By Karine Jacquemart and Anuradha Mittal
PARIS/OAKLAND, California, May 11 2015 (IPS)

In our work at Greenpeace and the Oakland Institute around access and control over natural resources, we face constant accusations of being anti-development or “Northern NGOs who care more for the trees”, despite working with communities around the world, from Cameroon, to China, to the Czech Republic.

Karine Jacquemart

This name calling, aimed at discrediting struggles for land, water, and other natural resources in the Third World countries, hides an ugly truth.  The land rush unleashed around the world to own and exploit Earth’s natural bounty is not only fierce and unfair, but increasingly fatal.

Recent reports, including a Global Witness report titled ‘How many more?’ released in April 2015, document the increase in the assassinations of land and environmental activists globally – a shocking average of over two a week in 2014.

As individuals and groups in the frontline of struggles face intimidation, arrests, disappearances, and even death, it is an ethical imperative to support the struggles of the grassroots land defenders against corporations and governments. This is what unites organisations like Greenpeace and the Oakland Institute.

Over the last decade, an estimated 200 million hectares – an area five times bigger than California – has been leased or purchased throughout the world, through completely opaque deals in most cases.

Natural resources in Africa are some of the most sought after, hence the fact that Africa experiences more than 70 percent of the reported land deals.

Anuradha Mittal

Multinational companies with assistance from powerful partners – the World Bank Group and G8 “donor” countries – are moving in, chanting their “development” formula: facilitate foreign investment through large-scale land acquisitions and mega-projects to ensure economic growth which will trickle down to translate into development for all.

Our work reveals a very different and worrying reality on the ground. Local communities and indigenous peoples report lack of consultation; their lands, homes and forests bulldozed and cleared for foreign investors; their livelihoods shattered.

As one villager in the Democratic Republic of the Congo said, “I want to remain a farmer on my land, not a daily worker depending on a foreign company”, or in the words of a Bodi chief in Ethiopia, “I don’t want to leave my land. If they try and force us, there will be war. So I will be here in my village either alive on the land or dead below it.”

They, and countless more, are victims of the theft of natural resources, made invisible and voiceless by those who define what development looks like.“As individuals and groups in the frontline of struggles face intimidation, arrests, disappearances, and even death, it is an ethical imperative to support the struggles of the grassroots land defenders against corporations and governments”

As if destruction of lives and livelihoods were not enough, those who resist are harassed, even face violence, by governments and private companies.

A planned palm oil plantation by the U.S.-based Herakles Farms in Cameroon threatens to evict thousands of people off their land and destroy part of the world’s second largest rain forest.

The company’s former CEO, responding to criticism of the project, said in an open letter: “My goal is to present HF for what it is – a modestly-sized commercial  oil  palm  project  designed  to  provide employment and  social  development and improve  the  level  of  food  security, while incorporating industry best practices.”

What he failed to mention is how a Cameroonian activist, Nasako Besingi, who heads a local NGO, The Struggle to Economize the Future Environment (SEFE), learnt first-hand the consequences of opposing the project. Arrested in 2012 for planning a peaceful demonstration in Mundemba, Nasako and two of his colleagues languished in a jail for several days.

Soon after his release, while touring the area with a French television crew, he was ambushed and assaulted by men he recognised as employees of Herakles Farms. Instead of protection from this violence, Nasako and SEFE face legal battles, including one of the favorite corporate tactics – a defamation lawsuit, intended to intimidate him and the others who oppose.

Privatisation of land and theft of natural resources will be irreversible and will put people, forest, ecosystems and the climate at risk, if it goes unchecked. The time is now to choose a development path that prioritises people and the planet over profits for the rich. (END/COLUMNIST SERVICE)

Edited by Phil Harris

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Oxfam research found that in Sri Lanka, where over 33,000 people died or went missing during the 2004 Asian tsunami, two-thirds were women. Credit: Amantha Perera/IPS

By Amantha Perera
BALI, Indonesia, Apr 2 2015 (IPS)

The statistics tell the story: in some parts of the world, four times as many women as men die during floods; in some instances women are 14 times more likely to die during natural disasters than men.

A study by Oxfam in 2006 found that four times as many women as men perished in the deadly 2004 Asian tsunami. In Sri Lanka, where over 33,000 died or went missing, two thirds were women, Oxfam research found.

“Women have to practically scream for their voices to be heard right now." -- Aleta Baun Indonesian activist and winner of the 2013 Goldman Environmental Prize
According to a World Bank assessment, two-thirds of the close to 150,000 people killed in Myanmar in 2008 due to Cyclone Nargis were women.

The aftermath of environmental disasters, too, is particularly hard on women as they struggle to deal with sanitation, privacy and childcare concerns. Women displaced by climate-related events are also more vulnerable to violence and abuse – a fact that was documented by Plan International during the 2010 drought in Ethiopia when women and girls walking long hours in search of water were subject to sexual attacks.

In post-disaster situations, the burden of feeding the family often falls to women, and many are forced to become breadwinners when men migrate out of disaster zones in search of work.

The pattern repeats itself in environmental crises around the world, every day.

A report published last month by the Global Greengrants Fund (GGF), the International Network of Women’s Funds (INWF) and the Alliance of Funds found that “women throughout the world are particularly vulnerable to the threats posed by a changing climate” – yet they are the least likely to receive proper funding to recover from, adapt to or protect against the dangers of disasters.

Produced after the August 2014 Summit on Women and Climate held in the Indonesian island province of Bali, which brought together over 100 grassroots activists and experts, the report revealed that “only 0.01 percent of all worldwide grant dollars support projects that address both climate change and women’s rights.”

Experts say this represents a critical funding gap, at a time when the international community is stepping up its efforts to deal with a global climate threat that is becoming more urgent every year; research by the non-profit Germanwatch found that between 1994 and 2013, “More than 530,000 people died as a direct result of approximately 15,000 extreme weather events, and losses during [the same time period] amounted to nearly 2.2 trillion dollars.”

Connecting funders with grassroots communities

The recent GGF report, ‘Climate Justice and Women’s Rights’, concluded, “Most funders lack adequate programmes or systems to support grassroots women and their climate change solutions. Men receive far greater resources for climate-related initiatives because [donors] tend to wage larger-scale, more public efforts, whereas women’s advocacy is typically locally based and less visible […].”

The problem is not a lack of funds; experts say the real issue is ignorance or unwillingness on the part of donors or supporting organisations to funnel limited financial resources into the most effective projects and initiatives.

“The new report is a guide to funders on how to identify and prioritise projects so that women can get out of this dangerous situation,” GGF Executive Director and CEO Terry Odendahl told IPS.

In a bid to connect funders directly with women on the ground working within their own communities, the Bali summit last year brought together activists with organisations that distribute some 3,000 grants annually in 125 countries to the tune of 45 million dollars.

The goal of the summit – carried forward in the report – was to enable the experiences and ideas of grassroots women’s groups to shape donor agendas.

Among the many priorities on the table is the need to increase women’s participation in policymaking at local, national and international levels; address the most urgent climate-related threats on rural women’s lives and livelihoods; and recognise the inherent ability of women – particularly indigenous women and those engaged in agricultural labour – to curb greenhouse gas emissions and protect environmentally sensitive areas.

Aleta Baun, an activist from the Indonesian island of West Timor who won the 2013 Goldman Environmental Prize for her efforts to organise local villagers in peaceful ‘weaving’ protests at marble mining sites in protected forest areas on Mutis Mountain, told IPS, “Women have to practically scream for their voices to be heard right now.”

Her tireless activism over many decades has won her recognition but also exposed her to danger. She recalled an incident over 10 years ago when she received death threats but had no support network – neither local nor international – to turn to for help.

The same holds true in India, where research by the International Union for Conservation of Nature (IUCN) found that although rural women spend, on average, 30 percent of their day searching for water, very few resources exist to support them, or study the impact of this grueling task on their families and health.

Experts like Odendahl contend that funders need to get out of the silo mentality and concentrate on the overall impact of climate change, environmental degradation, commercial exploitation of resources and even dangers faced by women activists as parts of one big puzzle.

Protecting women activists

Tools like the recently released report can be used to bridge the gap and connect actors and organisations that have hitherto operated alone.

INWF Executive Director Emilienne De Leon Aulina told IPS, “It is a slow process. We have now began the work; what we need to do is to keep building awareness among decision makers and results will follow.”

One such example is a potential project between the Urgent Action Fund and the Indonesian Samadhana Institute on mapping the impact of threats faced by female environmental activists, which have witnessed a disturbing rise in the past decade.

A study by Global Witness entitled ‘Deadly Environment’, which analyses attacks on land rights defenders and environmental activists, found that between 2002 and 2013 at least 903 citizens engaged in environmental protection work were killed – a number comparable to the death toll of journalists during that same period.

Because women environmental activists tend to focus on local and community-based issues, the dangers they face go largely undocumented.

For a person like Baun, who has faced multiple death threats and at least one threat of a gang rape, both awareness and funding have been slow in coming.

“I have been facing these issues for over 15 years, and it is only now that people have started to take note. But at least it is happening – it is much better than the silence.”

Edited by Kanya D’Almeida

Customary landowners in the Solomon Islands and Papua New Guinea, both rainforest nations in the Southwest Pacific Islands, are suffering the environmental and social impacts of illegal logging. Credit: Catherine Wilson/IPS

By Catherine Wilson
SYDNEY, Dec 1 2014 (IPS)

Rampant unsustainable logging in the southwest Pacific Island states of Papua New Guinea and Solomon Islands, where the majority of land is covered in tropical rainforest, is worsening hardship, human insecurity and conflict in rural communities.

Paul Pavol, a customary landowner in Pomio District, East New Britain, an island province off the northeast coast of the Papua New Guinean mainland, told IPS that logging in the area had led to “permanent environmental damage of the soil and forests, which our communities depend on for their water, building materials, natural medicines and food.”

Four years ago, a Malaysian logging multinational obtained two Special Agricultural Business Leases (SABLs) in the district, but local landowners claim their consent was never given and, following legal action, the National Court issued an order in November for the developer to cease logging operations.

“Within ten years nearly all accessible forests will be logged out and at the root of this problem is endemic and systematic corruption." -- Spokesperson, Act Now PNG
According to Global Witness, the company had cleared 7,000 hectares of forest and exported more than 50 million dollars worth of logs.

“We never gave our free, prior and informed consent to the Special Agricultural Business Leases (SABLs) that now cover our customary land … and we certainly did not give agreement to our land being given away for 99 years to a logging company,” Pavol stated.

One-third of log exports from PNG originated from land subject to SABLs in 2012, according to the PNG Institute of National Affairs, despite the stated purpose of these leases being to facilitate agricultural projects of benefit to local communities.

