Curbing illicit financial flows will free finances for development projects like the provision of safe drinking water. A man collecting water at a government-funded borehole in Southern Zimbabwe. Credit: Busani Bafana/IPS

By Busani Bafana
BULAWAYO, Zimbabwe, Jan 26 2017 (IPS)

Thanks to growing investor interest, increasing respect for democratic reforms, and its vast food production potential, the Africa Rising narrative is only getting better.

But Africa’s development success story will only be complete when the continent plugs the hemorrhaging of its financial resources badly needed for its own development. Africa is losing an estimated 50 billion dollars annually through illicit financial flows (IFFs) — half of all global losses and the equivalent of Morocco’s Gross Domestic Product (GDP)."[Illicit Financial Flows] are only a tip of the iceberg. Within the paradigm of Africa's natural capital losses, part of which is in the form of IFFs, the losses are mind-boggling.” --UNEP's Richard Munang

According to the World Bank, IFFs refer to the deliberate loss of financial resources through under-invoicing, which researchers say is a blot on the ‘Africa Rising’ narrative. Worst, IFFs are depriving Africans of needed resources to access better food, education and health care. Despite a decline in the prevalence of undernourishment in Sub-Saharan Africa, the World Food Programme says the region still has the highest percentage of population going hungry, with one in four persons undernourished.

As cancerous as corruption, illicit financial flows are costing Africa big time. This is despite a continental initiative to curb them at a time Africa is making some progress on good governance, according to the seminal Mo Ibrahim Index of African Governance 2016.

Can the wings of capital flight be clipped?

A 2015 report by the High-level Panel on Illicit Financial Flows from Africa established by the African Union and United Nations Economic Commission for Africa (ECA) puts the average financial losses at between 50 billion and 148 billion dollars a year through trade mispricing. South Africa, the Democratic Republic of Congo, Nigeria, Mozambique and Liberia are some of the countries that have suffered most due to trade mispricing.

“IFFs significantly hamper Africa’s development and progress towards achieving the Sustainable Development Goals (SDGs) considering the astronomical investments the region needs to mobilize and the declining international sources,” climate change expert and the United Nations Environment Programme’s Regional Climate Change Programme Coordinator, Richard Munang, told IPS.

Cumulatively, IFFs range from natural resources plundering and environmental crimes like illegal logging, illegal trade in wildlife, and unaccounted for and unregulated fishing (IUU) to illegal mining practices, food imports, and degraded ecosystems. Munang estimates that Africa loses up to 195 billion dollars annually of its natural capital — an amount exceeding the total annual cost Africa needs to invest in infrastructure, healthcare, education and adapting to climate change under a 2°C warming scenario.

“Reversing IFFs and other natural capital losses is an urgent imperative if the region is going to develop and achieve the SDGs,” said Munang, adding that in terms of climate resilience, for instance, it is projected that to meet adaptation costs by the 2020s, funds disbursed annually to Africa need to grow at an average rate of 10-20 percent annually from 2011 levels.

“So far, this has not been achieved. And no clear pathway exists from international sources,” Munang said. “But IFFs are only a tip of the iceberg. Within the paradigm of Africa’s natural capital losses, part of which is in the form of IFFs, the losses are mind-boggling.”

A recent study called “Financing Africa’s Post-2015 Development Agenda” shows that from 1970 to 2008, Africa lost between 854 billion and 1.8 trillion dollars in illicit financial flows — good money in bad hands.

UNECA says illicit financial flows are unrecorded capital flows derived from the proceeds of theft, bribery and other forms of corruption by government officials and criminal activities, including drug trading, racketeering, counterfeiting, contraband and terrorist financing.

In addition, proceeds of tax evasion and laundered commercial transactions are counted under IFFs. Africa is also losing much-needed money to drug trafficking, tax dodging, wildlife poaching, human trafficking and theft of minerals and oil.

Tax Inspectors without Borders (TIWB), a project launched by the Organisation for Economic Cooperation and Development (OECD) and the United Nations Development Programme (UNDP) in 2015, has helped collect more than 260 million dollars in additional tax revenues in eight pilot countries, indicating the potential of tightening tax audits.

Head of the TIWB Secretariat James Karanja noted that capacity-building can help companies pay their taxes, stop tax dodging and help raise domestic resources to fund government services.

According to the McKinsey Global Institute, GDP growth has averaged five percent in Africa in the last decade, consistently outperforming global economic trends. This growth has been boosted by among other factors, rapid urbanization, expanding regional markets, sound macroeconomic management and improved governance.

The Panel chaired by former South African President Thabo Mbeki also fingered large commercial corporations as culprits in IFFs, which have been fueled by corruption and weak governance. The solution, the panel said was to boost transparency in mining sector transactions and stop money laundering via banks, actions which rested on coordinated action between government, private sector and civil society.

“Illicit financial flows are a challenge to us as Africans, but clearly the solution is global. We couldn’t resolve this thing by just acting on our own as Africans,” Mbeki told the UN’s Africa Renewal magazine in a 2016 interview in New York.

For instance, Zimbabwe is currently in a financial crisis, having lost close to 2 billion dollars to illicit financial flows in 2015, according to the Reserve Bank. The figure is four times the money Zimbabwe attracted in Foreign Direct Investment in 2015 and more than half the 2016 national budget. The Global Financial Integrity Report estimates that over the last 30 years, Zimbabwe has lost a cumulative 12 billion dollars to IFFs.

“It is a grave concern. I looked at the statistics and found out that it’s a cancer that we are brewing,” Central Bank Governor John Mangudya conceded.

Is transparency the tool for slaying development’s demon?

The World Bank says curbing IFFs requires strong international cooperation and concerted action by developed and developing countries in partnership with the private sector and civil society.

IFFs pose a huge challenge to political and economic security around the world, particularly to developing countries. Corruption, organized crime, illegal exploitation of natural resources, fraud in international trade and tax evasion are as harmful as the diversion of money from public priorities, says the World Bank.

Advice on how to make tax policies more transparent — such as requiring all tax holidays to be publicly disclosed, along with names of officials involved in granting the holiday — would likely increase tax revenues collected by governments while reducing the risk of corruption and the potential for firms to abuse tax holiday provisions.

Global initiatives to limit tax evasion and stop proceeds of crime such as the the OECD/Global Forum on Taxation and the UN Conventions against Drugs, Trans-national Organized Crime and Corruption (UNODC) are yielding results. The World Bank’s Stolen Asset Recovery (StAR) programme found that of nearly 1.4 billion dollars in frozen corrupt assets in OECD countries between 2010 and 2012, less than 150 million has been recovered.

Proceeds of illicit financial flows are difficult to recover despite some high-profile cases like that of Teodorin Nguema Obiang, the son of Africa’s longest serving leader, Teodoro Obiang Nguema Mbasogo of Equatorial Guinea. In 2014, a U.S. court ordered Teodorin to sell 30 million dollars’ worth of property believed to have been the proceeds of corruption. In 2013, 700 million in assets stolen and stashed in Switzerland by the Sani Abacha regime was returned to Nigeria.

A 2016 report by the Africa Growth Initiative at the Brookings Institution, “Foresight Africa: Top Priorities for the Continent 2017”, says good governance significantly impacts the mobilization of domestic resources such as tax revenues, as well as external financial flows such as FDI, ODA, remittances, and illicit financial flows.

The report said lowest levels of corruption and highest levels of political stability correlated with the highest tax-to-GDP ratio while “conversely, countries with low political stability scores have a relatively high ODA-to-GDP ratio. In addition, though the differences are subtle, the charts hint that more corrupt countries have higher FDI-to-GDP ratios.”

The overwhelming majority of lobby meetings held by European Commissioners and their closest advisors are with representatives of corporate interests, according to an analysis published Jun. 24 by Transparency International (TI).

The finding was revealed by EU Integrity Watch, a new lobby monitoring tool launched by TI, which “works with governments, businesses and citizens to stop the abuse of power, bribery and secret deals.”

Today’s assessment of the situation of lobbying in Brussels follows the publication in April of TI’s report on lobbying in Europe. That report analysed lobbying in 19 European countries and in the three European Union institutions and showed examples of undue influence on politics across the region and in Brussels.

At the time, Elena Panfilova, Vice-Chair of TI, said: “In the past five years, Europe’s leaders have made difficult economic decisions that have had big consequences for citizens. Those citizens need to know that decision-makers were acting in the public interest, not the interest of a few select players.”"There is a strong link between the amount of money you spend and the number of meetings you get [with European Commission officials]. Those organisations with the biggest lobby budgets get a lot of access, particularly on the financial, digital and energy portfolios” – Daniel Freund, Transparency International EU

According to Tl’s new analysis, of the more than 4,300 lobby meetings declared by the top tier of European Commission officials between December 2014 and June 2015, more than 75 percent were with corporate lobbyists. Only 18 percent were with NGOs, four percent with think tanks and two percent with local authorities.

Google, General Electric and Airbus were reported to be among the most active lobbyists at this level, and Google and General Electric were also said to some of the biggest spenders in Brussels, each declaring EU lobby budgets of around 3.5 million euros a year.

Of the 7,908 organisations which have voluntarily registered in the EU Transparency Register – the register of European Union lobbyists – 4,879 seek to influence political decisions of the European Union on behalf of corporate interests.

Exxon Mobil, Shell and Microsoft (all 4.5-5 million euros) are the top three companies in terms of lobby budgets, according to their declarations made to the Register.

“The evidence of the last six months suggests there is a strong link between the amount of money you spend and the number of meetings you get,” said Daniel Freund of Transparency International EU. “Those organisations with the biggest lobby budgets get a lot of access, particularly on the financial, digital and energy portfolios.”

According to Transparency International EU, the portfolios for climate and energy (487 meetings), jobs and growth (398), digital economy (366) and financial markets (295) currently receive most attention from lobbyists.

The Commissioners in charge of the latter three – Finland’s Jyrki Katainen, the United Kingdom’s Jonathan Hill and Germany’s Günther Oettinger – are reported to have particularly low numbers for meetings with civil society – three, three and two respectively, representing between four and eight percent of the total number of their declared meetings.

While large global NGOs, such as World Wide Fund for Nature (WWF) and Greenpeace, are in the Top 10 of organisations with most meetings, TI said it was notable that meetings with civil society are often held as large roundtable events with multiple participants.

European Commission President Jean-Claude Juncker, who issued instructions In November 2014 that “Members of the Commission should seek to ensure an appropriate balance and representativeness in the stakeholders they meet”. Photo credit: CC BY 2.0 via Wikimedia Commons

In November 2014, European Commission President Jean-Claude Juncker issued instructions on the Commission’s working methods: “While contact with stakeholders is a natural and important part of the work of a Member of the Commission, all such contacts should be conducted with transparency and Members of the Commission should seek to ensure an appropriate balance and representativeness in the stakeholders they meet.”

The new data also reveals that 80 percent of the 7,821 organisations currently registered did not have a single meeting reported with a Commissioner or their teams, demonstrating the limitations of the European Commission’s new transparency provisions that only cover the highest ranking top one percent of E.U. officials and only 20 percent of the registered lobby organisations.

Lower-level officials, such as the team negotiating the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States, are not covered.

“The European Commission should be congratulated on providing this insight into lobbying of high-level officials, but this is just part of the picture,” said Carl Dolan, Director of Transparency International EU. “Officials are lobbied at all levels and greater transparency is required to reassure the public about the integrity of EU policy-making.

Transparency International EU also found that many organisations still remain absent from the register. This includes 14 of the 20 biggest law-firms in the world that all have Brussels offices, such as Clifford Chance, White & Case or Sidley Austin. Eleven out of these 14 law firms have registered as lobby organisations in Washington DC, where registration is mandatory.

“Much of the information that lobbyists voluntarily file with the lobby register is inaccurate, incomplete or outright meaningless,” said Freund, adding that over 60 percent of organisations that lobbied the European Commission on the EU-US trade agreement do not properly declare these activities.

Further, on the broad reform package of financial services entitled ‘Capital Markets Union’, many banks – including HSBC, BNP Paribas and Lloyds – that have had meetings on this topic fail to declare in the lobby register that they are active in this area.

The findings of EU Integrity Watch also reveal hundreds of completely meaningless declarations, with some organisations claiming to spend more than 100 million euros on E.U. lobbying or having tens of thousands of lobbyists at their disposal, showing the need for more systematic checks and verification by the Commission and ultimately a mandatory register.

Freund said that “all E.U. institutions should publish a ‘legislative footprint’ – a public record of all lobby meetings and other input that has influenced policies and legislation.”

Recognising that the European Commission has started moving in the right direction, TI says that the measures introduced so far need to be extended to everyone involved in the decision-making process, including the European Parliament and Council.

Edited by Phil Harris    

By Christian Guillermet Fernández and David Fernández Puyana
GENEVA, Apr 18 2015 (IPS)

The international community will have a great opportunity to jointly advance on the world peace agenda when a United Nations working group established to negotiate a draft U.N. resolution on the right to peace meets from Apr. 20 to 24 in Geneva.

In July 2012, the Human Rights Council (HRC) of the United Nations adopted resolution 20/15 on the “promotion of the right to peace” and established the open-ended working group to progressively negotiate a draft United Nations declaration on the right to peace.“Present generations should ensure that both they and future generations learn to live together in peace and brotherhood with the highest aspiration of sparing future generations the scourge of war and ensuring the maintenance and perpetuation of humankind”

High on the agenda of the working group has been giving a voice to victims of war and conflict.

Chaired by Ambassador Christian Guillermet, Deputy Permanent Representative of Costa Rica to the United Nations in Geneva, the working group has been conducting informal consultations with governments, regional groups and relevant stakeholders to prepare a revised text on the right to peace.

This text has been prepared on the basis of the following principles:

• the principles of the Charter of the United Nations, such as the peaceful settlement of disputes, international cooperation and the self-determination of peoples.
• elimination of the threat of war.
• the three pillars of the United Nations – peace and security, human rights and development.
• eradication of poverty and promotion of sustained economic growth, sustainable development and global prosperity for all.
• the wide diffusion and promotion of education on peace.
• strengthening of the Declaration and Programme of Action on a Culture of Peace.

Christian Guillermet Fernández, Deputy Permanent Representative of Costa Rica to the United Nations in Geneva and Chairperson/Rapporteur of the Working Group on the Right to Peace

The draft Declaration on the right to peace solemnly invites all stakeholders to guide themselves in their activities by recognising the supreme importance of practising tolerance, dialogue, cooperation and solidarity among all human beings, peoples and nations of the world as a means to promote peace through the realisation of all human rights and fundamental freedoms, in particular the right to life and dignity.

To that end, it recognises that present generations should ensure that both they and future generations learn to live together in peace and brotherhood with the highest aspiration of sparing future generations the scourge of war and ensuring the maintenance and perpetuation of humankind.

The main actors on which the responsibility rests to make reality this highest and noble aspiration of humankind are human beings, states, United Nations specialised agencies, international organisations and civil society. They are the main competent actors to promote peace, dialogue and brotherhood in the world.

It follows that everyone should be entitled to enjoy peace and security, human rights and development. In this case, entitlement is used to refer to the guarantee of access of every human being to the benefits derived from the three U.N. pillars – peace and security, human rights and development.

This draft Declaration could not have been achieved without the extensive cooperation and valuable advice received in recent years from academia and civil society. In fact, this process has involved consultations with prestigious professors of international law from over ten universities and research centres.

In particular, the Chairperson-Rapporteur has written papers – some of which will be published in the near future – in cooperation with other experts in prestigious journals of international relations and law on the different aspects on peace. He has also contributed to the Research Guide on Peace recently prepared by the Library of the United Nations in Geneva.

