Oil extraction in the Orinoco Belt, southeastern Venezuela. The crude extracted from this rich basin is very heavy and requires blending with diluent oil for refining—a process previously handled by U.S. company Chevron, which must now cease operations in the country. Credit: PDVSA

By Humberto Márquez
CARACAS, Apr 25 2025 (IPS)

Reduced to a marginal oil producer over the past decade, Venezuela has suffered another blow as United States president Donald Trump ordered punitive measures to blockade and further restrict the country’s oil exports.

Venezuelan crude will likely navigate the fringes of global oil trade and finance, flowing toward Asian markets as the government seeks to avoid financial suffocation—possibly without ruling out new negotiations with Washington."Revenues will drop significantly because PDVSA will struggle to produce, obtain diluents, and won’t have the capacity to invest in projects." — Francisco Monaldi

“Venezuela has been very hostile to the United States and the Freedoms which we espouse. Therefore, any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country,” Trump wrote on his media platform Truth Social on March 24.

Simultaneously, Trump revoked licenses allowing U.S. firms Chevron and Global Oil Terminals, Spain’s Repsol, France’s Maurel & Prom, India’s Reliance, and Italy’s Eni to operate in Venezuela.

The foreseeable outcome “will be a drop in oil production—possibly over 100,000 barrels per day—with lower revenues and difficulties in placing crude on the black market,” Francisco Monaldi, a fellow at Rice University’s Baker Institute’s Center for Energy Studies, told IPS.

Venezuela, which once produced three million barrels (159 liters each) per day in the early 2000’s, has seen a decline since 2013, falling below 400,000 barrels in 2020.

Until the beginning of this century, Venezuela was a major oil producer and exporter, thanks to the vast reserves in the Maracaibo Lake basin in the west. Although underground reserves remain enormous, production has declined, and the country has lost its leading role in the global hydrocarbon market. Credit: Mdnava / Fe y Alegría

This is a stark contrast to its history as the world’s second-largest producer and top exporter a century ago, a co-founder of OPEC in 1960, and still home to the largest crude reserves—over 300 billion barrels.

The collapse of the industry and state-owned PDVSA resulted from a mix of dwindling investments, neglected maintenance, erratic management, and bad deals—all amid economic and social collapse and intense political strife.

Moreover, corruption has reached such heights that several former Energy Ministers and presidents of PDVSA have been imprisoned, while others are fugitives abroad. According to the Venezuelan chapter of Transparency International, the amounts that “evaporated” without ever reaching state coffers add up to tens of billions of dollars.

Additionally, Washington imposed escalating sanctions on Venezuelan political and military leaders, with severe effects on PDVSA’s supplies and operations, the Central Bank, and other state entities.

GDP shrank to a quarter of its early-2000s level, hyperinflation reached six digits, income-based poverty hit 90%, and eight million Venezuelans—one in four—left the country.

However, since 2022, Washington’s green light for Chevron and other foreign firms helped production recover to 760,000 barrels per day in 2023, 857,000 in 2024, and 913,000 in March 2025, according to OPEC’s secondary sources.

Chevron accounted for 25% of this output, with PDVSA handling the rest. The U.S. firm also facilitated the import of 50,000 barrels of diluent daily to blend with Venezuela’s heavy crude, In order to improve and facilitate refining.

“It is assumed PDVSA will take over Chevron’s fields, but a drop is inevitable,” Andrés Rojas, editor of Venezuelan oil journal Petroguía, told IPS.

An oil tanker docks at the Waidiao terminal in Zhejiang province, eastern China. The Asian giant is the primary destination for Venezuelan oil, and this flow may increase as Venezuela loses its U.S. market due to new sanctions imposed by President Donald Trump. Credit: Zhejiang Municipal Government

The impact 

Monaldi explains that of Venezuela’s 700,000 daily exportable barrels, half went to “licensed destinations” (mainly the United States, Europe, and India), while the rest went to China (as debt repayment) and Cuba.

Economist Asdrúbal Oliveros, head of Ecoanalítica, consulting firm, estimates Venezuela will lose over US$3 billion this year from Chevron’s withdrawal, leaving external revenues at no more than US$13 billion for its 29 million people.

Government “revenues will plummet because PDVSA will struggle to produce (due to shortages of materials and spare parts), secure diluents, and invest in projects,” Monaldi said.

The expert explains that PDVSA will have to return to the black market, using practices such as transferring crude oil at sea or in the Strait of Malacca in Southeast Asia to vessels different from those originally dispatched.

This way, the oil reaches its destination, usually China, labeled as being produced in Malaysia or another part of the world.

However, these distant and complicated routes have the dual effect of increasing costs—including freight and insurance—and reducing revenue, as the oil must be sold at discounts of 30% or more compared to prices on the regular market.

Meanwhile, the trade, economic, and financial shock triggered by Trump’s tariff storm this month is driving oil prices down, with current benchmarks like West Texas Intermediate (WTI) at US$63 and North Sea Brent at US$67 per barrel.

Oil transfers between tankers take place offshore or near international trade hubs, such as the Strait of Malacca in Asia. This method, though riskier and costlier, is used as a black-market mechanism to evade sanctions like those imposed by Washington on Venezuela. Credit: Verdemar

Black market challenges 

In April of this year, two oil tankers—the Bahamian-flagged Carina Voyager and the Marshall Islands-registered Dubai Attraction—loaded 500,000 and 350,000 barrels of crude, respectively, at Venezuelan terminals. The oil was initially meant to be transported by Chevron to refineries on the U.S. Gulf Coast.

However, the vessels had to turn around and return to Venezuelan ports after state-run PDVSA realized it would not be able to collect payment for the shipments due to Washington’s sanctions. The cargoes will now be diverted to Venezuela’s top Asian client: China.

“PDVSA has done this since 2019 with Russian and Iranian support, using two or three intermediaries to deliver the loads,” Rojas noted.

In addition to the higher costs stemming from intermediaries, longer distances, and increased risks, Rojas points out that Venezuelan crude is heavier than benchmark Brent and WTI oils, meaning its price per barrel is roughly US$10 lower.

Monaldi notes that even if China disregards Washington’s threat to hike tariffs on Venezuelan oil imports—or Malaysia, where much of this black-market trade flows—risk premiums will rise, and Venezuela will bear the brunt by receiving insufficient diluents for its heavy crudes.

The Carina Voyager, one of the Bahamian-flagged tankers chartered by Chevron in April to transport Venezuelan crude to refineries on the U.S. Gulf Coast, had to turn around and return its cargo. PDVSA made the decision after realizing payment would be impossible due to Trump’s sanctions. Credit: Sun Enterprises

“The situation is extremely complicated, and this will likely push the Venezuelan economy—which had been experiencing modest growth in recent years (2.6% in 2023 and 5.0% in 2024, according to the Venezuelan Finance Observatory)—back into recession, possibly as early as 2025,” the expert warns.

Monaldi adds that the recession will come alongside a sharp depreciation of the bolívar against the dollar (already over 50% since January) and, consequently, higher inflation, which Ecoanalítica estimates could reach 189% this year.

In this new game, even American oil importers lose out—they had benefited from cheaper Venezuelan crude, which allowed them to free up United States oil volumes for higher-priced exports to third countries, Rojas noted.

He also points out that Chevron’s withdrawal “hurts communities like Soledad” (a town of 35,000 in southeastern Venezuela), where a health center relied on support from the corporation as part of its social responsibility program.

And, as a final blow to Venezuela’s setbacks, two South American neighbors—once net importers of its oil—have now joined the thriving club of exporters welcomed by Washington: Brazil, which produces 3.4 million barrels per day, and Guyana, now pumping 650,000 barrels daily.

Oil workers are busy on the banks of the Tiputini river, on the northern border of the Yasuní National Park, in Ecuador's Amazon region. CREDIT: Pato Chavez / Flickr

By Carolina Loza
QUITO, Oct 9 2023 (IPS)

The decision reached by Ecuadorians to put an end to oil production in Yasuní National Park, in a popular referendum in August, was a triumph for civil society and a global milestone in environmental democracy. But when it comes to implementation, the result is less promising.

Despite being a democratic decision, taken by the majority of Ecuadorians, who voted to halt oil exploration and production in the park, the authorities say the verdict is not clear."The referendum process sets a precedent because it is a way of establishing what is called an environmental democracy, where the people decide what to exploit and what not to exploit. These principles in practice are in harmony with the rights of nature that are mentioned in the Ecuadorian constitution, to protect nature above and beyond economic profit." -- Ximena Ron Erráez

During the Aug. 20 presidential and legislative elections, 59 percent of voters voted Yes to a halt to oil extraction in one of the most biodiverse protected areas in the world, part of the Ecuadorian Amazon rainforest that has been a biosphere reserve since 1989.

At the same time, 68 percent of the voters of the Metropolitan District of Quito voted against continued mining in their territory, in order to protect the biodiversity of the Chocó Andino, a forest northwest of the capital that provides it with water.

In the midst of an unprecedented political and criminal insecurity crisis in Ecuador, the two votes were a historic landmark at a democratic and environmental level, in addition to demonstrating that Ecuadorians are increasingly looking towards alternatives that would move Ecuador away from the extractivism on which the economy of this South American country has depended for decades.

But the No vote, i.e. the answer that allowed oil extraction to continue in the Yasuní ITT block, won in the provinces where the national park is located: Orellana and Sucumbíos. This is one of the arguments of the current authorities to stop compliance with the referendum, arguing that the areas involved want oil production to go ahead.

Constitutional lawyer Ximena Ron Erráez said the Ecuadorian government cannot escape the obligation to abide by the result of the referendum.

“As far as the Ecuadorian constitution is concerned…..it must be complied with in an obligatory manner by the authorities; there is no possibility, constitutionally speaking, that the authorities can refuse to comply with the results of the referendum,” she told IPS.

One of the murals that still remain on the streets of Quito from the campaign for the August referendum on whether or not to keep the oil wealth underground in Yasuní National Park, to which voters decided “yes”: leave it untouched. CREDIT: Carolina Loza / IPS

Ron Erráez also complained about a lack of political will.

On Sept. 5, Ecuadorian President Guillermo Lasso, in a meeting with indigenous communities, described the referendum as “not applicable”.

A leaked video in which he made the statement drew an outcry from civil society groups that pushed for the referendum for more than 10 years. Yasunidos, the group that was formed to reverse the 2013 decision by the government of then President Rafael Correa (2007-2017) to begin oil drilling and production in Yasuní, has declared itself in a state of permanent assembly.

The Correa administration had proposed a project that sought to keep the oil in Yasuní ITT (Ishpingo, Tambococha, Tiputini), also known as Block 43, in the ground, on almost 2,000 hectares, part of which is within the biosphere reserve and the rest in the so-called buffer zone.

The initiative consisted of asking for international economic compensation for not exploiting the oilfield, which contains more than 1.5 billion barrels of reserves, in order to continue to preserve the biodiversity of the park and its surrounding areas. But the proposal did not yield the hoped-for results in international financing and the government decided to cancel it.

This is despite the fact that Yasuní, covering an area of 10,700 square kilometers in the northeast of the country within the Amazon basin, is home to some 150 species of amphibians, 600 species of birds and 3,000 species of flora, as well as indigenous communities, some of which are in voluntary isolation.

Environmental activists and organizations working in favor of keeping Yasuní’s oil in the ground say the management of the project showed the dilemma of finding alternatives to the extractive industry and the lack of real political will on the part of the political powers-that-be to come up with solutions.

View of one of the rivers inside the Yasuni park, in northeastern Ecuador, which preserves an incomparable biodiversity. CREDIT: Manel Ortega Fernández / Flickr

Ron Erráez mentioned an important fact: Lasso, in power since May 2021, will be an outgoing president after the second round of presidential elections is held on Oct. 15, and it will be his successor who will have to fulfill the mandate of the referendum on the national park.

One difficulty is that his successor, who will take office on Nov. 25, will only serve as president for a year and a half, to complete the term of Lasso, who called for an unprecedented early election to avoid his likely impeachment by the legislature.

Alex Samaniego, who participates in Yasunídos from Scientist Rebellion Ecuador, said it was clear from the start that the campaign for the Yasuní and Andean Chocó referendums was a long-term process, which would not end with whatever result came out of the vote.

“We know that we have to defend the result, defend the votes of the citizens and make sure that the referendums are fully complied with,” he told IPS.

According to the environmental activist, the democratic process behind the referendums will serve as an example for many countries, including Brazil, where communities are waging a constant struggle to combat climate change by seeking alternatives to the extractive industries.

Capture from a video of the Quito Free of Mining campaign, which triumphed in the popular referendum on Aug. 20. CREDIT: Carolina Loza / IPS

“We are told about all the money that oil brings to the economy, but very little money stays in the communities,” said Samaniego, who mentioned alternatives such as community-based tourism and biomedicine and bioindustries as economic alternatives to oil production.

Ron Erráez said “the referendum process sets a precedent because it is a way of establishing what is called an environmental democracy, where the people decide what to exploit and what not to exploit.”

“These principles in practice are in harmony with the rights of nature that are mentioned in the Ecuadorian constitution, to protect nature above and beyond economic profit,” she added.

Ecuadorian voters decided at the ballot box, and their decision should accelerate the possibility of a transition to alternatives for their economy. But what will the implementation look like?

The referendum on the Andean Chocó region covers a conservation area of which Quito is part, which includes nine protected forests and more than 35 natural reserves, in order to avoid the issuance of mining exploration permits, a measure that will be implemented after the vote.

There are contrasting views over the halt to oil exploration and production in Yasuni. The state-owned oil company Petroecuador highlights the losses for the State and presents figures that question the studies of groups such as Yasunidos.

The referendum gives the government one year to bring oil production activities to a halt. But Ron Erráez said it could take longer to dismantle Petroecuador’s entire operation in Yasuní ITT. Meanwhile, operations in Block 43 continue.

Sofia Torres, spokesperson for Yasunidos, said that despite all the talk during the campaign about economic losses, the vote showed that a majority of Ecuadorians question the country’s extractivist industry status quo.

In her view, although government and oil authorities insist that oil resources are indispensable for the country’s development, Ecuadorians have not seen this materialize in terms of infrastructure, social measures or services.

For this reason, they decided that “it is better to opt for the preservation of something concrete, such as an ecosystem that provides us with clean water and clean air and that is something like an insurance policy for the future,” she told IPS.

On Oct. 15, Ecuadorians will choose between left-leaning Luisa Gonzalez, the protegé of former President Correa, and businessman Daniel Noboa. It will fall to one of them to enforce the majority vote on the future of Yasuní and the halt to oil industry activity in the park.

View of the bulk fuel plant in Dhahran, Saudi Arabia. Because the kingdom needs oil prices to remain high to balance its budget, it pushed OPEC and its allies to decide on a production cut as of Nov. 1. CREDIT: Aramco

By Humberto Márquez
CARACAS, Nov 1 2022 (IPS)

The decision to cut oil production by the Organization of Petroleum Exporting Countries (OPEC) and its allies as of Nov. 1 comes in response to the need to face a shrinking market, although it also forms part of the current clash between Russia and the West.

The OPEC+ alliance (the 13 members of the organization and 10 allied exporters) decided to remove two million barrels per day from the market, in a world that consumes 100 million barrels per day. The decision was driven by the two largest producers, Saudi Arabia – OPEC’s de facto leader – and Russia.

The cutback “is due to economic reasons, because Saudi Arabia depends on relatively high oil prices to keep its budget balanced, so it is important for Riyadh that the price of the barrel does not fall below 80 dollars,” Daniela Stevens, director of energy at the Inter-American Dialogue think tank, told IPS.

The benchmark prices at the end of October were 94.14 dollars per barrel for Brent North Sea crude in the London market and 88.38 dollars for West Texas Intermediate in New York."Notwithstanding Mohammed bin Salman's sympathy for Putin, the cut was due to his concern about the balance of the world oil market, and not to support Russia." -- Elie Habalián

“At the time of the cutback decision (Oct. 5) oil prices had fallen 40 percent since March, and the OPEC+ countries feared that the projected slowdown in the global economy – and with it demand for oil – would drastically reduce their revenues,” Stevens said.

With the cut, “OPEC+ hopes to keep Brent prices above 90 dollars per barrel,” which remains to be seen “since due to the lack of investment the real cuts will be between 0.6 and 1.1 million barrels per day and not the more striking two million,” added Stevens from her institution’s headquarters in Washington.

A month ago, the alliance set a joint production ceiling of 43.85 million barrels per day, not including Venezuela, Iran and Libya (OPEC partners exempted due to their respective crises), which would allow them to deliver 48.23 million barrels per day to the market.

But market operators estimate that they are currently producing between 3.5 and five million barrels per day below the maximum level considered.

The alliance is made up of the 13 OPEC partners: Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela, plus Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan.

The giants of the alliance are Saudi Arabia and Russia, which produce 11 million barrels per day each, followed at a distance by Iraq (4.65 million), United Arab Emirates (3.18), Kuwait (2.80) and Iran (2.56 million).

In July, U.S. President Joe Biden met with Saudi Crown Prince Mohammed bin Salman, with whom he discussed human rights and abundant oil supplies for the global market. A few months later Riyadh led the decision for an oil cut that has been seen as a betrayal by Washington. CREDIT: Bandar Algaloud/SRP

United States takes the hit

U.S. President Joe Biden was “disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of (Russian President Vladimir) Putin’s invasion of Ukraine,” a White House statement said.

The price of gasoline in the United States has soared from 2.40 dollars a gallon in early 2021 to the current average of 3.83 dollars – after peaking at five dollars in June – a heavy burden for Biden and his Democratic Party in the face of the Nov. 8 mid-term elections for Congress.

Biden visited Saudi Arabia in July, while the press reminded the public that during his 2020 election campaign he talked about making the Arab country “a pariah” because of its leaders’ responsibility for the October 2018 murder in Istanbul of prominent opposition journalist in exile Jamal Khashoggi.

The U.S. president said he made clear to the powerful Saudi Crown Prince Mohammed bin Salman his conviction that he was responsible for the crime. But the thrust of his visit was to urge the kingdom to keep the taps wide open to contain crude oil and gasoline prices.

Hence the U.S. disappointment with the production cut promoted by Riyadh – double the million barrels per day predicted by market analysts – which, by propping up prices, favors Russia’s revenues, which has had to place in Asia, at a discount, the oil that Europe is no longer buying from it.

Biden then announced the release of 15 million barrels of oil from the U.S. strategic reserve – which totaled more than 600 million barrels in 2021 and just 405 million this October – completing the release of 180 million barrels authorized by Biden in March, following the Russian invasion of Ukraine, that was initially supposed to occur over six months.

Saudi Crown Prince Mohammed bin Salman and President Vladimir Putin chat cordially during a visit by the Russian leader to Riyadh in October 2019. The two major oil exporters lead the 23-state alliance that upholds production cuts to prop up prices. CREDIT: SPA

Shift in Washington-Riyadh relations

Karen Young, a senior research scholar at the Center on Global Energy Policy at Columbia University in New York, wrote that “oil politics are entering a new phase as the U.S.-Saudi relationship descends.”

“Both countries are now directly involved in each other’s domestic politics, which has not been the case in most of the 80-year bilateral relationship,” she wrote.

“….(M)arkets had anticipated a cut of about half that much. Whether the decision to announce a larger cut was hasty or politically motivated by Saudi political leadership (rather than technical advice) is not clear,” she added.

Saudi leaders could apparently see Biden as pandering to Iran, its archenemy in the Gulf area, with positions adverse to Riyadh’s in the conflict in neighboring Yemen, and would resent the accusation against the crown prince for the murder of Khashoggi.

Young argued that “the accusation that Saudi Arabia has weaponized oil to aid Russian President Vladimir Putin is extreme,” and said “The Saudi leadership may assume that keeping Putin in the OPEC+ tent is more valuable than trying to influence oil markets without him.”

Gasoline prices in the United States, while down from their June level of five dollars per gallon, are still at a high level for many consumers ahead of the upcoming midterm elections. CREDIT: Humberto Márquez/IPS

More market, less war

OPEC’s secretary general since August, Haitham Al Ghais of Kuwait, said on Oct. 7 that “Russia’s membership in OPEC+ is vital for the success of the agreement…Russia is a big, main and highly influential player in the world energy map.”

Writing for the specialized financial magazine Barron’s, Young stated that “What is certainly true is that energy markets are now highly politicized.”

“The United States is now an advocate of market manipulation, asking for favors from the world’s essential swing producer, advocating price caps on Russian crude exports and embargoes in Europe,” Young wrote.

For its part, the Saudi Foreign Ministry rejected as “not based on facts” the criticism of the OPEC+ decision, and said that Washington’s request to delay the cut by one month (until after the November elections, as the Biden administration supposedly requested) “would have had negative economic consequences.”

In its most recent monthly market analysis, OPEC noted that “The world economy has entered into a time of heightened uncertainty and rising challenges, amid ongoing high inflation levels, monetary tightening by major central banks, high sovereign debt levels in many regions as well as ongoing supply issues.”

It also mentioned geopolitical risks and the resurgence of China’s COVID-19 containment measures.

The two million barrel cut was decided “In light of the uncertainty that surrounds the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market,” said the OPEC+ alliance’s statement following its Oct. 5 meeting.

Oil analyst Elie Habalian, who was Venezuela’s governor to OPEC, also opined that “notwithstanding Mohammed bin Salman’s sympathy for Putin, the cut was due to his concern about the balance of the world oil market, and not to support Russia.”

Latin America, pros and cons

Stevens said the oil outlook that opens up this November will mean, for importers in the region, that their fuels will be more expensive but probably not by a significant amount, and net importers in Central America and the Caribbean will be the hardest hit.

Exporters will benefit from higher prices. Brazil and Mexico have already increased their exports of fuel oil, and Argentina and Colombia have hiked their exports of crude oil. And higher prices would particularly benefit Brazil and Guyana, which are boosting their production capacity.

Argentina could have benefited if it had begun to invest in production years ago, but its financial instability left it with little capacity to take advantage of this moment. And Venezuela not only faces sanctions, but upgrading its worn-out oil infrastructure would require investments and time that it does not have.

Employees work on the solar panels of the El Romero plant, with a capacity of 196 megawatts, in the desert region of Atacama in northern Chile, a country that has set out to develop its solar power potential. CREDIT: Acciona

By Humberto Márquez
CARACAS, Apr 29 2020 (IPS)

The oil slump, global recession and uncertainty about the magnitude of the COVID-19 pandemic will fuel the appetite for cheaper fossil fuel energy and delay investments in renewables, affecting the targets of the Paris Agreement on climate change and the Sustainable Development Goals (SDGs).

The countries of the developing South, and in particular oil exporters, will be affected as suppliers to shrinking economies and as seekers of investment in clean energy, in a world that will compete fiercely for low-cost recovery, warned experts consulted by IPS.

The crises, “in view of the abundance and low prices of oil, far from accelerating a change of era that would leave behind fossil fuels and embrace renewable energies, will postpone for a long time that aim, outlined in the SDGs,” said Venezuelan oil expert Elie Habalián.

One of the targets of SDG 7, which calls for affordable clean energy, is to “increase substantially the share of renewable energy in the global energy mix” by 2030.

This is in line with the Paris Agreement on climate change, signed in 2015, which enters into force at the end of this year. The accord includes energy transition measures: national contributions to replace fossil fuels with clean energy, reduce greenhouse gas emissions and curb the increase in temperature to 1.5 degrees Celsius.

These commitments are undermined by the impact of the COVID-19 pandemic, which will cause a severe recession, with the global economy projected to shrink three percent this year and six percent in large countries in the North like the United States and in the South like Brazil.

With that forecast, “it seems that the efforts of governments will tend to sustain and deepen the extractivist model, including hydrocarbons,” said researcher María Marta di Paola, of Argentina’s Environment and Natural Resources Foundation.

In 2018, according to British oil giant BP, global consumption of primary energy (the energy embodied in natural resources before undergoing any human-made conversions or transformations) was 13,865 million tons of oil equivalent (Mtoe), with a predominance of fossil fuels: oil 33.6 percent, coal 27.2 percent and gas 23.8 percent.

Hydroelectricity represented 6.8 percent and sources strictly considered renewable (solar, wind, geothermal, marine, biomass) contributed just 561 Mtoe, or 4.04 percent.

The Paris Agreement, aimed at adapting to and mitigating the climate emergency, establishes that developing countries will take longer to comply with the agreement and that the reductions to which they commit will be made on the basis of equity and in the context of their fight against poverty and for sustainable development.