Pavol also cited human rights abuses with “the use of police riot squads to protect the logging company and intimidate and terrorize our communities.”

Last year an independent fact-finding mission to Pomio led by the non-governmental organisation, Eco-Forestry Forum, in association with police and government stakeholders, verified that police personnel, who had been hired by logging companies to suppress local opposition to their activities, had conducted violent raids and serious assaults on villagers.

Papua New Guinea, situated on the island of New Guinea, home to the world’s third largest tropical rainforest, has a forest cover of an estimated 29 million hectares, but is also the second largest exporter of tropical timber.

The United Nations Food and Agriculture Organisation (FAO) predicts that 83 percent of the country’s commercially viable forests will be lost or degraded by 2021 due to commercial logging, mining and land clearance for oil palm plantations.

Papua New Guinea recently pledged to bring forward plans to end deforestation by a decade at the Asia-Pacific Rainforest Summit held in Sydney, Australia, but indigenous activists remain unconvinced.

“Within ten years nearly all accessible forests will be logged out and at the root of this problem is endemic and systematic corruption,” a spokesperson for the non-governmental organisation, Act Now PNG, said.

“We do not have tough penalties for law breakers and our laws are not enforced,” Pavol added, a view supported by London’s Chatham House.

Environmental devastation and logging-related violence is increasing adversity in Pomio, one of the least developed districts in East New Britain, where there is a lack of health services, decent roads, water and sanitation. Life expectancy is 45-50 years and the infant mortality rate of 61 per 1,000 live births is significantly higher than the national rate of 47.

In the neighbouring Solomon Islands, where 2.2 million hectares of forest cover more than 80 percent of the country, the timber-harvesting rate has been nearly four times the sustainable rate of 250,000 cubic metres per year.

While timber has accounted for 60 percent of the country’s export earnings, this is unlikely to continue, given the forecast by the Solomon Islands Forest Management Project that accessible forests will be exhausted by next year.

High demand for raw materials by growing Asian economies is a major driver of legal and illegal logging in both countries, with the industry dominated by Malaysian companies, and China the main export destination.

Unscrupulous practices, including procuring logging permits with bribes and breaching agreed logging concession areas, are extensive. More than 80 percent of the wood-based trade from PNG and Solomon Islands derives from unlawful extraction with illegal log exports from both island states worth 800 million dollars in 2010, reports the United Nations Office on Drugs and Crime (UNODC).

Since 2003, international companies, most involved with logging, have gained access to 5.5 million hectares of forest in PNG, in addition to the 8.5 million hectares already subject to timber extraction, through fraudulent acquisition of SABLs, according to a Commission of Inquiry and study by the California-based Oakland Institute.

The UNODC highlights the collusion between transnational crime networks, logging companies, politicians and public officials.

“In Solomon Islands the links between politicians and foreign logging companies are complex and well-entrenched. We regularly hear stories of politicians using their power to protect loggers, influence police and give tax exemptions to foreign businesses. In return, loggers fund politicians,” a spokesperson for Transparency Solomon Islands said.

Many national forestry offices in developing countries lack the technical and human resources to adequately monitor logging operations and are ill-equipped to deal with organised crime networks that facilitate the extraction and movement of illicit timber. Associated money laundering is also an issue with the Australian Federal Police estimating that 170 million dollars of funds deriving from crime in PNG are laundered through banks and property investment in Australia every year.

But while an Illegal Logging Prohibition Act recently came into force in Australia, making it a criminal offence to import or process illegal timber, no such legislation exists in the main market of China.

Transparency Solomon Islands says that government accountability needs to be strengthened and rural communities educated about their rights, the law and affective action that can be taken at the local level.

Inequality and low human development among the rural poor is further entrenched by the failure of both countries to channel resource revenues into provision of infrastructure, basic services and equitable economic opportunities.

In Papua New Guinea, one of the most unequal nations with a Gini Index of 50.9, poverty increased from 37.5 percent in 1996 to 39.9 percent in 2009, according to the World Bank.

In the Solomon Islands, logging has been the government’s main source of revenue for nearly 20 years, with GDP growth reaching 10 percent in 2011.

But the Pacific Islands Forum reports that “strong resource-led growth is failing to trickle down to the disadvantaged”, with the country ranked 157th out of 187 countries for human development.

Edited by Kanya D’Almeida

By Mandeep S.Tiwana
JOHANNESBURG, Nov 25 2014 (IPS)

Nabeel Rajab, president of the Bahrain Centre for Human Rights, an advocacy NGO, is facing criminal charges for sending a tweet that said: “many Bahrain men who joined terrorism and ISIS have come from the security institutions and those institutions were the first ideological incubator”.

Yara Sallam, a young Egyptian woman activist, is in prison for protesting against a public assembly law declared by United Nations experts to be in breach of international law.

In Nigeria, it is illegal to support the formation of `gay clubs and institutions’.

Mandeep S. Tiwana

In Bangladesh, civil society groups are subjected to rigorous scrutiny of their project objectives with a view to discourage documentation of serious human rights abuses.

In Honduras, activists exposing the nexus between big business owners and local officials to circumvent rules operate under serious threat to their lives.

In South Sudan, a draft law is in the making that requires civil society groups to align their work with the government-dictated national development plan.

With barely a year to go before finalisation of the next generation of global development goals, civil society groups are facing increasing challenges as they seek to assume their rightful role as partners in development.

Back in 2010, when the United Nations organised a major summit to take stock of progress on the Millennium Development Goals (MDGs), a number of civil society groups lamented that“too little partnership and too little space” was marring the achievement of MDG targets.“With barely a year to go before finalisation of the next generation of global development goals, civil society groups are facing increasing challenges as they seek to assume their rightful role as partners in development”

They pointed out that, in a large number of countries, legal and practical limitations were preventing civil society groups from being set up, engaging in legitimate undertakings and accessing resources, impeding both the service delivery and watchdog functions of the sector, thereby negatively affecting development activities.

Since then, there has been greater recognition at multilateral levels about the challenges faced by civil society. In 2011, at a high-level forum on aid and development effectiveness, 159 national governments and the European Union resolved to create an “enabling environment” for civil society organisations to maximise their contributions to development.

In 2013, the U.N. Secretary General’s expert High Level Panel on the Post-2015 Development Agenda recommended that a separate goal on good governance and effective institutions should be created. The experts suggested that this goal should include targets to measure freedoms of speech, association, peaceful protest and access to independent media and information, which are integral to a flourishing civil society.

The Open Working Group on Sustainable Development Goals (SDGs) has also emphasised the importance of ‘partnership with civil society’ in the post-2015 agenda. Even as restrictions on civil society activities have multiplied around the world, the U.N. Human Rights Council has passed resolutions calling for the protection of civic space.

Senior U.N. officials and experts, including the new High Commissioner for Human Rights, Zeid Ra’ad Al Hussein, have spoken out against state-sanctioned reprisals against activists highlighting human rights abuses at home and abroad.

Yet, despite the progress, civic space appears to be shrinking. The State of Civil Society Report 2014 issued by CIVICUS points out that following the upheavals of the Arab Spring, many governments have felt threatened and targeted activists advocating for civil and political freedoms.

In Ethiopia, bloggers and journalists speaking out against restrictions on speech and assembly have been targeted under counter-terrorism legislation for “inciting” disaffection.

Additionally, the near total dominance of free market economic policies has created a tight overlap between the economic and political elite, putting at risk environmental and land rights activists challenging the rise of politically well-connected mining, construction and agricultural firms.

Global Witness has pointed out that there has been a surge in the killing of environmental activists over the last decade.

Notably, abundant political conflicts and cultural clashes are spurring religious fundamentalism and intolerant attitudes towards women’s equality and the rights of sexual minorities, putting progressive civil society groups at serious risk from both physical attacks as well as politically motivated prosecutions.

In Uganda, concerns have been expressed about the promotion of homophobia by right-wing religious groups.

In Pakistan, indiscriminate attacks on women’s rights activists are seriously impairing their work.

Countering these regressive developments will require greater efforts from the international community to entrench notions of civic space in both developmental as well as human rights forums.

A critical mass of leading civil society organisations has written to U.N. Secretary General Ban ki-Moon urging him to ensure that the post-2015 agenda focuses on the full spectrum of human rights, with clear targets on civil and political rights that sit alongside economic, social and cultural rights.

It is being argued that explicit inclusion of the freedoms of expression, association and peaceful assembly which underpin a vibrant and able civil society should be goals in themselves in the new global development agenda.

It is equally vital to make parallel progress on the human rights front. Many governments that restrict civic freedoms are taking cover under the overbroad provisions of the International Covenant on Civil and Political Rights (ICCPR).

They argue that the provisions of the ICCPR on freedom of association and assembly, which are short on detail, are open to multiple interpretations on issues such as the right to operate an organisation without formal registration or to spontaneously organise a public demonstration.

The global discourse on civil society rights would be greatly strengthened if the U.N. Human Rights Committee, the expert body of jurists responsible for interpreting the ICCPR, could comprehensively articulate the scope of these freedoms.

This would complement progress made at the U.N. Human Rights Council and support implementation of comprehensive best practice guidelines issued by the U.N. Special Rapporteur on the rights to freedoms of peaceful assembly and association.

For now, the odds seem to be heavily stacked against civil society groups fighting for economic, social and political justice. Many powerful governments do not subscribe to democratic values and are fundamentally opposed to the notion of an independent sector. And many democracies have themselves encroached on civic space in the face of perceived security and strategic interests.

Civil society around the world must remain vigilant and act collectively to ensure that the fundamental rights of freedom of expression, association and assembly are protected. We have come too far to let those with vested interests encroach on the space for citizens and civil society to thrive. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

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

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

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

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

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

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

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

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

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

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

140,000 children a year

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

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

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

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

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

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

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

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

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

Inevitable, unclear action

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

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

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

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

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

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

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

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

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

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

The Forest Declaration Assessment Partners calls for reform of the international financial system to halt deforestation and protect biodiversity. Credit: Amantha Perera/IPS

By Amantha Perera
COLOMBO/BALI, Oct 30 2014 (IPS)

Disregarding the rights of indigenous people to their traditional lands is costing companies millions of dollars each year, and costing communities themselves their lives.

A new paper by the Washington-based Rights and Resources Initiative (RRI) released on Oct. 30 found that a significant portion of forests and reserves in emerging markets is being allocated to commercial operations through concessions, ignoring indigenous communities who have lived on them for generations.

“The granting of concessions without the knowledge or approval of people directly affected by them is obviously a human rights issue of grave concern. But it may also have a real financial impact, and this impact concerns more than just those companies with ground-level operations,” the paper said.