Since the beginning of the negotiation process, the working group has based its approach on the TICO approach – transparency (T), inclusiveness (I), consensual decision-making (C) and objectivity (O) – and a little realism.

Consensus is a process of non-violent conflict resolution in which everyone works together to make the best possible decision for the group. Consensus is the tendency not only in international relations, but the United Nations.

For important issues affecting the life of millions of people, the United Nations, including its multiple entities and bodies, works on the basis of multilateralism with the purpose of reaching important consensual decisions.

The working group on the right to peace will meet as the United Nations is commemorating its 70^th anniversary and the most important message that should be given is the adoption by consensus of a declaration which, among others, pays real tribute to all victims of war and conflict. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris    

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

* Christian Guillermet Fernández is Deputy Permanent Representative of Costa Rica to the United Nations in Geneva and Chairperson/Rapporteur of the Working Group on the Right to Peace.
* David Fernández Puyana is Legal Assistant of the Chairperson/Rapporteur, Permanent Mission of Costa Rica in Geneva.

Excerpt:

The 2009 murder of prominent editor Lasantha Wickrematunge sent shock waves through Sri Lankan media circles. Credit: Amantha Perera/IPS

By Amantha Perera
COLOMBO, Feb 3 2015 (IPS)

On Jan. 8, 2009, the Sri Lankan media suffered a debilitating attack.

Lasantha Wickrematunge, an editor and unashamed critic of Sri Lanka’s then-President Mahinda Rajapaksa and his government, was killed just five minutes away from his office in Ratmalana, a suburb of the capital Colombo. Motorcycle-riding assailants, none of whom have been identified, waylaid him and assassinated him in broad daylight.

The murder sent shockwaves through the media community, already besieged by an administration that had a zero-tolerance policy towards criticism while it pushed for a military victory to end a long-running separatist war with Tamil rebels in the north of the island.

In 2014, Sri Lanka was ranked 85th on the Corruption Perceptions Index (CPI), with just 38 out of 100 points, indicating a strong need for anti-corruption measures -- Transparency International
The Wickrematunge murder was a catalyst that drove many others to take shelter outside of Sri Lanka, as state repression increased. According to the Committee to Protect Journalists (CPJ) at least 13 journalists have been killed in Sri Lanka, while dozens have fled in fear of deadly reprisals, since Mahinda Rajapaksa assumed office in 2005.

His assassination was also seen as an attack on one of the few news outlets committed to exposing corruption, revealing nepotism and pushing for good governance at a time when the so-called “right” to information was a pipedream.

Exactly six years to the day of the murder, Rajapaksa lost the presidency. Some of Wickrematunge’s close family members and associates have called the defeat divine retribution. And it has been hard to ignore the coincidence.

Since the election, the Sri Lankan media as a whole have been breathing lightly. The new government has eased travel restrictions and granted access to blocked or banned websites. New ministers have been quick to assure the public that national intelligence personnel have been ordered to stop listening in on private phone calls.

“The State Intelligence Service has been asked to strictly limit itself to national security operations, nothing else,” Cabinet Spokesperson and Health Minister Rajitha Senaratne told foreign correspondents on Jan. 28 in the capital.

The government is also pushing ahead with a long-delayed Right to Information (RTI) Act, which is likely to be presented to parliament by Feb. 20, little over a month after the new government took office.

A committee has been set up to draft the bill. It has been meeting with media rights groups and others to prepare a draft to be presented to the cabinet by Feb. 16.

This is not the first time such a bill has been moved in Sri Lanka’s parliament. In September 2010, Karu Jayasuriya, the deputy leader of the opposition United National Party (UNP), presented an RTI bill to parliament but was forced to withdraw it following strong resistance from the regime.

That was the last anyone heard of the transparency initiative for five years.

Under the new governing coalition helmed by President Maithripala Sirisena, however, the issues of transparency and good governance are finally drifting closer to the top of the agenda.

According to Gayantha Karunathilaka, the new minister of media, “There is a lot of house cleaning we have to do and we don’t want to waste any time.”

The bill will mandate by law the right to seek information from public offices and officials, and also protect those who seek such information. The new government has also appealed to those who fled the country to return though none have yet done so.

Ignorance fuels corruption

Economic analysts here feel that an RTI bill could act as a deterrent against rampant corruption, one of the main grievances with the Rajapaksa regime.

Corruption and waste by the former president and his detail was so extreme that the current interim budget, prepared ahead of General Elections in April, has indicated a cut of some 80 billion rupees (over 600,000 dollars) in the funds hitherto allocated to the presidential secretariat.

Experts say it is only the tip of the iceberg of the degree to which state funds were gobbled up by those in the president’s immediate family or closely allied with the regime.

“In countries like India, the RTI Act appears to have reduced corruption as reflected in the improvement in India’s rating in the Corruption Perceptions Index (CPI) produced by Transparency International [from 94^th place in 2012 to 85^th last year],” economist Muttukrishna Sarvananthan told IPS. “Many other developing countries have also experienced improvement in the CPI after Right To Information [Acts].”

He feels that such a step would pave the way for more scrutiny of public spending from the media when there is legal guarantee to seek such information from governments.

In 2014, Sri Lanka was ranked 85^th on the CPI, with just 38 out of 100 points, indicating a strong need for anti-corruption measures, according to the watchdog group.

In one of the most startling examples of corrupt public spending, the last government reportedly spent 846 million rupees, or roughly six million dollars, in a failed bid to host the Commonwealth Games in Sri Lanka.

Last week local newspapers reported that the Ministry of Highways, whose portfolio came under the former president, had spent 50 billion rupees in excess of its budget allocations in 2014, almost all of it on election campaigning for Rajapaksa who eventually lost the race.

Replacing self-censorship with public awareness

Sunil Jayasekera, convener of the Free Media Movement (FMM), the island’s foremost media rights group, said that the RTI Act formed part of a wider agenda.

“It is just one block in a larger wall that we need to build to reinforce civic rights here. Along with the RTI Act, the government should also look at establishing an independent commission for the judiciary and police […],” he stated.

Jayasekera said that the last five years have seen media rights erode like never before. The FMM official said that while scores of journalists have fled the country others have been forced to practice self-censorship.

“It is not only through fear and intimidation – they were the more obvious modes – there was a lot of censorship by way of financial control,” he added.

Several privately-held media houses changed ownership in the last five years, including The Sunday Leader, the leading English-language daily edited by Wickrematunge that at times acted as the lone deterrent against nepotism.

Most of the new investors were suspected of supporting the Rajapaksa administration.

In one such instance, a leading weekly newspaper management told its staff soon after the election that it had lost all advertising revenue, simply because over 90 percent of its ads came from government agencies.

The newspaper also had an unwritten law of not writing anything about the casino-related investments entered into by the Rajapaksa government – estimated at over one billion dollars.

The self-imposed restriction was suspected to be due to the new ownership’s business interests in gaming.

“That is just one example, there are dozens of such in the last decade or so,” Jayasekera explained.

He said that the new government should set the tone without delay to indicate that it supports a vibrant media culture.

“The FMM was one of over 40 civil organisations that supported the Sirisena campaign on a broad reform agenda, and the government is duty-bound to keep those pledges,” he stressed.

Edited by Kanya D’Almeida

Women play an important role in guaranteeing sufficient food supply for their families. They are among the stakeholders whose voice needs to be heard in the debate on nutrition. Credit: FIAN International

By Geneviève Lavoie-Mathieu
ROME, Nov 27 2014 (IPS)

There is a new dimension to the issue of malnutrition – governments, civil society and the private sector have started to come together around a common nutrition agenda.

According to the Food and Agriculture Organisation (FAO) and the World Health Organization (WHO), the launch of the “Zero Hunger Challenge” by U.N. Secretary-General Ban Ki-moon in June 2012 opened the way for new stakeholders to work together in tackling malnutrition.

These new stakeholders include civil society organisations and their presence was felt at the Second International Conference on Nutrition (ICN2) held from Nov. 19 to 21 in Rome."Malnutrition can only be addressed “in the context of vibrant and flourishing local food systems that are deeply ecologically rooted, environmentally sound and culturally and socially appropriate … food sovereignty is a fundamental precondition to ensure food security and guarantee the human right to adequate food and nutrition” – Declaration of the Civil Society Organisations’ Forum to ICN2

More than half of the world’s population is adversely affected by malnutrition according to FAO. Worldwide, 200 million children suffer from under-nutrition while two billion women and children suffer from anaemia and other types of nutrition deficiencies.

Addressing ICN2, FAO Director-General José Graziano da Silva said that “the time is now for bold action to shoulder the challenge of Zero Hunger and ensure adequate nutrition for all.” More than 20 years after the first Conference on Nutrition (ICN), held in 1992, ICN2 marked “the beginning of our renewed effort,” he added.

But the difference this time was that the private sector and civil society organisations were included in ICN2 and the process leading to it, from web consultations and pre-conference events to roundtables, plenary and side events.

“This civil society meeting is historical,” said Flavio Valente, Secretary-General of FIAN International, an organisation advocating for the right to adequate food. “It is the first time that civil society constituencies have worked with FAO, WHO and the Committee on World Food Security (CFS) to discuss nutrition.”

This gave the opportunity to social movements, “including a vast array of stakeholders such as peasants, fisherfolk, indigenous peoples, women, pastoralists, landless people and urban poor to have their voices heard and be able to discuss with NGOs, academics and nutritionists,” Valente explained.

According to a Concept Note on the participation of non-State actors in ICN2, evidence shows that encouraging participants enables greater transparency, inclusion and plurality in policy discussion, which leads to a greater sense of ownership and consensus.

As such, “the preparation for the ICN2 was a first step in building alliances between civil society organisations (CSOs)  and social movements involved in working with food, nutrition, health and agriculture,” Valente told IPS.

This means that “governments have already started to listen to our joint demands and proposals, in particular those related to the governance of food and nutrition,” he explained.

A powerful Declaration submitted by the CSO Forum on the final day of ICN2 called for a commitment to “developing a coherent, accountable and participatory governance mechanism, safeguarded against undue corporate influence … based on principles of human rights, social justice, transparency and democracy, and directly engaging civil society, in particular the populations and communities which are most affected by different forms of malnutrition.”

According to Valente, malnutrition is the result of political decisions and public policies that do not guarantee the human right to adequate food and nutrition.

In this context, the CSOs stated that “food is the expression of values, cultures, social relations and people’s self-determination, and … the act of feeding oneself and others embodies our sovereignty, ownership and empowerment.”

Malnutrition, they said, can only be addressed “in the context of vibrant and flourishing local food systems that are deeply ecologically rooted, environmentally sound and culturally and socially appropriate. We are convinced that food sovereignty is a fundamental precondition to ensure food security and guarantee the human right to adequate food and nutrition.”

At a high-level meeting in April last year on the United Nations’ vision for a post-2015 strategy against world hunger, the FAO Director-General said that since the world produces enough food to feed everyone, emphasis needs to be placed on access to food and to adequate nutrition at the local level. “We need food systems to be more efficient and equitable,” he said.

However, Valente told IPS that CSOs believe that one of the main obstacles to making progress in terms of addressing nutrition-related problems “has been the refusal of States to recognise several of the root causes of malnutrition in all its forms.”

“This makes it very difficult to elaborate global and national public policies that effectively tackle the structural issues and therefore could be able to not only treat but also prevent new cases of malnutrition.”

What needs to be addressed, he said, are not only the “symptoms of malnutrition”, but also resource grabbing, the unsustainable dominant food system, the agro-industrial model and bilateral and multilateral trade agreements that significantly limit the policy space of national governments on food and nutrition-related issues.

But, according to Valente, “things are changing” – civil society organisations have organised around food and nutrition issues, the food sovereignty movement has grown in resistance since the 1980s and societies are now demanding action from their governments in an organised way.

(Edited by Phil Harris)

Latin American experts on transparency and open data participate in a debate during the Open Government Partnership Regional Meeting for the Americas, in the Costa Rican capital. Credit: Diego Arguedas Ortiz/IPS

By Diego Arguedas Ortiz
SAN JOSE, Nov 21 2014 (IPS)

As public policy, political transparency and open data need an active ingredient to bring about social change that would reduce inequality in Latin America: citizen participation, said regional experts consulted by IPS.

That is the link that ties together open data and the transformation of society and that democratises access to rights and opportunities, said activists and government representatives working to democratise access to information and public records in the region.

During the Open Government Partnership Regional Meeting for the Americas, held Nov. 18-19 in San José, Costa Rica, experts in transparency referred over and over to a central idea: only empowered citizens can leverage information to create a better democracy.

“Simply opening up information never changed anyone’s reality, nor did it reduce the inequality gap,” Fabrizio Scrollini, lead researcher of the Open Data Initiative in Latin America, told IPS. “Just opening up access to information in and of itself doesn’t do that. Miracles don’t exist.”

What does happen, he said, “is that with a specific policy there is a set of parallel actions that can be major facilitators of these processes of empowerment of societies in the region.”

Scrollini said citizen participation makes it possible to turn a simple technological advance, such as a government platform or web site, into a tool for social change. Change is built from the grassroots level up, working with people, he said.

As an example, he cited the Uruguayan project Por mi Barrio (For My Neighbourhood), which enables the residents of the capital, Montevideo, to report problems in their community, from a pothole in the road or piles of garbage to a faulty street light, which are immediately received by the city government.

To that end, the municipal government allowed the developers of the project, a civil society group, access to its computer system for the first time.

“It brings the government closer to all segments of the population,” Fernando Uval told IPS. “We are holding workshops in different neighbourhoods, to inform people about how it works.”

“The emphasis is especially on those who have the least access to technology, so they can report problems in their neighbourhood and improve their living conditions,” said Uval, a Uruguayan who represents Open Data, Transparency and Access to Information (DATA), the organisation behind Por mi Barrio.

The key, experts say, lies in making open data and public policies on transparency a means to achieving social change, and not an end in themselves.

Moreover, if all information were open in real time, public policies and people’s response to social problems could be more effective.

“If government information were in a totally open format that would enable a political scientist to know where the inequality lies – through the GINI index, which measures it, for example – and to combine it with data related to economic or population growth, we could make better decisions,” Iris Palma told IPS.

Palma is the executive director of the non-governmental organisation DatosElSalvador, dedicated to securing the release of public information in that Central American country.

Open data is data that can be freely used, reused and redistributed by anyone – subject only, at most, to the requirement to attribute and sharealike – in easily managed formats.

For example, if an economist were to request information from a census, a digital version would be easier, to analyse the data using models and statistical programmes, instead of receiving them only in print.

The concept of open government stipulates that public administration should be transparent, provide easy access to information, be held accountable to the citizens, and integrate them in decision-making.

In the world’s most unequal region, governed by authoritarian regimes for decades, the concept of a participative government is relatively recent.

“We went from states and governments that operated on the basis of secrecy to a radical change, based on openness,” Scrollini said.

“That poses new challenges, because information should be used, and to be used, policies are needed to help people do so, and people need to be empowered,” he added.

Nevertheless, civil society in Latin America is forging ahead. For example, people in Mexico can find out how their tax money is used through the Open Budget programme.

In the region, the Latin American Network for Legislative Transparency brings together efforts to monitor the activities of the legislatures of nine countries in the region.

Meanwhile, in Costa Rica, a group of enterprising young people took public data from the Economy Ministry to create a smart phone app called “Ahorre Más”, which helps people make decisions when they’re shopping in the supermarket.

“With respect to the issue of open government, Latin America and the Caribbean are a step ahead, and are in the vanguard around the world,” said Alejandra Naser, an Economic Commission for Latin America (ECLAC) researcher who led a workshop on open government during this week’s regional meeting.

“It is precisely for that reason that we want to reinforce the movement with tools for decision-makers,” she added.

