegal fishing, the scourge of ‘‘pirate fishing’’ affects the entire region.

‘‘Between 1997 and 2001, aerial surveys of Guinea’s territorial waters found that 60 percent of the 2,313 vessels spotted were committing offences. Surveys of Sierra Leone and Guinea Bissau over the same period found levels of illegal fishing at 24 percent (of 947 vessels) and 24 (of 926 vessels), respectively,’’ the EJF writes.

Other European fishing companies have eluded the limits of quotas by resorting to the ‘‘senegalisation’’ of their fleet: ‘‘A European ship owner forms a joint venture to enable his boats to fly the Senegalese flag. This allows him to avoid strict controls and access to fish in waters reserved to Senegalese boats,’’ the report explains.

Such considerations drive ActionAid to recommend ‘‘a permanent suspension of the fisheries agreements, the imposition of biological rest periods and reinforced surveillance of territorial waters’’.

But restoring this policy space for West African governments would conflict with the interim EPAs. As currently drafted, the EPAs require ACP countries to further open their economies to European competition.

Excerpt:

By Hilaire Avril
PARIS, Jul 27 2008 (IPS)

Brussels is tempted to skip the translation of the interim economic partnership agreements (EPAs) into the 23 official European languages because of concerns that some African, Caribbean and Pacific (ACP) countries may change their minds about signing the final agreements.

An internal European Commission document dated July 17, 2008, seen by IPS, reveals that ‘‘translating and legally verifying the languages of the interim EPAs that were initialled last year is proving more burdensome and time-consuming than originally foreseen.

‘‘With a view to speeding up the signing of all interim agreements in 2008 we suggest, exceptionally, to move away from the traditional way of establishing authentic texts in all official languages at the time of signature while agreeing to adopt them at a later stage,’’ it adds.

According to the document, the Commission is concerned that translating the bulky interim EPAs into the Union’s 23 official languages will cause delays. The Commission has adopted the position that, without the EPAs, a trade regime is perpetuated with the ACP countries that is not compliant with World Trade Organisation (WTO) rules.

‘‘The Commission has estimated that if we follow the generally accepted approach prior to signature, the process could well take us past Easter 2009. Such delays would have repercussions regarding WTO notification and legal security,’’ it says.

But beyond the time and effort needed to translate thousands of pages of trade agreements into 23 languages, it appears the Commission has a more far-reaching concern.

Translating the interim EPAs ‘‘may also increase political risks that certain ACP countries change their mind and decide not to sign the interim EPAs’’, the document explains.

By cutting short the time European Union (EU) members have to debate in their national languages whether they support EPAs, the Commission hopes that the agreements will be signed by the European Council before African, Caribbean and Pacific countries are able to amend their position.

The European Council consists of the heads of state or governments of the European Union and the president of the Commission.

Should the European Council indeed decide to sign the EPAs in their current form, the Commission would then be able to notify these interim agreements to the WTO. Once notified, EPAs would be much harder to renegotiate for ACP countries.

According to Jean-Denis Crola, responsible for the economic justice campaign with Oxfam France, ‘‘from day one, the Commission has used the issue of conformity to WTO rules as an excuse to cover up the real reasons it wants the sgreements to be signed as soon as possible.

‘‘This is not the real issue, as all commercial relations between the EU and ACP countries have been WTO-compatible since January 1. Even those countries that did not sign interim EPAs are covered by the Everything But Arms trade regime,’’ Crola says.

‘‘The real motivation behind the Commission’s approach is the fear that some countries may change their position and reject any form of agreement,’’ he adds.

Under the pretence of saving time, the proposed strategy is in fact to rush through the approval process and set in stone interim commitments from ACP countries.

In order for member states to be fully informed of the matters on which the Commission requests their approval, the European Union’s usual protocol is to translate treaties into all member states’ official languages.

In a 2005 press release, the Commission’s own directorate general for translation acknowledged that ‘‘the scale of [the EU’s] multilingual regime makes it unique in the world, and to some the extra work it creates for its institutions may seem at first sight to outweigh the advantages.’’

However, the directorate general for translation defended this policy as a prerequisite for democratic debate.