“Most of the time [indigenous communities] are working without any kind of protection and taking on groups with lots of money and state support." -- Aleta Baun, 2013 winner of the Goldman Environmental Prize
It noted that indigenous communities inhabit over 99 percent of lands used by commercial entities through concessions. In some instances, large portions of national land are being divested through concessions.

The figure was 40 percent of all land extent in Peru and 30 percent in Indonesia. With Indonesia’s total land extent covering some 1.8 million square km, the portion of land under concession works out to around 500,000 sq km.

“In most cases governments feel that it is easier and simpler to work when they don’t get the indigenous communities involved,” Bryson Ogden, private sector analyst at RRI, told IPS.

But while companies and governments enter into agreements on lands as if they were not inhabited, when work begins on commercial projects it invariably collides head-on with communities who call the same land their traditional home.

The financial damage resulting from such confrontations can run into millions. A recent paper by the U.S. National Academy of Science noted that one company reported a loss of 100 million dollars during a single year, due to stoppages forced by company-community conflict. The company was not named in the report.

“An economy wide valuation of ‘environmental, social and governance risks’ across the Australian Stock Market in 2012 by Credit Suisse identified 21.4 billion Australian dollars in negative share-price valuation impact,” the paper, entitled ‘Conflict Translates Environmental and Social Risk into Business Costs’, claimed.

RRI’s Ogden said that despite such losses, the global trend still was to sideline indigenous communities when entering into concession agreements. “They remain invisible in most of these contracts.”

Such invisibility on paper can be deadly on the ground. In South Kalimantan, the Indonesian portion of the island of Borneo, serious violence erupted between police and activists during a protest that took place a fortnight ago, Mina Setra, deputy secretary general of Indonesia’s Indigenous Peoples’ Alliance of the Archipelago (AMAN), told IPS.

Such violent altercations are not rare. Earlier this year research by Global Witness, an organisation working on environmental rights, found that between 2002 and 2013 at least 903 citizens engaged in environmental protection work were killed.

During the period under review, according to the report, 41 people were killed in the Philippines because of opposition to mining interests. And in 2012 alone, 68 percent of all land-related murders in Brazil were connected to disputes over deforestation in the Amazon.

The report said that activists facing prosecution lacked local as well as international networks that were tailor-made to assist them.

“The problem we are facing is that there is still no recognition for indigenous peoples’ rights,” AMAN’s Setra said.

For almost four years AMAN and other environmental organisations lobbied the Indonesian parliament to adapt a law that would recognise the rights of indigenous communities. It was to be passed this month, when the government changed, bringing fresh officials into power.

“Now we are back to zero,” Setra said.

RRI’s Ogden said there were signs that some global companies were taking note of the rights of indigenous communities to their land, but AMAN’s Setra said that till there was legal recognition of such rights, commercial agreements were unlikely to include them.

“The companies keep asking us under what terms such communities can be recognized and we have no effective answer until there is a law,” Setra said.

For activists, working in that gray area could turn deadly.

Take the case of Aleta Baun, the Indonesian activist from West Timor, the Indonesia portion of the island of Timor, who in 2000 launched a campaign to stop mining operations that were affecting the lives of her Molo tribe members. She has been waylaid, stabbed and threatened with death and rape.

“Most of the time you are working without any kind of protection and taking on groups with lots of money and state support,” said the 2013 winner of the Goldman Environmental Prize.

In the Paracatu municipality of Brazil, the country’s largest gold mining operation run by a company called Kinross with a total investment of over 570 million dollars has been repeatedly interrupted since 2008 due to conflicts with traditional communities.

The parties signed a new agreement in 2010 that allowed operations to resume in 2011.

In Peru, two dam projects on the Ene-Tambo River have been abandoned after prolonged protests and legal action by the indigenous Ashaninka community, who claim that the projects could displace between 8,000 and 10,000 people.

In 2008 the Tata group pulled out a 350-million-dollar investment from the Indian state of West Bengal, where it intended to produce its signature Nano car, after protests by local communities.

The RRI report said that community rights to forests and other natural reserves were increasingly becoming a factor for commercial operations.

“As we have examined this problem, we have come to think of local populations as a kind of ‘unrecognized counterparty’ to concession agreements. We found that communities often used legal mechanisms to resolve their grievances with concessionaires. This suggests that local communities’ rights over an area have appreciable legal weight, even if government bodies and concessionaires haven’t attributed them much import in the terms of their agreements.”

Ogden said that more data was needed to clearly establish community rights over natural reserves.

Until then, indigenous peoples are left facing gigantic commercial entities in a David-and-Goliath scenario that shows no sign of improving in their favour.

Edited by Kanya D’Almeida

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Beneficial owners

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

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

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

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

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

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

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

Outside the framework

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

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

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

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

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

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

Commercial logging and firewood extraction for domestic use have accelerated Myanmar's deforestation rates in the last three decades. Credit: Amantha Perera/IPS

By Carey L. Biron
WASHINGTON, Aug 14 2014 (IPS)

Civil society groups are split over a decision by the U.S. government to waive sanctions on Myanmar’s timber sector for one year.

The decision, which went into effect late last month, is being hailed by some as an opportunity for community-led and sustainability initiatives to take root in Myanmar, where lucrative forestry revenues have long been firmly controlled by the military and national elites. The European Union, too, is currently working to normalise its relations with the Myanmarese timber sector.“The concern is that the system that is gaining traction with the international timber industry is to bypass any national systemic forestry reform process.” -- Kevin Woods of Forest Trends

Yet others are warning that Washington has taken the decision too soon, before domestic conditions in Myanmar are able to support such a change.

“Lifting sanctions on the timber industry now appears to be a premature move by the U.S., and risks lessening Burma’s impetus towards reform,” Ali Hines, a land campaigner with Global Witness, a watchdog group, told IPS.

“Burma is not yet in a position to state convincingly where and how timber is sourced, meaning that U.S. importers and traders have little way of knowing whether Burmese timber is illegal, or linked to social or environmental harm.”

In June, Washington granted a limited one-year license to the 200 members of the U.S.-based International Wood Products Association (IWPA) to engage in transactions with the Myanma Timber Enterprise, the state logging agency. U.S. officials say the aim of the decision is to allow U.S. companies and customers to help strengthen reforms in the Myanmarese timber trade, hopefully promoting transparency and building nascent sustainability practices.

“Interaction with responsible business can help build basic capacity so that Burma can begin to tackle the long-term systemic issues present in its extractive sectors,” Kerry S. Humphrey, a media advisor with the U.S. State Department, told IPS.

“The State Department has been in consultations with IWPA to ensure that any trade conducted under this license is in line with U.S. Government policies, including promoting sustainable forest management and legal supply chains.”

Humphrey notes that IWPA will now be required to file quarterly reports with the State Department on its “progress in helping to ensure legal timber supply chains”.

Yet critics worry this will simply create two parallel timber sectors, one licit and another that is little changed. The industry, as with Myanmar’s broader extractives sector, has long been notorious for deep corruption and human rights abuses.

“The concern is that the system that is gaining traction with the international timber industry is to bypass any national systemic forestry reform process,” Kevin Woods, a Myanmar researcher with Forest Trends, a watchdog group, told IPS.

Instead, Woods says, the end result could be to “create a wall around a few government-managed timber reserves to feed global tropical timber demand, leaving the rest of the country’s forests located in ethnic conflict zones to be continually pillaged and sold across its borders.”

Free-for-all?

Nearly a half-decade after Myanmar began a stuttering process of pro-democratic reform, many today are increasingly concerned that this process is slowing or even reversing course. Late last month, 72 members of the U.S. Congress warned U.S. Secretary of State John Kerry that conditions in the country have “taken a sharp turn for the worse” over the past year and a half.

Kerry was in Myanmar over the past weekend, where he reportedly raised U.S. concerns over such regression with multiple top government officials.

Yet he also rejected concerns that Washington is “moving too quickly” in rolling back punitive bilateral sanctions on Myanmar. He had gone through “a long list of challenges” with Myanmarese officials, Kerry told journalists Sunday, “in a very, very direct way”.

With the removal of sanctions, however, many worry that Washington is losing important leverage. In the timber sector in particular, some question the extent to which U.S. and other foreign companies will have the wherewithal, or interest, to effect change on the ground in Myanmar – particularly given the tepid commitments made by the country’s government.

“This is not the time for U.S.-based timber importers to be investing in Burma,” Faith Doherty, a senior campaigner at the Environmental Investigation Agency, a watchdog group, told IPS.

“Secretary Kerry … raised serious questions as to the backsliding of reforms and continuing human rights abuses within the country – how do companies within the IWPA think they are able to avoid contributing to these issues that are prevalent throughout the timber sector?”

Indeed, some observers suggest that Myanmar’s opening-up has been accompanied by a sense of free-for-all.

“Illegal logging and natural resource grabbing, including land, in ethnic states and regions … have become worse since the reforms started and the influx of foreign investment into the country,” Paul Sein Twa, with the Burma Environmental Working Group, an advocacy organisation, told IPS.

“Remember, we are still in a fragile peace-building period and there is no rule of law in the conflict areas. So our recommendation is to go slowly on reforming law and policies – to open up more space, engage with civil society organisations and the ethnic armed groups.”

Certification momentum

Any ultimate success in reforming Myanmar’s forestry sector will depend on future actions by both the country’s government and the foreign companies that end up purchasing the country’s timber. Yet some are applauding the lifting of U.S. sanctions as an important opportunity to finally begin the work of reform.

“The problem with sanctions is that they restrict buyers in our country from engaging in the sector – the international marketplace, which today includes strong preferences for sustainable products, is inaccessible,” Josh Tosteson, a senior vice-president with the Rainforest Alliance, a group that engages in the certification of tropical forest products, told IPS.

“Particularly if the lifting of sanctions comes along with some commitments from significant buyers to work cooperatively to support and incentivise the march toward sustainability certification, that can inject some real energy to drive this process forward.”

This week, the Myanmar Forest Department accepted a proposal from the Rainforest Alliance for a pilot production community forest in the country’s south.

“Having market mechanisms there that provide a minimum preference and a new market norm that won’t allow anything other than responsible or sustainably produced products to enter the market – that will be the key element,” Tosteson says.

“Particularly in intra-Asian trade you’ll need to have buying companies get on board with these norms. That will be a significant challenge, but if they’re not stepping up to create these new market norms no other efforts will matter – illicit products will simply flow through the routes of least resistance.”