The challenge is how to get citizens involved in these processes.

Scrollini says technology cannot be the only route to achieve open data, and calls for a rethinking of traditional social input tools, such as community workshops or neighbourhood meetings, to figure out how people’s ideas can be incorporated into the design of these policies.

Other methods target key segments of the population, which could later foment greater use by other social sectors – from marathon sessions where the groups are invited to work with data to broader programmes with the users of the future.

“We actively work on ‘hackathons’ (an event in which computer programmers and others involved in software development collaborate intensively on software projects), to get journalists involved, because these reporters then foment the involvement of society at large,” said Cristina Zubillaga, assistant executive director of the National Agency for e-Government and Information Society, a Uruguayan government agency.

At the same time, she said, “we work with academia to train students in data management.”

International development aid, meanwhile, the big source of financing for these programmes in the region, underlines that it is essential to support civil society groups that already have some experience and can serve as spearheads.

“We support organisations that can translate information into easily understood terms, showing people that they can get involved and that the availability of information affects and involves them,” Ana Sofía Ruiz, an official with the Dutch development organisation HIVOS’ Central America programme, told IPS.

“We are trying to draw people in, to get them involved in this,” said the representative of HIVOS, which has financed projects like Ojo al Voto, a Costa Rican initiative that provided independent information during this year’s presidential and legislative elections.

Ojo al Voto wants to help provide oversight of the work of the Costa Rican parliament.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Beneficial owners

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

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

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

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

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

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

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

Outside the framework

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

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

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

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

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

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

New analysis suggests that developing countries are losing a trillion dollars or more each year to tax evasion and corruption facilitated by lax laws in Western countries, raising pressure on global leaders to agree to broad new reforms at an international summit later this year.

These massive losses could be leading to as many as 3.6 million deaths a year, according to the ONE Campaign, an advocacy group that focuses on poverty alleviation in Africa. Recovering just part of this money in Sub-Saharan Africa, the organisation says, could allow for the education of 10 million more children“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer” – ONE Campaign
 a year, or provide some 165 million additional vaccines.

“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer,” a report on the findings, released Wednesday, states.

“When governments are deprived of their own resources to invest in health care, food security or essential infrastructure, it costs lives, and the biggest toll is on children.”

The new analysis focuses on a spectrum of money laundering, bribery and tax evasion by criminals as well as government officials. The lost money is not development aid but rather undeclared or siphoned-off business earnings – immense tax avoidance resulting in a decreased base from which governments can fund essential services.

International trade offers a key point of manipulation, the report says, with the extractive industries particularly vulnerable. In Africa alone, exports of natural resources grew by a factor of five in the decade leading up to 2012, offering clear prospects for growth alongside lucrative opportunities for corruption on a mass scale.

“Between 2002 and 2011 we saw an exponential increase in illicit financial flows across the globe,” Joseph Kraus, a transparency expert at the ONE Campaign, told IPS.

“Yet while we’re all familiar with corruption in developing countries, it takes two to tango – that money often ends up in the financial centres of the Global North. Those banks, lawyers and accountants are all essentially facilitators of that corruption, so in order to get at the root of this issue we need to go after the problems there.”

Real opportunity

Advocates including the ONE Campaign are currently stepping up pressure on industrialised countries to institute a series of across-the-board transparency measures. Some are aimed at corruption in developing countries, such as strengthening disclosure laws impacting on the extractives industry and bolstering “open data” standards to allow citizens increased oversight over their governments’ dealings.

Several other reforms would need to be carried out by developed countries, particularly those housing major financial centres such as the United States and United Kingdom. These would include new standards requiring governments to automatically exchange tax information, to mandate the publication of full information on corporate ownership, and to force multinational corporations to report on their earnings on a country-by-country basis.

In certain circles, such demands have been percolating for years. But current circumstances could offer unusual opportunity for such changes.

“In the last two years we’ve seen an acceleration of this agenda,” Kraus says. “Eighteen months ago, no one was talking about phantom firms or anonymous shell companies. But these issues have gained a lot of momentum in a short period of time, and there is real opportunity coming up.”

This new energy has been motivated particularly by concerns in advanced economies over shrinking government budgets in the aftermath of the global economic downturn. Yet developing countries arguably stand to benefit the most from substantive reforms, provided they’re structured accordingly.

Advocates of such changes are now looking ahead to a summit, on Nov 15 and 16 in Australia, of the members of the Group of 20 (G20) world’s largest advanced and emerging economies as well as two major meetings of finance ministers in the run-up to that event.

The G20 represent about two-thirds of the world’s population, 85 percent of global gross domestic product and over 75 percent of global trade.

The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

The G20 has taken on a primary role in issues of global financial stability and, more recently, in pushing the automatic exchange of tax information between governments. A new global standard on such exchange could be approved by the G20 ministers in November, among other actions.

“For too long, G20 countries have turned a blind eye to massive financial outflows from developing countries which are channelled through offshore bank accounts and secret companies,” according to John Githongo, an anti-corruption campaigner in Kenya.

“Introducing smart policies could help end this trillion dollar scandal and reap massive benefits for our people at virtually no cost. The G20 should make those changes now.”

Coordinated response

In fact, many G20 countries have instituted some of these reforms on their own. The U.K. government, for instance, has taken unilateral action on publicising information on corporate ownership, while the United States was the first to pass strong transparency requirements for multinational extractives companies.

While such piecemeal national legislation can spur other countries to action, many feel only a comprehensive approach would have a chance at having a substantial impact. Further, many governments have pledged to act on these issues, but have yet to actually follow through.

“Illicit financial flows are a perfect example of a transnational problem, in that you have two legal regimes in which loopholes are being exploited,” Josh Simmons, a policy counsel at Global Financial Integrity, a Washington watchdog group that supplied data for the new ONE Campaign report, told IPS.

“So when an international cooperative body is able to identify these loopholes, they can get member countries to move in sync to address the situation. But if only one country tries to do so, businesses would probably just move elsewhere.”

Others are looking even more broadly than the G20. A paper released last month by researchers with the Center for Global Development, a think tank here, calls for the inclusion of anti-tax-evasion aims in the new global development goals currently being negotiated under the United Nations.

Indeed, even while there could be real movement at the G20 on several of these issues this year, the work on the other end of this equation – in developing countries – remains onerous.

“We need to get developing countries’ tax systems up to speed, strengthen their financial intelligence units and get their anti-laundering laws up to code. And that is proceeding, but much more under the radar given its complexity,” Simmons says.

“Still, that’s where people are actually bearing the brunt of this problem. Tax avoidance in the United States contributes to the national debt, but in developing countries it’s literally causing people to go hungry.”

Edited by Ronald Joshua

By Roberto Savio
ROME, Jul 11 2014 (IPS)

While the Third World War has not been formally declared, conflicts throughout the world are reaching levels unseen since 1944.

Of course, for the large majority of people throughout the world, news about these conflicts is just part of our daily news, but another share of our daily news is about the mess in our countries.

This is so complex and confusing that many people have given up the effort to attempt any form of deep understanding, so I thought it would be useful to offer ten explanations of how we succeeded in creating this mess.

Roberto Savio. Credit: IPS

1)   The world, as it now exists, was largely shaped by the colonial powers, which divided the world among themselves, carving out states without any consideration for existing ethnic, religious or cultural realities. This was especially true of Africa and the Arab world, where the concept of state was imposed on systems of tribes and clans.

Just to give a few examples, none of the present-day Arab countries existed prior to colonialism. Syria, Lebanon, Iraq, the Gulf Countries (including Saudi Arabia) were all parts of the Ottoman Empire. When this disappeared with the First World War (like the Russian, German and Austro-Hungarian empires), the winners – Britain and France – sat down at a table and drafted the boundaries of countries to be run by them, as they had done before with Africa. So, never look at those countries as equivalent to countries with a history of national identity.“Do not go with the tide ... search for the other face of the moon. And if they tell you that they know, well, just look at the results” – Roberto Savio

2)   After the end of the colonial era, it was inevitable that to keep these artificial countries alive, and avoid their disintegration, strongmen would be needed to cover the void left by the colonial powers. The rules of democracy were used only to reach power, with very few exceptions. The Arab Spring did indeed get rid of dictators and autocrats, just to replace them with chaos and warring factions (as in Libya) or with a new autocrat, as in Egypt.

The case of Yugoslavia is instructive. After the Second World War, Marshal Tito dismantled the Kingdom of Yugoslavia and created the Socialist Federal Republic of Yugoslavia. But we all know that Yugoslavia did not survive the death of its strongman.

The lesson is that without creating a really participatory and unifying process of citizens, with a strong civil society, local identities will always play the most decisive role. So it will take some before many of the new countries will be considered real countries devoid of internal conflicts.

3)   Since the Second World War, the meddling of the colonial and super powers in the process of consolidation of new countries has been a very good example of man-made disaster.

Take the case of Iraq. When the United States took over administration of the country in 2003 after its invasion, General Jay Garner was appointed and lasted just a month, because he was considered too open to local views.

Garner was replaced by a diplomat, Jan Bremmer, who took up his post after a two-hour briefing by the then Secretary of State, Condolezza Rice. Bremmer immediately proceeded to dissolve the army (creating 250,000 unemployed) and firing anyone in the administration who was a member of the Ba’ath party, the party of Saddam Hussein. This destabilised the country, and today’s mess is a direct result of this decision.

The current Iraqi Prime Minister, Nouri al-Maliki, whom Washington is trying to remove as the cause of polarisation between Shiites and Sunnis, was the preferred American candidate. So was the President of Afghanistan, Hamid Karzai, who is now virulently anti-American. This is a tradition that goes back to the first U.S. intervention in Vietnam, where Washington put in place Ngo Dihn Dien, who turned against its views, until he was assassinated.

There is no space here to give example of similar mistakes (albeit less important) by other Western powers. The point is that all leaders installed from outside do not last long and bring instability.

4)   We are all witnessing religious fighting and Islam extremism as a growing and disturbing threat. Few make any effort to understand why thousands of young people are willing to blow themselves up. There is a striking correlation between lack of development/employment and religious unrest. In the Muslim countries of Asia (Arab Muslims account for less than 20 percent of the world’s Muslim populations), extremism hardly exists.

And few realise that the fight between Shiites and Sunnis is funded by countries like Saudi Arabia, Qatar and Iran. Those religions have been living side by side for centuries, and now they are fighting a proxy war, for example in Syria. Saudi Arabia has been funding Salafists (the puritan form of Islam) everywhere, and it has provided nearly two billion dollars to the new Egyptian autocrat, Abdel Fattah el-Sisi, because he is fighting the Muslim Brotherhood, which predicates the end of kings and sheiks and power for the people. Iraq is also becoming a proxy war between Saudi Arabia, defender of the Sunnis, and Iran, defender of the Shiites.

So, when looking at these wars of religion, always look at who is behind them. Religions usually become belligerent only if they are used. Just look at European history, where wars of religion were invented by kings and fought by people. Of course, once the genie is out of the bottle, it will take a long time to put it back. So this issue will be with us for quite some time.

5)   The end of the Cold War unfroze the world, which had been kept in stability by the balance between the two superpowers. Attempts to create regional or international alliances to bring stability have always been stymied by national interests. The best example is Europe. While everybody was talking about Crimea, Ukraine and Vladimir Putin (who had been made paranoiac about Western encirclement, from the George Bush Jr. administration onwards) and how to bring him to listen to the United States and Europe, European companies continued trade in spite of a much talked about embargo. And now, Austria has quietly signed an agreement with Russia to join the South Stream, a pipeline that will bring Russian gas to Europe – so much for the unity of a Europe which has been clamouring about the need to reduce its energy dependence on Russia.

A multipolar world is in the making, but it has to be seen how stable it will be. In Asia, China and Japan are increasing their military investments, as are surrounding countries. And while local conflicts, like Syria, Iraq and Sudan, are not going to escalate into a larger conflict, this would certainly be the case in Asia.

6)   In a world more and more divided by a resurgence of national interests, the very idea of shared governance is losing its strength, and not only in Europe. The United Nations has lost its significance as the arena in which to reach consensus and legitimacy. The two engines of globalisation – trade and finance – are not part of the United Nations, which is stuck with the themes of development, peace, human rights, environment, education and so on. While these issues are crucial for a viable world, they are not seen as such by those in power. Conclusion: the United Nations is sliding into irrelevance.

7)   At the same time, values and ideas which were considered universal, such as cooperation, mutual aid, international social justice and peace as an encompassing paradigm are also becoming irrelevant. French President Francois Hollande meets U.S. President Barack Obama, not to discuss how to stop the genocide in Sudan, or the kidnapping of children in Nigeria, but to ask him to intervene with his Minister of Justice to reduce a giant fine on a French bank, the BNP-Parisbas, for fraudulent activities. The outstanding problem of climate control was largely absent in the last  G7 meeting, not to talk of nuclear disarmament … and yet these are the two main threats to the planet!

8)   After colonialism and totalitarian regimes, the key phrase after the Second World War was “implementation of democracy”. But after the end of the Cold War, democracy was taken for granted. In fact, in the last twenty years, the formula of representative democracy has been losing its glamour. Pragmatism has led to the loss of long-term vision, and politics have become more and more mere administration.

Citizens feel less and less related to parties, which have basically become self-centred and self-reliant.  International affairs are not considered tools of power by parties, and decisions are taken without participation. This leads to choices which often do not represent the feelings and priorities of citizens.

The way in which the bailout of Cyprus from its financial crisis a few years ago was treated in the European Commission was widely recognised as a blatant example of lack of transparency. Few people certainly make more mistakes than many …

9)   A very important element of the mess has been the growth of what its proponents, especially in the financial world, call the “new economy” – an economy that contemplates permanent unemployment, lack of social investments, reduced taxation for large capital, the marginalisation of trade unions, and a reduction of the role of the State as the regulator and guarantor of social justice. Inequalities are reaching unprecedented levels. The world’s 85 richest individuals possess the same wealth as 2.5 billion people.

10)   All this brings its corollary. It is not by chance that all mainstream media worldwide have the same reading of the world. Information today has basically eliminated analysis and process, to concentrate on events. Their ability to follow the world mess is minimal, and they just repeat what those in power say. It is very instructive to see media which are very analytical about national affairs and very superficial about international issues. The media depend largely on three international news agencies, which represent the Western world and its interests. Have you read anywhere about the gas agreement between Austria and Russia?

So, a final point: never be satisfied with what you read in the newspapers, always try to get additional and opposite viewpoints through the net. This will help you to look at the world with your eyes, and not with the eyes of somebody else who is probably part of the system which has created this mess. Do not go with the tide … search for the other face of the moon. And if they tell you that they know, well, just look at the results. So, be yourself and, if you make a mistake, at least it will be your mistake. (END/IPS COLUMNIST SERVICE)

Excerpt:

The social role of journalists in Honduras is restricted under the official secrets law because they will not be able to report information that the state regards as “classified,” under the controversial new regulations. Credit: Thelma Mejía/IPS

By Thelma Mejía
TEGUCIGALPA, Jul 9 2014 (IPS)

The new official secrets law in Honduras clamps down on freedom of expression, strengthens corruption and enables public information on defence and security affairs to be kept secret for up to 25 years, according to a confidential report seen by IPS.

The Law on Classification of Public Documents related to Security and National Defence, better known as the official secrets law, was approved on the eve of the conclusion of the last parliamentary term, on Jan. 24.

“It [information about corruption] would be classified for 25 years, by which time the statute of limitations for prosecuting public servants for corruption would have expired, and no one would be held accountable,” says the IAIP
In a marathon two-day session, Congress approved a hundred decrees and laws to smooth the path of the new government of President Juan Orlando Hernández, who took office Jan. 27 and belongs to the right-wing National Party, like his predecessor Porfirio Lobo.