But in the face of the crises caused by the pandemic, many of the 196 signatory countries, “seeking to take advantage of their installed capacity and regulate impacts on employment and consumption, will relax environmental standards and miss the opportunity to begin a clean, fair and inclusive energy transition,” said Di Paola.

Lisa Viscidi of the Washington-based think tank Inter-American Dialogue said that “although rates of return are currently higher for renewables than for fossil fuels, there are indications that it will be difficult to attract investment in solar or wind energy before demand recovers.”

View of a gas plant in Abu Dhabi, United Arab Emirates, a major oil exporter. The outlook of abundant oil and lower prices in the midst of the crisis points to intense demand for and use of fossil fuels in the short and even medium term. CREDIT: ADNOC

She cited “the plunge in demand for electricity due to the self-isolation (to curb the spread of COVID-19), which strongly impacts the auctions of renewables, leading to their cancellation” – a reference to the mechanism for buying and selling electricity between suppliers and distributors.

With the collapse of oil prices, governments like those of Latin America “will not be inclined towards renewable energy for now, calculating that it could have higher costs,” said Viscidi, head of the energy area in her organisation.

But also when the current world health crisis ends, “the post-pandemic economy will pose insurmountable obstacles for many countries in the global South to achieve a transformation of their energy mix,” said Alejandro López-González, an expert in sustainability from the Polytechnic University of Catalonia in Spain.

This, he argued, is because “the transformation of the energy mix in countries of the South depends on trade in commodities with industrialised countries,” that is, on securing good markets and prices for their products, which provide revenue with which to adopt cleaner energy sources.

Throughout the developing South, the global recession will result in fewer exports, business closures, job losses, lower tax revenues and reduced investment, according to projections by multilateral bodies, leaving capital- and technology-intensive initiatives, such as solar or wind farms, without resources.

Currently, in the developing South, only India, with solar and wind energy plants, and Brazil (wind and biomass) are attempting to keep up with the giants that possess large non-conventional clean energy installations: China, the United States, Germany and Japan.

In 2018, renewable energies represented only 9.3 percent, or 2,480 of the 26,615 terawatts (1 Tw = 1 billion kilowatts) of electricity generation in the world, versus 10,100 Tw contributed by coal, 6,189 by gas and 4,193 by water sources.

Peter Fox-Penner, head of Boston University’s Institute for Sustainable Energy, said in an article distributed by The Conversation that “Economy-driven demand reductions, which are likely worldwide, will hurt new renewable installations.

“Utilities will tighten their budgets and defer building new plants. Companies that make solar cells, wind turbines, and other green energy technologies will shelve their growth plans and adopt austerity measures,” in the context of the global recession, he wrote.

But “Countervailing factors will partly offset this decline, at least in wealthy countries,” Fox-Penner said. “Many renewable plants are being installed for reasons other than demand growth, such as clean power targets in state laws and regulations,” and public pressure that forces utilities to close down coal-fired power plants, he added.

The outlook for oil

Along these lines, Venezuelan economist José Manuel Puente predicted that “the energy transition will happen, there are more and more regulations, electric and hybrid cars, and the problem for Venezuela, Nigeria or Mexico is that we will remain poor countries with deposits of black sludge underground.”

López-González is also in favour of countries like Venezuela – with an enormous potential for wind energy due to the strong, constant trade winds that blow in the northwest – fully exploiting their hydrocarbon resources in order to finance changes in their energy mix.

But these strategies were suspended for members of the Organisation of Petroleum Exporting Countries (OPEC), and for other crude oil producers, when oil prices collapsed to the point that on Apr. 20 they reached negative values, for the first time in history.

U.S. benchmark West Texas Intermediate was quoted that day on the New York futures market at -37 dollars per barrel, 50 dollars below its opening price that day of 13 dollars.

The prices plunged because, as stockpiles overwhelmed storage facilities, buyers did not want to be forced to receive agreed shipments for delivery on that “Black Monday”, and preferred to assume the cost of getting out of the commitment.

That day illustrated the decline in demand that had already started before the arrival of coronavirus in Europe and the Americas, and which gave rise in March to a supply reduction agreement between the 11 OPEC partners and 10 other exporters.

The recession triggered by COVID-19 will mean that the world will consume 30 percent less this year: 70 million barrels a day of oil, down from 100 million in 2019.

This oil crisis “brings very bad news for producers in the Gulf, Russia, Mexico, Venezuela and others: it is the end of absolute income, and the extreme minimisation of the differential income of oil,” said Habalián, a former Venezuelan ambassador to OPEC.

For years, oil exporting nations benefited from setting reference prices for oil before it reached the markets. And in addition, due to the wide gap between costs and prices, they piled up profits that are being pulverised by the current crisis.

Also affected are dozens of companies facing bankruptcy since the growing demand and strong oil prices had allowed them to extract, mainly in the United States, shale oil and gas by means of fracking (hydraulic fracturing), an environmentally questionable technique.

Finally, the energy landscape will be impacted by the behaviors that consumers adopt in the wake of the pandemic – such as their use of energy or demand for travel – or by changes in labour relations after the extensive experiment in off-site work as a result of the COVID-19 self-isolation.

The Paraguaná oil refinery complex in northwestern Venezuela, one of the world’s largest, can process a million barrels a day, and is working at just a third of its installed capacity. Credit: Pdvsa

By Humberto Márquez
CARACAS, Dec 19 2017 (IPS)

Corruption in the Venezuelan state oil industry, denounced by the government itself, and with former ministers and senior managers behind bars, is the latest evidence that, in the country with the largest oil reserves on the planet, the industry on which the economy depends is falling apart.

There was a drop “in the production of crude oil, of a million barrels per day,” economist Luis Oliveros, who teaches at the Metropolitan University, told IPS. In December 2013 output stood at 2,894,000 barrels per day compared to 1,837,000 in November 2017, according to the Organisation of the Petroleum Exporting Countries (OPEC).

By 2018 production could drop another 250,000 barrels per day at the current rate, and Venezuela, co-founder of OPEC in 1960 when it was the world’s largest crude oil exporter, is becoming an almost irrelevant player in the global market, Oliveros said.

This despite the fact that it has the largest known deposit of liquid fossil fuels, the 55,000- sq-km southeastern Orinoco oil belt, with an estimated 1.4 trillion barrels of crude, mainly extra-heavy, including proven reserves of 270 billion barrels, according to Venezuelan estimates.

Oil is virtually Venezuela’s only export product, the source of 95 percent of foreign exchange earnings, and by the middle of this decade it represented more than 20 percent of GDP. Most of the business is in the hands of the state-owned Petroleos de Venezuela (PDVSA), which has a few partnerships with transnational corporations.

President Nicolás Maduro started a purge on Nov. 28 within PDVSA, in the midst of the hail of corruption allegations and investigations, and asked the new management, led by a general new to the industry, Manuel Quevedo, to make an effort to raise production by one million barrels per day.

The immediate target was to meet the quota assigned by OPEC for 2017-2018, of 1,970,000 barrels per day, said presidential adviser Alí Rodríguez.

“Merely to sustain the current production of 1.85 million barrels per day – let alone increase it – we need to inject between four to five billion dollars into the industry, and the evidence is that this money is not there,” said Alberto Cisneros, CEO of the oil consulting firm Global Business Consultants.

With the economy in shambles, a four-digit inflation rate, different simultaneous exchange-rate systems for a currency that depreciates daily, shortages of food, medicines and essential supplies, and a foreign debt of more than 100 billion dollars, Venezuela does not have the resources that the industry needs, he told IPS.

Against this backdrop, the oil business “also suffers from management problems since PDVSA in 2003, after a strike against the government, dismissed 18,000 employees, half of its workforce,” former deputy energy minister Víctor Poleo (1999-2002) told IPS.

And corruption was dramatically exposed this December, when the Attorney General’s Office sent 67 PDVSA executives and managers to prison for crimes ranging from falsification of production figures to embezzlement and undermining the country’s sovereignty,.

Among these were two former oil ministers of President Nicolás Maduro, in power since 2013, Eulogio del Pino and Nelson Martínez, who were also presidents of PDVSA and its U.S. subsidiary, Citgo, which they allegedly damaged when re-negotiating debts.

Moreover, the Public Prosecutor´s Office is investigating Rafael Ramírez, a former oil minister and president of PDVSA between 2002 and 2014, and until last November Venezuelan ambassador to the United Nations, for his possible involvement in money laundering operations through the Banca Privada d’Andorra bank.

Petromonagas, a joint venture between state oil company PDVSA and Russia’s Rosneft, extracts crude oil from the Orinoco Oil Belt, in southeastern Venezuela, considered the largest oil deposit on the planet. Credit: Pdvsa

According to the Spanish newspaper El País, which claims access to reports on which Andorran Judge Canòlic Mingorance is working, people close to Ramírez received at least two billion euros (2.36 billion dollars) in illegal commissions between 1999 and 2013.

PDVSA, a company born from the nationalisation of the industry in 1975, and which for years boasted of being one of the top five oil companies in the world, is thus languishing under a cloud of accusations of corruption, incompetence and fraudulent management.

Production “is declining due to a lack of investment and maintenance, starting with the obsolete installations of Lake Maracaibo in the northwest, which produces no more than 450,000 barrels per day,” said Cisneros. Since 1914, more than 13,000 oil wells have been drilled there, and up to the 21st century, the lake basin produced more than one million barrels a day.

The relatively new fields of the east provide the rest of the output, but the figure of 1.3 million barrels per day extracted in the Orinoco Belt, announced by del Pino in the middle of the year, has been questioned by the criminal investigation.

Venezuelan expert Francisco Monaldi, at Rice University in the U.S. state of Texas, pointed out that exports are already below 1.4 million barrels per day (they stood at over 2.5 million at the beginning of the century), and less than 500,000 barrels per day were exported to the United States in November

For a century, the United States was the biggest importer of Venezuelan oil, purchasing 1.5 million barrels per day. And it is still the main source of revenue, as exports to China, which exceed 600,000 barrels per day, are used to pay off debts.

In oil refining, “it is perhaps even worse” according to Cisneros, since the Venezuelan refineries, installed to process 1.3 million barrels per day, “worked a few years ago at 90 or 95 percent of their capacity and now are only working at a third, 30 or 35 percent. We do not even supply our fuel needs,” which in part have to be imported, he pointed out.
To the decrease in the production of gasoline, lubricants and other derivatives are added distribution problems in the 1,650 service stations in this country of almost one million square kilometers, 31 million people and four million vehicles.

One of the problems is the absurdly low price of fuel in the country, the cheapest in the world. One litre costs just one bolívar, which at the official exchange rate is equivalent to about 10 cents, but at the black market rate is equivalent to one-thousandth of a cent: with one dollar you could buy 100,000 litres.

The cost of selling half a million barrels of fuel each day at this low price is a loss of between 12 and 15 billion dollars a year for PDVSA.

In addition, there is a problem of smuggling to Colombia, Brazil and the Caribbean, which Venezuela partially curbs with controls and rationing that cause shortages and huge queues of vehicles at gas stations along the border.

PDVSA has paid back interest in arrears this year for its debt bonds, while a US subsidiary of Chinese company Sinopec -a partner that has contributed more than 50 billion dollars in loans to Caracas – sued the Venezuelan state-owned company before a US court, for 21.5 million dollars over unpaid bills.

The United States imposed sanctions on Venezuela that make it difficult to renegotiate the country’s and PDVSA’s debts.

“Sanctions and default make it more difficult for partners to invest in joint ventures. The Venezuelan oil industry seems to have entered a spiral of death,” said Monaldi.

Cisneros believes that a recovery of the industry “is possible with a different organisational scheme, such as Argentina’s, which has a ‘front company’, Enarsa, and an operator, YPF (51 percent state-owned, 49 percent listed on the stock market).”

To achieve that “there are two possibilities; one is that the current regime reacts with respect to the economy and oil, and another is that there is a political change and the country starts to take advantage of its human, economic and oil resources,” he argued.

Timor-Leste wants the permanent maritime border between itself and Australia to lie along the median line. This would give sovereign rights to Timor-Leste over the potentially-lucrative Greater Sunrise oil and gas fields. Source: Timor-Leste's Maritime Boundary Office

By Stephen de Tarczynski
MELBOURNE, Australia, Feb 27 2017 (IPS)

Juvinal Dias has first-hand experience of mistreatment at the hands of a foreign power. Born in 1981 in Tutuala, a village in the far east of Timor-Leste, Dias’ family fled into the jungle following the 1975 invasion by Indonesia.

It was during this time, hiding from the Indonesian military, that his eldest sister died of malnutrition.Widely seen to be central to the maritime boundary issue with Timor-Leste is the potentially-lucrative Greater Sunrise oil and gas fields, reported to be worth some 30 billion dollars.

Speaking to IPS from Dili, Timor-Leste’s capital, Dias told of how “the struggle” against the Indonesian occupation had intertwined with his own family’s history. “I heard, as I grew up, how the war affected the family,” he says.

Dias’ father fought against the occupation with FALANTIL guerrillas, the armed wing of FRETILIN (Revolutionary Front for an Independent Timor-Leste) before surrendering in 1979. Up to 200,000 people are believed to have been killed by Indonesian forces or died from conflict-related illness and hunger during the brutal 1975-1999 occupation.

“People saw the Indonesian military as public enemy number one,” says Dias, now a researcher at the Timor-Leste Institute for Development Monitoring and Analysis, known as La’o Hamutuk in the local Tetum language.

But things have changed. Dias says that it is now Australia that provokes the ire of the Timor-Leste public, who regard their southern neighbour as a “thief country” due to its behaviour towards Timor-Leste over disputed territory in the Timor Sea.

Timor-Leste has long-sought a permanent maritime boundary along the median or equidistance line, as is often the norm in such cases where nations’ Exclusive Economic Zones overlap.

For Timor-Leste’s government, concluding a maritime boundary with Australia is linked to the young nation’s long history of subjugation, including its centuries as a Portuguese colony, its occupation by Indonesia and its treatment by Australia.

“The achievement of maritime boundaries in accordance with international law is a matter of national sovereignty and the sustainability of our country. It is Timor-Leste’s top national priority,” said Timor-Leste’s independence hero Xanana Gusmão last year.

Australia argues that its permanent maritime boundary with Timor-Leste should be based on Australia’s continental shelf, like that of the 1972 Australia-Indonesia seabed boundary. Source: Australia’s Department of Foreign Affairs and Trade

Australia, for its part, has repeatedly avoided entering into such negotiations. Instead, it has concluded a number of revenue sharing deals based on jointly developing petroleum deposits in the Timor Sea with both an independent Timor-Leste and Indonesia during the occupation years.

Australia argues that any border with its much smaller neighbour be based on Australia’s continental shelf, which extends well into the Timor Sea, and should therefore be drawn much closer to Timor-Leste. Australia has taken a hard-nosed approach over border negotiations for decades with nations to its north.

Widely seen to be central to the maritime boundary issue with Timor-Leste is the potentially-lucrative Greater Sunrise oil and gas fields, reported to be worth some 30 billion dollars. If the median line was accepted by both sides, Greater Sunrise would likely fall within Timor-Leste’s jurisdiction, potentially providing one of the poorest nations in the region with much-needed revenue.

However, under current arrangements based on a 2006 deal, Australia and Timor-Leste have agreed to equally divide revenue from Greater Sunrise.

But this deal is set to expire on April 10 following Timor-Leste’s January notification to Australia that it was withdrawing from the treaty. Timor-Leste had been calling for this agreement to be scrapped following the 2012 revelations by a former Australian spy that Australia bugged Timor-Leste’s cabinet rooms in 2004 to gain the upper-hand in the bilateral negotiations that eventually led to the 2006 treaty.

Australia has also been criticised for a 2013 raid on the offices of Timor-Leste’s Australian lawyer in which sensitive documents were seized.

While Timor-Leste took Australia to the International Court of Arbitration in April last year in the hope of forcing Australia to settle on a permanent maritime boundary, Australia’s 2002 withdrawal from compulsory dispute settlement procedures under the United Nations Convention on the Law of the Sea meant, according to the Australian government, that Australia was not bound by any decision made by the court.

But in a significant development, Australia announced in January that it would seek to establish a permanent maritime boundary with Timor-Leste by September this year.

Ella Fabry, an Australian activist with the Timor Sea Justice Campaign, says that Australia now has an opportunity to go some way in righting the wrongs of the past by negotiating in good faith with Timor-Leste and agreeing to a border along the median line.

“For Timor-Leste, it could mean literally billions of dollars of extra funding for them that could then go on to fund health, education [and] all of those things that a developing country needs,” she says.

Investment in such areas is indeed needed in Timor-Leste. According to global charity Oxfam, 41 percent of Timor-Leste’s population of 1.13 million people live on less than 1.25 dollars per day and almost 30 percent do not have access to clean drinking water.

Australia’s foreign affairs department identifies high maternal mortality rates and poor nutrition – leading to stunted growth in half of all children under five years – as being among key areas of concern.

Whether negotiations eventually lead to the financial windfall for Timor-Leste that some are predicting remains to be seen. A maritime boundary agreement along the median line is far from certain and there are serious concerns over the viability of a gas pipeline connecting Greater Sunrise to Timor-Leste, not least because it must cross the three kilometre-deep Timor Trough.

For Juvinal Dias, what often gets overlooked in the maritime boundary dispute is his nation’s over-reliance on income from petroleum resources, which, he argues, has led to a lack of investment in the non-oil economy.

“The oil money has dominated everything in Timor-Leste,” he says.

Timor-Leste has earned more than 12 billion dollars from its joint petroleum development area with Australia. It set up a petroleum fund in 2005, the balance of which was 15.84 billion dollars at the end of 2016, down some 1.3 billion since its peak in May 2015.

According to La’o Hamutuk, Timor-Leste’s oil and gas income peaked in 2012 and will continue to fall, with the Bayu Undan field expected to end production by 2020. It has also warned that if current spending trends continue, the petroleum fund itself will run dry by 2026.

This is a serious concern in a country where petroleum revenue has provided some 90 percent of the budget, leading to what Dias describes as “a very dangerous situation”.

He says that while there is a growing awareness in Timor-Leste about the importance of diversifying its economy, there is no time to waste.

“If we can’t manage our economy today, the poverty will be even worse in the next decade,” says Dias.

By Frank Mulder
UTRECHT, Netherlands, Jan 4 2016 (IPS)

Venezuela doesn’t want investment treaties anymore if they give investors the right to drag the country before a commercial court. “The system has been set up to break down the nation-state.”

All is not going well for Venezuela. While the country is torn apart by poor governance, poverty and polarisation, it is attacked from the outside by oil firms claiming tens of billions of dollars.

The method these firms use is called ISDS, or Investor-State Dispute Settlement. This is a mechanism by which investors can sue a state by means of arbitration, which is a kind of privatized court. Many lawyers stress the advantage that plaintiffs don’t have to go before a local judge whom they feel they cannot trust. You can choose a judge for yourself, the opponent does the same, and the two of those choose a chairman. They are called arbitrators. The case is heard at a renowned institute, like the World Bank. How could it be more fair?

Biased

But Bernard Mommer, former vice-minister for oil in the time of Hugo Chavez, now the main witness in different claims against Venezuela, has to laugh a bit. “I won’t say that Caracas is a neutral venue. But don’t be so foolish to say that Washington is neutral. The whole arbitration system is biased in favour of investors.”

After Argentina, no country has been sued as much as Venezuela: until 2014 at least 37 cases have been filed against this Latin American state. However, the fine they can expect now exceeds all of the others. ConocoPhillips, a Texas-based oil company, claims 31 billion dollars and seems to be on the winning side. According to critics, that case represents everything that’s wrong with the ISDS system.

Oil dispute

The dispute about oil began in 2006. Under the activist leadership of Chavez, Venezuela decided to nationalise the oil sector. Also, higher taxes were announced. Mommer was responsible for the negotiations with international oil firms about compensation. Most of the 41 companies in the country agreed with the buyout. Two didn’t. Those were the Texas-based companies ConocoPhillips and Mobil (now ExxonMobil).

“When we started with the expropriation, they went for arbitration,” says Mommer. “I didn’t even know that this was possible. For arbitration two parties need to consent, don’t they? How could they sue a state?” But Mommer discovered that Venezuela signed Bilateral Investment Treaties (BITs) in 1991, among others with the Netherlands. Those treaties give all investors from the given country an offer to arbitration if they feel treated unfairly by the host state.

Dutch sandwich

ConocoPhillips and Mobil quickly moved their Venezuelan holdings to the Netherlands in 2006. That gave them the opportunity to claim, as Dutch investors, that the unexpected policy change violated their BIT rights. Together, they demanded 42 billion dollars.

“This is called the Dutch sandwich”, says George Kahale III, a top lawyer from New York, who defends Venezuela in different cases. “You put a Dutch holding in the middle of your company chain and you can call yourself Dutch.”

Companies are not allowed to do this if the dispute already started. ExxonMobil and Conoco said that their move was made independently of the dispute. However, a remarkable message has been found among the Wikileaks cables. In these a representative of Conoco told someone from the American embassy that they “already” moved to the Netherlands to “safeguard their arbitration rights.”

Unlawful

The cases are still dragging on. ExxonMobil has had no luck. The three arbitrators have judged that the expropriation was lawful. ExxonMobil gets compensation, but not much more than what they were offered earlier, around one billion dollars.

But the Conoco case evolved differently. Two of the three arbitrators found the expropriation unlawful. This means that Venezuela has to compensate the firm, not on the basis of the low oil price in 2006, but on the basis of the much higher price at the time of the claim. This will amount to tens of billions of dollars.

This is insane, says Kahale. “The fact is that four out of six arbitrators found that the expropriation was perfectly lawful. And yet Venezuela can expect a mega award.”

Unfair

Talking about fairness: among the Wikileaks cables another juicy anecdote has been found. In a cable from 2008, the Conoco representative tells the American ambassador that the negotiations are going well and that Venezuela is being reasonable. This is in contradiction to what Conoco was claiming in public. Yet the arbitrators – at least, two of the three – now say that they can’t change their conclusion anymore and now have to proceed to the next phase, about the damages.

“In other words”, says Mommer, “the investor can lie. We can’t sue them anyway. They alone can sue us. This shows why Western countries have invented this system. It has been set up to break down the nation-state.”

Disaster

ISDS is structurally flawed, says Kahale. “Who are the judges? They are investment lawyers. Their commercial background shines through in their decisions. Every judge of course always brings his own views to his job. But in arbitration these people are deciding no longer private commercial disputes, but megacases of international significance, with sometimes vital importance for individual states, involving billions of dollars, with very little training in international law.”

Too many, conflicts of interest arise. “You will never see a supreme court judge acting as a counsel in another case. But many arbitrators also act as a counsel. It’s very hard to preside over the legality of something one day, and advocate the same issue the other day. It is natural that I’m holding back in one or the other, depending on which case is more important to me. There are very few checks and balances. Too many mistakes are made.”

Venezuela is fed up with ISDS claims. Soon after the claims were filed, they pulled the plug, not only from the ICSID convention (which acknowledges the World Bank as arbitration court) but also from a number of BITs. The Dutch BIT was the first to be terminated a few years ago. Unfortunately for Venezuela, this treaty contains a clause giving investors the right to arbitration until 2023.

Don’t challenge us

Arbitration can be an elegant method for solving a dispute. But is has developed into an instrument for multinational companies to pressure states.

“These oil firms were offered a brilliant compensation,” says Juan Carlos Boue, a Venezuelan researcher at the Oxford Institute of Energy. “But when the oil price rose, they decided to leave the country with as much money as possible.” For ExxonMobil, a giant with a revenue of 400 billion dollars, twice as big as the GDP of Venezuela, there is more at stake. “They have unlimited resources. They want to let the world know what happens if you challenge them.”

And the arbitrators? “Some of them are on the boards of multinational companies. They just don’t want the countries to get away with it. They have an extreme dislike towards countries like Venezuela.”

ExxonMobil and ConocoPhillips refrained from any comment.

(End)

Excerpt:

The heavily criticized legal mechanism, known as ISDS, is an important tool for European companies to pressurize developing countries. This year Uganda joins the rank of developing nations asking themselves: “Why have we ever signed this?”

Earlier this year, the French oil company Total filed a request for arbitration against the government of Uganda. In essence, arbitration is a way to resolve a dispute, not by going to a public court, but by asking the verdict of a private court. Both parties choose an arbitrator, usually an investment lawyer, and the two of them choose a third one. The arbitration is hosted, in this case, by the World Bank.