Edited by: Kitty Stapp

The writer can be reached at cbiron@ips.org

An aerial view of the Luwowo coltan mine, near Rubaya in the northeastern province of North Kivu, DRC. Credit: MONUSCO Photos/ CC-BY-SA-2.0

By Carey L. Biron
WASHINGTON, Jun 3 2014 (IPS)

For the first time, nearly 1,300 U.S. companies have filed reports on whether the products they manufacture or sell are made with minerals that have bankrolled conflict in the Great Lakes region of central Africa.

Monday was the deadline for the filings, the first concrete results of a provision passed in 2010 by the U.S. Congress aimed at helping to end the long-running civil war in the Democratic Republic of the Congo (DRC).

Yet the law’s regulatory details have since been the target of sustained legal attacks from companies and lobby groups that have warned that fulfilling the reporting requirements would be onerous and even unconstitutional.

“In general we’re very disappointed with how vague many of the reports are, lacking much description on processes.” -- Carly Oboth, policy advisor at Global Witness
By Tuesday, however, it appeared that most companies expected to file a report on the so-called conflict minerals in their supply chains had done so. Those reports are now publicly available through the Securities and Exchange Commission (SEC), the federal regulator tasked with implementing the rule, formally known as Section 1502.

“This is a historic day. Five years ago this issue wasn’t on anyone’s radar, and now consumers can look under the hood of what’s in a product,” Sasha Lezhnev, a senior policy analyst at the Enough Project, a Washington-based watchdog group, told IPS.

“I think many people knew what companies like Apple, Intel or HP had been doing, as they have been pretty proactive on this issue. But no one has known what companies like Walmart or GM [General Motors] have been doing.”

In 2009, the U.N. Security Council formally recognised that revenues from minerals extraction were strengthening multiple armed groups operating in eastern DRC. The electronics industry has been one of the most significant users of these minerals, which include tin, tantalum, tungsten and gold.

Since then, Lezhnev reports, 95 mines in the DRC have been validated as “conflict free”, while two-thirds of the tin, tantalum and tungsten mines in the country’s east have been demilitarised. Gold remains a significant problem, however, and the Enough Project and others are calling for more concerted action in tightening sourcing decisions, particularly from the jewellery industry.

Box-checking?

Under the SEC guidelines, companies listed on U.S. stock exchanges must now file annual reports describing their efforts to discern whether their products use conflict minerals and, if so, their plans for stopping this practice. Several thousand U.S. companies have been identified as potentially – and likely unwittingly – selling products containing conflict minerals.

The consulting firm Booz Allen Hamilton has stated that it has been involved in the manufacture of circuit boards, electrical assemblies and surveillance recorders containing conflict minerals. Many of these products, the company noted, were manufactured for the U.S. government.

Yet most companies have reported incomplete results. Microsoft, for instance, states that it “cannot exclude the possibility” that its products contain conflict minerals, but also that it hasn’t yet been able to obtain full sourcing information from its “extensive and complex” supply chain.

Advocacy groups are also concerned that most companies aren’t providing information on what follow-up actions they took after surveying their suppliers, if any.

“In general we’re very disappointed with how vague many of the reports are, lacking much description on processes,” Carly Oboth, a policy advisor at Global Witness, a watchdog group that has supported the conflict minerals regulations, told IPS.

“We’re concerned with how companies have come to their conflict minerals status decision, as many are claiming that they’re ‘conflict indeterminable’ or ‘conflict free’ but not showing how they arrived at that conclusion. This isn’t supposed to be a box-checking exercise, but rather about showing that you’re not sourcing from a conflict zone.”

Global Witness says the majority of the reports that have been filed thus far have been “inadequate”.

Conflict-free competition

For many companies faced with auditing their supply chains, a key chokepoint has been the metal smelters that turn raw resources into workable products. An industry-led initiative, the Conflict-Free Smelter Programme, has been particularly prominent, having so far certified around 40 percent of the world’s smelters, according to the Enough Project’s Lezhnev.

Yet Global Witness’s Oboth says many companies have simply ascertained whether their suppliers have this certification, and then gone no farther.

“Instead, what we want them to do – and what the [SEC] rule requires – is to follow up with the smelters,” she says. “Intel, for instance, has made site visits to smelters to check on their conflict minerals policy, to see how they’re actually identifying risk.”

Indeed, Intel, the microprocessor manufacturer, has in many regards been the most proactive company on the issue. In January, it unveiled the world’s first “conflict-free” product, and ahead of the recent filing deadline was the only company to offer a fully audited report on its supply chains.

Following an April court ruling that altered the original SEC rule, companies are no longer required to state whether or not a product is “conflict free” (though the court may rehear this case in coming months). Yet Intel, echoing advocacy groups and regulators, says such designations are important.

“One of our takeaways is around transparency. Although not required to disclose the status of our products, we believe this transparency shows our commitment on this issue to our customers and stakeholders,” Intel told IPS in a statement.

“We encourage other companies to also share their product conclusions as we all work towards validating our products as DRC conflict free. Product conclusions provide a useful and transparent method to communicate the progress of our due diligence efforts.”

Already the presence of a single conflict-free product on the market has spurred competition, and a similar dynamic is expected to result from Monday’s public filings.

“We’re already seeing other companies racing to make the next conflict-free product, and we’re encouraging consumers to urge the largest aerospace and automotive companies to take part,” Lezhnev stated.

“Intel’s step is a good one, but there are companies out there that are far bigger. For instance, when is Boeing or GE going to make the next conflict-free product?”

(END)

National police arrive on a boat at Goma's port in DRC as U.N. peacekeepers look on. Credit: William Lloyd-George/IPS

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

The United States’ second-highest court has upheld most of a landmark U.S. law requiring companies to ascertain and publicly disclose whether proceeds from minerals used to manufacture their products may be funding conflict in central Africa.

The ruling, released Monday, means that U.S.-listed companies will need to file their first such reports with federal regulators by the end of May. The statute, known as Section 1502 and covering what are referred to as “conflict minerals”, became law in 2010, but the details of its actual implementation have remained up in the air ever since.The ruling is “a major step backward for atrocity prevention in the Great Lakes region of Africa and corporate accountability in the United States.” -- Holly Dranginis

“There are very encouraging aspects of this ruling, and the bottom line is that the rule hasn’t been overturned and now companies will need to move forward,” Corinna Gilfillan, head of the Washington office of Global Witness, a watchdog group that supports Section 1502, told IPS.

“The heart of this statute is companies carrying out due diligence on their supply chains so they can figure out whether their minerals are coming from conflict areas. Due diligence is a process – first knowing the supply chain and then taking action to address any problems. This ruling has upheld the due diligence and reporting aspects.”

The U.S. Congress hoped Section 1502 would help quell the violence that has wracked Africa’s Great Lakes region, particularly in parts of the Democratic Republic of Congo (DRC), for the past decade and a half. Findings by the United Nations, rights groups and others have warned that rebels in these areas have funded their operations in part by mining and selling any of five minerals that have become particularly sought after by the international electronics industry.

The rule has come under attack by U.S. business groups who say the requirements would be onerous and infringe on their constitutionally guaranteed right to free speech, by forcing them to label their products “conflict free”. But agreeing with previous rulings, a three-judge bench on Monday dismissed most of these concerns.

The dismissal included business concerns that the Securities and Exchange Commission (SEC) had not adequately analysed costs and benefits of the regulation.

“The rule’s benefits would occur half-a-world away in the midst of an opaque conflict about which little reliable information exists, and concern a subject about which the [SEC] has no particular expertise,” the court stated in its decision.

“Even if one could estimate how many lives are saved or rapes prevented as a direct result of the final rule, doing so would be pointless because the costs of the rule – measured in dollars – would create an apples-to-bricks comparison.”

Compelled speech

Yet the court also offered a split decision in favour of the manufacturers on the free speech concern, allowing both proponents and critics of Section 1502 to claim victory.

U.S. law allows for certain “compelled” public disclosures, but generally only if those are recitations of straight fact. However, the court found the issue of conflict minerals to be far more complex.

“[I]t is far from clear that the description at issue – whether a product is ‘conflict free’ – is factual and nonideological. Products and minerals do not fight conflicts,” the court stated.

“The label ‘conflict free’ is a metaphor that conveys moral responsibility for the Congo war. It requires an issuer to tell consumers that its products are ethically tainted, even if they only indirectly finance armed groups … By compelling an issuer to confess blood on its hands, the statute interferes with that exercise of the freedom of speech.”

It is unclear whether the SEC will appeal this part of the decision to the U.S. Supreme Court (the agency says it’s reviewing the ruling). For now, the decision undermines a key strategy for groups hoping to use a labelling requirement to shame companies into compliance, though related information will still be publicly available.

The ruling is “a major step backward for atrocity prevention in the Great Lakes region of Africa and corporate accountability in the United States,” Holly Dranginis, a policy associate with the Enough Project, an advocacy group here, said Monday.

“The court’s proposal that a conflict-free determination is ideological is unfounded and undercuts the power of society’s growing awareness that global markets and security in fragile states are in fact linked.”

Meanwhile, a separate case before the same court could soon undermine the free speech finding. A smaller bench has already ruled in favour of requiring meat producers to include “country of origin” information on their products, and the case is now slated to be heard by the full court in mid-May.

A dissenting opinion in the conflict minerals ruling noted that the meat-labelling decision could have a significant impact on Monday’s ruling.

6,000 reports

The complexities of implementing Section 1502 remain highly problematic in central Africa, and some are warning that the law could soon collapse under its own weight. Yet others say the regulation is already having a noticeable impact, with the Enough Project suggesting that “over two-thirds of tin, tantalum and tungsten mines [are] now free of armed groups.”

Monday’s ruling should now allow the U.S. side of the statute’s implementation to proceed. This means that around 6,000 U.S. companies will need to file reports with the SEC, and post them to company websites, by the end of May.

The lawsuit against Section 1502 was brought by three of the United States’ largest business lobbies, the National Association of Manufacturers (NAM), the U.S. Chamber of Commerce and the Business Roundtable. In a joint statement sent to IPS, the three lauded the decision.

“[W]e are pleased with the D.C. Circuit’s decision … finding the statute and regulation are unconstitutional,” the groups stated. “We understand the seriousness of the humanitarian situation in the Democratic Republic of Congo (DRC) and abhor the violence in that country, but this rule was not the appropriate way to address this problem.”

Yet other businesses are already complying with the spirit of Section 1502. Perhaps the most significant of these companies, Intel, is actually a member of NAM.

In January, the company pledged to remove all conflict minerals from its microprocessors. It says it now has no plans to change course.

“Regardless of this decision, we will continue to do our part to achieve conflict-free supply chains and to report publicly on these efforts,” Lisa Malloy, an Intel spokesperson, told IPS.