“This law lets the government behave like a cat that covers its own dirt,” shopkeeper Eduardo Tinoco told IPS wryly. He pays 20 dollars a week extortion money to one of the gangs that control El Sitio, a neighbourhood in the northeast of the capital.

“I pay taxes here for everything, even to be allowed to live, and that secrecy law will only be used to cover up the diversion of funds used for security and other government business. There are no two ways about it,” said Tinoco, who owns a small grocery store.

The law was blocked in October 2013 because of opposition from the Honduran Community Media Association (AMCH) and international groups, which regard it as a violation of the right to information and freedom of expression.

But it was reconsidered in January. How this occurred is not really known, because there are no audio records in the parliament archives that indicate when the bill was reintroduced, legislature officials told IPS on condition of anonymity.

A report by a team of experts for the Institute for Access to Public Information (IAIP) says that the official secrets law lacks a clear definition of “national security” and this ambiguity opens the way to discretionality, so that anything considered sensitive may be classified as secret.

The IAIP is the autonomous state body responsible for ensuring transparency in Honduras, according to the Law on Transparency and Access to Public Information. IPS obtained the report, which is due to be made public in a few weeks.

Article 3 of the official secrets law indicates that the following can be classified as confidential, in the interests of “national security”: “matters, actions, contracts, documents, information, data and objects whose knowledge by unauthorised persons may harm or endanger national security and/or defence and the fulfilment of its goals in these areas.”

The law sets four classification levels: private, confidential, secret and ultra secret, with periods of secrecy of five, 10, 15 and 25 years respectively, which may be extended as determined by the National Security and Defence Council which is responsible for classifying and declassifying material.

This Council is made up of the three branches of state, the Attorney General’s Office, the ministers of Defence and Security, the national Information and Intelligence Office and the chairman of the Joint Chiefs of Staff of the armed forces.

Information classified as “private” is lower level information, documentation or strategic internal material within state bodies that could cause “undesired institutional effects” if they came to light.

“Confidential” is the term attributed to intermediate level information, which could cause “imminent risk” or a direct threat to security, national defence or public order if it were made public, the law says.

Materials classified as “secret” are high level information at the national level, in the strategic internal and external spheres of the state, revelation of which poses an imminent danger to “constitutional order, security, national defence, international relations and the fulfilment of national goals.”

Finally, “ultra secret” is the highest level classification and is described as material which, if in the realm of public knowledge, would provoke “exceptionally serious” internal and external harm, threatening security, defence, sovereignty and territorial integrity, and the achievement of national goals.

Omar Rivera, of the Civil Society Group (GSC), an association of political advocacy and human rights organisations, told IPS that the “broad discretionality provided by the law is very worrying, because it provides a cloak of secrecy that can cover everything.”

His main concern is related to the security tax that has been levied on businesses and individuals for the past two years, as a contribution to the fight against insecurity and violence. This law “will make it impossible to get factual information on how the millions of dollars the state collects are spent,” he said.

The IAIP report highlights the same discretionalities, pointing out that any information about a public official being implicated in corruption can be classified as “ultra secret”.

In this case it would be classified for 25 years, by which time the statute of limitations for prosecuting public servants for corruption would have expired, and no one would be held accountable, the report analysing the law says.

Meanwhile, human rights expert Roberto Velásquez told IPS that the law directly targets journalism and freedom of expression, by putting a stranglehold on investigating or disseminating information.

He was referring to Article 10 of the law, which establishes that “when it can be foreseen that classified material may come to the knowledge of the media, these shall be notified of the nature of the material, and shall respect its classified nature.”

Also, any person having knowledge of classified information is obliged to “keep it secret” and report it to the nearest civil, police or military authority.

The new law directly contradicts the Transparency Law, in force for the past five years, by removing the IAIP’s powers to classify information regarded as secret, and overriding guarantees for freedom of expression and investigative journalism.

Doris Madrid, the head of IAIP, told IPS that it is hoping that the official secrets law will be reformed, on the grounds that it is unconstitutional and violates international treaties, but a proposal to revise or repeal it was turned down in Congress in March.

IPS learned that Transparency International made the signing of an agreement with the government on Open Budgets conditional on a revision of the law.

Honduras is regarded as one of the Latin American countries with the highest perception of corruption and insecurity. In April, the United Nations Office on Drugs and Crime (UNODC) indicated that this country of 8.4 million people has the highest murder rate in the world.

The Observatory on Violence at the National Autonomous University of Honduras reported this rate as 79.7 homicides per 100,000 inhabitants. But now the authorities have refused to give any more figures on violent deaths to the Observatory, its members have complained.

Activists working to alleviate poverty worldwide gave a guarded welcome to the renewed commitment to development that G7 leaders made during their meeting in Brussels this week.

The group of industrialised countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States), normally known as G8 but currently without Russia, stated that the “pursuit of sustainable and inclusive development and greater prosperity in all countries remains a foundational commitment that unites our people and our countries.”

They said they would continue to implement the commitments made at previous summits and would provide a report next year on the progress toward the attainment of these pledges. Prominent among the aims is to complete the “unfinished business of the Millennium Development Goals” that comes to term next year.

According to the government leaders, the post-2015 agenda “should be centred on people and focused both on the eradication of extreme poverty, promoting development and on balancing the environmental, economic and social dimensions of sustainable development, including climate change.”

Friederike Roder. Photo courtesy of ONE

Friederike Röder, director of the French branch of anti-poverty campaign ONE, told IPS that several non-governmental organisations had specifically called for development to be a major focus of the meeting, and that their appeals seem to have been met.

“Despite a rushed agenda and pressing international events, the G7 leaders reaffirmed their ability to take into account global issues and provide concrete answers,” she said at the end of the meeting Thursday, as the Ukraine-Russia crisis topped most reports.

“Their repeated commitments or newly taken pledges in favour of transparency, health and the fight against illicit financial flows, mark progress, sometimes hesitant but still laudable, compared with the previous G8 summits,” she added.“Unless people living in extreme poverty who will be affected by future development goals are able to participate in their creation and implementation, any progress made risks leaving the most socially excluded and vulnerable members of society behind" – ATD Fourth World

She said that the leaders’ assurances provide a basis for discussion at the next big international meetings that will take place in the coming months, such as that of the G20 in Australia later this year and the G7 in Germany in 2015.

Meanwhile, international anti-poverty movement ATD Fourth World said it welcomed the G7 2014 statement’s recognition of the need to eradicate, rather than just reduce, extreme poverty. “However, we would like to call their attention to the fact that unless people living in extreme poverty who will be affected by future development goals are able to participate in their creation and implementation, any progress made risks leaving the most socially excluded and vulnerable members of society behind,” the organisation said.

“This is why we feel that poverty can only be truly eradicated by a rights-based  approach to development, which insists that the fundamental rights of every single individual are fulfilled. Such an approach would ensure that no one was left behind by the post-2015 agenda, and goes far beyond the  promotion of human rights as envisaged by the G7 Statement,” the group added.

ONE, the group co-founded by musician Bono of U2, had also appealed for a focus on transparency in the extractive industries because many developing countries are affected by unclear or illicit agreements in this sector.

In its statement, the G7 said that its members would “continue to promote inclusive and resilient growth in Africa, working with governments and citizens in Africa to enhance governance and transparency … and strengthen the responsible and sustainable management of natural resources and the revenues they generate.”

The pledge, from the G7 leaders and from the presidents of the European Council and the European Commission, explicitly mentioned the extractive sector.

“We remain committed to work towards common global standards that raise extractives transparency, which ensure disclosure of companies’ payments to all governments,” the leaders stated.

“We welcome the progress made among G7 members to implement quickly such standards.  These global standards should continue to move towards project-level reporting,” they added.

Prof. Mthuli Ncube, chief economist and vice-president of the African Development Bank, and other experts have long stressed that governments need to play a greater role in transparency.

“There must be fairer and more transparent relationships between investors and the African people, Ncube told IPS earlier. “Africa has huge natural resources, and the investors in these natural resources are mainly from outside. We have to examine how these investments can benefit the African people through job creation, protecting the environment, developing African entrepreneurs and using the revenues from resources to diversify African economies.”

Economists, as well as non-governmental organisations, have pointed out that benefits from foreign investment often go to the elite in African countries and to foreign investor companies.

World Bank studies also indicate that since 1980, an estimated 1.4 trillion dollars have left Africa illegally as a consequence of official corruption and other factors. The G7 now seems more prepared to work to increase transparency, which economists say is important for sustainable growth in Africa and other regions.

The government leaders pledged to “continue to work to tackle tax evasion and illicit flows of finance, including by supporting developing countries to strengthen their tax base and help create stable and sustainable states.”

“We renew our commitment to deny safe haven to the proceeds of corruption, and to the recovery and return of stolen assets,” they stated.

NGOs had additionally called for the G7 to focus on the least-developed countries (LDCs) which have seen decreasing levels of official development assistance in the past years, despite rising levels of overall aid in 2014.

The Paris-based Organisation for Economic Cooperation and Development said surveys showed that there was a “worrying trend of declines in programmed aid to LDCs and low-income countries, in particular in Africa.”

Among the G7 countries, France’s aid decreased almost 10 percent in 2013, due to lower levels of “loans disbursements and debt-relief compared to 2012,” the OECD said. Without these disbursements, the decrease is still over 3 percent, NGOs say.

But there was no mention of official development assistance (ODA) in the G7 statement. Some NGOs said that they would have been happier to see the G7 reiterate their commitment to ODA, but the government leaders did however give attention to health, another issue on which civil society had called for action.

“The Heads of State and Government of the G7 have responded to the challenges of global health, demonstrating a strong commitment to universal access to health, to the reduction of maternal mortality and to the fight against AIDS,” ONE said.

The G7 leaders said they recognised the impact of the GAVI Alliance (Global Alliance for Vaccines and Immunisation) and welcomed its efforts to expand access to vaccines to an additional 300 million children during 2016-2020.

The Alliance will seek replenishment funding at a conference in Germany next year, and the G7 said it reaffirmed its “commitment”, and called on other public and private donors to contribute.

Misinvoiced trade in five African countries cost their governments billions of dollars in tax revenue and facilitated at least 60.8 billion dollars in illicit financial flows from 2002 to 2011, says a new report by Global Financial Integrity (GFI), a research advocacy organisation here.

Using data on bilateral trade flows from 2002-2011 from the U.N.’s Commodity Trade database, the study calculated that the potential average annual tax loss from trade misinvoicing amounted over the same decade to roughly 12.7 percent of Uganda’s total government revenue, followed by Ghana (11 percent), Mozambique (10.4 percent), Kenya (8.3 percent), and Tanzania (7.4 percent), according to the 52-page report, “Hiding in Plain Sight.”“A lack of domestic enforcement of regulations against deliberate trade misinvoicing, as well as unclear international regulations, exacerbates the illicit money flows.” -- Brian LeBlanc

The report, sponsored by the Danish foreign ministry, represents the first comprehensive study on the magnitude of the loss of tax revenue for these countries.

Trade misinvoicing is the intentional misstating of the value, quantity, or composition of goods on customs declaration forms and invoices, usually for tax evasion or money-laundering purposes.

“Fraudulent trade transactions rob the people of these countries of funds that could otherwise have been used for investments in infrastructure, schools, hospitals, and other much-needed public services,” said Mogens Jensen, Denmark’s minister for Trade and Development Cooperation.

Further, misinvoiced trade is a significant source of illicit capital flight.

Tanzania tops the list, with the greatest annual average gross illicit flows of 1.87 billion dollars. Kenya is second with 1.51 billion in average gross flows. They are followed by Ghana (1.44 billion); Uganda (884 million), and Mozambique (585 million).

These losses create “one of the most damaging conditions undermining economic growth and development, governance, and human rights in Africa and around the world,” according to the report which, noted that misinvoicing thrives in a global shadow system that features financial secrecy and tax havens for the rich.

Over the decade, gross illicit outflows in Kenya were twice what the country received in official development assistance (ODA); in Ghana these flows roughly equaled its ODA, followed by Tanzania (77.6 percent), Uganda (58.9 percent), and Mozambique (32.6 percent).

The numbers are huge, but experts caution that these might be too modest.

“The estimates provided by our methodology are likely to be extremely conservative as they do not include trade misinvoicing in services or intangibles, same-invoice trade misinvoicing, hawala transactions, and dealings conducted in bulk cash,” GFI President Raymond Baker noted.

Ghana, Kenya, Mozambique, Tanzania, and Uganda have all experienced significant economic growth in recent years. But the wealth remains concentrated in the hands of a very few and has not trickled down to the average citizen and the very poor, who often lack basic services.

The revenues that the governments lost due to misinvoiced trade and illicit money flows could  help fill these gaps.

“The problem lies in a lack of transparency and poor data reporting. And publishing data is important,” Brian LeBlanc, who co-authored the report, told IPS.

He also noted statistics presented at last week’s launch of the latest report by the African Progress Panel, a think tank chaired by former U.N. secretary-general Kofi Annan. It estimated that illegal fishing and logging – most of which benefits foreign interests – cost sub-Saharan Africa an average of over 20 billion dollars each year.

GFI experts highlighted the importance of governments both domestically and internationally in cracking down against trade misinvoicing. Thus, the two main objectives of the report are focused on helping governments improve transparency in domestic and international financial transactions and enhancing cooperation between developed and developing country governments to shut down the channels through which illicit money flows.

“A country with weak laws or lax enforcement of money laundering statutes could encourage trade misinvoicing by making it easier to transfer and use the money gained from the illegal transaction,” the report says.

According to LeBlanc, particular attention needs to be paid to providing customs officials with “real-time access to pricing data” in order to identify the mispriced and mistraded goods. More pressure should also be placed on auditing firms to inform governments of misinvoiced trade.

Customs authorities often lack the means, or, in some cases, the will to collect the data they need to understand the magnitude of illicit flows of capital due to trade misinvoicing or the tax revenue and investment capital that are lost as a result.

Governments need to track the direction of trade flows, detect if the invoices are altered in different jurisdictions, and understand how the values of items included in invoices compare to the world market for the products involved.

“Many countries don’t have access to world market prices for different commodities, this information asymmetry makes it difficult to make progress in curtailing misinvoicing trade and illicit financial flows,” Clark Gascoigne, communications director at GFI, told IPS.

Not only does the information asymmetry deprive governments of tax revenues, it also hinders their efforts at halting illicit flows.

“A lack of domestic enforcement of regulations against deliberate trade misinvoicing, as well as unclear international regulations, exacerbates the illicit money flows,” LeBlanc said.

The five countries are nonetheless making some progress. The establishment of electronic customs systems and, in some cases, the creation of financial intelligence units (FIUs) hold some promise.

The World Trade Organisation (WTO) could also be used as an important enforcement mechanism, according to LeBlanc, who also cited a model that has been used with considerable success in the Philippines.

“A final step to curtailing illicit trade transactions and financial flows is a whistle-blowing mechanism, where employees as well as competitors can blow the whistle anonymously if their employers or rivals are engaging in misinovocing trade,” LeBlanc told IPS.

He added that it is in the interests of both employees and competitors. And while it is obvious why competitors would benefit from blowing the whistle on their rivals, LeBlanc further elaborates on why it is in the interest of employees of the company.

“There is a misconception that misinvoicing trade results in a better company performance in terms of revenue. It in fact hurts the company,” LeBlanc says, and “the extra profits from over- or under-invoicing imports and exports end up being transferred to off-shore accounts of the company owners and are not distributed to the employees.”