‘‘There are special reasons for it. The Union passes laws directly binding on its citizens and companies, and as a matter of simple natural justice they and their courts must have a version of the laws they have to comply with in a language they can understand,’’ it concludes.

The Commission document specifies that this is an exceptional departure from the protocol, ‘‘which was already tested in the Passenger Name Records Agreement signed by the EU and the US last year’’. This is an agreement on the exchange of passenger name records.

This document’s strategy is in direct opposition to the approach Christine Taubira, a French Member of Parliament representing Guyana, recently advocated in a report on EPAs commissioned by French President Nicolas Sarkozy.

It offered recommendations aiming at restoring confidence in a negotiating process which has often been marred by accusations of bad faith from both the EU and ACP countries.

One of these recommendations urges the EU to lift all linguistic ambiguities in order to foster increased clarity of the EPAs. It insisted that being informed in one’s native language is a basic principle of international law.

France, which is currently holding the rotating presidency of the EU, seems to have agreed that this recommendation was an essential step in a successful and equitable negotiation process.

However, as the recent spat between Sarkozy and EU Trade Commissioner Peter Mandelson has shown, the European position on the EPAs is still far from unwavering.

Sarkozy attacked Mandelson for pushing EPAs that will lead to a reduction in EU agricultural production and for EPA negotiations that ''influenced'' the Irish vote against the EU reform treaty.

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By Hilaire Avril
PARIS, Jun 17 2008 (IPS)

Some of the 35 African, Caribbean and Pacific (ACP) states that have initialled interim economic partnership agreements (EPAs) may still withdraw from the process – apart from the 44 states that have so far refused to sign EPAs with the European Union, according to researchers studying the fraught trade negotiating process.

‘‘There is certainly the possibility that some countries which have initialled interim EPAs may not go on to sign them, although we expect most to do so,’’ says Dr. Christopher Stevens, director of programmes at the Overseas Development Institute’s (ODI) international economic development group and co-author of a recent report on the EPAs.

‘‘The [European] Commission originally had June as the deadline for signature. That has been pushed back to September, and some member states believe that to be optimistic,’’ he adds.

‘‘Whether full EPAs will ever be finalised, as envisaged, remains open,’’ says Dr. Mareike Meyn, a researcher with the ODI and co-author of the comparative analysis of the EPAs. The ODI is a British think tank working on development and humanitarian issues.

The report highlights that ‘‘the EPA process has not been an easy or friendly one; words and deeds have often been at odds, and tension has flared up.

‘‘Lack of capacity has also hampered the effective consultation, involvement and participation in the EPA process of ACP civil society, private sector and parliamentarians…

‘‘As a result, the EPA process has generally not been effectively embedded in national policy processes in the ACP and in extreme cases it has generated a general public hostility towards the EPAs,’’ it adds.

Meyn argues that the European Commission should ‘‘talk to the countries, and try to find pragmatic solutions.

‘‘If a country, for instance, doesn’t want to open up its services [sector], public procurement or intellectual property rights, which the EU would like to include in the full EPAs, then there is no sense in pushing through these reforms if they are not wanted by the country,’’ she concludes.

The EPAs are almost as numerous and diverse as the countries negotiating them. Stevens and Meyn wrote the report to chart the progress with the EPAs, along with Jane Kennan and the European Centre for Development Policy Management (ECDPM). The report is called ‘‘The new EPAs: Comparative Analysis of their Content and the Challenges for 2008’’. The ECDPM is an independent foundation working at improving ACP relations.

The report sheds light on discrepancies between the EPAs and offers insight into what might improve negotiations between countries of the ACP block and the European Commission.

For close to 30 years, trade between Europe and ACP countries was regulated by the 1975 Lomé agreements and their successor, the Cotonou treaty. In the spirit of these treaties, preferential access to the European market was granted to ACP countries, in order to promote growth and development in what have been some of the most destitute regions of the world.

In 2000, the Cotonou agreement was signed in Benin's largest city by 79 ACP countries and the European Union. Its most radical departure from the previous accords is its trade agenda, which is to be embodied in complex treaties known as EPAs.

According to Meyn, ‘‘these agreements are very different from Cotonou and Lomé, because they are not preferential, but reciprocal trade agreements’’.