“The challenge of responsible minerals sourcing requires a comprehensive solution that involves government agencies in the U.S. and internationally, non-profit groups and industry. We urge all partners to continue the momentum towards a solution.”

The open wounds of the Amazon. Credit:Rolly Valdivia/IPS

By Michelle Tullo
WASHINGTON, Apr 9 2014 (IPS)

Indigenous leaders are warning of increased violence in the fight to save their dwindling forests and ecosystems from extractive companies.

Indigenous representatives and environmental activists from Africa, Asia, Australia and the Americas met over the weekend here to commemorate those leading community fights against extractive industries. The conference, called Chico Vive, honoured Chico Mendes, a Brazilian rubber-tapper killed in 1988 for fighting to save the Amazon.“Right now in our territory we can’t drink the water because it’s so contaminated from the hydrocarbons from the oil and gas industry." -- Chief Liz Logan of the Fort Nelson First Nation in BC, Canada

The gathering also recognised leaders who are continuing that legacy today.

“His struggle, to which he gave his life, did not end with his death – on the contrary,” John Knox, the United Nations independent expert on human rights and the environment, said at the conference. “But it continues to claim the lives of others who fight for human rights and environmental protection.”

A 2012 report by Global Witness, a watchdog and activist group, estimates that over 711 people – activists, journalists and community members – had been killed defending their land-based rights over the previous decade.

Those gathered at this weekend’s conference discussed not only those have been killed, injured or jailed. They also shared some success stories.

“In 2002, there was an Argentinean oil company trying to drill in our area. Some of our people opposed this, and they were thrown in jail,” Franco Viteri, president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, told IPS.

“However, we fought their imprisonment and the Inter-American Court of Human Rights ruled in our favour. Thus, our town was able to reclaim the land and keep the oil company out.”

Motivated by oil exploration-related devastation in the north, Ecuadorian communities in the south are continuing to fight to defend their territory. Viteri says some communities have now been successful in doing so for a quarter-century.

But he cautions that this fight is not over, particularly as the Ecuadorian government flip-flops on its own policy stance.

“The discourse of [President Rafael] Correa is very environmentalist, but in a practical way it is totally false,” he says. “The government is taking the oil because they receive money from China, which needs oil.”

China has significantly increased its focus on Latin America in recent years. According to a briefing paper by Amazon Watch, a nonprofit that works to protect the rainforest and rights of its indigenous inhabitants, “in 2013 China bought nearly 90% of Ecuador’s oil and provided an estimated 61% of its external financing.”

The little dance

Many others at the conference had likewise already seen negative impacts due to extractives exploration and development in their community.

“We have oil and gas, mines, we have forestry, we have agriculture, and we have hydroelectric dams,” Chief Liz Logan of the Fort Nelson First Nation in British Columbia, Canada, told IPS.

“Right now in our territory we can’t drink the water because it’s so contaminated from the hydrocarbons from the oil and gas industry … The rates of cancer in our community are skyrocketing and we wonder why. But no one wants to look at this, because it might mean that what [extractives companies] are doing is affecting us and the animals.”

Logan described the work of protecting the community as a “little dance”: first they bring the government to court when they do not implement previous agreements, then they have to ensure that the government actually implements what the court orders.

Others discussed possible solutions to stop the destruction of ecosystems, and what is at stake for the communities living in them. The link between local land conflicts and global climate change consistently reappeared throughout many of the discussions.

“My community is made up of small-scale farmers and pastoralists who depend on cattle to live. For them, a cow is everything and to have the land to graze is everything,” said Godfrey Massay, an activist leader from the Land Rights Institute in Tanzania.

“These people are constantly threatened by large-scale investors who try to take away their land. But they are far more threatened by climate change, which is also affecting their livelihood.”

Andrew Miller of Amazon Watch described the case of the contentious Belo Monte dam in Brazil, which is currently under construction. Local communities oppose the dam because those upstream would be flooded and those downstream would suddenly find their river’s waters severely reduced.

“People are fighting battles on local levels, but they are also emblematic of global trends and they are also related to a lot of the climate things going on,” Miller told IPS. “[Hydroelectric] dams, for example, are sold as clean energy, but they generate a lot of methane, which is a powerful greenhouse gas.”

According to Miller, one value of large gatherings such as this weekend’s conference is allowing participants to see the similarities between experiences and struggles around the world, despite often different cultural, political and environmental contexts.

“In each case there are things that are very specific to them,” Miller said. “But I think we are also going to see some trends in terms of governments and other actors cracking down and trying to limit the political space, the ability for these folks to be effective in their work and to have a broader impact on policy.”

Yet activists like Viteri, from Ecuador, remain determined to protect their land.

“We care for the forest as a living thing because it gives us everything – life, shade, food, water, agriculture,” Viteri said. “It also makes us rich, even if it is a different kind of richness. This is why we fight.”

Major manufacturing and business groups on Tuesday urged a court here to roll back a new U.S. regulation that would soon require major manufacturers to ensure that their global supply chains are free of minerals used to fund violence in the Great Lakes region of central Africa.

Former “blood diamonds” now provide employment in Sierra Leone. Credit: Tommy Trenchard/IPS

Yet the previous day, Intel, the major computer hardware manufacturer, announced the world’s first product formally dubbed free of such materials, stating that its microprocessors would no longer use “conflict minerals”. The announcement highlights trends that advocates of greater supply chain accountability say are already well underway, and which they suggest belie parts of the legal case against the rule.

“This provision has already catalysed reforms of the minerals trade in the Great Lakes region and has prompted both [U.S.] and Congolese companies to carry out supply chain due diligence and source minerals more responsibly,” Carly Oboth, an assistant policy advisor with Global Witness, a watchdog group, told IPS.

“According to consulting firm Claigan, in September 2013 2,946 companies were identified as having conflict minerals compliance programmes … Despite the appeal, many companies have already publically demonstrated the feasibility of the rule as they begin implementation to meet the May 31, 2014 reporting deadline.”

The U.S. Chamber of Commerce, the National Association of Manufacturers (NAM) and the Business Roundtable, all major lobby groups, say the new rules impose an undue financial burden on companies and infringe on constitutional guarantees of free speech. The groups say they are supportive of the aims of the regulation, known as Section 1502, but want significant tweaks and the inclusion of certain exemptions.

But supporters counter that the Securities and Exchange Committee (SEC), the country’s lead regulator of publicly listed companies, has already thoroughly weighed these issues.

“Generally we’ve been supportive of the SEC’s position and think they did extensive analysis before adopting the conflict minerals rule,” Julie Murray, an attorney currently acting as counsel for Amnesty International, a rights group that has joined the lawsuit in support of Section 1502, told IPS.

“The SEC received some 13,000 letters urging it to promptly adopt this rule, and we think the commission did an exhaustive job of looking at the issues – taking into account the concerns that were raised by these groups, and trying to make the rule cheaper and easier to comply with.”

The appeal follows a detailed and strongly worded legal decision in July that upheld Section 1502, which was mandated by Congress in 2010 but only finalised last year. As the regulation currently stands, by June large companies will need to certify the sourcing of a handful of minerals sourced from central Africa, while smaller companies will have a longer timetable.

In the appeal, a central issue in the court’s decision-making will be the estimates the SEC used to figure out the financial burden that Section 1502 would place on companies, upwards of four billion dollars in initial compliance costs followed by annual costs of 200-600 million dollars. Yet Murray suggests that companies will be able to bring these costs down as they learn how to comply with the new regulations.

“In general we think that it’s important that companies learn about the source of the materials they’re using – most consumers say they should know whether the materials they’re purchasing are responsible for rape, torture and murder in the DRC,” Murray says. “At the same time, this rule isn’t just about human rights, but also serves an important role in informing investors and consumers.”

On Tuesday, however, two of the three judges hearing the case appeared sceptical of several aspects of Section 1502. They raised concerns about the precedent that the regulation would set, the SEC’s capacity to create such a rule, and even the scope of the underlying law.

Conflict-free microprocessors

In 2009, the U.N. Security Council formally recognised that revenues from minerals extraction were strengthening multiple armed groups operating in eastern DRC. The electronics industry has been one of the most significant users of the minerals that have been singled out for scrutiny, which include tin, gold, tungsten and others.

Supporters of Section 1502 say that many businesses are showing strengthening interest in doing the work necessary to comply with the rule, both for brand and financial reasons. In this, Intel is widely seen as having made a uniquely serious effort to clean up its global supply chain.

“Two years ago, I told several colleagues that we needed a hard goal, a commitment to reasonably conclude that the metals used in our microprocessors are conflict-free,” Intel’s CEO, Brian Krzanich, said Monday. “We felt an obligation to implement changes in our supply chain to ensure that our business and our products were not inadvertently funding human atrocities in the Democratic Republic of the Congo.

(An Intel executive sits on the National Association of Manufacturers’ board and is thus technically a party to the current appeal. While a company spokesperson declined to comment on the case, on its website Intel notes that its “positions do not always align 100% with those of the industry and trade organizations to which we belong.”)

Intel called the achievement a “critical milestone”, while Krzanich said the it was “just a start. We will continue our audits and resolve issues that are found.” He also urged the rest of the electronics industry to follow suit.

Others say industry leadership from other sectors is equally important.

“Now that Intel has released the first conflict-free product, it’s time for other companies to do the same,” Sasha Lezhnev, a senior policy analyst with the Enough Project, an advocacy group here, told IPS. “Particularly for gold – it’s important for jewellers to take action, while aerospace companies also need to step up. This problem won’t be solved by just one company.”

Lezhnev recently returned from the DRC, and notes that Section 1502, despite having yet to come fully into force, has already played a “backbone” role in defunding armed groups in the eastern part of the country. Such groups, he says, are also far less present today in the mining areas.

“Smuggled minerals are now about a third of the price of the [certified] minerals, so the new price this rule helped to spur is offering a strong incentive to build up a conflict-free trade,” he says. “You’re seeing the disarmament of many armed groups … and while that is not only because of the new regulation, this rule is offering a strong incentive for them to not restart again.”

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. So-called ‘blood diamonds’ helped fund civil wars in Sierra Leone and Liberia, but now provide much-needed jobs as well as revenue for the government. Credit: Tommy Trenchard/IPS

By Carey L. Biron
WASHINGTON, Nov 12 2013 (IPS)

Countries in Africa’s Great Lakes region are moving too slowly on an international plan to certify the sourcing of “conflict minerals”, researchers here are warning, a failure that could threaten the entire certification process.