This is a new step in the frustrating process of Uganda trying to turn its oil into cash.

Peaceful names

Crude oil reserves in Uganda are estimated by government geologists at 6.5 billion barrels, half of which lies beneath the famous Murchison Falls, a famous national park, known for its wild animals. Wells have been given exotic names, like Crocodile, Buffalo, Giraffe and Warthog.

These peaceful names contrast with the bitter fights that are being fought over the oil. Commercial production has been repeatedly delayed by disputes with explorers over taxes and development plans. Now it’s the French oil company Total refusing to pay tax. It acquired a 33 per cent share in a 2.9 billion dollar project owned by Tullow Oil. According to Ugandan law, when a stock is bought, a stamp duty must be paid.

However, the oil firm refuses to do so, citing no legal obligation to honor the government claims. Total has not disclosed how much tax is at the heart of the dispute or why it objects to the tax levy but a source at the Uganda Revenue Authority told Reuters earlier that the Production Sharing Agreement (PSA) includes a tax waiver.

Secret

From their offices in an eight-story glass building located in the lush green high-end Nakasero area in the capital city Kampala, Total’s Corporate Affairs Manager Ms. Ahlem Friga-Noy stated that “given the applicable confidentiality obligations, we are not in a position to comment further on the proceedings.”

The Office of the Attorney General of the Government of Uganda replies in the same manner: “We are under obligation not to disclose the content of the matter to the public until it is appropriate.”

This points exactly to the problem of arbitration. In a court room all affected parties and stakeholders have the right to speak, or at least listen, but an arbitration procedure is very secretive. No one is obliged to disclose details. Has the state really behaved badly? Or is it the company who abuses arbitration as a pressure to get a tax reduction? The public remains completely in the mist, until the final verdict of the tribunal is published, which can be a multimillion dollar fine.

The Dutch sandwich

The problem Uganda now faces has been made possible by the Bilateral Investment Treaty signed in 2000 with the Netherlands. According to the treaty, all Dutch investors in Uganda have the right to pursue arbitration before the World Bank court if they feel treated unfairly. The French company Total Uganda registered itself as a Dutch company.

This is known as the Dutch Sandwich; you put a Dutch company in between and then you become a Dutch investor. Which turns the treaty into a tool to drag a state before a tribunal of three men in Washington, having a commercial background and the ability to award billion dollar fines, without a possibility to appeal. If Uganda is condemned to a compensation but refuses to pay, the company has the right to seize Ugandan assets in the world.

Against Ugandan law

This is against Ugandan law, says the renowned Human Rights lawyer Isaac Ssemakadde. “According to the constitution, taxation is wholly the creation of the law of the state.” Which means that disputes have to be settled on the basis of the law alone. “Even an agreement between parties cannot supercede the obligation fixed in the law. There is therefore no room for arbitration on taxation,” he said.

“In an earlier tax dispute, between Heritage Oil and Gas against Uganda Revenue Authority, the High Court has forbidden the state to refer proceedings to the arbitration processes in London or anywhere else outside the jurisdiction of the Ugandan courts of law,” noted Ssemakadde.

In short, “Total is being treated differently to other business persons which is in violation of article 21 of the constitution of Uganda which states that all persons are equal before and under the law.”

Nobody can check Total’s claims about a tax waiver, because the Product Sharing Agreements are confidential. This is so despite the fact that Uganda has an Access to Information law that was promulgated in 2005. This limits the discussion, and knowledge, about the proceedings in the country’s oil sector to senior politicians and bureaucrats. The ordinary Ugandan is kept in darkness about what happens there.

The secrecy is not only advantageous for oil companies, but also for certain politicians, who seem to be interested in “personalizing” the oil resources. The Ugandan president Yoweri Museveni recently told Ugandans that those people who are challenging him politically in the forthcoming general elections “are after my oil.”

Why BITs?

A new interactive map made by Dutch journalists, with all known ISDS cases in the world, shows that ISDS is mainly used against developing countries. Sometimes because they clearly behaved badly towards an investor, but in other cases it’s more likely that it is used as a bargaining tool and a threat by multinational companies for better deals. Litigation costs amount to 8 million dollars on average, calculated the Organisation for Economic Co-operation and Development.

For lawyers and arbitrators this is simply an effective tool to defend the rule of law. “I’m happy there is arbitration”, a Dutch investment lawyer says. “There are many thug states in the world. And why do they complain? They signed the treaty themselves.”

“In the end, it’s the ordinary Ugandan taxpayer to bear the brunt and consequences for the enormous amounts of money that is going to be spent on this arbitration process,” says Ssemakadde. “Whereas Total can afford to maintain a given team of lawyers in Washington for, say, a month, Uganda can hardly afford this.”

The people remain ignorant about the deals that are made, and who exercises pressure on whom. Unless the general public starts to view the oil, as well as the treaties their government signs, as belonging to them and not the selected few in government, companies like Total will continue dragging the state into expensive arbitration processes, paid by the Ugandan taxpayers, who are the actual owners of the national resources.

This article is part of a research by De Groene Amsterdammer, Oneworld and Inter Press Service, supported by the European Journalism Centre (made possible by the Gates Foundation). See www.aboutisds.org.

By N Chandra Mohan
NEW DELHI, Dec 3 2015 (IPS)

The crash in oil prices is not the only challenge confronting the Gulf States in West Asia. Economic disorder and lack of opportunity are contributing to instability in the region, stated Bahrain’s minister for industry, commerce and tourism, Zayed Al Zayani, while kicking off the recent IISS Bahrain Bay Forum. He emphasized the need for “unprecedented” economic reform across the Gulf in the wake of the lower oil revenues. These policies include the generation of millions of jobs for the youth in these economies that continue to depend heavily on expatriate labour from India, Pakistan, Bangladesh and Philippines.

N Chandra Mohan

The Gulf States face the prospect of a demographic dividend of a youth bulge in the population rapidly turning into a curse, thanks to high and rising rates of unemployment for those between 15 to 24 years of age. The highest rates are in Saudi Arabia (28.7 per cent), Bahrain (27.9 per cent), Oman (20.5 per cent) and Kuwait (19.6 per cent). India, too, has double digit rates of joblessness among the young like many of these economies. There was a suggestion at the Bahrain Bay Forum that such high rates of youth unemployment are a proximate factor behind the surge in militant terrorism, exemplified by the rise of the Daesh or ISIS.

The prospect of lower oil revenues certainly will constrain the Gulf States to diversify their economies away from dependence on this commodity. Countries like Bahrain seek to focus on education and training, communications and infrastructure and promoting a start-up ecosystem for fostering entrepreneurship. The level of ambition is also high as they intend to generate high skill jobs and build a knowledge- based economy. The technology sector in the Gulf States is likely expected to grow by 10 per cent per annum over the next five years while the spending on technology in the Middle East as a whole is expected to touch $200 billion.

However, the transition to this brave new world requires bridging the skills gap. The labour market in this region depends heavily on low skilled and low wage earning migrant labour. More than 80 per cent of the workforce in private sector employment in Bahrain is comprised of expatriates. It goes up to 96 per cent and 98 per cent in Kuwait and Qatar respectively. In sharp contrast, the nationals are disproportionately represented in the bloated public sector. So, one form of dualism in the labour market is that the private sector is dominated wholly by expatriates while the public sector is largely for the locals in the Gulf.

Another source of dualism is that women are not adequately represented in the labour market due to pervasive gender discrimination in these conservative economies. Although women’s enrolment in higher educational institutions is rapidly rising of late — a case in point are courses in financial services in Bahrain which attract a lot of women — female labour force participation rates are well below 30 per cent as against the global average of 50 per cent. Jobless among young females is as high as 55 per cent in Saudi Arabia which is three-times higher than that of young males, according to the World Bank’s World Development Indicators.

Gulf’s labour market thus is “locked in a low skills, low wages and low productivity equilibrium” argued Frank Hagemann, deputy regional director of ILO, at one of the sessions at the Bay Forum. This dualism is reflected in a substantial wage gap between the private and public sector. At the lower end, the living and working conditions of migrants is sub-standard and highly exploitative in nature. Dependency-driven employee-employers relations are rife. The big challenge for the Gulf States is to kick-start the transition from this state of affairs to one driven by higher skills, higher wages and productivity.

What is the impact of abundant supplies of low skilled, low productivity expatriate population queried Ausamah Al Absi, chief executive, Labour Market Regulatory Authority in Bahrain? If an entrepreneur were to make an investment in a state-of-the-art printing press in Germany, he has to employ high technology and productivity tools as the cost of manpower is high. But in Bahrain, he can go for lower technology supported by a low skilled workforce. Pursuing a capital-intensive option in a low wage economy is not on. For such demand-side reasons, this entrepreneur will naturally be rendered uncompetitive in this economy, felt Al Absi.

Low oil prices complicate the efforts of the Gulf States to address these distortions without throwing out the baby with the bathwater. If revenues continue to decline, a worry is that it reduces the fiscal space to pay nationals in the public sector. At the same time, there is a compulsion to reduce subsidies on water, electricity and school fees that will disproportionately hit the expatriate workforce. The Gulf economies thus will make it more and more difficult for the expatriates to work in these economies over the near-term Controls on migration appear inevitable, regardless of the heavy dependence on such labour at present.

The transition to a higher skills, wages and productivity equilibrium is far from easy. It entails changes over a generation. For instance, in Saudi Arabia, 40 per cent of the graduates come from humanities or Islamic studies while only 4 per cent are engineers. Stepping up the numbers of engineers takes more time. Yet there is a temptation to look for quick fixes like inviting tech giants in the US to set up cloud computing courses in the Gulf States! At the Bay Forum, Bahrain announced a $100 million venture capital based fund to that will work as the first cloud technology accelerator in the region. Can such moves kick-start hi-tech start-ups? Intermediate steps are perhaps more necessary like vocational and on-the-job training. Only 17 per cent of firms in the Gulf States provide on-the-job training as against the global average of 35 per cent. The best bet for these countries is greater gender empowerment in the labour market than expat-bashing policies to reduce sources of instability.

(End)

Excerpt:

All of the offices, shops and locales in the modern two-building Enterprise complex are empty. It is one of the many white elephants left in the city of Itaboraí, in southeast Brazil, by the state-run Petrobras’ aborted petrochemical and oil industry megaproject. Credit: Mario Osava/IPS

By Mario Osava
ITABORAÍ, Brazil , Oct 23 2015 (IPS)

Itaboraí still recalls its origins as a sprawling city that sprang up along a highway, not far from Rio de Janeiro. But a few years ago big modern buildings began to sprout all over this city in southeast Brazil, whose offices and shops are almost all empty today.

The number of white elephants, or costly, useless constructions, in this city of 230,000 people was the result of “two huge shocks” caused by the Rio de Janeiro Petrochemical Complex (COMPERJ), Luiz Fernando Guimarães, the municipal secretary of economic development, told IPS.

“The first impact came from the 2006 announcement by then President Luiz Inácio Lula da Silva (2003-2010) of the project, which was to consist of two refineries and two petrochemical plants that would generate 221,000 jobs, according to the Getulio Vargas Foundation,” he said.

The estímate by the prestigious Rio de Janeiro-based think tank was larger than the entire population of the city, which stood at 218,000 in 2010, according to that year’s census.

The complex, belonging to Brazil’s state-run oil company Petrobras, was to cost around 6.5 billion dollars according to initial projections. But it ballooned to twice that, and will now only entail a single refinery with a capacity to process 165,000 barrels a day of oil. Construction of the petrochemical plants and the second refinery was cancelled.

The original announcement and the start of construction in 2008 “turned Itaboraí into an El Dorado, attracting people from across Brazil, as well as many foreigners. Rents skyrocketed, the prices of food and services soared, and the value of land for building housing more than doubled,” Guimarães said.

The employment of some 30,000 workers and the prospect of a surge in industrialisation around the petrochemical complex drew abundant investment, because of the expectation that the city, “one of the poorest in the country, would soon to enjoy great prosperity,” the municipal secretary of finance, Rodney Mendonça, told IPS.

The real estate boom in this city 45 km from Rio de Janeiro led to the construction of modern buildings, including two big hotels – instead of the four that were originally planned.

In just a few years, there were 4,000 new shops and office buildings, said Guimarães, whose office was renamed the Secretariat of Economic Development and Integration. The former oil industry executive is now in charge of relations between the city government and COMPERJ.

The second shock was the decision to reduce the project to a single refinery, which was only announced in 2014. “But the change happened in 2010, and the public was not informed,” the official said. “I knew because several subsidiaries of Petrobras and Braskem (Latin America’s biggest petrochemical company) pulled out of the consortium.”

Bazarzão, which sells building materials and hardware in the city of Itaboraí, in southeast Brazil, saw its sales rise twofold when construction on the Rio de Janeiro Petrochemical Complex (COMPERJ) began. But they later plummeted when Petrobras cancelled the petrochemical side of the project. Credit: Mario Osava/IPS

“Imagine, a local university was getting ready to launch a new degree programme in petrochemical technology, with a view to the jobs that would be offered by COMPERJ. When I told him what was happening, the director just about killed me,” Guimarães said.

Not ony were the petrochemical plants and second refinery cancelled, but “construction of the first refinery stalled, and according to Petrobras, financing is being sought to finish it,” he said – even though it is 87 percent complete.

On the 45 sq km acquired for the construction of COMPERJ, Petrobras is forging ahead with the construction of the Natural Gas Processing Unit, which is now employing around 3,000 workers. “But after it is built, only 80 employees will be left to operate it,” said Guimarães.

The city has felt the blow. The shiny new commercial and office buildings are empty, and walking down the streets you see “to rent” or “to lease” signs everywhere, while most shops and other businesses are closed.

“The land of oranges turned into the land of white elephants,” joked Bruno Soares, the manager of a building materials, hardware and appliances store, Bazarzão, on 22 of May avenue, the main street in Itaboraí.

His store did not register as a COMPERJ supplier. Nevertheless, it has suffered the effects. “Our sales have fallen 50 percent since late 2014,” he estimated, although he admitted that they actually returned to the levels prior to the boom that was cut short.

“Business went up and down in five years, too quickly. Other stores closed and neighbouring towns were also hurt,” he said.

“Itaboraí would be a powerhouse in Latin America if the petrochemical complex was doing well, but it all came crumbling down because of the corruption,” Soares maintained.

The entrance to the nearly empty Hellix luxury office building. The local Secretariat of Economic Development in Itaboraí, in southeast Brazil, moved into several of the offices because of the low rent, driven down by the lack of demand after Petrobras drastically cut back its oil and petrochemical industry megaproject nearby. Credit: Mario Osava/IPS

That is a common conclusion reached by the public – and not only in Itaboraí – in response to the daily reports on the kickback scandal involving Petrobas projects, including COMPERJ, in which dozens of politicians and construction companies have been implicated.

Valcir José Vieira, the owner of a parking lot in downtown Itaboraí, concurs with Soares. “Between 2006 and 2014 my parking lot was always full – 200 cars a day came in. Today, I receive 100 at the most,” he told IPS.

The decline in the number of cars began in November 2014, and forced him to reduce his fees from five to two reais (1.30 dollars to 52 cents) an hour.

For the city government the disaster is twofold. Tax revenue plunged, while expenditure, which was driven up by the frustrated megaproject and the illusion of progress, continued to increase.

The tax on services, the municipal government’s main source of income, brought in around 64 million dollars a year during the COMPERJ construction boom – an amount that will fall 40 percent this year, according to forecasts by the local Secretariat of Finance.

Revenue from other taxes is also falling, due to the insolvency faced by companies in crisis.

Meanwhile, public spending has not dropped. The influx of workers and their families drawn by the prospect of jobs and prosperity drove up demand for healthcare, schools and other public services.

“The number of people who visited the emergency room of the Municipal Hospital climbed from 500 a day, to 2,000 since 2013,” said Mendonça, the finance secretary. The city government dedicates 30 percent of its budget to healthcare – double what is required by law, he pointed out.

And the administration that left office in 2012 hired 2,000 new public employees through competitive examinations, based on the increased demands and projected new revenue flow. And although the tax revenue dropped, the new civil servants can’t be laid off, because they enjoy guaranteed job stability in Brazil. So that increase in expenditure remains in place.

The two municipal secretaries complained that there was no compensation from COMPERJ for the impacts in the municipality, nor investment to mitígate the damaging effects of the shrinking megaproject.

In the face of these challenges, the city government is seeking alternatives to fuel development. Guimarães is convinced that logistics will be the main future activity in Itaboraí.

The city is located at the intersection of several highways, outside of the congested Rio de Janeiro metropolitan region, and in the centre of an area of oil industry activity – unrelated to COMPERJ – ports, shipyards and various industries, he pointed out.

At the same time, the municipalities affected by the downsizing of the COMPERJ project mobilised to pressure Petrobras to at least resume construction of the first refinery.

Itaboraí is also focusing on boosting small businesses. Guimarães’ Secretariat of Economic Development created a centre for entrepreneurs, aimed at expediting the creation of microenterprises and formalising the ones currrently operating in the informal sector of the economy.

Small firms that refurbish or expand housing, and beauty salons are the most frequent businesses opening at this time. “They rival the evangelical churches,” the head of the centre, Wilson Pereira, told IPS.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

By Farhang Jahanpour
OXFORD, Sep 9 2015 (IPS)

Iran has had a nuclear programme since 1959 when the United States gave a small reactor to Tehran University as part of the “Atoms for Peace” programme during Mohammad Reza Shah Pahlavi’s reign.  When the Non-Proliferation Treaty (NPT) was introduced in 1968 and entered into force in 1970, Iran was one of the first signatories of that Treaty.

Farhang Jahanpour

The Shah had made extensive plans for using nuclear energy in order to free Iran’s oil deposits for export and also in order for use in petrochemical industries to receive more revenue. The Shah had planned to build 22 nuclear reactors to generate 23 million megawatts of electric power.  By 1977, the Atomic Energy Organisation of Iran (AEOI) had more than 1,500 highly paid employees, with a budget of 1.3 billion dollars, making it the second biggest public economic institution in the country.

In 1975, the Gerald Ford administration in the United States expressed support for the Shah’s plan to develop a full-fledged nuclear power programme, including the construction of 23 nuclear power reactors.

President Gerald Ford has been reported as having “signed a directive in 1976 offering Tehran the chance to buy and operate a U.S.-built reprocessing facility for extracting plutonium from nuclear reactor fuel. The deal was for a complete ‘nuclear fuel cycle’.”“Iran has had a nuclear programme since 1959 when the United States gave a small reactor to Tehran University as part of the “Atoms for Peace” programme during Mohammad Reza Shah Pahlavi’s reign”

The Shah donated 20 million dollars to the Massachusetts Institute of Technology (MIT) to train Iranian nuclear experts, many of whom are still working for Iran’s Nuclear Energy Organisation, including the current head of the organisation and one of the chief negotiators, Dr. Ali Akbar Salehi.  In 1975, Iran also paid 1.18 billion dollars to buy 10 percent of Eurodif, a French company that produces enriched uranium. In return, Iran was supposed to receive enriched uranium for its reactors, a pledge that the French government reneged on after the Iranian revolution.

In 1975, Germany’s Kraftwerk Union AG started the construction of two reactors in Bushehr at an estimated cost of 3-6 billion dollars. Kraftwerk Union stopped work on the Bushehr reactors after the start of the Iranian revolution, with one reactor 50 percent complete, and the other 85 percent complete. The United States also cut off the supply of highly enriched uranium (HEU) fuel for the Tehran nuclear reactor.

After the revolution, the Islamic Republic initially stopped all work on the nuclear programme. However, in 1981, Iranian officials concluded that after having spent billions of dollars on their programme it would be foolish to dismantle it. So, they turned to the companies that had
signed agreements with Iran to complete their work. Nevertheless, as the result of political pressure by the U.S. government, all of them declined. Iran also turned to the International Atomic Energy Agency (IAEA) for help to no avail.

In the late 1980s, a consortium of companies from Argentina, Germany and Spain submitted a proposal to Iran to complete the Bushehr-1 reactor, but pressure by the United States stopped the deal. In 1990, U.S. pressure also stopped Spain’s National Institute of Industry and Nuclear Equipment from completing the Bushehr project.  Later on, Iran set up a bilateral cooperation on fuel cycle-related issues with China but, under pressure from the West, China also discontinued its assistance.

Therefore, it was no secret to the West that Iran was trying to revive its nuclear programme.

Having failed to achieve results through formal and open channels, Iranian officials turned to clandestine sources, and using their own domestic capabilities.  A major mistake was to receive assistance from A.Q. Khan, the father of Pakistan’s nuclear weapons programme.  In 1992, Iran invited IAEA inspectors to visit all the sites and facilities they asked. Director General Hans Blix reported that all activities observed were consistent with the peaceful use of atomic energy.

On Feb. 9, 2003, Iran’s programme and efforts to build sophisticated facilities at Natanz were revealed allegedly by Iranian dissident group, the National Council of Resistance of Iran, the political wing of the Mojahedin-e Khalq Organisation (MKO), for years regarded as a terrorist organisation by the West. It has been strongly suggested that MKO had received its information from Israeli intelligence sources.

President Mohammad Khatami announced the existence of the Natanz (and other) facilities on Iranian television and invited the IAEA to visit them. Then, in late February 2003, Dr. Mohammad El-Baradei, the head of IAEA, accompanied by a team of inspectors, visited Iran.  In November 2003, the IAEA reported that Iran had systematically failed to meet its obligations under its NPT safeguards agreement to report its activities to the IAEA, although it also reported no evidence of links to a nuclear weapons programme.

It should be noted that at that time Iran was only bound by the provisions of the NPT, which required the country to inform the IAEA of its nuclear activities only 180 days before introducing any nuclear material into the facility.  So, according to Iranian officials, building the Natanz facility and not declaring it was not illegal, but the West regarded it as an act of concealment and violation of the NPT’s Additional Protocol, which Iran had not signed. In any event, the scale of Iran’s nuclear activities surprised the West, and it was taken for granted that Iran was developing nuclear weapons.

In May 2003, in a bold move, the Khatami government in Iran sent a proposal to the U.S. government through Swiss diplomatic channels for a “Grand Bargain”, offering full transparency, as well as withdrawal of support for Hamas and Hezbollah, and resumption of diplomatic relations, but the offer went unanswered.

In October 2003, the United Kingdom, France and Germany undertook a diplomatic initiative to resolve the problem. The foreign ministers of the three countries and Iran issued a statement known as the Tehran Declaration, according to which Iran agreed to cooperate with the IAEA and to implement the Additional Protocol as a voluntary confidence-building measure. Iran even suspended enrichment for two years during the course of the negotiations.  On Mar. 23, 2005, Iran submitted to the EU Troika” a plan of “objective guarantees” with the following elements:

(1) Spent reactor fuels would not be reprocessed by Iran.

(2) Iran would forego plutonium production through a heavy water reactor.

(3) Only low-enriched uranium would be produced.

(4) A limit would be imposed on the enrichment level.

(5) A limit would be imposed on the amount of enrichment, restricting it to what was needed for Iran’s reactors.

(6) All the low-enriched uranium would be converted immediately to fuel rods for use in reactors (fuel rods cannot be further enriched).

(7) The number of centrifuges in Natanz would be limited, at least at the beginning.

(8) The IAEA would have permanent on-site presence at all the facilities for uranium conversion and enrichment.

In early August 2005, the EU Troika” submitted the “Framework for a Long-Term Agreement” to Iran, recognising Iran’s right to develop infrastructure for peaceful use of nuclear energy, and promised collaboration with Iran. However, as the result of extreme U.S. pressure, the EU Troika was unable to respond to Iran’s call for nuclear collaboration, and subsequently Iran withdrew its offer and resumed enrichment.

The rebuff by the West to President Khatami’s outstretched hand resulted in the weakening of the Reformist Movement and the election of hardline candidate Mahmud Ahmadinezhad as the next president of Iran in June 2005. (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:

The one-day summit on ‘Global Leadership in the Arctic – Cooperation, Innovation, Engagement, and Resilience (GLACIER) held in Anchorage, Alaska on Aug. 31 failed to make commitments to serious action to fight the negative impacts of global warming. Credit: Leehi Yona/IPS

By Leehi Yona
ANCHORAGE, Alaska, Sep 1 2015 (IPS)

After a one-day summit in the U.S. Arctic’s biggest city, leaders from the world’s northern countries acknowledged that climate change is seriously disrupting the Arctic ecosystem, yet left without committing themselves to serious action to fight the negative impacts of global warming.