Whereas Lomé provided regulations according to which Europe favoured ACP exports, Cotonou established the basis for a new, reciprocal trade regime with the EPAs.

Under existing World Trade Organisation rules, ACP countries are now required to open their markets to ‘‘substantially all trade’’.

However, the benefits of EPAs to ACP countries are not clear. ‘‘About 98 percent of ACP products were already exported duty free to the EU before the EPAs. Receiving full duty-and-quota-free market access under the EPA only improves the EU’s access to ACP markets,’’ Meyn says.

‘‘On the other hand, the challenge of opening up their markets to about 80 percent of European goods is huge for many ACP countries,’’ she adds.

According to the authors of the report, it ‘‘has been described as 'encyclopaedic' – another way of saying 'mind bogglingly complex'. If so, it reflects the character of the EPAs themselves’’.

It describes a wide variety of situations. As of December 2007, 18 African, 15 Caribbean and two Pacific states out of 79 ACP countries had initialled interim (that is, partial) EPAs.

But most agreements differ with regards to the tariff liberalisation schedules; their impact on regional integration initiatives; as well as on market opening to the EU. Some of these discrepancies hold implications for development.

For instance, ‘‘no clear pattern can be identified that the poorer countries have longer to adjust than the richer ones or of the EPAs being tailored to development needs’’, according to the report.

Moreover, differences in the agreements can be attributed to the individual negotiating capacity of countries.

Observing that countries have deals that reflect their negotiating skills, the authors believe that there is a need to reduce negotiation asymmetries between the EU and some ACP countries.

‘‘This needs to be done through adapting the pace of negotiations as well as the style of interaction between the parties and through capacity-building measures under the Aid-for-Trade initiative,’’ according to the report.

Another worry is that ‘‘there is little coherence between the EPA agenda and the regional integration processes in Africa. One particular concern has been that countries in the same economic region might liberalise different baskets of products and so create new barriers to intra-regional trade in order to avoid trade deflection’’.

Negotiations for the EPAS started in 2002 with the EU setting the deadline for December 31 2007. However, the deadline was missed by most states. No region except the Caribbean was able to finalise the negotiations towards an all-embracing EPA in time.

The Commission therefore agreed to EPAs covering trade in goods only, and to continue negotiations on services, intellectual property and other outstanding issues.

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By Hilaire Avril
PARIS, Jun 4 2008 (IPS)

According to the French constitution, France has no minorities. French law makes it illegal to record citizens’ ethnic origin or religion. But in the face of mounting discrimination, France recently introduced corrective institutions. However, the system is still in its infancy.

After World War II, memories of the Vichy regime which collaborated with Nazi Germany, institutional racism, and the holocaust led the drafters of France’s constitution to outlaw the recording of people’s ethnic groups or origins.

In the eyes of French justice, one is simply French or foreign. And the national motto, “Liberty, Equality, Fraternity” applies to all French.

But today, this also means ethnic or religious statistics cannot be used for positive discrimination in favour of the most destitute.

There is increasing doubt about the government’s ability to correct what it cannot measure, particularly ethnic or religious prejudices. As the racially polarised riots of 2005 exposed in Paris’s poorer suburbs, there is a widening gap between official equality and the reality of every day life in many parts of the country.

In 2005, the French government therefore created the High Authority against Discrimination and for Equality (HALDE, in its French acronym). The institution’s mandate is to provide legal assistance to victims of discrimination, as well as to document the problem and promote best practices.

“The French model for integration is that of a melting pot, not a salad bowl,” Mayada Boulos, spokeswoman for HALDE told IPS. “That is to say, it has always rejected ‘communitarianism’ (the segmentation of citizens along ethnic or religious lines).”

Most Anglo-Saxon countries favour a “different but equal” approach to questions affecting national minorities. This allows authorities to draw statistical tools registering one’s ethnic origin, religion, or sexual orientation on a voluntary basis, and to design corrective policies.

On the contrary, Article I of the French Constitution states: “France shall be an indivisible, secular, democratic and social Republic.” This is taken to mean that no French citizen can claim preferential access to employment, social housing and – until recently – education.