Recent international efforts have made important gains in cutting off militants in Rwanda, Congo and neighbouring countries from mining profits, while bolstering focus on ensuring clean supply chains, particularly in the global electronics industry. Today, for instance, far fewer rebel groups are present in mines in eastern Congo, according to new analysis by the Enough Project, a Washington advocacy group."The heart of this process is asking companies operating in the region to take responsibility for their supply chains." -- Annie Dunnebacke of Global Witness

Yet several key components of an international initiative aimed at systematising the global traceability of these “conflict minerals” have yet to be fully set up by the region’s governments. In a new report, the Enough Project suggests the certification process is today at a “crossroads”.

“Minerals can be a boon for peace in Congo and the region, not a conflict curse,” Sasha Lezhnev, a senior policy analyst with the Enough Project, said Monday.

“But if Rwanda, Congo and regional states do not take urgent steps to complete the mineral certification process in the next few months, multinational companies may stop purchasing many minerals from the region that cannot credibly be certified as conflict-free.”

One key deadline in this regard is now just months away. In May 2014, a landmark U.S. regulation will start requiring all U.S.-listed corporations to publicly report on the provenance of a list of minerals coming from the Great Lakes region.

And even as this U.S. provision – known as Section 1502 of the Dodd-Frank Act, massive financial sector overhaul legislation passed in 2010 – has proven to be a major global impetus, the European Union is currently working on similar legislation.

“Over the past two years, we’ve certainly seen increased interest by companies to strengthen the level of minerals traceability. Our member companies have been putting a lot of resources into due diligence, carrying out a tremendous amount of tracing very far up the supply chain,” Julie Schindall, director of communications at the Electronic Industry Citizenship Coalition (EICC), an initiative that focuses on auditing smelters and refiners, told IPS.

“Yet it would be unfair to say that every company is doing this only due to action by regulators, though pressure from government, civil society and consumers is all vital. Companies also believe this matters, and some have been working on these issues far longer than they’ve been mandated.”

Safeguards lagging

The Enough Project’s warning comes just as a major conference is set to take place, later this week in Rwanda, among an international group of experts on responsible mineral supply chains.

Just ahead of the meeting, the certification process reached something of a milestone, with Rwanda last week issuing its first conflict-free certificate, known formally as an International Conference of the Great Lakes Region (ICGLR) Mineral Export Certificate. (Unlike the EICC, this certificate aims to audit operations at the level of extraction.)

The Congo government is reportedly preparing to do the same soon.

Yet there are concerns that these certificates have been prepared without mandated safeguards being in place. Enough Project researchers note that the process by which these initial certificates are being offered are “ad hoc”, with the governments focusing on mines that are particularly easy to certify.

“Interim steps will not work for all mines,” they write.

In the half-dozen years since the ICGLR Regional Initiative against the Exploitation of Natural Resources (RINR) was created, a rudimentary mine inspection system has been created and is partially functioning. Yet other important components of this framework – including a regional database to allow for the tracking of minerals from individual mines, disclosure requirements and critical auditing and monitoring systems – have yet to be finalised, in addition to more general deficiencies in capacity and public support.

While the governments of Rwanda and Congo have put in place interim measures to address some of these systemic gaps, these have been criticised for lacking transparency.

“Right now it’s a bit of a case of putting the cart before the horse – if you want a certification to be credible, then safeguards and monitoring have to be in place before you launch it,” Annie Dunnebacke, deputy campaigns director at Global Witness, a watchdog group that has been a key proponent of the ICGLR certification initiative, told IPS from Rwanda.

“At the same time, if this system launches before it’s ready, and at some point down the road is certifying actual conflict minerals, then we have a problem. The credibility of the system is the most important component.”

Yet Dunnebacke cautions advocates not to lose sight of the central priority: private sector due diligence. She says focus on this responsibility will ease concerns over the possibility of companies turning away from the region.

“The heart of this process is asking companies operating in the region to take responsibility for their supply chains, to identify and mitigate risks. Private sector players have to prove they’re carrying out due diligence,” she says.

“But companies can carry out due diligence, and can also source from the region, even if a fancy certification process is not up and running.”

Transformational development

Ahead of this week’s meetings in Rwanda, the Enough Project is now urging the United States, European Union, World Bank and electronics companies to strengthen technical assistance in several areas, in the hopes of expediting the formation of central components of the certification processes.

The World Bank has recently created a new project, the Africa Extractive Industry Trust Fund, through which it says it aims to work with African countries to provide advice on how to negotiate “fair and equitable contracts and deliver transformational development benefits.”

But the Washington-based development institution emphasises that certification remains a key requirement.

“Channelling revenues from Africa’s minerals into significantly improving people’s lives is an essential development investment in the continent’s future,” a bank spokesperson told IPS, “and so effective certification and traceability are vital steps in this process for countries, especially in the Great Lakes region.”

A U.S. federal judge has upheld a key regulatory provision aimed at ensuring that the profits from products mined in central Africa are not used to benefit armed groups, particularly in the Democratic Republic of Congo (DRC).

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. So-called ‘blood diamonds’ helped fund civil wars in Sierra Leone and Liberia, but now provide much-needed jobs as well as revenue for the government. Credit: Tommy Trenchard/IPS

Rights groups are lauding the decision, stating that the so-called “conflict minerals” provision has already led to positive impacts on the ground, both in Congo and in U.S. boardrooms.

“This is a major victory, and shows how important this rule is for holding companies to account and ensuring that they take responsibility for the impacts of their purchases,” Corinna Gilfillan, head of the U.S. office of Global Witness, a watchdog group that filed a court brief in the case, told IPS.

“This provision has generated unprecedented levels of attention towards the eastern Congo, significantly increasing scrutiny around supply chains. After all, what company wants to be associated with funding human rights violations in Africa?”

The rule, known as Section 1502 or the “conflict minerals” provision, was originally signed into law in 2010 as part of a massive piece of financial industry legislation known as the Dodd-Frank Act. Two years later, in August last year, U.S. regulators finalised details on how companies listed in the United States would be required to implement the provision.

Under Section 1502, starting in early 2013 companies using any of four minerals – gold, tin, tungsten or tantalum, widely used in modern electronics – sourced from the DRC or neighbouring countries would need to provide proof that they had carried out due diligence to ensure that these products were not benefiting armed groups.

Yet the rule immediately faced a lawsuit by powerful trade associations representing U.S. businesses and manufacturers. They claimed that the conflict minerals provision would impose inordinate costs that U.S. regulators had not fully analysed, among several other complaints.

Another Dodd-Frank provision, requiring large extractives companies to disclose any payments made to foreign governments, was struck down by the U.S. courts earlier this month.

On Tuesday, however, Judge Robert Wilkins rejected each of these contentions, finding the Security & Exchange Commission (SEC)’s economic analysis to have been “eminently appropriate”.

“Taking all of these elements of the disclosure scheme together, the Court finds a ‘reasonable fit’ between the relevant provisions of Section 1502 and the Final Rule and Congress’s objectives in promoting peace and security in and around the DRC,” Judge Wilkins wrote in a detailed 63-page opinion.

The U.S. Chamber of Commerce, one of the main litigants in the case, told IPS in a statement that it is still “reviewing the court’s decision and our options going forward. We continue to believe this rule, while well intentioned, is unsupported by the Agency’s own record.”

‘Major opportunity’

For now, Tuesday’s fairly resounding decision clears the way for full implementation of Section 1502, with no other lawsuits on the issue currently pending.

Yet despite the legal uncertainty, this rule has already led to significant action from the Congolese government as well as several major U.S. companies – including those technically party to the lawsuit.

“There has actually been a rather strong disconnect between these big industry groups and their extreme positions and what we’ve been seeing individual companies doing to comply,” Global Witness’s Gilfillan notes. “Many have not been counting on lawsuits to get them out of this, but rather have been proactively working to comply.”

The utilities giant General Electric (GE), for instance, stated in May that it “shares … a commitment to take responsibility to alleviate suffering caused by the conflict in the DRC”, and noted that while it is a member of the U.S. Chamber of Commerce, “the views and positions expressed by the Chamber are its own, and not GE’s.”

Other major electronics companies to break with the Chamber on this issue in recent months have included Microsoft and Motorola. International industry initiatives – such as the Conflict Free Smelter Programme – have likewise been started or strengthened in the aftermath of Section 1502’s passage.

“So now we’re calling on all of these companies to do everything they can to ensure that the minerals they’re using aren’t fuelling human rights violations,” Gilfillan continues. “We have a very difficult situation in eastern Congo, so we can’t afford any more delays.”

In addition, the Congolese government has sought to build on the groundwork laid by Section 1502. In late 2011, the country’s mining minister reportedly stated that the legislation offered a “major opportunity” to delink minerals and violence in Congo, which has been at the centre of natural resources-driven conflict for more than a century.

Last year, the Congolese government introduced legislation requiring companies using these minerals to undertake supply chain due diligence to ensure that the products weren’t funding rights violations. Since then, the government has suspended at least two Chinese export companies for failing to adhere to this process.

Global principles

Dodd-Frank is also catalysing broader global action on conflict minerals, with the European Union in particular currently considering adopting policies similar to Section 1502. A public consultation process on this proposal just closed, and some are expecting draft legislation by the end of this year.

But while the United States may be leading global policy in this particular area, some groups are frustrated that Washington has yet to implement nascent international guidance on the human rights-related responsibilities borne by multinational corporations.

On Wednesday, a dozen rights, development and environment groups, under the umbrella of the International Corporate Accountability Roundtable (ICAR), sent a letter to President Barack Obama, calling on him to prioritise implementation of the United Nations Guiding Principles for Business and Human Rights, passed in 2011.

During a fact-finding mission to the United States, the letter notes, a U.N. working group found “significant gaps” in the U.S. efforts to implement the Guiding Principles, as well as “little appreciation of human rights being material to the conduct of business”.

Tuesday’s court decision on Section 1502 “recognises that business has a responsibility to respect human rights, and that the government, including agencies like the SEC, can and should ensure that business operations do not negatively impact human rights,” Amol Mehra, director of the Washington-based ICAR, told IPS.

“In this regard, we are calling for the development of a government-wide approach to business and human rights, and for President Obama to use appointments to critical positions in agencies and departments to effectuate the U.S. government’s duty to protect human rights. We look forward to further engagement to ensure that precedents like the conflict minerals provision are defended, promoted and extended.”

Oil rigs and pumps. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Jul 2 2013 (IPS)

A federal judge here on Tuesday struck down a key new regulatory provision that would require large U.S.-listed extractives companies to disclose payments made to foreign governments, a rule that rights groups had long pushed as a way to cut down on corruption in developing countries.

The judgement is being seen as technical, however, and could allow government regulators to tweak and re-issue the rule.