Demanding a right to health at the Fourth High Level Forum on Aid Effectiveness in Busan in 2011. Credit: Miriam Gathigah/IPS

By Bryant Harris
WASHINGTON, Apr 1 2014 (IPS)

Major foreign assistance donors have once again delayed the release of a report meant to measure transparency, accountability and cooperation of aid effectiveness.

The repeated delay of the voluntary U.N.-guided report, which was originally slated for release in January but was bumped for at least a second time last week, has prompted some aid groups to question donor countries’ commitment to aid transparency. The report would be the first of its kind."If your donors aren’t going to disclose where they’re going to build, how does a farmer know to grow a crop for export or for domestic consumption?” -- Gregory Adams

“If you don’t let state business leaders know where you’re going to build a new road then business owners can’t plan their investment,” Gregory Adams, the director of aid effectiveness at Oxfam America, an anti-poverty group, told IPS.

“We see this play out in the development sphere. If your donors aren’t going to disclose where they’re going to build, how does a farmer know to grow a crop for export or for domestic consumption?”

The push for this novel report emerged in 2011, when government officials, industry representatives and civil society members met in Busan, South Korea, at a conference hosted by the Organisation for Economic Cooperation and Development (OECD), a grouping of wealthy countries.

The conference spurred donor governments, along with the United Nations Development Programme (UNDP), to the create a new body, the Global Partnership for Effective Development Cooperation (GPEDC), which emphasises the “ownership” of aid recipients over development strategies alongside strengthened transparency and accountability for aid programming.

The global monitoring framework on aid effectiveness would assess and track progress on the agreements made in Busan, and was slated for release in early 2014, but it has been postponed several times.

The Busan principles call for the ownership of development projects by developing countries themselves, a results-oriented approach, inclusive partnerships with aid beneficiaries, and mutual accountability and transparency. They emphasise collaboration and partnerships with aid beneficiaries to give them a greater input into the design of development strategies while allowing them to ensure that aid money is used on actual, effective development projects.

“It’s a fundamental question of who drives development. At Oxfam, we believe that … aid doesn’t cause development, people cause development,” Adams said.

“Aid no more cures poverty than a shovel digs a ditch or a hammer builds a house. You actually need people who drive that, and if you deny people who drive your development basic information about what you’re doing, you’re not only missing opportunities but also frustrating the people you’re trying to help lead their own development.”

The report was originally slated for release before an upcoming GPEDC meeting on Apr. 15 in Mexico City, so that donors could assess progress made on the Busan agreement while developing new strategies for their implementation.

While it is unclear why the report’s public release has been repeatedly delayed, some analysts see a political motive. It appears the report’s findings will highlight the lack of progress made in implementing the Busan reforms.

Little progress

Oxfam and other watchdog groups have raised concerns regarding the report’s delay and, more generally, the implementation of the Busan principles from both developed and developing countries.

“The early findings of the GDEPC monitoring evidence show that overall little progress has been made, though they are being sold as ‘glass half full’,” Oxfam America wrote last week in a blog post. “For a number of indicators, it is too early to tell.”

“But of particular concern are the indicators that measure aspects of country ownership … Unlike previous reporting on aid effectiveness, data on how individual governments have performed will not be made available in the full monitoring report, with the exception of the transparency indicator.”

Hannah Ryder, a team leader at the United Kingdom’s Department for International Development (DFID), also notes that while the report measures 10 indicators, the individual success of each country is only ranked on one indicator – transparency. She says this is purely for political reasons, suggesting that some donors are unwilling to publicly disclose their performance on most indicators.

“UNDP and OECD are organisations that are not independent of the countries and organisations submitting the data,” Ryder wrote last week in a DFID blog entry. “And this is why ranking is too political for them.”

Ryder continued: “The key reason why transparency is able to be ranked in the report is that there is already an independently published report on transparency that has become well-known and well-respected … But for the other nine indicators and issues raised in [the] forthcoming report, no such credible, independent rankings exist yet.”

She refers to the Aid Transparency Index, published by the global watchdog group Publish What You Fund. The index also relies on a reporting framework that stems from the commitments donors made during the Busan conference.

While Oxfam’s Adams said that transparency and aid disclosure is a relatively new concept for development organisations, he stressed its importance.

“When that data is out there, it permits people to do two things,” he said. “One, they can think in a more sophisticated way about how they themselves can invest to best take advantage of these development investments. And secondly, it allows them to demand accountability for what’s being promised.”

Adams pointed to Malawi, where donor transparency in recent years has yielded tangible medical benefits for local communities.

“Additional information on where pharmaceuticals were being distributed allowed communities to better understand where those pharmaceuticals were stocked,” he said. “So it meant service delivery was able to improve.”

The increased emphasis on funding transparency and an inclusive, results-driven approach to aid comes at a time when all donor countries, including the United States, are undergoing tightened fiscal constraints.

“I think [monitoring and evaluation] has been bubbling around for a while now, but over the last two years it’s really coalesced into this specific focus as we’ve seen downward pressures on the budget,” Casey Dunning, a senior policy analyst at the Centre for Global Development, a think tank here, told IPS.

“I think it can be directly tied to budget austerity and the shift away from new programming. The emphasis has shifted to how we are using our resources and how we are making the most of what we actually have.”

Critics say Peru's new law on cybercrime is vaguely worded and threatens access to information. Credit: Public domain

By Milagros Salazar
LIMA, Nov 27 2013 (IPS)

A new law against cybercrime that restricts the use of data and freedom of information in Peru clashes with earlier legislation, on transparency, which represented a major stride forward in citizen rights.

The advances made in the law on transparency and access to public information have been undermined by the hastily passed law on computer crimes, which restricts and penalises the use of online databases, according to experts consulted by IPS.

The new law was put into effect to crack down on cybercrimes, including sexual harassment of minors. But civil society organisations complain that elements attacking the right to information were incorporated without debate or public input.

The Defensoría del Pueblo or ombudsman’s office says the transparency law, which entered into force in 2002, has a few shortcomings, but is important because of the creation and use of government databases – which would be hindered, however, by the law on cybercrime.

The transparency law was passed with the aim of making government more transparent, to comply with the 1993 constitution, which guaranteed the right of people to request and obtain public information, and established the right of habeas data, under which any government official or civil servant who denies that right can be sued.

Since then, the Defensoría del Pueblo has received 6,714 complaints about requests for public information that did not receive a satisfactory response from the authorities, according to a report to be published in the first week of December, to which IPS had access.

Based on those complaints, the assistant ombudsman on constitutional affairs, Fernando Castañeda, told IPS that his office identified and interviewed 122 public employees responsible for turning over the information, to find out why the requests had not been met.

The main conclusion reached by his office was that an independent authority was needed to monitor and oversee responses to information requests, because civil servants are limited by the orders of their superiors, and in some cases have been punished when they provide information to members of the public.

And things do not get any better when citizens take legal action to complain about the lack of response to their requests for information, especially in rural areas.

Between January 2007 and March 2013, 841 habeas data actions were handled in the justice system, where cases can take up to a year in the first instance court, another year in the second instance court and two more in the Constitutional Court, Castañeda pointed out.

In other words, a four-year journey to try to obtain public information that has been denied.

The official said that the most significant aspect of the law was the creation of tools to facilitate citizens’ access to information, with websites and open access to databases, under the concept of open data.

However, that access will be directly restricted by the new law on computer crimes, which was given fast-track treatment in Congress and signed into law a few weeks later, on Oct. 22, by President Ollanta Humala.

Protests by experts and civil society groups forced Justice Minister Daniel Figallo to state on Nov. 13 that he would study proposed reforms to the law. “We will revise some articles of the law,” he said.

But Figallo defended the legislation, saying the aim was to fight data interference or interception rather than the dissemination of information. His ministry argues that Peru is thus accepting the guidelines of the Council of Europe’s Convention on Cybercrime, the first international treaty of its kind, which since 2001 has provided global guidelines for the adoption of laws against computer crimes.

The president of the congressional justice commission, Juan Carlos Eguren, also said he was open to suggestions.

The law creates a three- to six-year sentence for people found guilty of capturing computer information from a public institution, to find out, for example, what is spent on social programmes and to complement that with the introduction of new data or alteration to analyse the information, lawyer Roberto Pereira of the Press and Society Institute (IPYS) told IPS.

That is based on article three of the law, which penalises those who use computer technologies to “introduce, delete, deteriorate, alter or suppress data, or render data inaccessible.”

The law also establishes a three- to five-year sentence for creating a database on an identified or identifiable subject to provide information on any aspect of his or her personal, family, financial or labour life, whether or not it causes harm.

A common practice by journalists is to create databases on companies that are subcontractors for the state, in order to monitor public spending. But under the new law, doing that would automatically make them “cyber criminals,” Pereira explained.

The IPYS stated in a communiqué that the law poses “a serious threat to the freedom of journalistic information, and to research and investigation in general.” The majority of the local media, regardless of their ideological bent, agree with that criticism.

The law on cybercrime could “end up criminalising legal behaviour in cyberspace,” said Pereira.

It also creates “an unacceptable framework of discretionality in its application,” because of the broad, ambiguous criteria it contains, and ends up undermining other basic rights, he said.

There has been a great deal of speculation in Peru on what lay behind the passage of the controversial law.

Pereira cited three explanations: the legislators’ ignorance about cyberspace; the interest on the part of some public figures in criminalising digital freedom and thus blocking investigations of corruption; “and the genuine interest of sectors of the government in improving penal legislation on cybercrime.”

The non-governmental organisation Hiperderecho, which defends digital rights, noted in a communiqué that Congress passed the law “in less than five hours, with their backs turned to the public.”

The organisation criticised the fact that on Sept. 12, Congress suddenly began to debate a bill that had just been introduced by the government, without incorporating in the discussion a long-debated justice commission ruling on another cybercrime bill.

The executive branch presented its bill after a telephone conversation by Defence Minister Pedro Cateriano was made public, and after progress was made towards a common regional code against cybercrime during a technical level meeting of experts of the Ibero-American Conference of Justice Ministers (COMJIB), held in Lima in June.

Miguel Morachimo, a representative of Hiperderecho, admitted to IPS that it was reasonable for the government to fight cybercrime. But he said that when the bill was debated in Congress, “it was completely overhauled.”

In his view, the government was pressured by COMJIB and the banking association – which is worried about card cloning – and ended up acting in haste as a result.

The Defensoría del Pueblo’s office on constitutional affairs has not yet taken a stance on the details of the new law, said Castañeda. But it did acknowledge that it runs counter to some objectives of the transparency law.

Hiperderecho has sent suggestions to Congress for improving the law on cybercrime. Meanwhile, what one law defends, the other blocks.

In 2010, Kyrgyzstan tried to promote good governance and reduce corruption by attaching public watchdogs to major ministries and state agencies. Almost three years later, the watchdogs are still functioning, but many express frustration about bureaucratic resistance that hinders their ability to do their jobs.

Observers lauded the September 2010 decree forming Public Advisory Councils (PACs) as a means of giving democratisation a boost in Kyrgyzstan, where a violent uprising in April of that same year ousted an authoritarian-minded president and initiated an experiment in a parliamentary system of government.

Earlier this year, parliament passed a law cementing the PACs’ status. The legislation is now awaiting President Almazbek Atambayev’s signature. But members of the voluntary, unpaid collectives complain that their perennial struggle for acceptance among government officials – regularly rated by transparency indices as among the most corrupt in the world – has kept them from fulfilling their mandate.

Because the councils are free to devise their own work plans – a coordinating body exists but does not control their work – some have yielded better results than others. The PAC overseeing the State Penitentiary Service (GSIN), for example, successfully campaigned for separate cells for female prisoners who were either pregnant or had just given birth. Elsewhere, the Finance Ministry PAC has been instrumental in creating okmot.kg, an online portal where citizens can find information about state tenders and the budget.

“I think we have made steps in terms of transparency,” said Azamat Akeleev, chair of the Finance Ministry PAC. “But there are things that are harder to influence – internal processes, staffing, distribution of the budget, budget policy.”

A number of the watchdogs complain their hands are tied. Jomart Jumabekov, a member of the Ministry of Agriculture’s PAC and the head of a non-profit farming consultancy, echoes a common complaint about access: “The minister thinks he is a god, and has no interest in our council. The [ministry’s] secretary always falls ill whenever we have our meetings. They ignore us,” Jumabekov told EurasiaNet.org.

Galina Davletbaeva, who sits on the PAC of the State Fund for Material Reserves, endured a similar experience before appealing to former president Roza Otunbayeva, who oversaw the creation of the PACs in 2010.

“To begin with, they told us all their documents were secret… I told Roza: ‘Our PAC has nothing to report. We have just been warring [with the State Fund] for the last year-and-a-half.’” After the public dressing down, the leadership of the Fund, which controls Kyrgyzstan’s reserves of foodstuffs and other staples, “began to behave totally differently,” and even provided the council with a room in their building, Davletbaeva said.

Exacerbating their challenges, the watchdogs have not always found easy allies among lawmakers. Although parliament passed a law confirming their status on June 20, several lawmakers spoke out against PACs at a session the day before.

“We don’t need these PACs, because we, the MPs, should be overseeing the work of the ministries,” thundered nationalist lawmaker Jyldyz Joldosheva in comments picked up by the Vechernii Bishkek newspaper.

MP Ismail Isakov, a lieutenant general, said the PACs had “turned the government into a kindergarten” and was especially critical of PACs working on the security structures. He contended that PACs potentially can muddle the chain of command.

Perhaps inevitably, members of the PACs overseeing economically strategic departments such as the Ministry of Energy and the State Agency for Geology and Mineral Resources have been criticised for conflicts of interest; some have faced corruption allegations. Davletbaeva, of the PAC on the State Fund for Material Reserves, says conflicts of interest must be balanced against the need for sector specialists to sit on these boards.

If the watchdog experiment is going to last, it will need stronger support within state structures, members say. The PAC for the Transport Ministry, particularly active in 2011 when it identified a series of tender and labor code violations, was disbanded that December at the request of the ministry. It reemerged in May 2012, but has been quieter since.

The Ministry of Agriculture’s PAC, where Jumabekov works, also hit a wall last year. “We identified [150,000 dollars] that had been written off [by the ministry] for a crop-spraying operation, and demanded they return it to the state budget,” Jumabekov said. “We sent a complaint to the Prosecutors Office, but nothing happened.”

Such incidents have left council members feeling the initiative has lost steam. Timur Shaikhutdinov, who sits on the Interior Ministry oversight board, calls the PAC idea an “ill-fated project.” “It hurts to talk about the PACs. It was a beautiful idea, but it hasn’t worked out,” Shaikhutdinov told EurasiaNet.org.

Editor’s note: Chris Rickleton is a Bishkek-based journalist.This story originally appeared on EurasiaNet.org.

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

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

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

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

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

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

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

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

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

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

Shell companies

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

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

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

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

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

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

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

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

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

Recommitment

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

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

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

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

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

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

“Peace at home, peace in the world” is the official motto of the Turkish Republic. Coined in 1931 by the republic’s founder, Mustafa Kemal Ataturk, it implies a causal relationship, but the events this week in Istanbul and dozens of other cities of Turkey suggest that causality can work in reverse order, too.

With protests continuing over the past week, two years of Arab Spring and intense socioeconomic unrest in southern Europe seem to be spilling into Turkey, which until now had stayed out of trouble.

Still, the economy is strong, although not as strong as it has generally been in the past decade. As a result, the similarities Turkey shares with northern and southern Mediterranean countries that are also going through a crisis have more to do with poor leadership.

Financial success, fuelled by foreign direct investment (FDI) in luxury real estate in Istanbul and along Turkey’s Aegean coast and by massive privatisation of state enterprises, has given the ruling Justice and Development Party (AKP) unparalleled popularity as well as an increasing feeling of invincibility."The ruling Justice and Development Party (AKP) has unparalleled popularity as well as an increasing feeling of invincibility."