The Aug. 31 summit on ‘Global Leadership in the Arctic – Cooperation, Innovation, Engagement, and Resilience (GLACIER)’, was organised by the U.S. State Department and attended by dignitaries from 20 countries, including the eight Arctic nations – Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and United States.

Political leaders like U.S. President Barack Obama, who urged Arctic nations to take bolder action as the summit ended, came out with strong words, but stakeholders from civil society and scientific groups said the outcome came short of the tangible action needed.“This statement (from the one-day GLACIER Arctic summit] unfortunately fails to fully acknowledge one of the grave threats to the Arctic and to the planet – the extraction and burning of fossil fuels” – Ellie Johnston, World Climate Project Manager at Climate Interactive

The summit attracted the attention of environmental and indigenous groups, which criticised Obama’s reputation as a climate leader in the face of allowing offshore oil drilling in the Arctic.

Numerous protests and acts of non-violent civil disobedience in recent months have attempted to block oil company Shell from drilling; the company is currently active off the Alaskan coast.

“The recent approval of Shell’s Arctic oil drilling plans is a prime example of the disparity between President Obama’s strong rhetoric and increasing action on climate change and his administration’s fossil fuel extraction policies,” said David Turnbull, Campaigns Director for Oil Change International.

All participating countries signed a joint statement on climate change and its impact on the Arctic, after the initial reluctance of Canada and Russia, which eventually added their names.

“We take seriously warnings by scientists: temperatures in the Arctic are increasing at more than twice the average global rate,” the statement read, before going on to describe the wide range of impacts felt by Arctic communities’ landscapes, culture and well-being.

“As change continues at an unprecedented rate in the Arctic – increasing the stresses on communities and ecosystems in already harsh environments – we are committed more than ever to protecting both terrestrial and marine areas in this unique region, and our shared planet, for generations to come.”

However, the statement lacked concrete commitments, even on crucial topics like fossil fuel exploration in the Arctic, leaving climate experts with the feeling that it could have been more ambitious or have offered more specific, tangible commitments on the part of countries.

“I appreciate the rhetoric and depth of acknowledgement of the climate crisis,” the World Climate Project Manager at Climate Interactive, Ellie Johnston, told IPS. “Yet this statement unfortunately fails to fully acknowledge one of the grave threats to the Arctic and to the planet – the extraction and burning of fossil fuels.”

“This is particularly relevant as nations and companies jockey for access to drilling in our historically icy Arctic seas which have now become more accessible because of warming,” she said. “Drilling for fossil fuels leads to more warming, which leads to more drilling. This is one feedback loop we can stop.”

Oil and gas companies were encouraged – but not required –to voluntarily take on more stringent policies and join the Climate and Clean Air Coalition’s Oil and Gas Methane Partnership, an initiative to help companies reduce their emissions of methane and other short-lived climate pollutants.

U.S. Secretary of State John Kerry addressed participants – members from indigenous communities, government representatives, scientists, and non-governmental organizations – at the opening of the summit. “The Arctic is in many ways a thermostat,” he said. “We already see [it] having a profound impact on the rest of the planet.”

Kerry also attempted to drum up action ahead of the COP21 United Nations climate change negotiations in Paris this December, urging governments to “try to come up with a truly ambitious and truly global climate agreement.”

He added that the Paris conference “is not the end of the road […] Our hope is that everyone can leave this conference today with a heightened sense of urgency and a better understanding of our collective responsibility to do everything we can to deal with the harmful impacts of climate change.”

In a closing address to summit participants, President Obama repeatedly said “we are not doing enough.” He outlined the stark impacts of a future with business-as-usual climate change: thawing permafrost, forest fires and dangerous feedback loops. “We will condemn our children to a planet beyond their capacity to repair … any leader willing to take a gamble on a future like that is not fit to lead,” he stated.

However, neither Kerry nor Obama acknowledged, as many environmental groups have pointed out, that the United States’ current greenhouse gas emissions reduction commitment falls nearly halfway short of what the country must do in order to stay within the Paris conference goal of a 2^oC warming limit.

While participants emphasised engagement from affected communities, the summit itself did not manifest engagement with those communities: less than one-third of the panellists and presenters were either indigenous or female, and only one woman of colour was present.

“It would have been nice to hear more from indigenous women or women of colour,” Princess Daazrhaii, member of the Gwich’in Nation and strong advocate for the protection of the Arctic National Wildlife Refuge, told IPS. “The Arctic is more diverse than what I felt like was represented at the conference.”

“As life-givers and as mothers, many of us nurse our children. We know for a fact that women in the Arctic are more susceptible to the persistent organic pollutants (POPs) that are bound to the air we breathe. Violence against women is another issue that I feel gets exacerbated when there are threats to our ecosystem.”

All individuals talked to appreciated the conference’s emphasis on climate change as a significant problem, yet all of them also expressed a desire for the United States – and governments around the world – to do more.

“[Climate change] is what brings human beings together,” Daazrhaii said. “We’re all in this together. And we have to work on this together.”

Edited by Phil Harris   

Excerpt:

Climate change is melting the Arctic’s ice, and will be on the agenda of the one-day GLACIER summit in Alaska on Aug. 31. Photo credit: Patrick Kelley/CC BY 2.0 via Wikimedia Commons

By Leehi Yona
ANCHORAGE, Alaska, Aug 30 2015 (IPS)

A one-day summit taking place here on Aug. 31 hopes to bring Arctic nations together in support of climate action against a backdrop of criticism of offshore oil drilling in the region.

The meeting on ‘Global Leadership in the Arctic – Cooperation, Innovation, Engagement, and Resilience (GLACIER)’, is being organised by the U.S. State Department and will be attended by dignitaries from 20 countries, including the eight Arctic nations – Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and United States. U.S. President Barack Obama and Secretary of State John Kerry are scheduled to address the conference.

The conference comes at a time of significant changes to the ever-shifting Arctic: this year’s forest fires in Alaska reached record highs, blazing so rapidly that many were left unmanaged. Last week, thousands of walruses hauled up on Alaskan shores as the ice they depend on as habitat disappeared.“Arctic drilling is a violation of the human rights of the indigenous peoples of the Arctic. Obama and Shell are bypassing many laws designed to protect our coast and our communities” – Carl Wassilie, a Yu’pik activist with ShellNo Alaska

“The evidence for climate change in the Arctic is visible from space as we observed declining sea ice and melting glaciers, and in the lived lives of Arctic residents who see coastlines eroding from sea level rise and reduced access to traditional foods from the land and sea,” said Ross Virginia, Director of the Institute of Arctic Studies at Dartmouth College and co-lead scholar of the Fulbright Arctic Initiative.

“These changes will be more evident to the rest of us,” he added. “The challenge is to learn from the Arctic and to work with the Arctic to adapt and prevent further climate change.”

The GLACIER summit is also taking place at a time of great public focus on the issue of climate change. Critiques of Arctic drilling, as well as the upcoming United Nations climate change negotiations in December in Paris, have helped bring global warming to the political forefront.

“In visiting the U.S. Arctic, President Obama is clearly demonstrating that the United States is an Arctic nation with a stake in the region’s future,” said Margaret Williams, Managing Director of U.S. Arctic Programs at the World Wildlife Fund. “This trip provides the President with the perfect opportunity to define his vision of how all nations should work in unison to manage and conserve our shared Arctic resources.”

The conference has drawn the attention of environmental and indigenous groups, which both praise the conference’s potential for ambitious leadership but also criticise Obama’s reputation as a climate leader in the face of allowing offshore oil drilling in the Arctic.

Numerous protests and acts of non-violent civil disobedience in recent months have attempted to block oil company Shell from drilling; the company is currently active off the Alaskan coast.

“The recent approval of Shell’s Arctic oil drilling plans is a prime example of the disparity between President Obama’s strong rhetoric and increasing action on climate change and his administration’s fossil fuel extraction policies,” said David Turnbull, Campaigns Director for Oil Change International.

“The President needs to align his energy policy with his climate policy and put an end to Shell’s drilling for unburnable oil in the Arctic,” Turnbull said.

Dan Ritzman, Associate Director of the Sierra Club’s Our Wild America campaign, stressed that the drilling decision “went against science, common sense, and the will of the people.” Many environmental groups pointed to the irresponsibility of drilling in the Arctic, one of the world’s regions most vulnerable to climate change.

A senior State Department official responded to this criticism on Aug. 28 by stating that many “citizens of Alaska, and in particular, Alaskan natives” desire more drilling in an effort to develop their communities.

However, indigenous activists rejected the official statement. Carl Wassilie, a Yu’pik activist with ShellNo Alaska, said: “Arctic drilling is a violation of the human rights of the indigenous peoples of the Arctic. Obama and Shell are bypassing many laws designed to protect our coast and our communities. Obama needs to start listening to the peoples of the Arctic who oppose Arctic drilling.”

One of the aims of the GLACIER conference is to be a stepping stone towards COP21, the U.N. climate change conference to be held in Paris in December. COP21 hopes to usher in a binding, ambitious agreement on climate change.

Observers said that GLACIER may be an important moment on the road to Paris because it hopes to bring together a small subset of countries – including China, Canada, India, Japan, Russia, the United States and many European nations – which together account for the overwhelming majority of global greenhouse gas emissions.

Some suggested that the conference could be a moment for these polluting countries to step up their carbon emission reduction commitments.

“On climate change, President Obama has been good, but not good enough,” according to marine biologist Richard Steiner. “The U.S. commitment to reduce carbon emissions by about 30 percent in the next 15 years is about half of what is urgently needed.”

Steiner said: “It is like we are on a sinking boat, taking on two gallons of water a minute, and we are bailing 1 gallon a minute. We are still sinking. We urgently need a U.S. and global commitment at the Paris climate summit of at least 60 percent carbon reduction by 2030. Otherwise, we’re sunk.”

With these challenges ahead, the GLACIER summit has high expectations for international cooperation on climate change. Among the diversity of opinions, one clear message has rung out – the need to engage young people in Arctic climate change discussions

“A real priority should be engaging youth at all aspects of the climate problem – education, research, leadership and activism,” said Virginia. “It is vital that they are ‘at the table’ and that they help shape the questions to be addressed by policy-makers. After all, they have the most at stake.”

Edited by Phil Harris   

Flooding in Nigerian villages is just one of the effects of climate change that the country will have to address in drawing up its “intended nationally determined contributions” (INDCs) for the U.N. Climate Conference in Paris in December: Credit: Courtesy of NDWPD, 2011

By Ini Ekott
LAGOS, Aug 2 2015 (IPS)

Nigeria seems in no haste to unveil its climate pledge with just four months to go before the U.N. Climate Conference scheduled for December in Paris.

However, unlike Gabon, Morocco, Ethiopia and Kenya – the only African nations yet to submit their commitments – Nigeria has just commissioned a committee of experts to draw up targets and responses for its “intended nationally determined contributions” (INDCs).

INDCS are the post-2020 climate actions that countries say they will take under a new international agreement to be reached at the U.N. Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP21) in Paris, and to be submitted to the United Nations by September."The whole exercise [of preparing INDCs] will consider some priority sectors, look at the baseline and look at our needs for development and see what we can put on the table that we are going to strive to mitigate in terms of greenhouse gases” – Samuel Adejuwon, Nigeria’s Federal Ministry of Environment

Ahead of that date, Nigeria says its goals are clear: balancing post-2020 greenhouse gas (GHG) emission cut projections with its development peculiarities, according to Samuel Adejuwon, deputy director of the Federal Ministry of Environment’s Department of Climate Change in Abuja.

Nigeria is Africa’s fourth largest emitter of CO2, and there is no doubt climate change is already a problem it faces.

From the north, encroachment of the Sahara is helping to fuel a bloody insurgency by the jihadist group Boko Haram, as well as resource conflict between farmers and pastoralists in its central region, while the rise in ocean levels and flooding are affecting the south.

In a report issued in October 2014, the Mapelcroft global analytics company said that Nigeria, along with Bangladesh, Ethiopia, India and the Philippines, were the countries facing the greatest risk of climate change-fuelled conflict today.

Nigeria’s hopes for slashing its emission levels as part of its INDCs face several tests.

One is that for an economy almost solely dependent on oil – which accounts for a major portion of its 500 billion dollar gross domestic product (GDP), Africa’s highest – the commitment it takes to Paris will reflect how jettisoning fossil fuel cannot be an urgent priority and why doing so will require significant time and resources.

“The whole exercise will consider some priority sectors, look at the baseline and look at our needs for development and see what we can put on the table that we are going to strive to mitigate in terms of greenhouse gases,” says Adejuwon.

Another test is Nigeria’s energy shortage. The country produces about 4,000 megawatts for 170 million people, leaving much of the population reliant on wood, charcoal and waste to fulfil household energy needs such as cooking, heating and lighting.

In 2014, Nigerians used at least 12 million litres of diesel and petrol every day to drive back-up generators, according to former power Minister Chinedu Nebo. The country’s daily petrol consumption (cars included) stands at about 40 million litres, according to the state oil company, Nigerian National Petroleum Corporation.

Cutting the level of pollution that this consumption causes will require big investments in renewable and cleaner energy, says Professor Olukayode Oladipo, a climate change expert and one of three consultants drawing up the INDCs for the government.

Last year, former finance minister Ngozi Okonjo-Iweala said the country needed 14 billion dollars each year in energy investments and related infrastructure.

Oladipo argues that the key to the issue lies in striking a balance between a future of lower greenhouse emissions and immediate developmental realities.

“Every country is now exploring how to use less energy … in an efficient manner, how to rely on renewable energy sources.” In Nigeria, we are looking at “how to be able to drive our economy through reduced energy consumption without actually reducing the rate at which our economy is growing.”

Last year, minister of power Chinedu Nebo said that while solar panels were welcome for use in shoring up generation in distant communities, the government will deploy coal in addition to the hydro power currently in use.

“There is no doubt that the potential is there. Clean coal technology can give us good electricity and minimum pollution at the same time,” he said.

Insecurity

Oladipo also stresses that besides fuel, Nigeria’s climate plans will focus on agriculture, partly to diversify from oil and also as a response to growing resource conflict.

“We are not saying it is the only determinant of crisis,” he says of climate change stoking conflict over resources, “but at least it is adding to the degree and the frequency of the occurrence of these conflicts.

Apart from Boko Haram activities in the north which have been responsible for at least 20,000 deaths, clashes between pastoralists and farmers over land has killed thousands in Nigeria’s central region in recent years.

In the latest attack in May this year, herdsmen from the Fulani tribe slaughtered at least 96 people in the central state of Benue, Nigeria’s Punch newspaper reported.

The government agrees that climate change is one of the causes of the frequent bloodletting, alongside factors like urbanisation, but not much has been done to address the problem.

Oladipo says he believes that Nigeria’s new leader, Muhammadu Buhari, will do more to address fundamental climate change issues, point out that in his inaugural address on May 29, Buhari pledged to be a more “forceful and constructive player in the global fight against climate change.”

However, Nnimmo Bassey of the Health of Mother Earth Foundation argues that proposals put forward by Nigeria and Africa can barely be achieved if the developed nations – the biggest polluters – fail to act more to meet their commitments and cut down on their emissions.

“Nigeria should insist that industrialised nations cut emissions at source and not place the burden on vulnerable nations,” says Bassey.

Urging action from those nations, including the United States, will form a key element of Nigerian and African INDCs, adds Oladipo.

Edited by Phil Harris    

By Arul Louis
NEW YORK, Jul 20 2015 (IPS)

The Vienna agreement between Iran and the five permanent members of the United Nations Security Council acting in concert with Germany has the potential to remake international relations beyond the immediate goal of stopping Iran from acquiring nuclear weapons.

Courtesy of Arul Louis/ICFJ

Its impact could be felt at various levels, from United States engagement in the Middle East to the interaction of the competitive global powers, and from the economics of natural resources to the dynamics of Iranian society and politics.

President Barack Obama has invested an inordinate amount of political capital on the deal, challenging many in the United States political arena and Washington’s key allies like Israel and Saudi Arabia in hopes that a breakthrough on Iran would be his presidency’s international legacy along with his Cuba opening.

Obama is gambling on the nation’s war-weariness after the Afghanistan and Iraq wars that took a total toll of 6,855 casualties and, according to a Harvard researcher, is costing the nation at least $4 trillion. He presented the nation with a stark choice: War or Peace.

“There really are only two alternatives here,” he said, “either the issue of Iran obtaining a nuclear weapon is resolved diplomatically, through a negotiation, or it’s resolved through force, through war.”Even if Washington and Tehran don't recapture the closeness of the Pahlevi era, the U.S. will increase its options in the Middle East, a region posing a growing to the world threat from the Sunni-based Islamic State or ISIL.

Though the deal has been denounced by Republicans and some Democrats, and, earlier, the opponents had taken the unprecedented step of inviting Israeli Prime Minister Benjamin Netanyahu to make their case before Congress, Obama expects to carry the day. Even if Congress votes against the agreement, Obama reckons the opposition will not be able to able to get the two-thirds majority to override his threatened veto.

Obama’s Iran legacy, if it works according to plan, will not have the impact of Richard Nixon’s opening to China, but it still could mark the end of 36 years of virulent hostilities. Even if Washington and Tehran don’t recapture the closeness of the Pahlevi era, the U.S. will increase its options in the Middle East, a region posing a growing to the world threat from the Sunni-based Islamic State or ISIL. Right now Washington is hamstrung by unsure Sunni allies in the region.

Already in Iraq, the U.S. and Iran have been working with different elements on parallel tracks against ISIL. Obama has been blamed for pulling out U.S. troops from Iraq, although it was largely in keeping with his predecessor George W. Bush’s timetable, and for failing to reach an agreement with Baghdad on stationing some troops beyond the pullout deadline. These have been mentioned as factors leading to the rise of ISIL.

Now, there is a chance for Obama to redeem himself through the cooperation of Iran, even if they will not go to the extent of a formal agreement.

In the other ISIL flashpoint to the west of Iraq, there seems to be implacable differences on Syria. Tehran stands firmly by Syrian President Bashar al-Assad, whom Washington considers the irreconcilable foe of peace in that civil war ravaged country. Bridging this gap even if by face-saving measures would be the true test of a diplomatic shift.

The Iran nuclear issue takes the inevitable colour of a Shia-Sunni conflict. In the first place, the unspoken impetus for Tehran’s nuclear ambitions was Pakistan’s nuclear arsenal and the threat from its Sunni fundamentalists against Shias.

Now Pakistan’s stock will rise in Saudi Arabia and other Sunni nations as hedge, a Sunni-dominated nuclear power ranged against Iran, which they mistrust.

Add to this mix Israel, which has developed an unlikely alliance with Saudi Arabia. For Israel, the threat comes from fears of the millenarian trends among some Shia Muslims that could cancel out the insurance that Jerusalem, sacred to the Muslims, provides and Teheran’s venomous, ant-Semitic rhetoric.

But a more immediate issue for Israel is Tehran’s support for the Palestinian Hamas and the Lebanese Shia Hezbollah. The sanctions against Iran limited its potential financial and material backing for these organisations and the flow of funds after sanctions are lifted could boost Tehran’s adventurism, directly and through proxies, Israel fears.

On the global diplomatic front, the Iran deal is a break from the incessant U.N. Security Council squabbles that have hobbled it as issues like Ukraine, Syria, the South China Sea and assorted hotspots in Africa burn. Russia and China showed they could work intensively with the West. Moscow even earned plaudits from Obama for its role in facilitating the deal.

Russia and Iran share some common interests in places like Syria, Central Asia and the caucuses. An unbridled Tehran could more effectively cooperate with Moscow in these areas.

Economically, Russia, like other oil producers, may be hit by falling oil prices, but the diplomatic congruence and future arms sales could compensate.

For the European Union and China, the deal opens up business opportunities in a nation with tremendous economic potential along with lower oil prices.

Iran has the fourth largest known reserves of oil and its current production of 1.1 million barrels could soar to four million within a year. For most of the developing world, further reduction in oil prices will be a great help, even as it increases political and social pressures in some oil-producers.

The picture for India is mixed . It has been paying for Iranian oil imports in rupees while it has been exporting limited amounts of machinery and chemicals. The bilateral trade is in Iran’s favor and is estimated at about 14 billion dollars, with Indian imports at about 10 billion and exports at about 4 billion.

Now India may be able to buy more oil, but it will have to pay in rupees and its exports will have to compete with the rest of the world. With the prospects sanctions going away, India is already facing Tehran’s truculence in oil and gas and railway projects they had agreed on.

The Chabahar port project remains the strategic cornerstone of India’s ambitious engagement with Iran The port on the Gulf of Oman would give India access to Afghanistan and Central Asia bypassing Pakistan.

Chabahar is also a counterweight to Beijing’s Gawadhar project in Pakistan that would provide another sea outlet for China, Afghanistan and Central Asian countries.

On the nuclear nonproliferation front, the Iranian agreement chalks up a small victory after North Korean blatantly developed nuclear weapons. The world has been unable to confront Pyongyang diplomatically or militarily because of its mercurial nature leadership that borders on the insane.

For the Iranians themselves, the deal could ease up their lives and bringing back some normalcy. The bigger question is how it would play in the dynamics of Iranian politics. Supreme Leader Ayatollah Ali Khamenei approved the deal, but he has since expressed mistrust of the West in keeping its end of the bargain. That may be rein euphoria and send a message to the moderates.

Would the deal lead to a lessening of the paranoia among the religious and nationalist elements in Iran and in turn strengthen the moderates and push the present day heirs of the ancient Persian civilisation towards a relatively liberal modernity? If that were to happen Iran would have truly emerged from the shadows of international isolation.

Edited by Kitty Stapp

Excerpt:

By Roberto Azevêdo
GENEVA, Jun 29 2015 (IPS)

The latest report by the World Trade Organisation (WTO) on G20 trade measures shows a slight deceleration in the application of new trade-restrictive measures by G20 economies, with the average number of such measures applied per month lower than at any time since 2013.

According to the thirteenth such WTO report, issued on Jun. 15, G20 economies had applied 119 new trade-restrictive measures since mid-October 2014, an average of 17 new measures per month over the period.

Roberto Azevêdo

A slight decrease in the number of trade remedy investigations by G20 economies has also contributed to this overall figure.

But it is not yet clear that this deceleration will continue and the WTO calls on G20 leaders to show continued vigilance and reinforced determination towards eliminating existing trade restrictions.

The longer term trend remains one of concern, with the overall stock of trade-restrictive measures introduced by G20 economies since 2008 continuing to rise.

Of the 1,360 restrictions recorded by this exercise since 2008, less than one-quarter have been eliminated, leaving the total number of restrictive measures still in place at 1,031. Therefore, despite the G20 pledge to roll back any new protectionist measures, the stock of these measures has risen by over seven percent since the last report.

The broader international economic context also supports the need for continuing vigilance and action. According to the WTO’s most recent forecast (14 April 2015), growth in the volume of world merchandise trade should increase from 2.8 percent in 2014 to 3.3% percent 2015 and further to four percent in 2016, but remaining below historical averages.“The longer term trend [vis-à-vis protectionism] remains one of concern, with the overall stock of trade-restrictive measures introduced by G20 economies since 2008 continuing to rise”

The overall response to the 2008 financial crisis has been more muted than expected when compared with previous crises. The multilateral trading system has proved an effective backstop against protectionism.

During this period, G20 economies also continued to adopt measures aimed at facilitating trade, both temporary and permanent in nature.

These developments confirm that G20 economies overall have shown a degree of restraint in introducing new trade restrictions. However, it is not yet clear that the deceleration in the number of measures introduced will continue in future reporting periods. It is also relevant that the slow pace of removal of previous restrictions means that the overall stock of restrictive measures is continuing to increase.

The broader international economic context also supports the need for continuing vigilance and action.

Trends in world trade and output have remained mixed since the last monitoring report, as merchandise trade volumes and GDP growth picked up in the second half of 2014 but appear to have slowed in the first quarter of 2015.

Economic activity remained uneven across countries as the United States and China slowed in the first quarter, while growth in the Euro area and Japan picked up.

Plunging oil prices and strong exchange rate fluctuations, including an appreciation of the U.S. dollar and a depreciation of the Euro contributed uncertainty to the economic outlook.