The ruling is seen as a major victory for the American Petroleum Institute (API), a lobby group that sued the U.S. government following the rule’s adoption, last August, on several grounds, including that it would force businesses to divulge proprietary secrets, impose significant costs and infringe on their Constitutionally mandated right to free speech.

“The court has vacated the SEC’s requirement that U.S. companies report competitive information that can be used against them by global competitors,” Harry Ng, API vice president and general counsel, said in a statement.

“U.S. companies are leading the way to increase transparency, but the rule would have jeopardised transparency efforts already underway by making American firms less competitive against state-owned oil companies.”

Ng points out that several major companies under the API umbrella are engaged in the Extractives Industry Transparency Initiative (EITI), a set of standards currently being implemented in around three-dozen countries. Yet the U.S. Congress had felt that the EITI standards were not strong enough (they have since been tightened), and thus mandated the SEC to come up with the extractives payment rule.

The rule is known as Section 1504, part of financial industry overhaul legislation known as the Dodd-Frank Act, signed into law in 2010. As finally adopted in August, Section 1504 requires that all oil, gas and mining companies listed on U.S. stock exchanges engage in annual, public reporting of any payments over 100,000 dollars made to foreign governments.

The rule would apply to around 1,100 companies, and disclosures would have been required starting next year.

Passage of Section 1504 was seen as an important victory by pro-transparency activists and development groups, who suggest that such transparency can crack down on rampant corruption and help to lift the “resource curse” in some resource-rich, governance-poor developing countries, particularly in Africa.

“Needless to say we are incredibly disappointed with this decision, particularly given that the United States has been a leader on this issue through the passage of Section 1504,” Jana Morgan, a Washington campaigner with Global Witness, an advocacy group, told IPS.

“We are now seeing similar initiatives in the European Union and Canada, with transparency in resource payments becoming the new paradigm and the new standard for best business practices.”

Senator Ben Cardin, who co-authored Section 1504, similarly expressed concerns over the potential broader effects of Tuesday’s court decision.

“The U.S. has been at the forefront of the transparency fight, and this decision will delay implementation of vital transparency rules,” Cardin said in a statement.

“Congress was clear in the letter and the spirit of the law that this information should be in the public domain. It’s unfortunate that the court believes that company disclosures to the SEC should remain hidden.”

‘Substantial errors’

The court’s decision revolves around the SEC’s interpretations of the law originally handed down by Congress. In this context, the judge ruled that the SEC had overreached the Congressional mandate in two important ways.

First, the commission’s rule required that company reports on this issue be made public, rather than publishing only, say, summaries of the reports. API-aligned companies had stated in court that changing this element would have cleared up most of their concerns over Section 1504.

Second, the rule did not offer any exemption for companies operating in countries where national laws disallow any such disclosure – Angola, Cameroon, China and Qatar are the four at issue in this case, though this is disputed by transparency advocates.

“The record of comments to the SEC shows clearly that no one has yet correctly identified a single country where Section 1504 disclosures would come into conflict with local laws,” Heather Lowe, director of government affairs with Global Financial Integrity (GFI), a Washington watchdog group, said in a statement on Tuesday. GFI has estimated that illicit financial flows cost developing countries a trillion dollars a year.

Yet companies say Section 1504’s lack of an exemption for national rules would force them to pull out of certain countries, resulting in massive economic costs.

U.S. District Court Judge John D. Bates noted these two points constituted “substantial errors … the commission misread the statute to mandate public disclosure of the reports, and its decision to deny any exemption was, given the limited explanation provided, arbitrary and capricious.”

Because Bates had already struck down the rule based on these two points, he did not offer a decision on the remaining arguments, including the issue of constitutionality. The decision now sends the issue back to the SEC to refashion a new rule, unless the commission moves to appeal the judgement to a higher court.

Contacted by IPS, John Nestor, an SEC spokesperson, said only that the agency is reviewing the decision.

Towards re-enactment?

While rights groups here and internationally are expressing disappointment over the decision, they are noting that the judgement leaves intact significant components at the heart of Section 1504.

“We strongly disagree with the court findings, but that said, the court hasn’t precluded the possibility that the rules will be re-enacted in the same form but with a stronger justification,” Gavin Hayman, the London-based director of campaigns for Global Witness, told IPS.

“Further, we note that nothing in the decision blocks the SEC from requiring public reporting or allows for exemptions from reporting. The oil industry has never been able to clearly show the existence of host country prohibitions against payment disclosure.”

Similar points were made Tuesday by the Washington office of Oxfam America, a humanitarian group that filed a court brief in support of the SEC in this case.

“Nothing in the decision says that the SEC may not require public reporting or deny exemptions – it just says that the SEC needs to use its discretion and provide a fuller analysis,” Ian Gary, Oxfam’s senior policy manager, said in a statement to IPS.

“We disagree with the court’s analysis of the SEC’s justification for not providing reporting exemptions. Despite the court’s conclusions, the SEC balanced the potential costs and benefits of granting exemptions.”

Gary also noted the court’s refusal to rule on the API’s free speech-related argument, but suggested that the judge “did recognise that the Supreme Court has upheld public disclosure requirements as an appropriate approach to regulation.”

The United States is being singled out for criticism after the Group of Eight (G8) rich countries failed to adopt a plan pushed by British Prime Minister David Cameron to require the creation of public country-level registries with detailed information on corporate ownership and activity.

Although the United States did unveil important new pledges Tuesday to crack down on anonymous “shell” corporations, used by money launderers and tax evaders, critics point out that Washington has not outlined how it will implement these commitments. They also warn that the commitments will not put corporate ownership information into the public domain, a criticism also levelled at the G8 declaration overall.

The G8 met Monday and Tuesday at a summit in Northern Ireland, during which tax evasion and corporate transparency were given top billing. While Cameron had hoped other countries would back his call for the creation of public registries, none did so.

Even as the G8 countries decided on a more incremental approach to financial transparency than some had hoped, however, they did arrive at a host of important agreements, including for countries to begin sharing tax information."We would like to see even greater moves for corporate transparency."
-- Eric LeCompte

“The G8’s declaration is absolutely historic,” Eric LeCompte, executive director of Jubilee USA Network, a religious antipoverty group, said Tuesday. “We would like to see even greater moves for corporate transparency, but the foundation the G8 built will take us into a more accountable corporate world then we’ve seen before.”

Christine Lagarde, managing director of the International Monetary Fund, the Washington-based multilateral lender, similarly issued congratulations, noting, “International tax avoidance and evasion have emerged as major risks to government revenue and as threats to the credibility of tax systems in the eyes of citizens – in both advanced and developing countries.”

Others are offering more tempered reactions, however, particularly over the failure of the G8 to explicitly call for the creation of public registries detailing the “beneficial” (or final) ownership of all companies, including shell corporations.

While the United States has now said it will be creating these registries on its own, these will apparently be available only to law enforcement and tax authorities. Critics urge these databases to be made open to the public from the beginning.

“It is important that the United States has committed to creating registries of beneficial information, because this does go beyond the G8 declaration,” Stefanie Ostfeld, a senior policy advisor with Global Witness, an advocacy group and member of the Financial Transparency Coalition, told IPS.

“But it’s not putting that information in the public domain, as the United Kingdom is saying it will do. Without such a commitment, these moves will not live up to their potential impact.”

Shell companies

“We’re very pleased to see the G8 as a whole recognise that anonymous shell companies around the world are a massive problem,” Heather Lowe, legal counsel and director of government affairs at Global Financial Integrity (GFI), a Washington watchdog group, told IPS.

“But then it comes down to the individual national action plans to achieve meaningful progress. In this, the United States is particularly significant in part because of the very high number of companies created here in the first place.”

In recent years, the United States has increasingly spoken out on international tax evasion and money laundering, with a domestic political debate progressing on related reforms to the tax code. At the same time, the United States is widely thought to shelter a huge number of these shell corporations, used to launder corrupt earnings or hide income of foreign citizens.

“It’s very hard to tell how many of these shell companies are incorporated here, as the U.S. doesn’t require information on the ultimate beneficial controller of each company,” Lowe said.

“However, we do know that the potential for a large number of anonymous corporations existing under U.S. law is very high. We also know that those who want to create such a company know this is a good place to do it.”

U.S. shell companies are estimated to have facilitated some 18 billion dollars in illicit transactions in 2005 alone, according to the Treasury Department. Advocates say this legal laxity is directly affecting developing economies, allowing corrupt officials or cronies in resource-rich countries to siphon billions of dollars out of their countries.

According to a recent report by GFI, such abuse could be resulting in losses for developing countries as high as a trillion dollars a year – 10 times the amount those countries receive annually in foreign aid.

For this reason, activists had increased pressure substantially in recent months on President Obama, calling on him to back Cameron’s plan to create a public registry on corporate ownership.

Yet the final pledge fell short of this goal. In a fact sheet released Tuesday, the White House said simply that “The Treasury Department, along with other federal agencies, will continue to advocate for comprehensive legislation on beneficial ownership.”

Recommitment

Simply pushing for such legislation is in line with a commitment the Obama administration made nearly two years ago. According to Lowe, little progress has been made since then.

“While this is a step forward, it’s certainly not a change in U.S. government policy,” she said.

“This [G8 announcement] is really just a recommitment to the issue. That’s fine, but what we really wanted to see was a plan for how the government would advocate for new legislation, which we haven’t been able to obtain.”

In the past, U.S. legislation to require the collection of “beneficial ownership” information has been difficult to advance. One proposal has been introduced (and rejected) in the Senate at least three times over the past decade, at one point being co-sponsored by then-Senator Obama.

On Tuesday, Senator Carl Levin, a primary sponsor of a bill that would require such disclosure, lauded the new G8 commitments: “I said before the summit that the G8 nations were poised to strike a hammer blow against offshore corporate tax avoidance. The G8 commitments made today, if carried out, can bring that hammer down.”

Levin’s legislation, as well as a similar bill in the House of Representatives, is expected to be reintroduced in the coming weeks. Meanwhile, it is currently unclear whether regulatory or executive action on this issue could allow the administration to work around Congress, but advocates suggest they see some opportunities for doing so.

Over the past decade, EITI is said to have facilitated reporting on nearly a trillion dollars in revenues from natural resources. Credit: Bigstock

By Carey L. Biron
WASHINGTON, May 23 2013 (IPS)

Development groups and corruption watchdogs are applauding landmark new standards adopted Wednesday by an international initiative focused on ensuring greater transparency among oil and mining companies operating particularly in developing countries.

Yet some civil society advocates are also warning that the new standards, agreed ahead of a board meeting of the Extractive Industries Transparency Initiative (EITI) being held Thursday and Friday in Sydney, don’t go far enough.