Since AKP’s 2011 electoral victory, this sentiment has translated into diminishing transparency and accountability by key government figures. Recep Tayyip Erdogan, AKP’s leader and the Turkish prime minister, and a handful of close collaborators have ostentatiously disregarded calls by trusted advisors to consider the average citizen’s concerns and be more inclusive of the 50 percent of Turkey’s population that has not voted for AKP.

Lack of government transparency, such as in southern Europe, and arrogance towards citizens and their fundamental freedoms, such as in the Middle East, have paved the way to an explosive manifestation of the sense that enough is enough, resulting in three deaths, over 1,000 injuries and 1,700 arrests.

Some observers claim that the crisis started with a kiss, referring to a ban in May by Ankara’s authorities of displays of affection by couples in public areas that triggered youth demonstrations in the capital. Others point to earlier signs of discontent.

In May 2012 and the following fall, Erdogan challenged women’s rights to abortion and caesarean section for giving birth, repeatedly proclaiming that women should have a minimum of three children. Women’s associations took to the streets.

More recently, the Turkish parliament, where the AKP holds 326 of 550 seats, passed legislation severely restricting the promotion and consumption of alcohol, and Erdogan has promised high taxes on alcoholic drinks.

Secularist Turks, some of whom have voted AKP in past elections because of the government’s economic performance, have begun complaining that Erdogan is interfering with people’s lifestyles in an unacceptable way.

At the same time, citizens are tired of an excessively liberal economy that has increased the income gap between the bourgeoisie and the working classes.

The decision to turn Gezi, the only green park in central Istanbul, into a shopping mall and luxury apartment complex was the trigger rather than the cause of the Gezi revolt. Cumhuriyet Avenue, adjacent to the park, has already been demolished to make way to a large complex of expensive shops, residences and shopping malls, while Taksim Square, a landmark of Istanbul, will be converted to a large mosque.

Independent research by a non-governmental organisation published in 2012 showed that Turkey, with a total population of 75 million, possesses 85,000 mosques, 17,000 of which were built in the past 10 years.

In comparison, the country has 67,000 schools, 1,220 hospitals, 6,300 health care centres and 1,435 public libraries. The annual budget of the Ministry of Culture and Tourism is less than half of that of the Directorate General of Religious Affairs, which represents the Sunni Muslims of the country (80 percent of the population).

FDI that has flowed into Turkey since 2002, mostly from Qatari and Saudi investors and U.S. and Dutch pension funds, has concentrated on speculative high-end real estate projects. The number of shopping malls grew from 46 in 2000 to 300 in 2012. Istanbul alone currently has 2 million square metres of malls under construction, according to CBRE, an international consulting firm.

A series of privatisations announced this year – a railway system, the national airline, major energy state enterprises, the highways and bridges network – will provide funds for undertaking grandiose construction projects: a third bridge over the Bosporus, a third airport in Istanbul, an artificial second Bosporus that will facilitate even more premium real estate developments, and the largest mosque in the Middle East, to be built in Istanbul.

The demonstrations that began ten days ago were spontaneous and peaceful and appeared to reflect citizen frustration with aloof state governance, but the zero-tolerance attitude adopted by the police and incendiary statements by Erdogan and certain ministers have transformed them into an unexpected political crisis that has uncertain implications for Turkish democracy.

IPS has spoken with political personalities and well known journalists who have been reluctant to discuss the situation as it evolves.

The personal secretariat of Fetullah Gulen, a Turkish Muslim theologian and head of a worldwide movement promoting moderate Islam and inter-faith dialogue, told IPS that Gulen will issue a statement at the end of this week. Currently living in self-exile in the state of Pennsylvania in the United States, he is followed by millions of Muslims.

As rallies continued Wednesday and student mobilisation has been announced for Thursday, the Turkish president, Abdullah Gul, and the vice prime minister, Bulent Arinc, both known for political maturity and moderation, have tried to offer limited excuses for police excessive force.

The true litmus test for the evolution of Turkey’s political climate will take place upon Erdogan’s return from North Africa later this week. But statements similar to those he made before his departure, such as “I will press with the Gezi project—if you don’t want a mall I will build a mosque” or labelling the protesters “marauders”, are unlikely to restore social peace.

To old hands in Turkish politics, the current unrest is reminiscent of the hegemonic style of the Democrat Party leadership of the 1950s.

“In 1957, Prime Minister Adnan Menderes and President Celal Bayar were quite confident because they had received 47 percent of the votes in the elections,” said Huseyn Ergun, a veteran politician and current chairman of the Social Democrat Party (SODEP), described.

“They had started to put sanctions on the opposition party and its deputies. They also had an investigation commission in parliament against the opposition and destroyed Istanbul landmarks. You know how all this ended.”

Indeed, their reign ended in 1960 with a military coup, history that Turks are not eager to see repeated in their lifetimes.

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. In resource-rich countries, the natural resource sector is usually the main source of illicit financial flows. Credit: Tommy Trenchard/IPS

By Carey L. Biron
WASHINGTON, May 28 2013 (IPS)

Over the past three decades, Africa has functioned as a “net creditor” to the rest of the world, the result of a cumulative outflow of nearly a trillion and a half dollars from the continent.

The new data, to be formally released Wednesday by the African Development Bank (AfDB) and Global Financial Integrity, a Washington-based watchdog group, stands in stark contrast to widely held images of Africa receiving massive amounts of foreign aid."While these figures are amazing, we have to recognise that they’re being directly facilitated by Western banks and tax havens." -- GFI's Clark Gascoigne

Foreign assistance levels are indeed high for Africa – following on a 2005 pledge among the Group of Eight (G8) rich countries, the continent receives more than 50 billion dollars a year, making it the world’s most aid-dependent region. Yet according to the new joint report, the interplay of corruption, tax evasion, criminal activities and other factors resulted in a net outflow of some 1.4 billion dollars between 1980 and 2009.

“In development circles we talk a lot about how much aid is going to Africa, and there’s this feeling among some in the West that after we’ve been giving this money for decades, it’s Africa’s fault if the continent’s countries still haven’t developed,” Clark Gascoigne, communications director at Global Financial Integrity (GFI), told IPS.

“In fact, our research shows that while the West has been giving money to Africa, far more is flowing out illicitly. Further, you can assume that illicit outflows from other regions would likely lead to high net resource transfers from other developing regions, as well.”

In Africa, this trend appears to have particularly strengthened over the past decade, during which time some 30.4 billion dollars every year are thought to have illegally leaked from the continent. Of that, around 83 percent is thought to have come from North African countries alone.

Over the full three decades, perhaps counter-intuitively, dark-money outflows appear to have originated particularly in resource-rich countries, those most prominently engaged in oil, gas and other natural resource extraction. Some of the most notable include Nigeria, Libya, South Africa and Angola.

Such findings are bolstered by a new index, released last week by the Revenue Watch Institute (RWI), another watchdog group, that for the first time systematically correlated governments’ economic dependency on natural resources and low human development indicators.

The RWI index looked at 58 countries responsible for the vast majority of the world’s petroleum, copper and diamond extraction, and reported that the profits of their extractive sectors added up to more than 2.6 trillion dollars in 2010, far outweighing Western aid flows. Yet more than 80 percent of those countries had also failed to put in place satisfactory standards for openness in these sectors – and half hadn’t even taken basic steps in this regard.

“In resource-rich countries, the natural resource sector is usually the main source of illicit financial flows,” the AfDB-GFI study states, noting a finding by the International Monetary Fund (IMF) that Angola’s oil sector in 2002 failed to report around four billion dollars.

“These countries generally lack the good governance structures that would enable citizens to monitor the amount and use of revenues from the natural resource sector. Often, rents and royalties derived from resource management are not used to support the social and economic development of resource-rich countries but instead are embezzled or expended in unproductive ways through corruption and cronyism.”

The impacts of this mass leakage on both African public coffers and foreign development-focused aid are clear.

“The resource drain from Africa over the last 30 years – almost equivalent to Africa’s current gross domestic product – is holding back Africa’s lift-off,” Mthuli Ncube, chief economist and vice-president of the African Development Bank, said Tuesday.

“[But] the African continent is resource-rich. With good resource husbandry, Africa could be in a position to finance much of its own development.”

Halting “absorption”

The new report, which is being released Wednesday at the African Development Bank annual meetings in Morocco, does not look into country-specific drivers of these outflows.

Yet while it is clear that differing levels of strengthening of country-level regulatory mechanisms will be required to ensure that natural resource development in Africa benefits public sector aims, it is impossible to ignore the role of Western countries in this ongoing situation.

“While these figures are amazing, we have to recognise that they’re being directly facilitated by Western banks and tax havens that allow for the creation of anonymous shell companies, by Western governments that don’t share tax information and continue to lack adequate money-laundering enforcement,” GFI’s Gascoigne says.

“While the onus for change is on both national and international players alike, the Western countries can control the international component of this dynamic – the international financial structure.”

The AfDB and GFI analysts are encouraging strengthened alignment of financial policies between African countries and those countries that are “absorbing” these illicit flows. The United States, for instance, continues to be the largest incorporator of shell companies in the world, while Gascoigne says there is also far more that Washington and other Western capitals can do on swapping tax information and refusing to tolerate bank and tax haven secrecy.

In this regard, many observers are eagerly awaiting the G8 summit slated to be held in the United Kingdom in mid-June. The first part of this year has seen unique international momentum build around issues of tax evasion and tax havens, energised particularly by depleted government coffers in the aftermath of the global economic crisis.

British Prime Minister David Cameron, who is hosting the upcoming summit, has taken on the issue of tax evasion as a key priority for his government’s G8 presidency this coming year. He has been widely praised for his recent leadership on the issue, particularly for pushing a new global standard under which governments would automatically share tax information.

European Union countries have now largely aligned themselves with the U.K. stance. But key to watch at the June summit will be whether the United States, Canada, Japan and Russia agree to sign on to a robust new initiative – or choose instead to stand in the way of greater reform.

“Curtailing these outflows should be paramount to policymakers in Africa and in the West because they drive and are, in turn, driven by a poor business climate and poor overall governance, both of which hamper economic growth,” GFI chief economist Dev Kar, formerly with the IMF, said Tuesday.

“The slower growth rate results in more aid dependency, with foreign taxpayer funds filling the shortfall in domestic revenue – to the extent that tax evasion is a part of illicit flows.”

As officials in Kyrgyzstan prepare to negotiate with their country’s largest investor in Bishkek this week, new details are emerging about how the Kyrgyz government wants to restructure the agreement covering operations at the country’s flagship gold mine.

Bishkek and Toronto-listed Centerra Gold are engaged in a protracted legal dispute over Kumtor, the largest gold mine operated by a Western company in Central Asia.

Earlier this year, a Kyrgyz state commission claimed Centerra owes approximately 467 million dollars for environmental damages. Then, in February, parliament gave Kyrgyz officials three months to negotiate a new operating agreement, which would be the third in 10 years.

Kyrgyz officials say the current agreement, negotiated under former president Kurmanbek Bakiyev in 2009, shortly before he was ousted amid violent street riots, was unfair. The company, which also operates a mine in Mongolia, argues that it negotiated in good faith with what was at the time the legitimate government, and has threatened to seek international arbitration.

It calls the 467-million-dollar claim — which other miners in Bishkek say is a negotiating tactic — “exaggerated or without merit.” Centerra officials also point out that the agreement gave the company confidence to invest almost one billion dollars in the mine since 2009.

Kumtor is critical to Kyrgyzstan’s economy. Last year the mine, which sits above 4,000 metres in the Tien Shan mountains, contributed approximately 5.5 percent of the country’s GDP. In 2011, a good year, the mine accounted for 12 percent of GDP and over 50 percent of industrial output. Earlier this month, Centerra announced its first quarter revenue rose 44 percent.

Negotiations are likely to focus on current operating agreement’s structure, a source close to the Kyrgyz side told EurasiaNet.org. Under the existing agreement, Kyrgyzstan owns close to one-third of the Toronto-listed company. That arrangement places Bishkek in a bind: if the government fines the company, it hurts its own potential dividends.

Bishkek is ready to divest itself of Centerra ownership, the source said, in return for “both a higher income stream and more direct control over operations at the mine.”

The current agreement “doesn’t allow the nation to properly exercise its function as a sovereign. It actually creates an internal conflict. The more they levy tax, the more they assess environmental penalties, the less revenue is available to them in dividends,” the source said, speaking on condition of anonymity due to the sensitivity of the negotiations.

“This structure may be very useful to Centerra, but it is very difficult to understand why, in 2009, the Bakiyev regime pressed for this structure. That reinforces the suspicions of corruption.”

Centerra has repeatedly denied allegations of corruption, and Kyrgyz authorities have not presented convincing evidence the company engaged in corrupt practices. But some believe the venal Bakiyev administration was eager to obtain stock options so it could one day sell them and embezzle the proceeds.

Kyrgyzstan’s shares are held by the state-run gold company, Kyrgyzaltyn. Kyrgyzstan “has every interest in seeing shareholder value maximised and Centerra run as a profitable and successful business,” Kylychbek Shakirov, Kyrgyzaltyn deputy chairman for economics and finance, said in a May 10 speech to shareholders.

Shakirov stressed that Kyrgyzstan is not seeking to nationalise the mine, but said his delegation was acting as a “responsible shareholder” by pushing for Centerra to use a new auditor (it has employed KPMG for a decade) and sideline a senior member of the board while he faces insider-trading allegations in Canada.

Shakirov also expressed “strong reservations” about proposals to offer senior Centerra managers pay raises, noting that in the past few years, compensation packages have risen “sharply as the company’s performance overall was falling.”

Centerra’s top five principals each earned, on average, over 1.6 million Canadian dollars in 2012, 56.7 percent more than they earned in 2010, according to the management information circular distributed at the shareholders’ meeting. Yet, over the past two years – while production has fallen and the company has faced repeated calls for nationalisation by some Kyrgyz politicians – the company’s value has fallen roughly 80 percent.

John Pearson, Centerra’s vice president for investor relations, told EurasiaNet.org that the two sides “are making progress” as they approach negotiations, which parliament has said must be completed by Jun. 1.

“The discussions with the government are ongoing. Most recently in our discussion with the government we recommended that they retain external independent advisors on both the financial and legal fronts and they have done so,” he said.

Bishkek is said to have hired DLA Piper, the law firm, and Price Waterhouse Coopers as advisors.

In recent weeks, increased waste rock movement at Kumtor has highlighted long-standing environmental concerns, some of the thorniest issues in the negotiations. Centerra points to studies – including several commissioned by Bishkek – that absolve it of wrongdoing.

But questions remain about whether an accelerated pace of melting ice at the high-altitude mine is being encouraged by extraction activities there.

As part of its approach, Bishkek is expected to push for a review of environmental compliance standards, while it considers ways of tightening its own legislation related to mining’s environmental impact in general.

*Editor’s note: David Trilling is EurasiaNet’s Central Asia editor.

This story originally appeared on EurasiaNet.org.

An open pit copper mine. Credit: Bigstock

By Carey L. Biron
WASHINGTON, May 16 2013 (IPS)

Trillions of dollars a year are being produced through extractive industries, but just a tiny percentage of this money is impacting on the lives of poor communities in developing countries, according to a first-of-its-kind study released Wednesday.