In order to prevent positive as well as negative discrimination, French law thus prohibits differential treatment based on a set of 18 criteria: adherence to a union, age, disability, ethnic, national or racial origin, family, situation, gender, genetic characteristics, health, mores, origin, physical appearance, political opinions, pregnancy, religion, sexual orientation, and surname.

Victims of such discrimination can address HALDE, which may advise the claimant, mediate with the culprit, and provide legal counsel should the case go to court.

A quick look at French social networking websites, a booming industry, shows registration forms systematically avert questions relating to a candidate’s religion or ethnic group. This is a marked difference from U.S. websites, or Indian matchmaking sites, where one is asked to detail his or her religion, region of origin, as well as caste in some cases.

But France’s many legal instruments aimed at fighting discrimination did not impress Gay J. McDougall, the United Nations Expert on Minority Issues who visited France in September 2007.

According to her findings, “racism is alive, insidious and clearly targeted at those ‘visible’ minorities of immigrant heritage, the majority of whom are French citizens.

“People who have worked hard, played by all the rules and truly believe in the principles of the French Republic are trapped in socially and geographically isolated urban ghettos, with unemployment in some areas over 40 percent. They feel discriminated against and rejected by rigid notions of French national identity to which they do not conform,” McDougall commented after a ten-day visit.

HALDE does not debate the gap between theory and practice. “French law offers decent protection against discrimination. The problem is its enforcement,” says Boulos.

Home of the 35-hour workweek, France is notoriously protective of labour rights. “Regardless,” says Boulos, “50 percent of the complaints HALDE received in 2007 related to employment. Of these, a third pertained to recruitment, and two-thirds to career progression.”

Some institutions have decided to take matters into their own hands. With a view to diversifying its student body, the Institute of Political Studies (better known as ‘Sciences-Po’ and alma mater to many a generation of French politicians) decided in 2001 to design a special selection process. Candidates residing in areas designated as under-privileged were to be admitted on account of their school grades rather than have to go through the traditional competitive exam.

The initial reaction from the public and among many students of the notoriously elitist university was lukewarm. Many decried what they perceived as unequal treatment. However, “the controversy the idea of this reform sparked in 2001 has yielded, in the space of a few years, to a broad consensus,” writes Cyril Delhay, responsible for the scheme which is now being emulated in several other universities.

“In this instance, positive discrimination was made possible by the use of individuals’ addresses, which identified them as residing in impoverished areas without recourse to criteria of ethnicity,” Boulos explains.

“Admittedly, this is only a start, but we should heed the warning by Trevor Phillips (head of the United Kingdom’s Commission for Racial Equality) that a ‘multiculturalist’ approach amounted to ‘sleepwalking into segregation’,” adds Boulos.

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By Hilaire Avril
PARIS, Apr 24 2008 (IPS)

As it prepares to assume the presidency of the European Union in July one of the main issues on France’s agenda will be the economic partnership agreements (EPAs). But with less than three months to go, France’s official position concerning EPAs is still surprisingly unclear.

Officially, it is the European Commission sitting in Brussels which holds the mandate to negotiate EPAs with African, Caribbean and Pacific (ACP) countries on behalf of all members of the European Union (EU).

‘‘This has been used as a convenient excuse for France not to take sides in the debate for or against EPAs,’’ says Jean-Denis Crola, responsible for Oxfam France’s economic justice campaign. Oxfam is an international group of non-governmental organisations fighting poverty.

‘‘States are hiding behind the European Commission, which puts unbearable pressure on ACP countries to sign these EPAs,’’ Crola says.

‘‘Officially, France’s policy towards ACP countries is in favour of their economic development. However, the current government has not voiced its official stance on a single occasion,’’ according to Crola.

‘‘The government has managed to sidestep the issue and to dodge direct questions on EPAs both in Lisbon (at the EU-Africa summit held in the Portuguese capital last December) and during President Nicolas Sarkozy’s visit to South Africa a month ago,’’ he adds.

According to an official at the ministry of foreign affairs, who spoke on condition of anonymity, France is eager to ‘‘ensure privileged access to European markets for ACP countries’ products, in compliance with World Trade Organisation rules’’.

However, under the formula currently favoured by Brussels, the liberalisation of trade in goods and services between the EU and ACP countries would be reciprocal, thus exposing ACP economies to direct and overwhelming competition from European exports and companies.