Lower prices for oil and other primary commodities were expected to provide a boost to importing economies, but reduced export revenues weighed heavily on commodity exporters.

In light of these developments, our most recent forecast (14 April 2015) predicted a continued moderate expansion of trade in 2015 and 2016, although the pace of recovery was expected to remain below historical averages.

In the area of government procurement, work from the Organisation for Economic Cooperation and Development (OECD), identifying 65 measures implemented since the financial crisis, suggests that discriminatory government procurement policies have become increasingly popular and potentially affect 423 billion dollars of government procurement in the implementing economies.

This report shows that G20 economies implemented 48 new general economic support measures during the period under review, with the majority targeting the manufacturing and agricultural sectors through various incentive schemes, often, but not exclusively, in the context of exports.

The overall assessment of this thirteenth report on G20 trade measures is that the continuing
increase in the stock of new trade-restrictive measures recorded since 2008 remains of concern in the context of an uncertain global economic outlook.

Individually and collectively, the G20 must show leadership and deliver on the pledge to refrain from implementing new measures taken for protectionist purposes and to remove existing ones. (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:

Is the G7 commitment to an energy transition that aims to gradually phase out fossil fuel emissions this century to avoid the worst of climate change just hot air? Credit: CC BY-SA 2.5

By Lucy Cadena
LONDON, Jun 11 2015 (IPS)

One of the promises made by the leaders of the world’s seven richest nations when they met at Schloss Elmau in Germany earlier this week was an energy transition over the next decades, aiming to gradually phase out fossil fuel emissions this century to avoid the worst of climate change.

Let us be clear: a target of zero fossil fuels by 2100 puts us on track for warming on an unmanageable scale. The only commitment made by the G7 this week was a commitment to climate chaos.

Putting our faith in as-yet-underdeveloped technology fixes such as ‘carbon capture and storage’ and ‘geo-engineering’ to save us in the next 85 years, while the solutions to the climate crisis – renewable technology and community energy systems – exist here and now, is senseless.“The only way to avoid the worst of climate change is to act now, with urgency and ambition. Not by 2100, nor 2050. We need real commitment to real solutions – and the best place the G7 can start is by taking its money – public money – out of dirty energy”

The only way to avoid the worst of climate change is to act now, with urgency and ambition. Not by 2100, nor 2050. We need real commitment to real solutions – and the best place the G7 can start is by taking its money – public money – out of dirty energy.

While the G7 gathered on Jun. 7 and 8, this was the message from people from around the world, who are calling for a ban on all new dirty energy projects and an end to the financing of dirty energy.

The G7’s role in upholding the current dirty energy system is not limited to the subsidies they pour into fossil fuels daily.

G7 countries also directly finance – and profit from – dirty energy projects, particularly in the global South, and in regions where poverty and limited energy access devastate families.

These include projects affecting communities deeply reliant on clean air, water, and land that is polluted and stolen from them, projects among populations most vulnerable to the effects of climate change, and projects where people face harassment and human rights violations for speaking out.

France

Last week, France, host of the 30 November-11 December 2015 Paris climate summit – the U.N. gathering to set the agenda for global climate commitments in the next decades – announced that two of the summit’s key sponsors will be EDF and ENGIE (formerly GDF-Suez).

The French state holds 84 percent and 33.3 percent of shares in these companies respectively. Both are involved in the construction of several very controversial, polluting projects across the world.

EDF is currently planning the destructive Mphanda Nkuwa mega-dam on the Zambezi River in Mozambique, in the face of fierce opposition from local communities and environmental organisations.

A letter from civil society reminds French President François Hollande that these and other projects place EDF and ENGIE among the top 50 companies that contribute the most to global climate change.

With 46 coal-fired power plants between them, EDF and ENGIE are responsible for emitting 151 million tonnes of CO₂ a year – which amounts to about half the total of France’s overall emissions.

Italy

The Italian state owns a considerable number of shares – almost one-third – in oil and gas company ENI. According to a recent report by Amnesty International, last year alone ENI reported 349 oil spills in the Niger Delta from its own operations.

The figure is remarkable – almost unbelievable. Each spill triggers a human and ecological crisis. The scale of the devastation and ENI’s failure to safeguard communities and ecosystems begs the question: is this sheer incompetence, recklessness, or simply utter indifference to the welfare of local communities?

Japan

Japan, the next offender on the G7 list, is the number one public financier of coal plants globally among the Organisation for Economic Cooperation and Development (OECD) countries.

Japan has 24 coal-powered projects either under construction or planned, many of them in Indonesia, Vietnam and India, where the more vulnerable local populations live under the cloud of plants’ toxic emissions.

Emissions of deadly sulphur dioxide and nitrogen oxides from coal plants are currently highest in Indonesia, where the planned Batang coal power plant is set to become the largest ever Japanese-financed plant in Southeast Asia.

United States

A report by Oil Change International indicates that the United States government alone provides 5.1 billion dollars in national subsidies to fossil fuel exploration each year – that’s 5.1 billion dollars into seeking out new sources of civilisation-destroying energy sources.

Canada

Likewise, Canada’s expanding oil sector (caused by the growth in dirty tar sands production, known as ‘the biggest industrial project on Earth’) continues to reap the benefits of massive national subsidies.

United Kingdom

The U.K. government spent 300 times more supporting dirty energy overseas than it contributed towards renewable energy projects during its last term.

The 2012-2013 annual report of UK Export Finance, the country’s export credit agency, announced spending on projects such as a 147 million pounds (228 million dollars) guarantee to support oil and gas exploration by Petrobras in Brazil and 15 million pounds (23 million dollars) in guarantees to a loan for a gas power project in the Philippines.

Domestically, the government is prioritising drilling for new oil and gas, which will require huge subsidies. Hailing carbon-emitting gas as a ‘bridge fuel’ towards a cleaner energy system, the government is delaying investment in renewables to push fracking onto a population that vehemently opposes the dash for gas.

Germany

Meanwhile, Germany – the host of the G7 meeting – has been much lauded for its ‘Energiewende’ (‘Energy Revolution’), with a rapidly increasing use of renewable energy compensating for its nuclear phase-out in recent years.

However, German euros still make their way into the dirty energy machine – through sizeable tax exemptions afforded to fossil fuel producers’ exploration activities – allowing such companies to go further and dig deeper to uncover more carbon that needs to stay in the ground.

G7 Must Catch Up

The G7 countries have done the most to cause climate change. According to the Climate Equity Reference Calculator, they are responsible for 70 percent of historical carbon emissions, while hosting only 10 percent of the global population.

A commitment to a phase-out of fossil fuels in eight decades’ time is not a commitment. It is an easy promise for a politician, who probably will not even be in power in the next decade, to make. It is an easy promise for a rich nation, whose citizens are not the most vulnerable, to make.

G7 societies have grown rich by exploiting the human and natural world. They owe an enormous ‘climate debt’ to developing nations – yet they can barely scrape together the money they promised to the developing world via the Green Climate Fund.

Whether it’s an oil spill in Nigeria, a mega-dam in Mozambique or a coal plant in Java, the sources of our publicly-owned dirty energy are always sites of ecological and social devastation.

Access to energy is a right, but it should not come at the cost of other people’s rights – to clean air and drinking water, to land and food sovereignty, and to sustainable societies.

The international movement for climate justice is building, and will keep up pressure on governments to take money out of dirty energy and reinvest it in democratic renewable solutions that benefit everyone.

The global shift towards a just energy transformation has long been under way. Now, it’s snowballing. People from around the world are showing the way and implementing community-owned renewable energy solutions.

There is a hunger for change, despite continued inaction from governments. G7 leaders, take note: you are trailing far behind and have a lot of catching up to do!

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:

Demonstrators protesting at the Business & Climate Summit in Paris, May 20. Credit: A.D. McKenzie/IPS

By A. D. McKenzie
PARIS, May 21 2015 (IPS)

When it comes to climate change, business as usual is simply “not an option”.

That was the view of Eldar Saetre, CEO of Norwegian multinational Statoil, as international industry leaders met in Paris for a two-day Business & Climate Summit, six months ahead of the next United Nations Climate Change Conference (COP 21 ) that will also be held in the French capital.

Subtitled “Working together to build a better economy”, the May 20-21 summit brought together some 2,000 representatives of some of the world’s largest retail and energy concerns, including  companies that NGOs have criticized as being among the worst environmental offenders.

At the end, business leaders proclaimed that they wanted “a global climate deal that achieves net zero emissions” and that they wanted to see this happen at COP 21.

Throughout the conference, participants stressed that businesses will have to change, not only to protect the environment, but for their own survival. “Taking climate action simply makes good business sense. However, business solutions on climate are not being scaled up fast enough,” declared the summit organizers.

They pledged to lead the “global transition to a low-carbon, climate resilient economy.”

Saetre, for example, said his company wanted to achieve “low-carbon oil and gas production” and that it had embarked on renewables in the form of offshore wind energy. But he said that fossil fuels would still be needed in the future, alongside the various forms of renewable energy.

Acknowledging the widespread scepticism about multinational companies’ commitment, business leaders said that they could not “go it alone”, and called for support from governments as well as consumers.

Mike Barry, Director of Sustainable Business at British retailer Marks & Spencer, told IPS in an interview that global commitment was important in the drive to transform industry to have more environmentally friendly practices.

“Collective action can bring about real change,” he said. “We’re here today because we believe that climate change is happening and it’s going to have a significant impact on our business in the future and our success.

“Our customers would expect us to take the lead on this, and we want governments to take this seriously as well in the run-up to COP 21 [the 21st session of the Conference of the Parties to the United Nations Framework Convention on Climate Change to be held in Paris from Nov. 30 to Dec. 11].”

He said that Marks & Spencer and other companies in a network called the Consumer Goods Forum wanted to “stand shoulder to shoulder with government to say ‘this matters and we’re here to help’.”

But government consensus on how to address climate change has proved difficult, and even French President Francois Hollande, who opened the summit, conceded that it would require a miracle for a real agreement to be reached at COP 21.

“We must have a consensus. It’s already not easy in our own countries, so with 196 countries, a miracle is needed,” he said at the Business & Climate Summit, expressing the conviction, however, that agreement will be reached through negotiation and “responsibility”.

Hollande and other officials said the involvement of businesses was essential, and France, with its huge oil and electricity companies, evidently has a big role to play.

However, demonstrators outside the summit, held at the headquarters of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), slammed big business.

“These multinationals (and the banks that finance their activities) are in fact directly at the origin of climate change,” read a statement from organisations including Les Amis de la Terre (Friends of the Earth, France) and the civil disobedience group J.E.D.I. for Climate.

Saying that it was ironic to have fossil-fuel companies represented at the summit, the groups asked: “Can one imagine for a second that the tobacco industry would be associated with policies to combat smoking aimed at ending the production of cigarettes? No, that would be the best way to ensure that the world continued to chain-smoke.”

The protesters added that if Hollande and his ministers wanted to show a real commitment to the environment, they should make it clear that “the climate is not a business”.

“The fight against climate change is not the business of fossil-fuel multinationals: they belong to our past,” the groups said in a joint release, handed out on the street.

At the summit, Christiana Figueres, Executive Secretary of the U.N. Framework Convention on Climate Change (UNFCCC), said that businesses should not be “demonised” and she called for collaboration rather than confrontation.

“We all start with a carbon footprint,” she said. “It is not a question of demonising anyone but realizing that we’re all here … This is not about confrontation. This is about collaboration. If you’re thinking about confrontation, forget it. Because we’re not going to get there.”

The summit – co-hosted by Entreprises Pour l’Environnement, an association of some 40 French and large international companies, and UN Global Compact France, a policy initiative for businesses – also addressed the vulnerability of island states in the face of climate change.

Tony de Brum, the Marshall Islands’ Minister of Foreign Affairs, said that island states in the Pacific and elsewhere had an interest in keeping pressure on carbon emitters because their populations’ survival was at stake.

Angel Gurría, Secretary General of the Paris-based Organisation for Economic Cooperation and Development (OECD), also highlighted the threat to vulnerable countries, saying that for them, climate change is not about protecting the environment for future generations, but “it’s about how long the water will take to overcome the land.”

Gurría said that greater reductions in carbon emissions were required than has so far been proposed by states, and he stressed that countries over time needed to “develop a pathway to net zero emissions globally” by the second half of the century.

“Governments at COP 21 need to send a clear directional signal that will drive action for decades to come,” he said. “We are on a collision course with nature, and unless we seize this opportunity, we face an increasing risk of severe, pervasive and irreversible climate impact.”

Edited by Phil Harris    

Cameroon’s government under President Paul Biya is bearing down on a separatist movement fighting for the rights of a minority English-language region, using as its weapon a sweeping new anti-terrorism law introduced at the end of last year.

The separatist Southern Cameroons National Council (SCNC) – which is demanding an independent Southern Cameroons made up of Cameroon’s Northwest and Southwest Regions – has been targeted under the new law, which forbids public meetings, street protests or any action that the government deems to be disturbing the peace.

Map showing location of Southern Cameroons (highlighted). Credit: Wikimedia Commons Public Domain

English-speaking Cameroonians make up over 22 percent of the country’s population of 20 million.

Long desired by Western powers for its beauty and natural resources, Cameroon was first occupied by the Germans in 1884. After the First World War, the French and British carved it up between them as League of Nations mandates – four-fifths went to France, the rest to the United Kingdom.

A federation was declared in 1961, followed by the annexation of the English-language region into the United Republic of Cameroon, with its capital in Yaounde in 1972. Dissension continues to seethe, however, in the English-speaking regions which resent the lack of control over their assets.

Over the years, Cameroon has downplayed its problems with the English-speaking regions, while making token placements of a few of their citizens in its administration.

Secessionists say this relationship of inequality has led to impoverishment of the territory and its population and a diminishment of their educational and cultural heritage, while feeding the flame of ethnic strife between the people of the Northwest and Southwest Regions.

The extraction of oil and the expropriation of Cameroon’s substantial oil revenues is frequently cited as the touchstone for frustration and anger among those of the struggling south.The separatist Southern Cameroons National Council (SCNC) has been targeted under Cameroon’s new anti-terrorism law, which forbids public meetings, street protests or any action that the government deems to be disturbing the peace

In this regard, the Natural Resource Governance Institute (NRGI) gave Cameroon a “failing grade”, ranking it 47^th out of 58 countries for such weaknesses as enabling environment, safeguards and quality controls, and reporting practices.

“Cameroon’s national oil company (SNH) dominates the sector,” NRGI reported. “It is directly controlled by the Presidency … The largest revenue streams are collected by SNH and transferred quarterly to the national treasury after subtracting the company’s operational costs – meaning that some oil revenues never reach the treasury.”

Aside from publishing environment impact assessments, Cameroon provides very little information on its extractive sector, noted NRGI, while it performed near the bottom of rankings on measures of budgetary openness and the rule of law.

Oil exploration, production and refining all take place in Southern Cameroons, while oil-derived revenues are paid to the state coffers directly in Yaounde.

Against this background, and since Cameroon’s President Paul Biya endorsed an anti-terrorism law in December 2014, the SCNC has not been able to organise any major gathering.

An attempt this month, on Apr. 3, ended with the arrest of Nfor Ngala Nfor, SCNC Vice National Chairman, and six others in Buea, Southwest Region.

Andrew Kang, who had hosted the SCNC leaders, told IPS from his hospital bed at the Buea Regional Hospital that security forces barged into his house while he and the guests were about to have a meal. “We were not even permitted to eat our food. They just beat us, ordered us to move and led us to the station. We spent four days in a prison cell and only regained freedom at about 5 pm on Apr. 6.”

Kang denied the government’s charges of promoting secession and rebellion which had been levelled against the group.

Talking to IPS, Martin Fon Yembe, a member of the SCNC and human rights activist, said that while the government made it seem that the new anti-terrorism law was designed to boost the fight against Boko Haram, the main aim was to stop the holding of SCNC meetings and gatherings.

“Everyone knows that law was put in place to hinder the activities of the movement and there is no gainsaying the fact that it poses a problem,” he said.

A U.S. State Department human rights report on Cameroon in 2013 referred to security force torture and abuse, denial of fair and speedy public trials and restrictions on freedom of assembly and association. “Although the government took some steps to punish officials who commit abuses in the security forces and in the public service, impunity remained a problem,” said the report.

Meanwhile, thousands of Southern Cameroonians are currently in exile in Europe and the United States and thousands more are on the run because of their support for the separatist movement.

The Biya administration, on the other hand, presents a picture of a country unswervingly headed for growth. In a document titled Cameroun Vision 2035, a long-term vision is described which envisages the consolidation of democracy, enhancement of national unity, economic development and increasing employment.

Under a three-year plan, unveiled in December, Cameroon will spend 1.75 billion dollars “to meet the immediate needs of the population,” focusing on sectors such as road infrastructure, health, agriculture, energy and security.

“The special programme, evaluated at 925 billion CFA francs, is financed through the mobilisation of the required resources from local and international financial institutions at sustainable rates,” Prime Minister Philemon Yang said without giving further details.

In the latest twist to the South Cameroons issue, a meeting this month of Cameroon’s English-speaking lawyers gave notice that an All-Anglophone Lawyers Conference would be held shortly in Bamenda, chief city of the Northwest Region, “to develop strategies at safeguarding the Common Law and to map out the way forward for the Southern Cameroons territory,” the Cameroon Concord reported.

The news online was met with over a dozen enthused readers. “Machiavelli Ayuk” of the University of Buea wrote: “This is the kind of action that the marginalised Anglophone people love to hear. At last we have some Educated Elites in the Anglophone zone…”

The comment was followed by “Fast Man”, a self-described fieldworker, who wrote: “I hope the lawyers use their intelligence and remember their oath. We will never go anywhere under French hegemony. God bless the Southern Cameroons and its citizens…”

Edited by Lisa Vives/Phil Harris    

By Joaquín Roy
MIAMI, Apr 14 2015 (IPS)

U.S. President Barack Obama has earned a place in history for taking the first steps towards rectifying a policy that has lasted over half a century without ever achieving its primary goal of ending the Castro regime in Cuba.

At the Seventh Summit of the Americas, held in Panama City Apr. 10-11, Obama set aside the tortuous negotiations with his Cuban counterpart Raúl Castro and the impossible pursuit of consensus with his domestic opponents. Going out on a limb, he made an unconditional offer. He knew, or he sensed, that Castro would have no option but to accept.

Joaquín Roy

The Cuban economy is on the verge of collapse and the regime is receiving subtle pressure from a population that has already endured all manner of trials.

Signs of weakening in Venezuela, its protector, with which it exchanged social favours (in the fields of health and education) for subsidised oil, are gathering like hurricane storm clouds over the Raúl Castro regime

Instead of shaking the tree to knock the ripe fruit to the ground, Obama chose to do the unexpected: to prop it up and instead encourage its survival.

Obama is committing to stability in Cuba as the lesser evil, compared with sparking an internal explosion, with conflict between irreconcilable sectors and the imposition of a military solution more rigid than the current level of control. Washington knows that only the Cuban armed forces can guarantee order. The last thing the Pentagon aspires to is to take on that unenviable role.

Thus, between underpinning the Raúl Castro government and the doubtful prospect of attempting instantaneous transformation, the pragmatic option was to renew full diplomatic relations and, in the near future, lift the embargo.

Raúl Castro, for his part, yielded ground on the oft-repeated demand for an end to the embargo as a prior condition for any negotiations, and has responded wisely to the challenge. He contented himself with the consolation prize of reviewing the history (incidentally, an appalling one) of U.S. policy towards Cuba, in his nearly one-hour speech at the Summit.

“Obama is committing to stability in Cuba as the lesser evil, compared with sparking an internal explosion, with conflict between irreconcilable sectors and the imposition of a military solution more rigid than the current level of control”
To sugar the pill, however, he generously recognised that Obama, who was not even born at the time of the Cuban Revolution, shares no blame for the blockade. In this way, Castro contributed decisively to Obama’s triumph at the summit.

Venezuelan President Nicolás Maduro has emerged from this inter-American gathering as the clear loser. The key to his failure was not having calculated his limitations and having undervalued the resources of his fellow presidents. Initially, Maduro logically exploited Obama’s mistake in decreeing that Venezuela is a “threat” and imposing sanctions on seven Venezuelan officials.

A large number of governments and analysts criticised the language used in the U.S. decree. In the run-up to the summit, Obama publicly recanted and admitted that Venezuela is no such threat to his country.

Maduro’s weak showing at the Summit was due to a combination of his own personality, the reactions of important external actors (significantly distant from the United States), the weak support of many of his traditional allies or sympathisers in Latin America, and the absence of unconditional support from Cuba.

It should be noted that the United States barely made its presence felt over this issue, although U.S. State Department counsellor Thomas Shannon made an effort to smooth over Maduro’s excesses and visited the Venezuelan president in Caracas ahead of the summit.

Maduro’s actions were already burdened by the imprisonment of a number of his opponents on questionable charges. As a result, protests spread worldwide, especially in Latin America, but also in Europe.

A score of former Latin American presidents signed a protest document which was presented at the summit.

Although these former presidents might be regarded as conservative and liberal, they were joined by former Spanish president José María Aznar (a notorious target of attacks by the late Venezuelan president Hugo Chávez and, afterwards, Maduro himself) and former Spanish socialist president Felipe González, who offered to act as defence lawyer for Antonio Ledezma, the mayor of Caracas, who is one of those imprisoned by the Venezuelan regime.

Maduro’s attempt to have a condemnation of the U.S. decree included in the summit’s final communiqué ended in another defeat. Although efforts were made to eliminate direct mention of the United States, the outcome was that the summit issued no final declaration because of lack of consensus.

In spite of the loquacity of its partners and protégés in the Bolivarian Alliance for the Peoples of Our America (ALBA), Venezuela’s Latin American supporters showed caution and avoided direct confrontation with Washington.

The same was evidently true of the Caribbean countries; fearful of losing supplies of subsidised Venezuelan oil, they made their request to Obama for preferential treatment by the United States at the meeting of the Caribbean Community (CARICOM) in Jamaica earlier in the month.

But Maduro’s main failure was not realising that Raúl Castro would have to choose between fear of diminished supplies of cheap Venezuelan crude and rapprochement with Washington. It remains unknown how Cuba will be able to continue supplying Cuban teachers and healthcare personnel to Venezuela, until now the jewel in the crown of the alliance between Havana and Caracas in the context of ALBA.

Translated by Valerie Dee/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. 

Joaquín Roy can be contacted at jroy@Miami.edu

Excerpt:

An unidentified woman from Zimbabwe's Mashonaland Central Province at Manzou Farm packs her tobacco with the help of her children as they prepare to leave following an eviction order. “Land grabs in Africa have helped to perpetuate economic inequalities similar to the colonial era economic imbalances” – Terry Mutsvanga, Zimbabwean rights activist. Credit: Jeffrey Moyo/IPS

By Jeffrey Moyo
HARARE, Apr 8 2015 (IPS)

There is a new scramble for Africa, with ordinary people facing displacement by the affluent and the powerful as huge tracts of land on the continent are grabbed by a minority, rights activists here say.

“Our forefathers cried foul during colonialism when their land was grabbed by colonialists more than a century ago, but today history repeats itself, with our own political leaders and wealthy countrymen looting land,” Claris Madhuku, director of the Platform for Youth Development (PYD), a democracy lobby group in Zimbabwe, told IPS.

Civil society activist Owen Dliwayo, who is programme officer for the Youth Dialogue Action Network, another lobby group here, said multinational companies were to blame in most African countries for land seizures.“Our forefathers cried foul during colonialism when their land was grabbed by colonialists more than a century ago, but today history repeats itself, with our own political leaders and wealthy countrymen looting land” - Claris Madhuku, Zimbabwe’s Platform for Youth Development (PYD)

“I can give you an example of the Chisumbanje ethanol fuel project here in Chipinge. The project resulted in thousands of villagers being displaced to pave way for a sugar plantation so that thousands of hectares of land space could be created for the ethanol-producing project, consequently displacing poor villagers,” Dliwayo told IPS.

The 40,000 hectare sugar cane plantation which started in 2008 left more than 1,754 households displaced, according to PYD.

Fifteen years ago, Zimbabwe embarked on a controversial land reform programme to address colonial land-ownership imbalances, but activists have dismissed the move as disastrous for this Southern African nation.

“To say African nations like Zimbabwe addressed the land problem is untrue because land which African governments like Zimbabwe grabbed from white farmers was parcelled out to political elites at the expense of hordes of peasants here,” Terry Mutsvanga, an award-winning Zimbabwean rights activist, told IPS.