The revenues being produced by exploiting natural resources in developing countries already massively outweigh development-focused foreign aid flows. But according to new research from the Revenue Watch Institute, a global watchdog group, there is a startling correlation between economic dependency on natural resources and low human development indicators."Clearly, 2.6 trillion dollars has major transformative potential." -- Daniel Kaufmann of the Revenue Watch Institute

“The 58 countries [studied] produce 85 percent of the world’s petroleum, 90 percent of diamonds and 80 percent of copper. Profits from their extractive sector totaled more than $2.6 trillion in 2010,” according to Revenue Watch’s new Resource Governance Index, unveiled here Wednesday.

“Revenues from natural resources dwarf international aid: In 2011, oil revenues for Nigeria alone were 60 percent higher than total international aid to all of sub-Saharan Africa. The future of these countries depends on how well they manage their oil, gas and minerals.”

Of those 58 countries, more than 80 percent have reportedly failed to put in place satisfactory standards for openness in these sectors – and half haven’t even taken basic steps in this regard.

Revenue Watch analysts say the findings constitute a “striking governance deficit”. While such problems have been widely known on an anecdotal basis, this is the first time these issues have been systematically disaggregated and compared.

“The index is a real wake-up call about how far we still have to go in managing public resources effectively and for the betterment of poor populations around the world,” Warren Krafchik, director of the International Budget Partnership, a Washington-based project that works to strengthen civil society involvement in public budgeting, told IPS.

“Particularly now after the global financial crisis, this data shines a big spotlight on how, while resources can still be transferred from the Global North to the South, the fact is that the South is sitting on really substantial resources of its own. The challenge is how to use those effectively.”

The new data highlight a real opportunity to do something “fundamental” about global poverty, Krafchik notes.

“It’s really not the amount of public resources that’s available that’s the primary obstacle to overcoming extreme poverty,” he says. “The issue is how those resources are managed and distributed.”

Similarly, several analysts are suggesting the data could influence discussion on the new international development agenda following the expiration of the Millennium Development Goals (MDGs) in 2015.

“We’re talking about real money here – foreign aid can be used as leverage, but the domestic resources issue is absolutely key,” Daniel Kaufmann, president of the Revenue Watch Institute, told a Washington audience Wednesday.

“Clearly, 2.6 trillion dollars has major transformative potential in terms of translating these natural resources riches into human capital. Further, oil-rich states are three times less likely to democratise than are the non-oil-rich, so this matters from a political standpoint, too. This is the development challenge of the decade.”

No resource curse

In terms of extractives governance, particular problems appear to be concentrated in northern and southern Africa and the Middle East. Latin America, on the other hand, is seen as generally doing better, with Brazil, Mexico, Chile, Colombia and Trinidad & Tobago all ranked in the top 10.

The index is topped by developed countries, with Norway, the United States (though only regarding its extractives work in the Gulf of Mexico) and the United Kingdom the only countries rated satisfactory on all indicators. Australia and Canada (though only its sector in Alberta) are also in the top 10.

However, the governance findings are more complex, and more interesting, than a simple breakdown of poor versus rich countries. Kaufman says the data rejects “the tired notion of the deterministic ‘resource curse’”.

“The silver lining here is that there’s variation – a number of countries have satisfactory performance, and those are in diverse contexts, including in emerging economies,” he notes.

“Among those that perform poorly are some very rich countries, particularly in the Gulf. Just being rich isn’t necessarily an indication that a country is performing well, and being a developing country isn’t a rationale for doing poorly.”

While many are suggesting that the new index will provide an important tool for identifying country-level problems, debate remains over how to rectify these issues. While political will in affected countries will clearly be a paramount factor, potential roles for the international community are less clear.

According to numbers offered at a panel discussion here on Wednesday, foreign assistance won’t necessarily offer significant leverage towards greater compliance.

“Of the 46 countries with below satisfactory levels on this index, just six have external assistance levels greater than five percent of gross domestic product, and only three are higher than 15 percent,” George Ingram, a senior fellow at the Brooking Institution, a think tank here, said, suggesting this route of influence is a “dead end”.

“However, that money can be used to enhance the performance of government capability … For instance, on taxation, there is a new movement of acknowledging that we need to help developing countries develop their capacity to develop their own revenues.”

Over the past decade, international discussion on natural resources governance has coalesced around a set of standards known as the Extractive Industries Transparency Initiative (EITI). According to the EITI website, 21 countries are currently considered compliant with the initiative, while another 16 are pending candidates.

Yet EITI is still codifying its standards, and several EITI-compliant countries fared poorly on the new Governance Index. Advocates are particularly calling for the inclusion of contracts in the EITI transparency requirements, and several such major reforms will be discussed next week at an EITI board meeting in Australia.

Revenue Watch and others say the most potent role in ensuring government accountability in this regard will fall to national-level civil society.

“Control over resources traditionally meant power, and the incentives for politicians to give that up are really low,” Carlos Pascual, a U.S. State Department official, said Wednesday.

“You have to create different incentive structures, and changing that equation will have to strengthen the role of civil society and the political processes by which pressures can be brought on politicians to link their ability to stay in government with how they manage the resource base. We’re at the very beginning right now on thinking about what the best models may be … but at least we’re starting to have that discussion.”

President Obama's new executive order could make the U.S. government among the world’s most transparent. Credit: Official White House Photo by Pete Souza

By Carey L. Biron
WASHINGTON, May 9 2013 (IPS)

President Barack Obama has initiated a potential sea change in U.S government accountability, unveiling Thursday an executive order mandating all federal agencies to make openness and public accessibility the default methods for handling official data.

Depending on how the order and related rules are implemented, the change could make the U.S. government among the world’s most transparent, at least with regard to non-secret information. Elated supporters – including many longstanding critics of government secrecy – suggest that the move now offers a potent model for other countries that have expressed interest in increasing their transparency."If you release the data, people will be able to find ways to analyse it in ways that make sense.” -- Dave Maass of the Electronic Frontier Foundation

“It’s really reassuring to see this issue get formalised in an executive order, which constitutes a major step in updating how government information gets disseminated,” Dave Maass, a spokesperson for the Electronic Frontier Foundation (EFF), a digital-rights advocacy group, told IPS.

“One of the most important aspects of this order is that it will force the government not only to release vastly more data but to do so in a more standardised format. Over the past several years, many policy experts have been doing great stuff with ‘big data’, but so far not much of that has been machine readable, meaning that it’s been very difficult to collate and analyse.”

Maass notes that the move will impact on both agencies’ input and output responsibilities, and thus will do much to ensure that government information is accurate to begin with, prior to its release. Still, that now puts additional onus on analysts to come up with inventive ways of using any massive new streams of data.

“While some journalists have had trouble with big data dumps, there have been notable examples – for instance, surrounding WikiLeaks – in which we’ve seen that people are able to sort through huge amounts of data and come up with innovative ways of parsing that information,” he says.

“I think the key here is that if you release the data, people will be able to find ways to analyse it in ways that make sense.”

New mindset

The new moves are mirroring a broader international discussion over digital standards among fast-changing industries. While governments, including Washington, have been relatively slow to adopt such new standards, Thursday’s executive order should now speed that process up.

The new policies build on but greatly expand a series of steps taken by the Obama administration in recent years, beginning with a directive in 2009 that set a series of deadlines towards increased transparency. March 2012 then saw the release of a new government-wide strategy paper.

While advocates of government openness cautiously applauded these moves, many continued to push the administration to do far more, urging the adoption of a new mindset altogether.

Thursday’s order “is significantly different from the open data policies that have come before it”, John Wonderlich, policy director at the Sunlight Foundation, a Washington advocacy group that has been at the forefront of the push for greater government transparency, wrote Thursday on the group’s website.

“This Executive Order and the new policies that accompany it cover a lot of ground, building public reporting systems, adding new goals, and laying out new principles for openness … Most importantly, though, the Executive Order takes on one of the most important, trickiest questions that these policies face – how can we reset the default to openness when there is so much data?”

At least 48 governments have now committed to the Open Government Partnership, a set of principles in favour of greater transparency. Concrete implementation has been slow, however, and Wonderlich suggests says the United States now offers an important model.

The partnership “has spawned a huge number of similar commitments from governments around the world … [exhibiting] enthusiasm that needs an example of where to head next,” he writes, noting that Obama’s policy changes constitute a “new approach to open data, moving beyond rhetoric and aspiration”.

Troves

While many advocates are seeing the new policies in terms of facilitating public oversight, the White House is emphasising the entrepreneurial potential of this new data availability.

“One of the things we’re doing to fuel more private sector innovation and discovery is to make vast amounts of America’s data open and easy to access for the first time in history,” President Obama said Thursday.

The administration is calling the executive order “historic”. But it also points to previous examples of government data leading to major consumer services, including regarding government weather satellites, agricultural advisory services and the Global Positioning System (GPS).

“This move will make troves of previously inaccessible or unmanageable data easily available to entrepreneurs, researchers and others who can use that data to generate new products and services, build businesses and create jobs,” Todd Park, the White House’s chief technology officer, told reporters Thursday.

“In fact, just … two types of open government data, weather and GPS, alone have added tens of billions of dollars in annual value to the American economy, as basically the government has given taxpayers back the data that they pay for.”

A website, data.gov, soon to be expanded, will serve as a central hub for the new initiatives. Indeed, while the new policies are unique in their application across the federal government, recent years have seen a substantial increase in “open data” projects in federal agencies, covering health, education, finance and other fields.

Foremost among these is the State Department’s foreign assistance “dashboard”, which began operating in late 2010 and is seen as a central component in bringing the United States in compliance with a global standards agreement known as the International Aid Transparency Initiative (IATI). Aimed at offering regular data updates on all federal agencies with foreign assistance budgets, the U.S. system is to be fully up and running by 2015.

“Endorsed by the [Obama] administration in 2011, IATI has demonstrated that it is only through the use of open data standards and a presumption to publish that information can be understood, compared and become useful to a wide range of users. To its great credit, the new Executive Order recognises these principles,” David Hall Matthews, managing director of Publish What You Fund, a London-based advocacy group, told IPS, calling the policy a “step change” in Washington’s approach to open data.

“In the specific area of foreign assistance, data from U.S. agencies will be most helpful to other agencies – as well as to other international donors and to recipients – when it is accessible, timely, complete and as granular as possible. We are delighted that the new policy indicates exactly that.”

Heavy rains in Haiti’s northern city of Cap-Haïtien flooded streets, homes and fields in November 2012. Credit: UN Photo/Logan Abassi

By Joe Hitchon
WASHINGTON, Apr 5 2013 (IPS)

Following the devastating 2010 earthquake in Haiti, more than a billion dollars of U.S. aid money has gone to that country with little transparency or accountability on how the money is being used, according to new data released by a watchdog group here.

A report by the Centre for Economic and Policy Research (CEPR), a Washington think tank, identifies significant problems with the delivery of U.S. aid to Haiti, citing a lack of audits and evaluations, particularly on the part of the USAID, the country’s main foreign aid arm.There is a lot of resistance to change, especially when some of the largest recipients of contracts in Haiti are the for-profit development companies that have hired a lobbyist to push back on these reforms.

Since the 2010 earthquake, CEPR authors Jake Johnston and Alexander Main write, the few evaluations that have been carried out on U.S. aid to Haiti present “a troubling picture of the manner in which U.S. relief and reconstructions efforts have been conducted so far”.

They note, for instance, that contractors have hired far fewer Haitians than promised, while Haitian businesses have been largely excluded from U.S.-funded projects. In addition, goals have reportedly gone unmet, grantees have received inadequate supervision, and USAID had not conducted internal financial reviews of contractors.

Of the 1.15 billion dollars in U.S. contracts and grants awarded since the earthquake, Johnston and Main report that “over half went to the top 10 recipients of global USAID awards”, particularly a for-profit company called Chemonics International. In addition, less than one percent of USAID awards went directly to Haitian businesses or organisations.

“There has been some coalescing in the development community around changing the traditional aid model, which involves increasing local procurement, and working closer with host countries,” Johnston, a research associate with CEPR, told IPS.

“That’s part of the frame of this report, as we have not seen these kind of things happening from USAID. One of the main findings is just how little of the money, in the form of contracts and grants, have gone to Haitian organisations or Haitian companies.”

In addition, there is very little information available on the subcontracting done by the direct recipients of USAID awards. According to the report, of the 540 million dollars in contracts awarded by USAID, “only one of them, [to] MWH Americas, has reported any information on the use of subcontractors to the USASpending.gov database. Among grantees, only five have reported sub-grant data.”

“I am very much in agreement – we just don’t know where this money has gone. There is a real lack of transparency around this money,” Vijaya Ramachandran, a senior fellow at the Centre for Global Development (CGD), a non-profit Washington think tank, who has also written extensively on U.S. aid to Haiti, told IPS.

“I estimated that three billion dollars in U.S. public funds has been distributed to various NGOs and private contractors around the world and we just don’t know what has happened afterward. These groups are supposed to be doing quarterly reports for the U.S. government, and presumably they are doing that but we just don’t know, as they are not available to the public – we don’t even know if anyone is really reading them.”

She says no hard data is publicly available on how many people U.S. funding has helped in Haiti, and echoes the report’s terminology, calling the whole situation a “black box”.

“I think this kind of situation is worse when money has been distributed following a major disaster, like the earthquake in Haiti, where money is rounded up and sent quickly,” Ramachandran said.

“It may be that USAID does not have enough resources to make some of this information public, as the agency has been understaffed for a long time. That said, with technology today, there are many ways to make information public, so that’s becoming less and less of an excuse.”

Some have also argued that certain information should not be released given that countries are competing with each other for contracts. But Ramachandran rejects this on the basis that public money requires greater transparency regarding cost-effectiveness – on both sides.

“It is important that the citizens of Haiti be actually helped by these funds, and we can only know that if we can see how the money was spent,” she said. “So I think this information is important also to the recipient side.”

Wake-up call

Johnston and Main also note that USAID has taken further steps to keep this information out of the public realm, having reportedly blocked various attempts at disclosure, including through Freedom of Information Act requests.

“Issues like accountability and transparency are incredibly important, especially to ensure the Haitian government is taking a leading role in the reconstruction of their country and that they know what is actually going on with all the different aid agencies that are operating there,” Johnston said.

“It’s also important that U.S. taxpayers, who are funding these operations, have faith they are being carried out efficiently.”

Johnston says he personally was blocked by USAID while doing research for the new report, in both the United States and in Haiti, where he says agency officials refused to meet with him during a recent month of research in the country. (USAID did not respond to requests for comment for this story.)

“It’s hard to say if this is totally unique to the Haiti experience … in other countries, USAID has gone further in terms of a reform agenda,” he continued.

“For instance, in 70 other countries, USAID missions have published reports stating that they have developed a new framework for publicising information as part of a reform agenda. But this has not happened in Haiti, nor is it planned to happen in the next couple years.”

Still, he says he hopes the new report can act as a “wake-up call”, potentially strengthening reformers within USAID.

“Of course, there is a lot of resistance to change, especially when some of the largest recipients of contracts in Haiti are the for-profit development companies that have hired a lobbyist to push back on these reforms,” Johnston said.

“Still, USAID’s stated goal is to conduct more local procurement, like awarding contracts and grants to local organisations and not always relying on the big development players. For those large companies, which receive a vast majority of their income from government contracts, they see these reforms as a threat to their business model. “

Ban Ki-moon's UNCTAD pick will be routinely endorsed by the 193-member General Assembly, which has never rejected a nomination from a secretary-general. Credit: UN Photo/Mark Garten

By Thalif Deen
UNITED NATIONS, Mar 28 2013 (IPS)

– The Geneva-based U.N. Conference on Trade and Development (UNCTAD), described as a key forum for developing nations on issues relating to trade, investment and development, will have a new secretary-general come September.

As befits a longstanding tradition of geographical rotation, the next head should come from Africa.

At least four Africans, including a former trade minister from Zambia, are feverishly lobbying for the prestigious job.