This issue, which most worries critics of the EPAs, has not yet been officially addressed by France.

‘‘It’s very hard to figure out what the government’s position is, as it hides behind the European Commission,’’ concurs Frédéric Viale of the Association for the Taxation of Financial Transaction to Aid Citizens (known by its French acronym ATTAC). ATTAC is an NGO which promotes alternatives to neo-liberalism.

‘‘The matter is complicated by the fact that several French ministries are competent to address the issue of EPAs, and they appear to have conflicting views,’’ Viale says.

The ministry of foreign affairs, the ministry of agriculture and the ministry of foreign Trade all have a say in trade agreements.

‘‘According to our official contacts, the ministry of foreign trade thinks EPAs should allow for further deregulation and cover many more types of goods, whereas the ministry of foreign affairs sees a serious political problem with EPAs in their current form,’’ says Viale.

Crola confirms that the ministry of foreign affairs is more tepid than its trade counterpart when it comes to the EPAs: ‘‘Some officials have become more critical of the proposed agreements as they realise they are about to ‘lose Africa’.’’

‘‘After the council of EU development ministers, held last February, an official from the French ministry seemed to hint at a new policy more favourable to ACP countries’ development.

‘‘However, a couple of weeks later, it appeared the official was ‘promoted’ to the ministry for war veterans… We have not heard from the ministry (on this issue) since,’’ says Crola.

Now there seems to be growing concern at the ministry of foreign affairs over the recent food-related riots which affected several ACP countries.

According to the ministry official, ‘‘France would like to see the debate on EPAs include the issue of food security. In the current context of sustained and lasting increases in food prices, this should be an essential component of the sustainable development strategy we must develop with our partners, especially our African partners.’’

But if it is still unclear how and when the French presidency will arbitrate between these conflicting agendas, the ministry for agriculture’s position has always been unmistakably clear.

‘‘The ministry of agriculture has steadily been pushing for EPAs to be signed in their current form, as it wants to secure more markets for French products,’’ says Viale.

‘‘These debates within the government are not public, and dissenting voices are rarely heard. At the end of the day France’s position is aligned with that of the European Commission,’’ according to Viale.

The fact that French media largely ignores these issues does not help in shaping public opinion.

‘‘The issue of EPAs has never made the headlines in France,’’ says Viale. ‘‘We have a lot to achieve in terms of advocacy, in order for French public opinion to react to these matters and weigh in on the debate.’’

There has also been a contradiction between the Commission’s approach and the French ministry of foreign affairs’ approach.

Brussels has been able to apply a ‘‘divide and rule’’ approach to discussing EPAs. Bilateral negotiations between the EU and individual ACP countries are extraordinarily unbalanced, and developing countries can hardly resist the pressure to sign unfavourable treaties.

The French ministry of foreign affairs says, ‘‘France is especially committed to the regional integration efforts many ACP countries undertake and supports regional talks for negotiating EPAs.’’

However, this does not apply to Brussels’s strategy. ‘‘The EU aims at dividing ACP countries, by negotiating different agreements covering different goods and services for each country,’’ says Viale.

Crola was hopeful that some of these issues would be answered by European governments at the United Nations Conference on Trade and Development meeting currently underway in Accra, Ghana.

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By Hilaire Avril
PARIS, Mar 24 2008 (IPS)

France is expected to push for the further entrenchment of trade-distorting agricultural subsidies when it ascends to the presidency of the European Union (EU) on July 1 this year.

Despite amendments to the EU’s controversial Common Agricultural Policy (CAP) and skyrocketing crop prices worldwide, Europe’s farm subsidies for 2007 still amounted to 54.7 billion euros (85 billion US dollars).

African states have been agitating against the EU and U.S.’s subsidies for many years as they cause overproduction which distorts world prices and leads to the dumping of commodities on African markets. Many African states are also dependent on agriculture as their main source of exports and foreign exchange.

France, a traditional champion of the subsidies regime, will hold the EU presidency for 6 months from July 1. Wrapping up the undergoing ‘‘health check’’ of the CAP will be a major item on its agenda. Many expect it to perpetuate trade-distorting financial aid well beyond the World Trade Organisation’s deadline of 2013.