“Land grabs in Africa have helped to perpetuate economic inequalities similar to the colonial era economic imbalances,” he added.

In 2010, ZimOnline, a Zimbabwean news service, reported that about 2,200 well-connected black Zimbabwean elites controlled nearly 40 percent of the 14 million hectares of land seized from white farmers, with each farm ranging in size from 250 to 4,000 hectares, with Zimbabwean President Robert Mugabe and his family said to own 14 farms spanning at least 16,000 hectares.

Further up in East Africa, according to a 2011 presentation by Uganda’s Joshua Zake titled ‘Land Grabbing; silent pain for smallholder farmers in Uganda’, key characters of land grabbing in that country are also a few wealthy or powerful individuals against many vulnerable individuals or communities.

Zake is Senior Programme Officer Environment and Natural Resources and Coordinator of the Uganda Forestry Working Group at Environmental Alert.

According to Zake, land grabbing in Africa, particularly in Uganda, is promoted by the suspected presence of oil and other mineral resources beneath the land, such as in Uganda’s Amuru and Bulisa districts.

Zake’s remarks fit well with Zimbabwe’s situation, where more than 800 families were displaced by government from Chiadzwa in Manicaland Province after the discovery of diamonds there in 2005.

But land grabs in Africa may also be rampant in towns and cities, according to private land developers here.

“There is high demand of land for the construction of homes in towns and cities across Africa owing to the sharp rural-to-urban migration,” Etuna Nujoma, a private land developer based in Windhoek, the Namibian capital, told IPS.

“The wealthy and the powerful as well as the corrupt politicians are taking advantage of the land demand and therefore often parcelling out urban land amongst themselves for resale at exorbitant prices at the expense of the poor.”

Last year, irked by corrupt local authorities appearing to be dishing out land among themselves for resale, a group of informal settlement dwellers outside Namibia’s coastal holiday town of Swakopmund occupied municipal land with the intention of settling there.

With land grabs at their peak in Zimbabwe, members of the ruling Zanu-PF party are measuring out land pieces which they then give to people who pay in the range of 10 to 20 dollars for 30 to 50 square metres, depending on the areas in which they want to obtain housing stands, according to Andrew Nyanyadzi of Zanu-PF.

“We don’t need permission from local authorities for us to have access to the land which our liberation war leaders fought for. It’s our land and we are therefore selling at affordable prices to ruling party loyalists,” Nyanyadzi told IPS.

Houses that once sheltered farmworkers stand empty as lands are reallocated for commercial farming and other profit-making purposes in Africa. Credit: Jeffrey Moyo/IPS

Consequently, lobby groups in Zimbabwe say havoc rules supreme in the country’s towns and cities.

“In Harare, land belonging to the city has been taken over by known militant groups of people with links to Zanu-PF, whom police here are even afraid to apprehend,” Precious Shumba, the director of Harare Residents Trust, told IPS.

“This is exactly what happened to Harare’s urban land in Hatcliff high density area, where housing cooperatives belonging to the ruling Zanu-PF leaders have grabbed council land using their political power,” Shumba said.

However, like other countries across Africa, Zimbabwe’s local authority by-laws prohibit individuals or organisations from selling land that does not legally belong to them.

Meanwhile, in Mozambique, the poor are losing out to foreign investors on land rights there despite the state being the sole owner of land.

Under the country’s constitution, there is no private land ownership – land and its associated resources are the property of the state – although the country’s Land Law grants private persons the right to use and benefit from the land whether or not they have a formal title. However, loopholes have emerged in the law.

A survey last year by Mozambique’s National Farmers’ Union showed that there was a colonial-era style land grab there, with politically-connected companies in the former Portuguese colony seizing hundreds of thousands of hectares of farmland from peasants.

According to GRAIN, a non-profit organisation supporting small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems, peasants in northern Mozambique have difficulties keeping their lands as foreign companies set up large-scale agribusinesses there.

The NGO says Mozambicans are being told that these projects will bring them benefits, but this is not how Caesar Guebuza and other Mozambican peasants see it.

“Agricultural investments by foreign companies have not benefitted us, but rather we have lost land to these companies investing here and we are being treated as aliens in our own land,” Guebuza told IPS.

Economists blame the Mozambican government for favouring foreign investors, who now possess large swathes of state land.

“The Mozambican government is known for siding with foreign investors who now occupy huge tracts of land for their own use as local peasants lose out on land, which is their birth right,” Kingston Nyakurukwa, a Zimbabwean independent economist, told IPS.

With foreign investors acquiring huge tracts of land ahead of locals in Africa, ActionAid Tanzania earlier this year said that through the European Union, United States and several European countries, the European Union’s New Alliance for Food Security and Nutrition plans to invest 7.57 billion euros in agricultural development and food security across Africa.

However, said Nyakurukwa, these will be business ventures that will strip Africans of their hard-earned money as they buy agricultural produce.

Similarly, in Nigeria, Mozambique and Tanzania, smallholder farmers are being moved off their land, paving the way for sugarcane, rice and other export crop-growing projects backed by New Alliance money, according to ActionAid Tanzania’s findings.

For Africans in Tanzania, big money might be gradually rendering them landless.

“Money from investors seem to be elbowing us out of our native lands here in Tanzania as no one has been offered the choice of whether to be resettled or not as we are being forcibly offered money or land for resettlement,” Moses Malunguja, a disgruntled peasant from Tanzania, told IPS.

Edited by Phil Harris   

Driven by solar and wind, world investments in renewable energy leapt in 2014. Photo credit: Jürgen from Sandesneben, Germany/Licensed under CC BY 2.0

By Sean Buchanan
ROME, Mar 31 2015 (IPS)

Driven by solar and wind, world investments in renewable energy reversed a two-year dip last year, brushing aside the challenge from sharply lower oil prices and registering a 17 percent leap over the previous year to stand at 270 billion dollars.

These investments helped see an additional 103Gw of generating capacity – roughly that of all U.S. nuclear plants combined –around the world, making 2014 the best year ever for newly-installed capacity, according to the 9th annual “Global Trends in Renewable Energy Investments” report from the U.N. Environment Programme (UNEP) released Mar. 31.

Prepared by the Frankfurt School-UNEP Collaborating Centre and Bloomberg New Energy Finance, the report says that a continuing sharp decline in technology costs – particularly in solar but also in wind – means that every dollar invested in renewable energy bought significantly more generating capacity in 2014."Climate-friendly energy technologies are now an indispensable component of the global energy mix and their importance will only increase as markets mature, technology prices continue to fall and the need to rein in carbon emissions becomes ever more urgent" – Achim Steiner, Executive Director of UNEP

In what was called “a year of eye-catching steps forward for renewable energy”, the report notes that wind, solar, biomass and waste-to-power, geothermal, small hydro and marine power contributed an estimated 9.1 percent of world electricity generation in 2014, up from 8.5 percent in 2013.

This, says the report, means that the world’s electricity systems emitted 1.3 gigatonnes of CO2 – roughly twice the emissions of the world’s airline industry – less than it would have if that 9.1 percent had been produced by the same fossil-dominated mix generating the other 90.9 percent of world power.

“Once again in 2014, renewables made up nearly half of the net power capacity added worldwide,” said Achim Steiner, Executive Director of UNEP. “These climate-friendly energy technologies are now an indispensable component of the global energy mix and their importance will only increase as markets mature, technology prices continue to fall and the need to rein in carbon emissions becomes ever more urgent.”

China saw by far the biggest renewable energy investments last year – a record 83.3 billion dollars, up 39 percent from 2013. The United States was second at 38.3 billion dollars, up seven percent on the year (although below its all-time high reached in 2011). Third came Japan at 35.7 billion dollars, 10 percent higher than in 2013 and its biggest total ever.

According to the report, a prominent feature of 2014 was the rapid expansion of renewables into new markets in developing countries, where investments jumped 36 percent to 131.3 billion dollars. China with 83.3 billion, Brazil (7.6 billion), India (7.4 billion) and South Africa (5.5 billion) were all in the top 10 investing countries, while more than one billion dollars was invested in Indonesia, Chile, Mexico, Kenya and Turkey.

Although 2014 was said to be a turnaround year for renewables after two years of shrinkage, multiple challenges remain in the form of policy uncertainty, structural issues in the electricity system and even the very nature of wind and solar generation which are dependent on breeze and sunlight.

Another challenge, says the report, is the impact of the more than 50 percent collapse in oil prices in the second half of last year.  However, according to Udo Steffens, President of the Frankfurt School of Finance and Management, the price of oil is only likely to dampen investor confidence in parts of the sector, such as solar in oil-exporting countries and biofuels in most parts of the world.

“Oil and renewables do not directly compete for power investment dollars,” said Steffens. “Wind and solar sectors should be able to carry on flourishing, particularly if they continue to cut costs per MWh. Their long-term story is just more convincing.”

Of greater concern is the erosion of investor confidence caused by increasing uncertainty surrounding government support policies for renewables.

“Europe was the first mover in clean energy, but it is still in a process of restructuring those early support mechanisms,” according to Michael Liebreich, Chairman of the Advisory Board for Bloomberg New Energy Finance. “In the United Kingdom and Germany we are seeing a move away from feed-in tariffs and green certificates, towards reverse auctions and subsidy caps, aimed at capping the cost of the transition to consumers.

“Southern Europe is still almost a no-go area for investors because of retroactive policy changes, most recently those affecting solar farms in Italy. In the United States there is uncertainty over the future of the Production Tax Credit for wind, but costs are now so low that the sector is more insulated than in the past. Meanwhile the rooftop solar sector is becoming unstoppable.”

A media release announcing publication of the UNEP report said that if the positive investment trends of 2014 are to continue, “it is increasingly clear that major electricity market reforms will be needed of the sort that Germany is now attempting with its Energiewende [energy transition].”

The structural challenges to be overcome are not simple,” it added, “but are of the sort that have only arisen because of the very success of renewables and their over two trillion dollars of investment mobilised since 2004.”

Edited by Phil Harris    

In Bangladesh, dramatic reductions in open defecation contributed to large declines in the number of stunted children. Credit: Mahmuddun Rashed Manik/IPS

By Thalif Deen
UNITED NATIONS, Mar 18 2015 (IPS)

Nearly half of the world’s hungry, amounting to about 363 million people, live in some of the rising middle income countries, including Brazil, China, India, Indonesia and Mexico, according to a new report released Wednesday by the Washington-based International Food Policy Research Institute (IFPRI).

The 2014–2015 Global Food Policy Report (GFPR) calls on these developing nations, described as “rising economic powerhouses,” to reshape their food systems to focus on nutrition and health, close the gender gap in agriculture, and improve rural infrastructure to ensure food security for all.“It has become clear that the factors that influence people’s nutrition go well beyond food and agriculture to include drinking water and sanitation, the role of women, the quality of caregiving, among others.” -- Shenggen Fan

“It may seem counterintuitive, but these growing economies play a key role in our ability to adequately and nutritiously feed the world,” said Shenggen Fan, director general of IFPRI.

The report traces the link between sanitation and nutrition, with findings in Bangladesh that show “dramatic reductions in open defecation contributed to large declines in the number of stunted children.”

The research also found that “Bangladeshi children living in places where open defecation had been reduced were taller than children in neighboring West Bengal, India, where open defecation is still common, even at the same levels of economic wealth.”

“It has become clear that the factors that influence people’s nutrition go well beyond food and agriculture to include drinking water and sanitation, the role of women, the qual­ity of caregiving, among others,” Fan said.

The study also finds strong evidence that food insecurity was a contributing factor to instability in the Middle East.

Additionally, it draws attention to the pressing need to regulate food production to prevent food-borne diseases, help small family farmers move up by increasing their incomes or move out to non-farm employment, improve social protection for the rural poor, and support the role of small-scale fishers in satisfying the global demand for fish.

Asked specifically about the impact of Middle East conflicts on food security, Clemens Breisinger, a senior research fellow in the Development Strategy and Governance division at IFPRI, told IPS food insecurity is quite obviously often a consequence of political instability and conflict.

As such, he said, the number of food insecure people has risen in many Arab countries since 2011, especially in Syria, Iraq and Yemen (three countries ravaged by political turmoil).

“But new research shows that food insecurity can also fuel conflicts, particularly in countries that are net food importing countries and thus vulnerable to global food price shocks,” Breisinger said.

He pointed out Arab countries import about 50 percent of their food and were thus hard hit by the global food price spikes in 2008 and 2011.

Meanwhile, Imed Drine, a senior economist at the Islamic Development Bank, says the slump in oil prices continues to upend the global economy and experts believe this is likely to last for several years.

Oil prices dropped by about 50 percent from the fourth quarter of 2014 to the first month of 2015, the second largest annual decline ever where the falling oil prices have helped to push food prices down, according to the Rome-based Food and Agriculture Organization (FAO).

Of the regions affected by these declining oil prices, said Drine in a blog post, the MENA region (Middle East and North Africa) is affected the most.

That is due to the fact that the majority of its countries depend on oil revenues for growth and because it is the most food imports-dependent region where food dependency ratios exceed 50 percent on average.

Drine says the strong relationship between oil and food prices may be explained by a key fact: “Our modern global food system is highly oil-dependent.”

Oil is the key fuel for production and for transporting food from field to market, and fuel costs, he said, make up as much as 50 to 60 per cent of total shipping costs.

In addition, energy related costs such as fertilisers, chemicals, lubricants and fuel account for close to 50 percent of the production costs for crops such as corn and wheat in some developed countries.

“As a result, declining oil prices will have a direct influence on production costs,” he added.

Furthermore, grain prices have become increasingly linked to the movement of oil markets since more corn is being diverted to biofuel production.

Generally, as demand for these alternative fuels decreases, crop prices are forced down, making food more affordable, Drine added.

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

There is rising anger among trade unionists, environmentalists and civil society groups in Gabon after a wood company, Rain Forest Management (RFM), sacked 38 fixed-term workers last month in Mbomao, Ogooué-Ivindo province.

RFM, a Gabonese wood processing company with Malaysian investment, is one of several exploiting the rich natural forests in Gabon. The forestry sector is the country’s second source of foreign exchange after oil.

RFM and the woodworkers had been locked in a lengthy dispute over working conditions, lack of contacts and legal working hours, among other complaints.

According to the Entente Syndicale des Travailleurs du Gabon (ENSYTG) union, RFM refused to negotiate with them and workers who were planning to take part in trade union meetings were threatened and intimidated.“Although Gabon’s forests are often described as being relatively undamaged and offering great potential for long-term sustainable timber production, it is clear that industrial forestry within the current policy framework threatens their future integrity and the country’s biodiversity” – Forests Monitor

After numerous threats and charges of intimidation, on Feb. 17, as the employees were returning to work, RFM called on police to evict them from their company-supplied dormitories, claiming that the workers had violated company rules.

The dismissals were linked to worker protests over poor working conditions, unsanitary housing infested with rats, cockroaches and snakes, demands for legal working hours and payment of wages on time.

Léon Mébiame Evoung, president of ENSYTG, told IPS that the workers were simply calling on the company to respect basic rights and provide a pharmacy and an infirmary that should be managed by competent Gabonese health professionals.

RFM failed to meet any of these demands, said the union official. Instead, it decided to execute its earlier threat by firing all protesting workers.

The action has provoked the ire of civil society groups and syndicates, including Building and Wood Workers’ International (BWINT), which is circulating an online petition to help the strikers’ return to their jobs.

Marc Ona Essangui, founder of the environmental NGO Brainforest and president of Environment Gabon, a network of NGOs, told IPS in an online interview that he could not accept such “gross suppression” of workers’ rights. “I have signed up to the call to protect the workers,” he said.

“I strongly protest against the dismissal of these workers, which is clearly linked to their strike action,” he insisted. Such anti-union activities, he added, violate International Labour Office (ILO) conventions 87 and 98 (on freedom of association and the right to organise and bargain collectively, respectively).

Along with other environmentalists in the region, Essangui – who once received a suspended sentence for accusing a presidential ally of exploiting timber, palm oil and rubber in Gabon’s “favourable agri-climate” – is troubled by risks to the region’s natural forests due to development activities.

The Gabonese government and international donors, however, regard the exploitation of timber as central to the country’s macroeconomic development.

According to Forests Monitor, an NGO that supports forest-dependent people, “although Gabon’s forests are often described as being relatively undamaged and offering great potential for long-term sustainable timber production, it is clear that industrial forestry within the current policy framework threatens their future integrity and the country’s biodiversity.”

The NGO notes that “production levels are already considerably above the official sustainable production estimates and are set to continue rising”, meaning that “the contribution which forestry sector revenues make to the country’s population as a whole and to people living in the locality of forestry operations is questionable.”

On its website, the World Resources Institute (WRI) notes that “nowhere is the pressure (on resources) more intense than in Gabon, a nation with 80 percent of its territory covered by dense tropical forest. With resource use demands spiralling in recent years, Gabon urgently needs better forest management planning if the government is to achieve its goal of becoming an emerging economy while preserving the country’s natural resources.”

RFM’s woodworking factory lies at the centre of three national parks – Lope, Crystal Mountain, and Ivindo – and to the east of Libreville. The park area is a small fraction of the land marked for development on a WRI map. The wood used by RFM is locally sourced.

Established in 2008, RFM produces windows and doors for the Gabonese domestic market. It exports semi-finished products to Asia, Europe and the Middle East. The company employs more than 700 workers, with a Gabonese majority.

Since November 2009, when log exports were banned, the formal economy production of processed wood has increased significantly.

According to a WRI report titled ‘A First Look at Logging in Gabon’, compiled by seven Gabonese environmental organisations, “Gabon has vast forest resources, but rapid growth of logging activity may threaten those resources. If managed properly, Gabon’s forests could offer long-term revenues without compromising the ecosystems’ natural functions.”

However, the authors continued, “(we) found information about forest development unreliable, inconsistent, and very difficult to obtain. We believe that more public information will promote accountability and transparency and favour the implementation of commitments made to manage and protect the world’s forests, which would significantly slow forest degradation around the world.”

Edited by Lisa Vives/Phil Harris    

Africa’s wetland areas are experiencing immense pressure from commercial development and agriculture, settlements, excessive exploitation by local communities and improperly-planned development activities. Credit: Creative Commons CC0

By Tonderayi Mukeredzi
HARARE, Mar 12 2015 (IPS)

African wetlands are among the most biologically diverse ecosystems on the continent, covering more than 131 million hectares, according to the Senegalese-based Wetlands International Africa (WIA).

Yet, despite their importance and value, wetland areas are experiencing immense pressure across the continent. Commercial development ranks as the major threat for the draining of wetlands, including for tourism facilities and agriculture, where hundreds of thousands of hectares of wetlands have been drained.

Other threats to Africa’s wetlands are commercial agriculture, settlements, excessive exploitation by local communities and improperly-planned development activities. The prospect of immense profits from recently discovered oil, coal and gas deposits has also led to an increase in on-and offshore exploration and mining in sensitive ecological areas.Commercial development ranks as the major threat for the draining of [Africa’s] wetlands, including for tourism facilities and agriculture … Other threats are commercial agriculture, settlements, excessive exploitation by local communities and improperly-planned development activities

In Nigeria, Guinea-Bissau and Mozambique, for example, wetlands and estuaries coincide with fossil fuel deposits and related infrastructure developments.

In northern Kenya, port developments in Lamu are set to take place in the West Indian Ocean Rim’s most important mangrove area and fisheries breeding ground.

In KwaZulu-Natal and the Eastern Cape of South Africa, heavy mineral sands are located in important dune forest ecosystems, and gas is being prospected for in the water-scarce and ecologically unique Karoo.

In East Africa, oil discoveries have been made in the tropical Congo Basin rain forest and the Virunga National Park – a world heritage site and a wetland recognised under the Ramsar Convention.

The Okavango Delta in Botswana, one of Africa’s most important wetlands and designated as the 1,000th world heritage site by UNESCO, has been home to many threatened species and the main water source of regional wildlife in Southern Africa. Yet it is shrinking due to drier climate, increased grazing and growing pressure from tourism.

“This delta is a true oasis in the middle of the bone-dry Kalahari Sand Basin, a rare untouched wilderness that’s been preserved by decades of border and civil wars in the Angolan catchment,” said National Geographic explorer Steve Boyes in an interview. “Many people along the Okavango River live like communities did some 400 years ago – and from them I think we can learn a lot about how to be better stewards of the natural world.”

Boyes calculated the abundance of life in the delta: more than 530 bird species, thousands of plant species, 160 different mammals, 155 reptiles, scores of frogs and countless insects.

“Everywhere you look you find life. We surveyed bats and we found 17 species in three days. We started looking for praying mantises and found 90 different species,” he said.

A recent survey by the Botswana Department of Wildlife and National Parks and the environmentalist group BirdLife Botswana concluded that that the wetland’s historical zones of dense reed beds and water fig islands were largely destroyed by hydrological changes and fire. Bush fires and a high grazing pressure further reduced the natural shores of the Okavango Delta.

Studies by BirdLife Botswana also showed that the slaty egret, a vulnerable water bird living only in Southern Africa, with its main breeding grounds in the wetlands of Zambia, Mozambique and Botswana’s Okavango Delta, is now estimated to have a total population of only about 4,000 birds.

The egret, which is listed on the IUCN Red List of Threatened Species as vulnerable, seems to be losing its main breeding sites in the Okavango.

Environmentalists hope that they can still save the wetland, and pin their hopes on a “Slaty Egret Action Plan” which will be used by the Botswana’s Department of Wildlife and National Parks, BirdLife and other environment stakeholders to guarantee the survival of the Okavango Delta as a safe haven for the birds.

In a further step to save the wetlands, the Botswana government announced this month that from now on, seekers of mobile safari licences would be prohibited from operating in the Okavango Delta because the area in now congested.

The Botswana Guides Association, which represents many of the mobile safaris, is threatening to appeal.

Another example of the devastation of major wetlands occurred in Nigeria with pollution of farmlands linked to the Shell oil company.  The Niger Delta Natural Resource Damage Assessment and Restoration Project, an independent team of scientists from Nigeria, the United Kingdom and the United States, has characterised the Niger Delta as “one of the world’s most severely petroleum-impacted ecosystems.”

In 2013, a Dutch court found the Nigerian subsidiary of Shell culpable for the pollution of farmlands at Ikot Ada Udo in Akwa Ibom state in the coastal south of the country.

The Niger Delta is Africa’s largest delta, covering some 7,000 square kilometres – one-third of which is made up of wetlands. It contains the largest mangrove forest in the world.

Assisted by environmental organisation Friends of the Earth, the court ruling was a victory for the communities in the Niger Delta after years of struggle against the oil company dating back 40 years, although the clean-up still has far to go.

“Destruction of wetlands is prevalent in almost all countries in Africa because the driving factor is the same – population pressure – many mouths to feed, ignorance about the role wetlands in playing in the ecosystem, lack of policies, laws and institutional framework to protect wetlands and in cases where these exist, they are hardly enforced,” John Owino, Programme Officer for Water and Wetlands with the International Union for Conservation of Nature (IUCN)  told IPS from his base in Nairobi, Kenya.

Owino said that the future of African wetlands lies in stronger political will to protect them, based on sound wetland policies and encouragement for community participation in their management, which is lacking in many African countries.

But very few African governments have specific national policies on wetlands and are influenced by policies from different sectors such as agriculture, national resources and energy.

Edited by Lisa Vives/Phil Harris   

Palestinians demonstrating outside the UN office in Gaza calling for freedom for political prisoners. Credit: Eva Bartlett/IPS

By Leon Anderson
PHILADELPHIA, Feb 27 2015 (IPS)

There is a currently popular idea in Washington, D.C. that the United States ought to be doing more to quash the recently born Islamic States of Iraq and Syria (ISIS), because if we don’t, they will send terrorists to plague our lives.

Incredibly, most of the decision makers and policy influencers in Washington also agree that America has no standing in the Middle East; that is, the U.S. has no natural influence based on territorial proximity, ethnicity, religion, culture, politics or shared history. In short, the only apparent reason for our presence in the Middle East is to support Israel.Oil is not a weapon as some would have us believe. As the Middle East, and now Russia, knows all too well, it is a crutch.

To say that the United States is universally resented by everyone in the region is a massive understatement. That we are hated, despised, and the sworn enemies of many, is not difficult to understand. There is no moral ground under our feet in any religion. Stealing is universally condemned.