“The EITI needs to keep its bite,” Corinna Gilfillan, an EITI board member and director of the U.S. office of Global Witness, an advocacy group, said following the unveiling of the new standards. “It needs to apply and build on its new rules and be prepared to be a driver rather than a follower of governance reform to avoid diminishing relevance.”

EITI has been in place since 2002, created out of civil society discussions over how resource-rich developing countries can escape the “resource curse” – ensuring that income from their extractives industries is used for public-sector funding rather than risk being siphoned off by corrupt government officials or cronies. Over the past decade, the initiative is said to have facilitated reporting on nearly a trillion dollars in revenues from natural resources.

EITI includes governments, the private sector and civil society, currently covering 39 countries and requiring those members to engage in public reporting of revenues from within their extractives sectors. While most of those members are in Africa, on Wednesday the heads of France and the United Kingdom agreed to become members, following a similar pledge made by the United States in 2011.

Other Western countries engaged with EITI in some respect include Norway, where the EITI secretariat is housed, and Australia. When the U.K. hosts the Group of Eight (G8) rich countries next month, transparency is slated to be a central focus.

While there has been much optimism about the aim and provenance of EITI, recent years have offered increasing evidence that its requirements have not been strong enough. According to a 2011 internal evaluation, compliance with EITI requirements was not necessarily “bring[ing] about fundamental changes” in line with the initiative’s principles.

Evidence of this failure can be seen in the Democratic Republic of Congo.

Although an EITI member, Congo’s government “was able to sell in secret five major mining assets to anonymous shell companies,” according to research by Global Witness. “As a result, the DRC may lose out on around 1.36 billion dollars, twice the country’s health and education budgets.”

In mid-April, the EITI board temporarily suspended Congo, citing a failure to ensure “full disclosure and assurance of the reliability of the figures”. Yet the growing evidence of the EITI standards’ potential ineffectiveness also led to the push for the new rules unveiled Wednesday.

“The new EITI Standard will address a number of the recommendations made [by civil society], including requiring more transparency of state-owned companies and natural resource funds,” Jonas Moberg, head of the EITI international secretariat, told IPS ahead of the Sydney conference.

The standards will now impose significant new reporting requirements on EITI member countries, requiring regular project-to-project details, covering extraction licenses, how those licenses were awarded, and companies involved in the sector. State oil companies, too, will now need to disclose how much product they’re selling.

“The EITI has finally recognised that, when it comes to complex industries, merely disclosing payments is not enough,” Daniel Kaufmann, president of the Revenue Watch Institute, a U.S. watchdog group, said Wednesday. “The new Standard could make EITI more effective in addressing the vast governance challenges facing resource-rich countries.”

Safeguarding relevance

The extractives industry can have a “tremendous impact – good or ill” on a country’s development, Robert F. Cekuta, a U.S. State Department official, said at the EITI conference Wednesday.

“Mismanagement of these resources, as we have seen too many times, can impede economic growth, reduce opportunities for trade and investment, divert critically needed funding from social services and other government activities, and contribute to instability and conflict,” he noted.

“At the same time … proper, sound management of the sector means revenues generated from oil, gas and mining can fuel a country’s economic growth, producing jobs and fostering responsible investments in infrastructure, health, education, and other high-impact sectors, as well as appropriate savings.”

While Cekuta expressed his government’s strong support for the new rules, the U.S. has already passed legislation – known as Section 1504 of the financial regulatory Dodd-Frank Act – that would impose stronger standards on U.S.-listed extractives companies than the new EITI rules would require. The European Union is expected to put in place a similar law next month.

For this reason, some proponents of greater transparency have expressed concern that EITI is losing its pioneering role.

“The EITI’s influence rests on its being seen as a totemic reformers club which governments and companies want to be part of,” Global Witness said following the announcement of the new standards. “This attraction will fade if the initiative is seen to be merely playing catch-up with more dynamic reforms taking place elsewhere.”

The group points in particular to a rollback on civil society calls to require that extractives contracts be publicly disclosed, an obligation that the new standards would merely encourage rather than mandate. Likewise, the new standards will only require that full company ownership information is publicised by 2016.

Global Witness and others are also pushing EITI to ensure that the new reams of data are as user-friendly as possible, in order to encourage collation and analysis by public watchdogs.

Two-tongued interests

Meanwhile, an interesting disconnect has cropped up between events in Sydney and Washington. On the one hand, several of the world’s largest oil companies – including ExxonMobil, Shell and Chevron – sit on the EITI board and are thus inferred to be in agreement with the newly revised transparency rules.

On the other hand, these companies are currently part of a lawsuit here attempting to dismantle Section 1504 of the Dodd-Frank Act, the legislation on which the new EITI standards are mostly closely based.

“Protection of the law is essential for investors to asses a company’s risk and for communities in resource-rich countries to hold governments to account,” Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining programme, said from Sydney.

“This lawsuit is wholly incompatible with the industry’s transparency commitments and support of payment disclosure through [EITI]. It is unacceptable that oil companies should receive reputation benefits by supporting a transparency initiative while at the same time fighting a landmark payment disclosure law in U.S. courts.”

Coalition of Immokalee Workers (CIW) farmworkers at a rally in Lakeland, Florida on Apr. 18, 2010. The Working Group voiced particular concerns regarding low-wage agricultural workers. Credit: Andrew Stelzer/IPS

By Carey L. Biron
WASHINGTON, May 4 2013 (IPS)

A United Nations expert group is warning that too many gaps remain in implementing new safeguards among businesses based in the United States, both in terms of their domestic and international operations, to ensure the protection of human rights of workers and communities affected by those operations.

Two members of the U.N. Working Group on Business and Human Rights wrapped up a 10-day fact-finding mission to the United States this week, at the end of which they released initial observations. Ultimately, these will be expanded upon and finalised for presentation to the U.N. Human Rights Council in June 2014.“It’s a sad thought that our politicians are so crooked that we have to ask the United Nations for help, but no one else will listen.” -- Junior Walk of Coal River Mountain Watch

“With a few exceptions, most companies still struggle to understand the implications of the corporate responsibility to respect human rights,” Puvan Selvanathan, the current head of the Working Group and one of the two members on the U.S. trip, said at the end of the mission “Those that do have policies in place, in turn, face the challenge of turning such policies into effective practices.”

Selvanathan and his colleague, Michael Addo, focused on gauging U.S. adherence to and regulatory changes following the 2011 adoption of the U.N. Guiding Principles on Business and Human Rights. These principles offer the first international standards aimed at ameliorating the negative rights impacts of global business.

Although the United States is a signatory to the Guiding Principles, Washington has not yet come up with a national plan for their implantation, a gap highlighted by the Working Group and long emphasised by civil society.

“We were pleased that the Working Group engaged with civil society organisations, including human rights, environmental, labour and indigenous groups,” Amol Mehra, director of the International Corporate Accountability Roundtable (ICAR), a Washington-based coalition, told IPS.

“We believe that the U.S. government has much farther to go in fulfilling its duty to protect human rights under the Guiding Principles … and we also note the Working Group’s call to the U.S. government to develop a National Action Plan for implementation of the Guiding Principles.”

Both Mehra and the Working Group also noted the recent U.S. Supreme Court decision known as Kiobel vs. Royal Dutch Shell. That case, decided just weeks ago, will now “significantly limit access to judicial remedy for victims of corporate-related human rights abuse,” Mehra said.

The Working Group, meanwhile, noted that further analysis was still necessary to understand the “full implications” of the judgement.

Due diligence

In late April, ICAR and a group of civil society groups sent a brief to the U.S. State Department outlining a series of recommendations to bring the country closer in line with the Guiding Principles and to strengthen related indicators.

The brief’s three central recommendations, in addition to developing a national implementation plan, include strengthening remedies for human rights violations. It also calls on regulators to mandate that U.S. corporations incorporate human rights into their “due diligence”, the legally mandated inquiries that companies must take ahead of a business sale or agreement.

Currently, such a step regarding human rights impact is not required.

“Our overall concern is that quite a bit more needs to be done on this issue in the United States, and we’re looking for regulatory mechanisms that can hold businesses to account on human rights,” Corinna Gilfillan, head of the U.S. office of Global Witness, a watchdog group, told IPS.

“In particular, we’re asking that the U.S. government mandates human rights due diligence, looks into how laws can be structured around this issue. And, of course, we’re also asking that U.S. government institutions themselves act in accordance with human rights norms.”

The early notes from the Working Group do offer positive reports on local-level engagement in line with the Guiding Principles, as well as on important strengthening of U.S. policy and regulation, including bolstering disclosure standards. Movement towards broad implementation, however, appears to be taking place only slowly.

“The U.S. government has committed to the Guiding Principles, and established a number of key initiatives in this regard,” the Working Group’s Michael Addo stated Wednesday, when he and Selvanathan unveiled their early observations here in Washington.

“[But] it is now facing the challenge of putting them into practice, across all departments, ensuring that this is done in a coherent and effective way, and in a way that makes a real difference to people on the ground.”

Selvanathan and Addo pointed to “significant gaps” in oversight, regulation and enforcement in the context of U.S. attempts to conform to the Guiding Principles. Yet they said the responsibility goes beyond government officials.

“There is negligible awareness of the Guiding Principles generally among U.S. stakeholders,” they note in an eight-page concluding statement seen by IPS, “and, it seems, little appreciation of human rights being material to the conduct of business in the U.S.”

Chronic disregard

Speaking with reporters and civil society on Wednesday, the Working Group voiced particular concerns regarding low-wage agricultural workers, lack of free and prior informed consent for Native American communities engaging with big business, and harmful practices by the domestic extractives industry.

Indeed, Selvanathan and Addo reserved some of their strongest language for these issues. For instance, they reported having heard “allegations of labour practices in low-wage industries with migrant workers, particularly within the services sector, that would be illegal under both U.S. laws and international standards.”

Such violations reportedly include violations of minimum wage requirements, wage theft and “chronic disregard for minimum health and safety measures”.

The two also singled out the extractives industry, travelling to the state of West Virginia, in the Appalachian Mountains, to talk to communities living near strip mines and so-called “mountaintop removal” mining operations.

There, they were told of “significant adverse human rights impacts, most notably related to the enjoyment of the rights to health and water”, and also heard allegations of intimidation and harassment by those opposed to surface mining.

“I am hopeful that our visit from the United Nations is a sign that they’re starting to take notice of the human rights atrocities being committed in Appalachia today,” Junior Walk, a campaigner with Coal River Mountain Watch, a local advocacy group, said in a statement.

“It’s a sad thought that our politicians are so crooked that we have to ask the United Nations for help, but no one else will listen.”