The CAP was initially created at the end of World War II to ensure Europe could feed itself. Half a century later, and despite vocal arguments among EU members, it still absorbs 42 percent of the EU’s budget.

Despite this, French President Nicolas Sarkozy recently announced that his administration would strive to guarantee the high prices agricultural products currently fetch.

Hélène Brial, an official at the French ministry of agriculture, concurs: ‘‘It is only fair that we financially support producers we impose strict and costly traceability and hygiene standards on’’. This is especially needed as safety and environmental standards increasingly become mandatory requirements of European agriculture.

‘‘This is the reason why France is planning for a new CAP beyond 2009. The CAP is really about giving cash to our farmers,’’ Brial told IPS.

An official of the European Commission told IPS that ‘‘France isn’t thinking of a simple ‘check-up’. It wants to plan for the future and to make the CAP subsidies a lasting feature of the EU.

‘‘By 2050, humankind will need to feed nine billion human beings, which means that a hectare of land currently feeding four people will have to provide for 6 instead. This is why the CAP has become a hot political topic once again,’’ he says, speaking on condition of anonymity.

Not all EU members agree with France, the largest single beneficiary of the CAP (receiving about 20 percent of subsidies) or Germany (the second largest, with 13 percent).

Britain and other countries have long refuted the claim that subsidising farms is necessary for European agriculture to flourish, especially in the light of recent market movements.

According to a large British dairy producer, ‘‘the government in Britain never supported the CAP system of price support… The view was that farmers were businesspeople and should accept the same risk as other commercial operations.’’

Dairy products’ prices doubled in 2007. ‘‘This explosion in world prices has allowed the EU to remove subsidies on all dairy products, and even contemplate increasing production in 2008,’’ he adds.

But many farmers balk at such change. Jean Notat, a stock breeder and a board-member of the FNSEA (the French abbreviation for the French Federation of Farmers’ Unions), confirms that recent increases in crop prices worldwide have given French farmers ‘‘the highest revenue since 1992’’.

But he still thinks the CAP should be left untouched. ‘‘With prices rising worldwide, the EU could be tempted to scrap the existing subsidies. The problem is, what if prices drop again tomorrow?’’ he asks.

However, lower prices are unlikely, given that most European governments are now also considering subsidising the production of bio-fuels, which puts additional strain on the world supply of cereals and vegetable oils.

Even if they were to remain stable, current crop prices present cattle breeders with a soaring bill for animal fodder. In certain areas, such as France’s Brittany, animal feed now accounts for more than 50 percent of production costs. ‘‘Again, this is another sign that no agriculture can possibly subsist without public support,’’ says Notat.

However, when asked about the impact of CAP subsidies on non-European farmers, such as those in Africa, Notat thinks ‘‘they should be content with rising world prices’’.

While benefiting from rising prices is contingent on being able to export one’s production, an ability which EU subsidies are accused of undermining, Notat argues that ‘‘the EU cannot be held accountable for all of Africa’s problems’’.

Following years of public pressure against excessive production and subsequent destruction and dumping of crops, the CAP was reformed in 1999 and in 2003. The previous system, based on support prices that were deemed wasteful, was abandoned.

Today, European farmers are free to grow any crop the market demands. More importantly, financial support to farmers is contingent on production figures for a reference period and not on volumes.

This is a far cry from the CAP of the 1980s, when subsidies supported small European farms believed to be too vulnerable to market fluctuations. Based on past figures, most subsidies now go to large holdings.

What the reforms did not alter significantly, regardless of the change in criteria, is the volume of subsidies paid to farmers, an ever-growing number as the EU enlarges.

Although most tenants of the CAP candidly advocate the ‘‘principle of European preference’’ (that is, subsidising domestic production for privileged access to the European market), support for the EU’s export subsidies is much less vocal.

‘‘Yes, the EU subsidises its agricultural exports but it is also the world’s first importer of agricultural commodities,’’ counters Brial.

The ministry of agriculture’s explanation for the WTO negotiations being at a deadlock is thus hardly surprising. ‘‘It is always very hard to agree to anything when unanimity is required,’’ argues Brial.

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