Abetting in the pillaging of Palestinians and their land is hard to justify. Yet we keep sending Israel military and financial aid, we support them in the United Nations, and we ignore the pleas of Israel’s neighbours to stop the spread of settlers on more stolen land.

There was once an old canard that we had to intervene in the Middle East to protect the flow of oil to Western Europe and America. But since the defeat of Nazi Germany in North Africa, that threat has never again existed. The fact is that the source of most of the wealth in the Middle East is oil, which is a commodity; there’s a lot of it all over the world.

If it’s not sold, the producer countries’ economies collapse, because that’s all they have on which to survive. They are, few of them in the Middle East, industrial economies, or mercantile economies. They are almost completely dependent on oil exports to Europe and Asia for their economic survival.

The oil crunch in 1973 that saw prices rise in the West and shortages grow was a temporary phenomenon produced by the Persian Gulf countries that was impossible to sustain. It was like a protest movement, a strike. It ended by costing OPEC a lot of money and by spurring a world-wide surge in exploration and drilling for more oil supplies.

Oil is not a weapon as some would have us believe. As the Middle East, and now Russia, knows all too well, it is a crutch.

Therefore, we get down to the real reasons why the United States is involved militarily in the Middle East. One, we clearly don’t need their oil. A possible reason for being there is conquest: we covet Iraq or Syria or Afghanistan for ourselves. I think we can dismiss that notion as absurd and move on.

Then the question screams: Why are we there? Why are we continuing to give ISIS and other extremist, nationalistic groups a reason to hate us and want to destroy us?

The only answer is Israel. We have made Israel the artificial hegemonic power in the region against the will of everyone who is native to the area. We have lost all credibility among Arabs, all moral standing and nearly all hope of ever restoring either.

The United States has become a pariah in the Middle East, and the result is that we will be faced with endless war and terrorist attacks for ages to come unless we make a dramatic change of course in our foreign policy—namely, stop supporting an Israeli regime that will not make peace with its neighbours.

An organisation called the Jewish Voice for Peace has endorsed a call from Palestinians for a boycott of Israel, divestment of economic ties, and sanctions (on the order of those imposed on Iran and Russia) to encourage Israel to end its occupation and colonization of all Arab lands occupied since 1967.

The JVP urges Israel to dismantle the grotesque wall they have built to keep the Palestinians out of territory that was once theirs; to recognise Palestinians as citizens of Israel with equal rights; and to recognise the right of refugees to return to their homes and properties in Israel as stipulated in U.N . Resolution 194.

The argument that we are fighting ISIS because they threaten our democracy is absurdly infantile. That’s another of those political throwaways we hear because our leaders think we’re all simpletons who can’t figure things out for ourselves.

How on earth could 40,000 or 100,000 disaffected Arabs destroy American democracy? They are fighting us because we are there fighting them. Let us go home, and they would have no reason to fight us.

I suggest this avenue knowing full well that some may say that we must instill the spirit of democracy among these people or there will never be peace in the world. Excuse me, but there will never be peace in the world. We all thought that when Gorbachev gave up the Soviet Empire a new era of Russian democracy would ensue.

Instead, Russia got drunken and loutish leadership until a strongman, in the Russian historical context, Vladimir Putin, took over. Democracy cannot be exported. It has to be wanted and won in the light of local historical, religious, social and economic needs. If they want what we have, Arab women will find a way to get it.

In spite of all this more or less common knowledge, the prime minister of Israel, Benjamin Netanyahu, warns us that if we don’t crush Iran, if we don’t continue to support Israel and back their hegemony, the world will collapse in anarchy, and democracy will be lost to all of us. I ask you: how much of this nonsense are you willing to take? Someone has to begin a discussion on what the hell we’re doing in the Middle East—and do it soon.

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.

Edited by Kitty Stapp

Excerpt:

By Roberto Savio
ROME, Dec 15 2014 (IPS)

It is now official: the current inter-governmental system is not able to act in the interest of humankind.

The U.N. Climate Change Conference in Lima – which ended on Dec. 14, two days after it was scheduled to close – was the last step before the next Climate Change Conference in Paris in December 2015, where a global agreement must be found.

Roberto Savio

In Lima, 196 countries with several thousand delegates negotiated for two weeks to find a common position on which to convene in Paris in one year’s time. Lima was preceded by an historical meeting between U.S. President Barack Obama and Chinese President Xi Jinping, in which the world’s two main polluters agreed on a course of action to reduce pollution.

Well, Lima has produced a draft climate pact, adopted by everybody, simply because it carries no obligation. It is a kind of global gentlemen’s agreement, where it is supposed that the world is inhabited only by gentlemen, including the energy corporations.

This is an act of colossal irresponsibility where, for the sake of an agreement, not one solution has been found. The “big idea” is to leave to every country the task of deciding its own cuts in pollution according to its own criteria.“Lima has produced a draft climate pact, adopted by everybody, simply because it carries no obligation. It is a kind of global gentlemen’s agreement, where it is supposed that the world is inhabited only by gentlemen”

And everybody is aware that this is most certainly a disaster for the planet. “It is a breakthrough, because it gives meaning to the idea that every country will make cuts,” said Yvo de Boer, the Dutch diplomat who is the former Executive Secretary of the United Nations Convention on Climate Change (UNFCCC). ”But the great hopes for the process are also gone.”

To make things clear, all delegates knew that without some binding treaty to reduce emissions, there is no way that this will happen. But they accepted what it is possible, even if it does not solve the problem. It is like a hospital where the key surgeon announces that the good news is that the patient will remain paralysed.

The agreement is based on the idea that every country will publicly commit itself to adopting its own plan for reducing emissions, based on criteria established by national governments on the basis of their domestic politics – not on what scientists have been indicating as absolutely necessary.

This, of course, is the kind of treat that no country in the world objects to. The real value of the treaty is not the issue. The issue is that the inter-governmental system is able to declare unity and common engagement. The interests of humankind are not part of the equation. Humankind is supposed to be parcelled among 196 countries, and so is the planet.

This act of irresponsibility is clear when you look at all the countries producing energy, like Saudi Arabia or Venezuela, Iran or Ecuador, Nigeria or Qatar, whose governments are interested in using oil exports to keep themselves in the saddle. And take a look at what the world’s third largest polluter, India, is doing in the spirit of the Lima treaty.

Under the motto: “We like clean India, but give us jobs”, the government under Prime Minister Narendra Modi is moving with remarkable speed to eliminate any regulatory burden for industry, mining, power projects, the armed forces, and so on.

According to the high-level committee assigned to rewrite India’s environmental law system, the country’s regulatory system ”served only the purpose of a venal administration”. So, what did it suggest? It presented a new paradigm: ”the concept of utmost good faith”, under which business owners themselves will monitor the pollution generated by their projects, and they will monitor their own compliance!

The newly-appointed Indian National Board for Wildlife which is responsible for protected area cleared 140 pending projects in just two days; small coal mines have a one-time permission to expand without any hearing; and there is no longer any need for the approval of tribal villages for forest projects.

Environment Minister Prakash Javadekar boasted: ”We have decided to decentralise decision making. Ninety percent of the files won’t come to me anymore”. And he said that he was not phasing out important environmental protections, just “those which, in the name of caring for nature, were stopping progress.” He also plans to devolve power to state regulators, which environmental expert say is akin to relinquishing any national integrated policy.

It is, of course, totally coincidental that Lima conference took place in the middle of the greatest decrease in oil prices in five years. The price of a barrel of oil is now hovering around the 60 dollar mark, down from over 100 two years ago. This price level has basically been decided by Saudi Arabia, which did not agree to cut production to increase the cost of a barrel.

The most espoused explanation was that the low cost would undercut schist gas exploitation which is making the United States energy self-sufficient again, and soon an exporter. But this will equally undercut renewable energies, like wind or solar power, which have higher costs and will be abandoned when cheap oil is available.

Again coincidentally, this is creating very serious problems for countries like Russia and Venezuela (U.S. irritants) and Iran (a direct enemy), which are now entering into serious deficit and serious political problems. And, again coincidentally, this is making use of fossil energy more tempting at a moment in which the world was finally accepting that there is a problem of climate change.

In March, countries will have to present their national plans and it will then become clear that governments are lacking on the very simple task of arresting climate change, and this will lead us to irreversible damage by our climate’s final deadline, which was identified as 2020.

Thus the exercise of irresponsibility in Lima will also become an exercise in futility.

Is there any doubt that if the people, and not governments, were responsible for saving the planet, their answer would have been swifter and more efficient?

Young people, all over the world, have very different priorities from corporations and industry … but they also have much less political clout.

(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:

Governments continue to subsidise exploration for fossil fuels despite pledges to support the transition to clean energy. Credit: Flickr/Leszek Kozlowski

By Shelagh Whitley
LONDON, Nov 11 2014 (IPS)

Just a week after the Intergovernmental Panel on Climate Change (IPCC) gave its starkest warning yet that the vast majority of existing oil, gas and coal reserves need to be kept in the ground, a new report reveals that governments are flagrantly ignoring these warnings and continuing to subsidise exploration for fossil fuels.

The report by the Overseas Development Institute (ODI) and Oil Change International (OCI) shows that G20 governments are propping up fossil fuel exploration to the tune of 88 billion dollars every year through national subsidies, investment by state owned enterprise and public finance.

Shelagh Whitley, Research Fellow at the Overseas Development Institute (ODI)

And this is only a small part of total government support to producing and consuming fossil fuels, which is estimated at 775 billion dollars a year.

The G20 continues to provide these subsidies – mostly hidden from public view – in spite of repeated pledges to phase out fossil fuel subsidies, address climate change, and support the transition to clean energy.

The subsidies provided to exploration by the G20 alone are almost equivalent to total global support for clean energy (101 billion dollars), tilting the playing field towards oil, gas and coal.

The report also shows that G20 governments spend more than double what the top 20 private companies are spending to look for new oil, gas and coal reserves. This suggests that companies depend on public support for their exploration activities.“Fossil fuel exploration subsidies are fuelling dangerous climate change; this support is increasingly uneconomic; and oil, gas and coal will not address the energy needs of the poorest and most vulnerable”

As finding fossil fuels gets more risky, expensive and energy intensive, and the prices of oil, gas and coal continue to fall, companies are only likely to become more dependent on tax payers’ money to continue exploration.  This was also demonstrated by the recent request by the United Kingdom’s oil and gas industry for further tax breaks to address rising operating costs in the North Sea.

Some will claim that although these subsidies are uneconomic, exceptions can be made. After all, the arguments go, we need fossil fuels to provide energy access – and we can keep burning oil, gas and coal if we just use carbon capture and storage.

This simply isn’t true. Doing so will drive dangerous climate change, with the impacts falling first on the most vulnerable people in the poorest countries and regions.

First, when it comes to energy access, it is actually through clean energy that we will be able to provide heat and electricity to the poorest.

According to the International Energy Agency, most new investment needs to be in distributed energy, including in mini-grid and off-grid options that most often rely on renewable energy sources. If G20 governments redirected 49 billion dollars a year – just over half of what they currently provide in support to fossil fuel exploration – we could achieve universal energy access as soon as 2030.

Second, there has only been very limited application of carbon capture technology so far.

The first and only full-scale ‘commercial’ carbon capture and storage project, launched this year in Canada, relies on government subsidies and sells the captured carbon to the oil industry, which uses it to extract even more fossil fuels. It is not a sustainable model.

In short: fossil fuel exploration subsidies are fuelling dangerous climate change; this support is increasingly uneconomic; and oil, gas and coal will not address the energy needs of the poorest and most vulnerable.

The G20 countries have the resources to support a transition to clean energy. They can set an example for the world by shifting national subsidies, investment by state-owned enterprise and public finance away from fossil fuels and toward renewables and efficiency.

G20 leaders meeting in Brisbane this week must recognise this and make good on their existing pledges. Immediately phasing out fossil fuel exploration subsidies would be the right place to start.

(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:

Is this one of those rare occasions where policy-makers self-critically correct a gigantic blunder? Or is it a cold turnabout guided by pure self-interest?

On August 15, the foreign ministers of the European Union gathered in Brussels and decided that each would henceforth be free to supply arms to Kurdish rebels fighting Sunni extremists of the Islamic State in the north of Iraq. Even Germany which in the past had been unwilling to furnish military supplies to warring parties  in ‘conflict zones’, is now ready to provide armoured vehicles and other hardware to the Kurds opposing the Islamic State’s advance.

The decision of Europe’s foreign ministers may surprise some because, barely a year and four months ago, in April 2013, the European Union had lifted a previously instituted ban on all imports of Syrian oil.

Peter Custers

Moreover, the lifting of this boycott was quite explicitly intended to facilitate the flow of oil from areas in the north-east of Syria, where Sunni extremist rebel organisations had established a strong foothold, if not overall predominance over the region’s oil fields.

The Islamic State was not the only Sunni extremist organisation disputing control over Syrian oil fields. Yet there is little doubt that the fateful decision that the European Union took last year helped the Islamic State consolidate its hold over Syrian oil resources and prepare for a sweeping advance into areas with oil wells in the north of Iraq.

The outcome of the recent Brussels’ meeting thus appears to overturn a disastrous previous decision. To underline the point it is useful to briefly describe the extent to which Sunni extremist rebels have meanwhile established control over oil extraction and production in both Syria and Iraq.“Is this one of those rare occasions where policy-makers self-critically correct a gigantic blunder? Or is it a cold turnabout guided by pure self-interest?”

The Syrian oil fields are basically concentrated in Deir-ez-Zor, a province bordering on Iraq. Whereas oil extraction in Syria has always been very limited in size if measured as a percentage of world supplies, control over the Syrian oil wells plus its refinery has become crucial for the financing of the Islamic State’s war efforts.

In neighbouring Iraq, oil reserves are not concentrated in one single geographic region as they are in Syria. The bulk of the oil wells are to be found in the country’s south, at great distance from the Islamic State’s war theatre in the north. Only one-seventh of Iraq’s oil resources are said to be located in areas controlled by the Islamic State on the one hand, and Kurdish fighters on the other. Nevertheless, recent reports indicate that the Islamic State controls at least seven major oil wells in Iraq alone.

Using expertise gathered after it established control over wells in Syria, the Sunni extremist organisation is able to draw huge profits from the smuggling and sale of oil. It is the Islamic State’s oil-backed armed strength amassed in two adjacent civil wars that has now sent shivers throughout the Western world.

If the European Union’s April 2013 decision appears to have helped trigger the Islamic State’s current success, the situation created is historically novel. To my knowledge, never before has a rebel force fighting a civil war in the global South been able to base its war aspirations on control over oil.

True, in most of the civil wars that have rocked Africa over the last thirty years, access to raw materials has been fundamental. Witness the cases of Angola, Sierra Leone, Liberia, Congo (DRC) and Sudan. It is also true that oil exports have been a specific mode of war financing, for instance in Angola and the Sudan.

Yet, in those cases, the state remained in command of the oil wealth. In Angola, the right-wing rebel movement UNITA relied heavily on smuggling rough diamonds towards financing its war, while the country’s oil fields were located at great distance UNITA’s war theatre.

In Sudan, oil fields are concentrated in the country’s south, that is, close to and in the region which was disputed by the rebel movement. But the regime of Omar Al-Bashir pursued an inhuman policy of depopulation through aerial bombardments, massacring hapless villagers and forcing survivors to flee. In the self-same process the rebels were deprived of access to people and oil.

Hence, strictly speaking there is no precedent for the oil-fuelled civil wars waged by Sunni rebels in Syria and Iraq.

Now – in turning from de facto supporters to opponents of the Islamic State – Europe’s foreign ministers have followed the U.S. lead, because the United States had just started bombardments of Islamic State positions in Iraq’s north.

Though loudly defended on the grounds of the Islamic State’s relentless persecution of minorities, the renewed U.S. military intervention is not devoid of self-interest. Uppermost in the minds of Pentagon officials is the nexus between oil and arms.

Shortly after President Barack Obama announced the withdrawal of U.S. occupation forces from Iraq in October 2011, the United States clinched a huge deal for the sale of F-16 fighter planes and other armaments to Iraq’s military, valued at 12 billion dollars. At least four in five of the top U.S. military corporations are beneficiaries of Iraqi purchases.

Coincidentally, around the time when the U.S.-Iraq agreement on arms’ sales was sealed, the extraction of Iraqi crude was back to old levels, crossing the threshold of three million barrels per day in 2012. As the Iraqi government’s income from oil extraction and exports rose exponentially, U.S. and competing Russian arms’ manufacturers both lined up to bag the orders.

And there is robust confidence that the oil-and-arms nexus can be sustained – according to euphoric projections of the International Energy Agency (IAE), the body of Western oil consumer nations, Iraq holds the key to future increases in world production of crude!

Western policy-makers are feverishly espousing the cause of Muslim Shias, Christians and Yezidis, who are persecuted in areas of Iraq controlled by the Islamic State and, yes, there is no doubt that the Sunni extremist force is guided by a Salafi ideology that severely discriminates against religious minorities, whether Muslim or non-Muslim.

But at what point in the past have Western states consistently defended religious minority rights in the Middle East? The idea seems to have emerged as an afterthought of the illegal U.S. invasion of Iraq.

And are Muslim and Christian Arabs in Israel, Muslim Shias in Saudi Arabia and Bahrain – to name just some of the groups mistreated by the West’s close allies – likely to be charmed by the West’s resolve to save the Yezidis of Iraq?

In any case, it is high time that the policy reversals in Brussels be questioned.

To recap: a turnabout in relation to the twin civil wars in Syria/Iraq was staged twice. First, in September 2011, a general prohibition on investments in and exports of oil from Syria was imposed, affecting both Assad’s government and Syria’s opposition. Then, in 2013, the European Union shifted de facto towards a position favourable to Syria’s Sunni extremist rebels.

Although the European Union’s foreign ministers now appear to have realised their sin, the damage can no longer be repaired without a complete overhaul of E.U. policy-making towards the Middle East.

(Edited by Phil Harris)

*  Peter Custers, an academic researcher on Islam and religious tolerance with field work in South Asia, is also a theoretician on the arms’ trade and extraction of raw materials in the context of conflicts in the global South. He is the author of ‘Questioning Globalized Militarism’. 

July 2014 floods in Russia but authorities turning blind eye to climate change. Credit: takemake.ru

By Mikhail Matveev
MOSCOW, Aug 30 2014 (IPS)

The recent call from Russian Prime Minister Dmitry Medvedev for “tightening belts” has convinced even optimists that something is deeply wrong with the Russian economy.

No doubt the planned tax increases (introduction of a sales tax and increases in VAT and income tax) will inflict severe damage on most businesses and their employees, if last year’s example of what happened when taxes were raised for individual entrepreneurs is anything to go by – 650,000 of them were forced to close their businesses.

Nevertheless, it looks like some lucky people are not only going to escape the “belt-tightening” but are also about to receive some dream tax vacations and the lucky few are not farmers, nor are they in technological, educational, scientific or professional fields – it is the Russian and international oil giants involved in oil and gas projects in the Arctic and in Eastern Siberia that stand to gain.

“In October [2013], Vladimir Putin signed a bill under which oil extraction at sea deposits will be exempt from severance tax. Moreover, VAT will not need to be paid for the sales, transportation and utilisation of the oil extracted from the sea shelf,” noted Russian newspaper Rossiiskie Nedra.“It looks like some lucky people are not only going to escape the ‘belt-tightening’ but are also about to receive some dream tax vacations and the lucky few are not farmers, nor are they in technological, educational, scientific or professional fields – it is the Russian and international oil giants involved in oil and gas projects in the Arctic and in Eastern Siberia that stand to gain”

Some continental oil projects were alsoblessedby the “Tsar’s generosity”: “For four Russian deposits with hard-to-recover oils [shale oil, etc.] – Bazhenovskaya [in Western Siberia] and Abalakskaya in Eastern Siberia, Khadumskaya in the Caucasus, and Domanikovaya in the Ural region – severance taxes do not need to be paid. Other deposits had their severance tax rates reduced by 20-80%.”

In fact, the line of thinking adopted by Russian officials responsible for tax policy is very simple. Faced with the predicament of an economy dependent on oil and gas (half of the state budget comes from oil and gas revenue, while two-thirds of exports come from the fossil fuel industry), they decided to act as usual – by stimulating more drilling and charging the rest of the economy with the additional tax burden.

There have been many warnings from well-known economists about the “resource curse” [the paradox that countries and regions with an abundance of natural resources tend to have less economic growth and worse development outcomes than countries with fewer natural resources] – and its potential consequences for the countries affected: from having weak industries and agriculture to being prone to dictatorships and corruption.

For a long time, however, economists have been keen on separating the economic and social impacts of fossil fuel dependency from the environmental and climate-related problems. But now, these problems are closely interconnected, and Russia might be the first to feel the strength of their combination in the near future.

Medvedev may not have read much about the “resource curse” but he should at least be familiar with the official position of the UN Framework Convention on Climate Change (UNFCC), whose Executive Secretary Christiana Figueres has said that three-quarters of known fossil fuel reserves need to stay in the ground in order to avoid the worst possible climate scenario.

One should at least expect this amount of knowledge from Russia as a member of the UN Security Council and it will be interesting to note whether the Russian delegation attending the UN Climate Summit in New York on September 23 will be ready to explain why, instead of limiting fossil fuel extraction, the whole country’s economic and tax policy is now aimed at encouraging as much drilling as possible.

However, it is not just the United Nations that has been warning against the burning of fossil fuels due to the related high climate risks. In 2005, Russia’s own meteorology service Roshydromet issued its prognosis of climate change and the consequences for Russia, stating that the rate of climate change in Russia is two times faster than the world’s average.

Roshydromet predicted a rapid increase in both the frequency and strength of extreme climate events – including floods, hurricanes, droughts, and wildfires. The number of such events has almost doubled during the last 15 years, and represent not only an economic threat but also a real threat to humans’ lives and their well-being,

Consider this summary of climate disasters in Russia during an ordinary July week (not including any of the large natural disasters such as the floods in Altai, Khabarovsk, and Krymsk, or the forest fires around Moscow in 2010):

“Following the weather incidents in the Sverdlovsk and Chelyabinsk District where snow fell last weekend, a natural anomaly occurred in Novosibirsk, resulting in human casualties … Two three-year-old twin sisters died after a tree fell on them during a strong wind storm in the town of Berdsk, Novosibirsk District.”

“The flood in Yakutia lasted a week and resulted in the submersion of Ozhulun village in Churapchinsky district last Saturday. Due to the rise of the Tatta River, 57 house went under.”

“Flooding in Tuapse [on the coast of the Black Sea] occurred on July 8, 2014 … [and] has left 236 citizens homeless.”

Cars swept away in July 2014 floods in Russia. Credit: takeme.ru

Is it not worrisome that so many climate disasters have to occur before Russian officials start to realise that climatologists are not lying? Or perhaps they are simply not inclined to take the climatologists’ warnings seriously.

Another significant problem could arise for Russia if oil consumers start taking U.N. climate warnings seriously – and there is evidence that this is happening.

The European Union (still the main consumer of Russian oil and gas) has announced an ambitious “20/20/20 programme” – increasing shares from renewables to 20 percent, improving energy efficiency by 20 percent, and decreasing carbon emissions by 20 percent. The United States has decided to decrease carbon emissions from power plants by 30 percent. These are only first steps – but even these steps can help decrease fossil fuel consumption.

Fossil fuel use has only very slowly been increasing in the United States and decreasing in Europe in the last five years. On the other hand, demand for oil has continued to rise in China and Southeast Asia, and it is perhaps this – rather than the recent “sanctions” against Russia over Ukraine – that inspired President Vladimir Putin’s recent “turn to the East”.

But there are serious doubts that Asia’s greed for oil will continue into the future. China recently admitted that it will soon be taking measures to limit carbon emissions – for the first time in its history. China has already turned to green energy andled the rest of the worldin renewable energy investment in 2013.

Will other Asian countries follow suit? Perhaps – because they certainly have a very strong incentive. According to Erin McCarthy writing in the Wall Street Journal, South and Southeast Asia’s losses due to global warming may be huge, and its GDP may be reduced by 6 percent by 2060, despite the measures taken to curb its emissions.

What does this mean for Russia?

Well, if the oil-consuming countries meet their carbon emission targets, we can expect a 10-20 percent decrease in oil demand in the next ten years, maybe more. Any decrease in demand usually induces a decrease in price – but not always proportionally. Sometimes, especially if the market is overheated, even a small decrease in demand can trigger a drastic falls in price. Economists call such a situation a “bursting bubble”.

Today, the situation in the oil (and, in general, fossil fuel) market is often called a “carbon bubble”. Because of high oil prices, investors are motivated to make investments in oil drilling in the hopes of earning a stable and long-term income.

But once the world starts taking climate issues seriously and realises that most of the oil needs to be left in the ground, oil assets will fall in value. Investors will try to withdraw their money from the fossil fuel sector, and, facing a crisis, oil companies will be forced to decrease both production and prices.

If the “carbon bubble” bursts, Russia will be left with sustainable businesses (that are being choked by the nation’s own tax politics) and with a perfect network of shelf platforms, oil rigs, and pipelines (which will be completely unprofitable and useless). Thus, by making fossil fuels the core of its economy, Russia is taking twice the number of risks.

First, it risks ruining the climate, and second, it risks ruining its own economy. It looks like Russia will lose at any rate: if the leading energy consumers are unable to decrease their oil consumption, the climate will be ruined everywhere, including Russia. If they manage to decrease their dependence on fossil fuel, the Russian economy will be ruined.

This certainly is not looking pleasant, especially if we add in the high probability of a major disaster like the Gulf of Mexico Oil spill happening in the Arctic, as well as countless minor leaks possibly occurring along the Russian pipelines.

But maybe Russia just has no other alternative to an economy dependent on fossil fuels?

In that case, perhaps it is worth mentioning a recent article by Russian financier Andrei Movchan in the Russian Forbes magazine. Movchan convincingly shows that the Achilles’ heel of the modern Russian economy is its extremely underdeveloped small and medium-sized businesses. And it looks like the current tax plans would literally exterminate them.

If Russia were able to reverse this tax policy and make small businesses play as big of a role in the economy as they do in the United States or Europe, there could be economic growth comparable to the growth expected from oil and gas – without all the frightful side effects of an economy driven by fossil fuels.

Sounds like a dream, but the first step to making it a reality can be simple: get rid of big oil lobbying in the government and try to reform the taxation system to suit the interests of Russian citizens instead of the interests of the big oil corporations.

(Edited by Phil Harris)

* Mikhail Matveev is 350.org Communications Coordinator for Eastern Europe, Caucasus, Central Asia and Russia

The presidents of China, Xi Jinping, and Costa Rica, Luis Guillermo Solís, both at their microphones during a Jul. 17 meeting in Brasilia. Credit: Presidencia de Costa Rica

By Diego Arguedas Ortiz
SAN JOSE, Jul 30 2014 (IPS)

China’s plan to become Costa Rica’s main energy ally through the joint reconstruction of an oil refinery has been revived after the presidents of the two countries agreed to review the conditions of the project during a meeting in the Brazilian capital.

The two countries initially signed a framework accord in 2008, including Chinese participation in oil projects, especially the upgrade and expansion of the Moín refinery on Costa Rica’s Caribbean coast, with an investment of 1.5 billion dollars.

But criticism from public institutions, political leaders and social organisations brought the initiative to a halt.

The Costa Rican president’s office stated in a communiqué that Beijing had accepted its request to renegotiate the project, with the aim of “resolving inconsistencies in the contract,” in which each country has invested 50 million dollars so far.

Costa Rican Foreign Minister Manuel González said in a Jul. 22 press conference that “we have no deadline” for that review, which all of the involved institutions will take part in.

President Luis Guillermo Solís participated in the news briefing, although he did not specifically refer to the refinery.

Solís held a bilateral working meeting with Chinese leader Xi Jinping on Jul 17 in Brasilia, during a summit of presidents of the Community of Latin American and Caribbean States (CELAC) with Xi, after the sixth summit of the BRICS (Brazil, Russia, India, China and South Africa) grouping.

The upgrade of the Moín refinery, which belongs to the state oil refinery Refinadora Costarricense de Petróleo (Recope), would increase its processing capacity from 18,000 to 60,000 barrels a day of crude. The company controls Costa Rica’s oil imports, and since 2011 it has had to purchase only refined products, because the plant was shut down.

The joint refinery project, or “Chinese refinery” as it is referred to locally, was criticised by politicians and a large part of organised civil society from the start.

“We have always defended the construction of a refinery, whether it was with China, Russia or France,” said Patrick Johnson, a leader of the oil workers’ union, the Sindicato de Trabajadores Petroleros Químicos y Afines.”We want the confusion to be cleared up…and if the project is beneficial, then it should go ahead because the country needs a refinery,” he told IPS.

In June 2013, the office of the comptroller general brought the initiative to a halt arguing that there were serious problems with a key feasibility study. Since then, the project has been on hold.

The renegotiations should overcome the first real hurdle that China has run into in Costa Rica. In 2007, this country became the first in Central America to establish diplomatic relations with China, in a part of the world that continues to have ties with Taiwan – incompatible with relations with China.

“Having an embassy here makes it easier to deal with matters with Central America,” Patricia Rodríguez, an expert on China who was an official in Costa Rica’s embassy in Beijing from 2008 to 2010, told IPS.

China is now Costa Rica’s second-biggest trading partner after the United States. This country’s sales to the Asian giant climbed from 91 million dollars in 2000 to 1.5 billion in 2011, when a free trade treaty signed in 2010 went into effect.

In strategic terms, the joint refinery between Recope and the state-run China National Petroleum Corporation International (CNPCI) is China’s star project in the country, and the joint venture Sociedad Reconstructora Chino Costarricense (Soresco) was set up in 2009 to carry it out.

The investment is to amount to 1.5 billion dollars, of which Soresco would receive 900 million in loans from the China Development Bank. The rest will come from the partners. The construction and remodeling of the plant will absorb 1.2 billion dollars of that total.

The work was to begin early this year and was to last 42 months. The comptroller general’s office’s decision to put it on hold was due, among other things, to the fact that the feasibility study was carried out by a subsidiary of CNPCI, which it said subverted the evaluation.

The resolution had the effect of “completely paralysing the refinery upgrade process by leaving it without the technical studies necessary for it to continue,” explained Recope in a lawsuit brought against the comptroller general’s office in response to the measure.

Despite the ruling by the comptroller general’s office, the administration of conservative President Laura Chinchilla (2010-May 2014) continued to defend the refinery modernisation project. But the centre-left Solís promised during the election campaign to renegotiate the agreement, because he considered several aspects of the contract negative for the country.

The request to renegotiate the contract had the support of political sectors and in particular of lawmaker Ottón Solís, an economist and university professor who was one of the first to speak out against certain facets of the agreement.

“We have enormous bargaining power here because China is desperate to open up negotiations with Costa Rica and this country has prestige,” Deputy Solís, of the governing Citizen Action Party, told IPS.

“If we insinuate that it’s impossible to negotiate with China because they take advantage of you with unfair contracts, the whole world will be put on the alert and other countries won’t want to negotiate with them,” and that gives Costa Rica bargaining power, he said.

One of the promises made was that the upgrade of the refinery will bring down fuel costs for consumers, who currently pay 41 percent extra in taxes and profit margins for service stations and Recope’s operating costs.

Petrol currently costs 1.48 dollars a litre in Costa Rica, which makes it the most expensive gasoline in Central America. Official figures from 2012 indicate that oil consumption in the country stood at 53,000 barrels per day.

“Fuel is a fundamental element for price stability because there are public services that depend on its price, like public transportation and electricity, and the same is true in the case of the productive apparatus,” the president of Costa Rica’s consumers association, Erick Ulate, told IPS.

During the meeting with President Solís, Xi also agreed to expand the timeframe for carrying out studies for the project of widening the road connecting San José with the Caribbean port of Limón, where 90 percent of the country’s exports are shipped out. The expansion of the road will be financed with a 395 million dollar loan from Beijing.

Which story line sounds the more credible – that linking the rebel movement ISIS (the Islamic State in Iraq and Syria) to policies pursued by Iran or that linking the Sunni extremist force to Iran’s adversary Saudi Arabia?

In June this year, fighters belonging to ISIS – a rebel movement that had previously established its foothold in the oil-rich areas of north-eastern Syria – succeeded in capturing Mosul, a city surrounded by oil fields in northern Iraq. Ever since, commentators in the world’s media have been speculating on the origins of the dreaded organisation’s military success.

It is admitted that the occupation of Mosul and vast tracts of the Sunni-dominated portion of Iraq would not have been possible except for the fact that ISIS forged a broad grassroots’ alliance expressing deep discontent by Iraq’s minority Sunnis with the policies of Iraqi Prime Minister Nouri Al-Maliki’s government. Nor would Mosul have fallen but for the dramatic desertion by top-officers of Iraq’s state army.

Peter Custers

Yet various observers have meanwhile focused on the political economy behind the advance of ISIS. Some experts from U.S. think tanks have discussed the likely sources of ISIS’ finance, pinpointing private donors in Saudi Arabia and other Gulf states. Other writers instead have connected ISIS’ reliance on black market sales of oil in Kurdish territory with Iranian exports of crude, described as “illegal”.

I propose putting the spotlight on the methods of war financing used by ISIS, but first it is necessary to highlight the movement’s complete sectarianism.

Soon after the occupation of Mosul, rebels blew up and bulldozed shrines and mosques in the city belonging to Shia Muslims. Pictures on the demolition of these buildings were circulated widely by the world’s mainstream media. Unfortunately, few Western journalists cared to draw attention to the role which destruction of shrines has played in the history of Islam.

Contrary to Catholicism, the veneration of saints at Sufi and Shia tombs and shrines basically reflects heterodox tendencies within the Islamic faith. On the other hand, Sunni orthodoxy and especially its Saudi variety, Wahhabism, either condemns intercession or, at the least, considers the worshipping of saints at tombs to be unacceptable. Islam’s minority of Shias, and its mystical current of Sufism, freely engage in such worship – and this throughout the Muslim world.“ISIS is … a ‘religiously inspired’ Sunni extremist organisation with an utterly secular objective: to control the bulk of oil resources in two Middle Eastern states in order to re-establish acaliphat, an all-Islamic state-entity guided by a central religious authority”

ISIS’ work of demolition in Iraq can in no way be equated with practices of Iran’s Shia rulers. Instead, they express the extremist movement’s affinity with policies long championed by Saudi Arabia. Ever since the founding of the Saudi state, numerous Shia and Sufi shrines have been rased to the ground at the behest of this country’s Wahhabi dynasty.

What does the political economy behind ISIS’ military advance in Syria and Iraq tell us about the organisation’s affinities? First, in one sense, the ISIS strategy might be interpreted as rather novel.

Whereas the extraction of raw materials is a war strategy pursued by numerous rebel movements in the global South – see, for example, UNITA’s extraction of diamonds in the context of Angola’s civil war, and the trade in coltan by rebels in the Democratic Republic of Congo – rarely has a Southern rebel movement succeeded in turning crude oil into its chief source of revenue.

Indeed, whereas ISIS originally relied on private funders in Saudi Arabia to build up a force of trained fighters, the organisation has consciously targeted regions in Syria and Iraq harbouring major oil fields and (in the case of Iraq) oil refineries. By laying siege to the oil refinery at Baiji, responsible for processing one-third of oil consumed in Iraq, ISIS hoped to undermine the state’s control of oil resources.

Further, some 450 million dollars was stolen by ISIS fighters from a subsidiary of Iraq’s central bank after the occupation of Mosul. This reportedly was all income from oil extraction. Some observers put the cash income which ISIS derives from smuggled oil at one million dollars a day!

ISIS is thus a ‘religiously inspired’ Sunni extremist organisation with an utterly secular objective: to control the bulk of oil resources in two Middle Eastern states in order to re-establish acaliphat, an all-Islamic state-entity guided by a central religious authority.

Yet though ISIS’ methodology of reliance on oil for financing of its war campaigns is novel for a rebel movement, such use of oil is not unique in the context of the Middle East. Ever since the 1970s, most oil-rich countries of the region have squandered a major part of their income from the exports of crude by (indirectly) exchanging their main natural resource against means of destruction – weapon systems bought on the international market.

And while Iran under the Shah was equally enticed into opting for this form of trade in the 1970s, – it is the Wahhabi kingdom of Saudi Arabia which all the way through from the oil crisis of 1973 onwards and up to today has functioned as the central axe of such a trade mechanism.

Witness, for instance, the 1980s oil-for-arms (!) ‘barter deal’ between the Saudi kingdom and the United Kingdom, the so-called ‘Al Yamamah’ deal, and the 60 billion dollar, largest-ever international arms’ agreement between Saudi Arabia and the United States clinched in 2010.

Forward to 2014, and an Iraq desperately struggling to survive. A section of the world’s media has already announced its impending demise, predicting a split of the country into three portions – Sunni, Kurdish and Shia. On the other hand, some commentators have advised that the United States should now change gear and line up with Iran, in order to help the Iraqi government overcome its domestic political crisis.

Yet the United States and its European allies for long, too long, have bent over to service the Wahhabi state. Even as Western politicians loudly proclaimed their allegiance to democracy and secularism, they failed to oppose or counter Saudi Arabia’s oppression of, and utter discrimination against, Shia citizens.

For over 40 years they opted to close their eyes and supply Saudi Arabia with massive quantities of fighter planes, missiles and other weaponry, in exchange for the country’s crude. Playing the role of a wise elderly senior brother, the United States has recently advised Iraq’s prime minister al-Maliki, known for his sectarian approach, that he should be more ‘inclusive’, meaning sensitive towards Iraq’s minority Sunni population.

But has the United States’ prime Middle Eastern ally Saudi Arabia ever been chastised over its systematic discrimination of Shias? Has it ever been put to task for its cruel oppression of heterodox Muslims? And has the United States ever pondered the implications of the trading mechanism of disparate exchange it sponsored – for the future of democracy, food sovereignty and people’s welfare in the Middle East?

*  Peter Custers, an academic researcher on Islam and religious tolerance  with field work in South Asia, is also a theoretician on the arms’ trade and extraction of raw materials in the context of conflicts in the global South. He is the author of ‘Questioning Globalized Militarism’. 

By Sam Olukoya
ABUJA, Jun 8 2014 (IPS)

Nigeria is one of Africa’s largest emitters of greenhouse gases. A significant percentage of this pollution takes place in the Niger Delta region thanks to the existence of multination oil companies and the activities of hundreds of illegal refineries where local people process stolen crude oil.

For a country that is at the receiving end of the environmental impact of climate change, there is a growing sense that this West African country should curb its emission of greenhouse gases. Private initiatives and effective legislation are likely to play crucial roles in Nigeria’s drive to curbing its emissions.

Time for Nigeria to Curb its Own Emissions from IPS News on Vimeo.

Unloading containers in the port of Pecém, Brazil. Credit: Mario Osava/IPS

By Jill Richardson
BOSTON, Jun 3 2014 (IPS)

In the past 15 years, China has gone from being a relatively insignificant economic partner in Latin America to the number-one trading partner of some of the largest economies in the region.

In many cases, China has unseated the United States in its own backyard. As a whole, Latin American exports to China have risen massively since 2000, averaging a 23-percent annual export growth rate.

However, this relatively rosy picture obscures the fact that in recent years this rate has dropped precipitously, slowing to a growth rate of just 7.2 percent in 2012. Much of this slowdown can be attributed to falling commodity prices. Despite Latin American exports to China growing in volume, price volatility has allowed for stagnant, or even declining, export values.

[A] recent study concluded that the more a nation trades with China, the more inclined that nation will be to vote in China’s favour at the United Nations.
The Latin American reliance on commodity-based exporting to China has allowed for regional vulnerability to price fluctuations. Over 50 percent of Latin American exports are in just three sectors: copper, iron, and soy. This lack of diversification is problematic, as copper and iron prices have both experienced a double-digit percentage global decline in recent years while global soy prices have also begun stagnating.

Additionally, these three main commodity exports are concentrated in Argentina, Brazil, and Chile, further demonstrating a lack of regional diversification in exporting to China. This lack of diversity in exports as well as exporting nations leaves Latin America as a whole vulnerable to unforeseen future disruptions or trends.

Conversely, Chinese exports to Latin America are growing in both volume and valuation, owing mostly to the diversity and relatively high-skilled nature of the exported goods. The majority of Chinese exports to Latin America are in the manufacturing sector, with a heavy emphasis on electronics and vehicles. Such industries, compared to raw materials, are much less prone to price volatility, thus preserving much of the overall value of Chinese exports.

The impact of these trends is that since 2011, a growing Latin American trade deficit in goods has opened up with China. Despite the fact that the volume of exports to China is increasing, the fundamental nature of Latin American exports is undermining growth and creating an impending balance-of-payments problem. As long as commodity price values remain on a downswing, this trend will continue through 2014.

As China continues to overtake the United States as the key trading partner of the region as a whole, U.S. influence may decline in Latin America.

A heavier reliance on Chinese demand for commodity exports will likely drive many Latin American foreign policy moves in the near future. Already China has used its economic leverage in the region to diminish the political influence of Taiwan in Latin America.

Chinese nationalists view the tiny island nation as a rebellious extension of the mainland, and consequently many Chinese leaders seek to circumscribe any international support for an independent Taiwan. Should the issue ever reach the United Nations or World Court, China has already locked down support from nearly every country in the Latin American region.

Some of Latin America’s traditionally leftist countries are cozying up to China for political reasons (viewing China as an alternative to the hegemony of the United States), and perhaps more significantly, for economic reasons.

Oil-producing nations such as Venezuela, Brazil, and Ecuador are hugely dependent on and influenced by their economic ties to China and, as a result, tend to follow China’s lead on the international diplomatic stage.

Indeed, one recent study concluded that the more a nation trades with China, the more inclined that nation will be to vote in China’s favour at the United Nations. That will place limits on international scrutiny of the Chinese human rights record, and it could mean a boon for proxy powers in world conflicts supported by China as opposed to the United States.

Ultimately, as China continues its expansion of political and economic influence in Latin America, the United States may find itself less and less at home in what Washington once considered “America’s Backyard.”

(END)

Jill Richardson is the Communications Fellow for Boston University’s Global Economic Governance Initiative and a contributor to Foreign Policy In Focus. She is currently working on her Master’s Degree in International Relations and Communications. This article originally appeared on Foreign Policy in Focus.

The decision late Thursday by the Kurdistan Regional Government (KRG) to proceed with its first shipment of crude oil to Europe out of the port of Ceyhan in southern Turkey has received mixed reactions from all the parties concerned.

What may be seen by the Turkish government as a blessing, at a time that faith in the future of the country’s economy is wavering, may prove a political curse in Ankara’s already troubled relations with Baghdad.

Map of Kirkuk–Ceyhan oil pipeline

It took less than 24 hours for the central government of Iraq to react to the news. Late Friday afternoon the Iraqi Ministry of Oil announced that it had “filed with the International Chamber of Commerce (ICC) in Paris a Request for Arbitration against the Republic of Turkey and its state-owned pipeline operator Botas, seeking to stop the unauthorised transportation, storage and loading” of KRG-originating oil to one of the two Iraq-Turkey pipelines, running from Kirkuk in Iraq to Ceyhan.

In addition, Baghdad is seeking financial damages in excess of 250 million dollars from Ankara.

Under the agreement, signed in 1973 and amended several times, most recently in September 2010, Turkey and Botas undertook to reserve the entire infrastructure system for the exclusive use of the Iraqi Ministry of Oil, which retained the right to approve any and all uses of the 1,200 mile-long pipelines.

When in November 2013 Turkey announced the signature of a series of cooperation agreements with KRG, one of which contemplated the use of the Iraq-Turkey pipeline, Baghdad immediately protested that this was in violation of its agreement with Ankara.

KRG is a ‘federal region’, according to article 117 of the Iraqi Constitution of 2005 and enjoys certain autonomy in matters not falling within the exclusive jurisdiction of the federal government of Baghdad (Article 121, first paragraph).

International relations, including treaties, agreements and trade policy, are in the sphere of exclusive competence of Baghdad (Iraqi Constitution, Article 110, first paragraph). Moreover, Article 111 declares that “oil and gas are owned by all the people of Iraq in all the regions and governorates.”

It therefore seems that KRG and Turkey may have overlooked Iraq’s constitutional provisions in striking their oil transit and distribution deal.

In its official press release on May 24, Baghdad also accused Turkey and Botas of having violated the Mutual Friendship Treaty of 1946, which “requires Turkey to observe a strict policy of non-interference in domestic Iraqi affairs.”"What may be seen by the Turkish government as a blessing ... may prove a political curse in Ankara’s already troubled relations with Baghdad"

The crisis in the relations between the two states had been anticipated since November last year. The United States had put pressure on KRG’s Prime Minister Nechirvan Barzani and Turkish Prime Minister Recep Tayyip Erdogan to avoid antagonising further the Iraqi leadership. In February, Turkey’s Minister of Energy Taner Yildiz gave signs that exports from Ceyhan would not begin without Baghdad’s approval.

With the Syrian civil war dragging-on and domestic unrest between Sunni and Shia factions in Iraq intensifying, the U.S. administration did not want to risk further complications in the region.

Ankara’s interests also seem to support a business-like relation with Baghdad. Hours before KRG oil exports from Ceyhan began, the Energy Market Regulatory Authority of Turkey announced that in 2013 Iraq had ranked first in oil imports to Turkey, with a 32 percent share, a substantial increase from its 19 percent stake in 2012.

The overlapping of interests, however, stops there. In spite of a temporary warm-up in political relations in 2008, which led to the signature of 39 agreements, the entente between Erdogan and his Iraqi counterpart Nouri al-Maliki has turned into mistrust and bitter exchange of blame, influenced by the sectarian politics which plague the region.

The first clash occurred in 2009, when Baghdad issued an arrest warrant for its Sunni vice-president Tariq al-Hashemi, who was accused of planning to assassinate Shia leaders, including Maliki. Ankara refused to extradite Hashemi and offered him political asylum.

Then came the Syrian crisis. Erdogan, a Sunni, openly and materially supported the rebels against the Alawite regime in Damascus, siding with Saudi Arabia and Qatar. The Alawites are a denomination of the Shia sect. Maliki, a leader of the Shia community, which represents 60 percent of the Iraqi population, did not take an open position, but got closer to Iran, an ally to Syrian President Bashar al-Assad.

But Turkey’s chess game has two additional dimensions. The first is the Kurdish community of the country, mostly settled in southeastern Anatolia, which represents approximately 18 percent of the country’s 77 million population. Its outlawed Kurdistan Workers Party (PKK) has been seeking independence, often through armed action, which has resulted in the death of 40,000 rebels, civilians and security forces.

In 2012, Erdogan masterminded a ‘peace process’, promising PKK freedoms that should lead to the recognition of the Kurds’ ethnic identity. PKK has retreated to the mountains in KRG territory and Barzani has been instrumental in maintaining a truce between the rebels and Ankara. Preserving the status is important for Erdogan’s Justice and Development (AK) Party in view of the Turkish presidential elections set for August.

But a good relationship between Ankara and Erbil, KRG’s capital, irritates Baghad, which considers Barzani disloyal to the federal government and suspects that KRG will, sooner or later, press for complete independence. This possibility is also of concern to Turkey, which fears renewed separatist sentiment by its own Kurds. Financial success of KRG, through oil exports, may paradoxically become an accelerator in fuelling such development.

The other dimension in Turkey’s regional plans is its ambition to become a world energy power, by establishing the country as eastern Mediterranean’s leading hub in oil and natural gas exports to Europe.

Having damaged its relations with the European Union since 2009, Turkey sees a chance to become an indispensable partner of the West, not only in theory, but also in practice. Its geographical capability to provide safe transit for oil and natural gas from Iraq and, in the near future, from Israel and Cyprus to international markets, presents a strategic window of opportunity that it cannot afford to miss.

Erdogan’s seemingly good relationship with the Russian Federation and Iran is based on realpolitik rather than affinities. In fact, Ankara would like to minimise its energy dependence on Moscow and Tehran by 2023. The countdown has already begun. Last year the share of oil imports from Iran and Russia decreased from 39 to 28 percent and from 11 to 8 percent, respectively.

Following his recent electoral victory in the Iraqi elections, in which he secured 94 out of the 328 seats in parliament, Maliki is poised to return to the driver’s seat in Baghdad. In the absence of reconciliation, Ankara may have to revise its ambitions, given that Iraq has already built alternative routes for its oil exports, through its southern ports and Israel, while in the more distant future a normalisation of the political situation in Syria will offer additional options to oil and gas exporters.