But Secretary-General Ban Ki-moon, who is vested with the power to nominate the new UNCTAD chief, heads an opaque selection process where he refuses to even name a short-list of candidates, as with all other senior appointments in the world body.

Ban’s pick will be routinely endorsed by the 193-member General Assembly, which has never rejected a nomination from a secretary-general.

Sir Richard Jolly, a former deputy executive director of the U.N. children’s agency UNICEF, told IPS, “There is a need for some process of open hearing and interview of the best qualified potential candidates, prior to and as a step towards the decision by the secretary-general.”

He said possible ways this could be done were set out in a 1996 Dag Hammarskjold publication by two senior U.N. officials, Brian Urquhart and Erskine Childers, titled ” A World in Need of Leadership: Tomorrow’s United Nations- a Fresh Appraisal”.

“I would add that given the importance of choosing someone with the professional range and awareness of how asymmetries of political and economic power operate in trade and development, the interviewing group should include some distinguished economists with knowledge, experience and reputation in this area,” he added.

He singled out Joseph Stiglitz, professor at Columbia University and the 2001 Nobel Prize winner for Economics, and Jose Antonio Ocampo, former finance minister of Colombia and ex-U.N. under-secretary-general for economic and social affairs, as good examples of potential members of an interview panel.

As Urquhart and Childers explained, such a process of open hearings and interview, need not pre-empt the final decision by the secretary-general but it would help narrow the field to a small number of suitable and outstanding candidates and add transparency and objectivity to the whole process, said Sir Richard, currently honorary professor and research associate at the Institute of Development Studies at the University of Sussex in the UK.

Jan Pronk, a former three-term Dutch minister of development cooperation and a former UNCTAD assistant secretary-general, told IPS, “In my view, (and under) the present phase of globalisation and (economic) crisis, the new secretary-general of UNCTAD should be a person who will carry weight in discussions with leaders of other international organisations, which – contrary to the UNCTAD secretary-general – have decision-making powers.

“He/she should in particular be able to voice the concerns of weaker developing countries, rather than emerging economies,” said Pronk, currently professor of theory and practice of international development at the International Institute of Social Studies in The Hague, Netherlands.

The latter, much more than one or two decades ago, have already gained influence both in the Bretton Woods institutions – namely, the World Bank and the International Monetary Fund – and in the World Trade Organisation (WTO), he said.

Asked for his comments, U.N. spokesman Farhan Haq, told IPS, “We don’t comment on appointment processes, so I won’t do that this time, either.

“I haven’t heard about any change in this process from our normal one,” he added.

Both Sir Richard and Pronk are part of a group of nearly 150 academics, former senior U.N. officials, ranking diplomats and political decision-makers who are calling for “an intellectually outstanding personality as the new leader of UNCTAD” when the current head, Supachai Panitchpakdi of Thailand, completes his term of office in August.

In an open letter to Ban, the group says the selection is crucial, especially at this time of global economic uncertainty.

“We very strongly urge that the next Secretary-General of UNCTAD, in addition to all the necessary experience, knowledge and management abilities, should have in particular the capacity and courage for independent thought,” the letter says.

“It is this characteristic that has been the distinguishing factor among the eminent persons who have held the post over nearly 50 years of UNCTAD’s existence.

“We have an interest in the outcome of this matter,” the letter further states, “but no interest in a particular candidate.”

“We all fervently believe in the value to the international community, particularly developing countries, of ensuring a strong and credible UNCTAD that serves to focus inter-governmental debates on how the workings of the global economy affect developing countries.”

Yilmaz Akyuz, chief economist at the Geneva-based South Centre and former Director and Chief Economist at UNCTAD, regretted there is no transparency in U.N. appointments compared with the International Labour Organisation (ILO) or the WTO, where candidates are known publicly, interviewed and shortlisted.

He said no secretary-general has taken an UNCTAD candidate to the General Assembly without securing the support of 132-member Group of 77 developing countries (G77).

“And never more than one candidate. It is all agreed before it is taken to the General Assembly,” he told IPS.

“And if he cannot get agreement, the process is delayed. We were without a secretary-general in UNCTAD for more than a year after Ken Dadzie left in 1994,” he added.

A G77 source told IPS that Ban has so far not consulted the Group about a candidate or candidates for the UNCTAD job.

John Burley, a former UNCTAD director and coordinator of the open letter, told IPS there has been no official response to the collective letter.

“The letter has been posted on a number of websites and the reaction is positive,” he added.

He found it “incongruous” that the declared candidates for the post of WTO director general are invited to make presentations to an informal meeting of the WTO General Council, and thereafter hold a WTO-sponsored press conference, “whereas the U.N. hides the process.”

The last seven UNCTAD heads include: Raul Prebisch (Argentina), Manuel Perez-Guerrero (Venezuela), Gamani Corea (Sri Lanka), Alistair McIntyre (Grenada), Ken Dadzie (Ghana), Carlos Fortin (Chile) and Rubens Ricupero (Brazil).

The United States’ main foreign assistance agency is getting widespread plaudits for new data on a series of internal reforms aimed at aid improvement, but some development experts are pointing to a persistent opaqueness from the agency.

In a first-of-its-kind report released this week, the U.S. Agency for International Development (USAID) has laid out the progress it has made under a key reform initiative undertaken over the past three years.

“This report does provide a nice, concise summary with policy descriptions and challenges, but it could go further in its attempt to be transparent,” Sarah Rose, a senior policy analyst on the Rethinking Foreign Assistance team at the Center for Global Development (CGD), told IPS.

The report focuses heavily on new evaluation policies aimed at increasing accountability and country ownership, incorporating new technologies (“from improved seeds to mobile phones”) and leveraging “high impact” partnerships, specifically with the private sector.

In the past, USAID has been widely criticised for a lack of transparency. While the agency is currently in the midst of a massive overhaul of related policies, just this past October an advocacy group called Publish What You Fund ranked USAID just 27th out of 43 foreign aid agencies, in terms of transparency.

To address such criticisms, in 2010 President Barack Obama unveiled a policy directive that spurred the new round of reforms. At the forefront of its objectives were the development of “robust … budget and evaluation capabilities”, progress toward which the new report outlines.

For instance, a new policy has been introduced that requires every major U.S. aid project to undergo a rigorous evaluation conducted by an independent third party. The report touts that this new policy has already been called “a model for other federal agencies” by the American Evaluation Association, a professional association for evaluators, and that it has led to budgetary changes in a third of the cases examined.

Some aid organisations have also expressed enthusiasm about increasingly collaborative partnerships between the United States and recipient countries, a break from the old structure in which the host countries were seen as less active participants in project design.

“The progress demonstrated in the report, especially on promoting sustainable development through high-impact partnerships, demonstrates a commitment to ensuring that people are the leaders of their own development,” Gregory Adams, Oxfam America’s director of aid effectiveness, said in a release.

They point particularly to the development of Country Development Cooperation Strategies (CDCS), five-year plans drafted collaboratively by the United States and recipient countries that identify the needs of partner countries and detail specific paths forward. CDCSs ostensibly give host countries more of a stake in USAID development projects.

The new report finds that the percentage of USAID funds allotted to local institutions grew from 9.7 in 2010 to 14.3 in 2013. That puts the agency at the halfway mark of a five-year goal of 30 percent by 2015.

Transparency concerns

Still, many see room for improvement in USAID’s partnership strategies.

“USAID has done a good job refurbishing its human capacity and bringing on additional people,” George Ingram, the co-chair of the Modernizing Foreign Aid Assistance Network (MFAN), an advocacy group, told IPS.

“But it needs to do a better job providing its employees with training and advanced managerial skills to help them keep abreast of new developments.”

Transparency and accountability concerns are also central. Although the report outlines a 50-percent increase in local partnerships by USAID, it lacks detail about what local institutions were partnering with USAID.

“There are a number of stakeholders who want to know exactly what those local partnerships are,” CGD’s Rose told IPS. “Doing so would allow stakeholders to do their own analyses.”

Similarly, although the paper reported that USAID had increased its public-private partnerships by 40 percent over the past three years and leveraged an additional 383 million dollars of non-U.S. government money toward development goals, the report made little mention of the companies or projects involved in those partnerships.

For some, the greatest threat to increased transparency could be a greater reliance on private-sector funds in development assistance. This has been at the core of a decade-long shift in USAID projects, and now looks set to continue to increase.

“In a world where foreign direct investment flows vastly outpace development assistance,” the report states, “we have to enable global investment and local private sector entrepreneurs to serve as engines of sustainable growth for even the most vulnerable communities.”

MFAN’s Ingram says that public-private sector initiatives can indeed be complementary in supporting economic growth in host countries.

“To some extent, government organisations are good at formulating plans about what needs to be done,” he says. “But the private sector knows how to get those things done – on the ground, in the marketplace, for their clients.”

But Ingram also notes looming barriers to public-private cooperation, highlighting the possible obstacles to transparency that a strengthened public-private partnership would imply. There is a degree of “public trust”, he says, to which government agencies are beholden by virtue of operating on taxpayer funds.

“In honouring and respecting that public trust, [government agencies] end up developing a lot of rules and regulations to make sure that the way they conduct business is open to public scrutiny,” he says. “In the end, there has to be some balance between the rules and responsibilities that come with public funds, and the private sector that isn’t used to that.”

Indeed, the private sector’s inclination toward efficiency and profit at the expense of oversight and accountability is precisely what concerns many development advocacy groups here in Washington.

In a conversation with IPS earlier this month, Janet Redman, director of the Sustainable Energy and Economy Network at the Institute for Policy Studies, a Washington think tank, expressed concern about public-private aid collaboration blurring the line between two very different measures of progress.

“The danger lies in pretending gross domestic product and foreign direct investment are the same thing as making economies more sustainable and enabling them to meet the needs of their citizens,” she said.

The Green Climate Fund is expected to channel some 100 billion dollars a year to help developing countries counter and adapt to climate change. Impacts include severe flooding, as the Caribbean island nation Dominica experienced in 2011. Credit: Desmond Brown/IPS

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

As the new board of the United Nations Green Climate Fund meets in Berlin this week, activist and watchdog groups here and around the world are expressing frustration over proposed rules they say are already significantly limiting civil society participation in the new initiative.

The fund, created in 2010 under the auspices of the U.N. Framework Convention on Climate Change (UNFCCC), is eventually expected to channel some 100 billion dollars a year to help developing countries counter and adapt to climate change. Yet because it has no fundraising capability itself, the source of that money has yet to be decided upon.Unfortunately, the whole discussion has become part of a much larger geopolitical struggle, part of much broader narratives.

In weeklong meetings this week, the Green Climate Fund (GCF) board members are slated to engage in critical discussions on that funding model. This will include the role that private sector financing is expected to play, an issue that has divided developed and developing countries.

“Decisions taken at the Green Climate Fund board are central to how the needs of climate vulnerable communities will be met, so it is essential that their deliberations are open and transparent,” Janet Redman, co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies, a Washington think tank, said Tuesday.

“At this point it seems the board wants to limit public participation, access and voice. That would be a huge step backward.”

On Tuesday, 73 international civil society organisations sent the GCF’s leadership an open letter decrying a lack of rules conducive to their “meaningful” participation.

“The active and engaged participation of civil society at the Board and country level is essential for creating an effective, equitable and environmentally sound Fund that can be responsive to the differentiated needs of men and women, minorities and indigenous peoples increasingly impacted by climate change,” the letter states.

The signatories urge the fund to build on the experiences of other international funds “rather than permitting a retreat to operations that are less transparent and accountable, as is currently the case”.

Among broad policy recommendations and potential procedural tweaks, the letter pushes for a system of permanent observers allowed to participate in all meetings and the broadcasting of board proceedings on the Internet. The signatories also suggest a process by which to accredit stakeholders and “sufficient financial resources … to support their effective participation”.

“I would be pleasantly surprised if the GCF board started to view civil society as valuable partners in shaping the GCF into a 21st century institution based on science and equity, but I’m not going to hold my breath,” Karen Orenstein, a Washington-based campaigner with Friends of the Earth U.S., a watchdog group, told IPS from Berlin.

“Already the interim parametres set up for our participation Wednesday – the first day of the Berlin meeting – are overly restrictive. At some point in the not-too-distant future, though, the marginalisation of civil society in this process is going to become a real liability that will come back to haunt the board.”

Paradigm shift

Developing countries have keenly watched the development of the GCF. In mid-February, a joint statement from ministers of Brazil, China, India and South Africa urged the prioritisation of the “early and meaningful operationalisation” of the fund.

Yet thus far, progress has been slow. Last year, South Korea agreed to host the institution’s secretariat, and a 24-member executive board has been named, comprising equal numbers of representatives from developed and developing countries.

But so far, significant funding has been notably lacking.

When the fund was set up, developed countries promised 30 billion dollars as starter capital. According to a February statement by Environment Minister Jayanthi Natarajan, however, only around seven billion dollars of that has so far come in, undoubtedly affected in part by austerity concerns in Europe, the United States and elsewhere.

For this reason, many observers are particularly interested in this week’s deliberations over the role that the private sector will play in funding the GCF. Particularly since the 2008 financial crisis started to squeeze national governments, bilateral and multilateral donors, including the United Nations, have increasingly looked for ways to rely on private sector capital.

“Many members of the board from developed countries have said they don’t want to talk about potential sources for the public money, and have focused instead on how to leverage private capital,” the Institute for Policy Studies’ Redman told IPS from Berlin.

“But many developing countries are saying the GCF should be largely funnelling public money, and are talking about the possibility of raising finance through, for instance, taxing financial transactions or carbon. Unfortunately, the whole discussion has become part of a much larger geopolitical struggle, part of much broader narratives.”

Further, when the GCF does engage with the private sector, she cautions, the focus should be not on major multinational investors but rather on local actors interested in developing sustainable national economies.

“The GCF wants to bring about a paradigm shift, but we’re not going to avoid any climate catastrophe unless we get a profound shift in the organisation of our economies,” she says.

“Clearly that includes the private sector, and we certainly want to include private sector entrepreneurs in countries most affected by climate change. But what we can’t do is provide fertile ground for foreign direct investments that look to extract profit from developing countries rather than working to build up sustainable local economies.”

Because the UNFCCC framework offered little guidance on the source of GCF funding, the issue is open to significant interpretation. The U.S. government, among others, has suggested that the 100-billion-dollar pledge, to be raised yearly by 2020, can be made up partially by private sector investments.

Yet Friends of the Earth’s Orenstein and others have strongly cautioned against this reading.

“Private climate finance cannot be a substitute for direct public support – the 100 billion dollars developed countries have promised must be made up entirely of public funds,” she says.

“Private finance would be especially difficult to deploy in low and lower-middle income countries. Many areas in need of funding, especially adaptation, will simply not turn a profit.”

While advocates are hoping this week to lay a progressive conceptual basis for the funding discussion, the board’s discussion on an overall model for the GCF is expected to stretch until at least September.

Civil society opposition here has strengthened against a U.S.-proposed free trade zone that would include some dozen countries around the Pacific Rim.

As negotiators head into a 16th round of talks this week in Singapore, around 400 organisations are urging the U.S. Congress to demand greater transparency in the proceedings.

On Monday, the first day of the negotiations, Medecins Sans Frontieres (MSF), a humanitarian group, called on President Barack Obama’s administration to “end its stall tactics and revise its proposals for what otherwise promises to be the most harmful trade deal ever for access to medicines in developing countries.”Look at who has a seat at the table, with the public shut out and more than 600 corporate lobbyists...

The Singapore talks will extend through Mar. 13. Critics say civil society and other critical stakeholders have been systematically shut out of the negotiations, supplanted by corporate interests.

The proposal, known as the Trans-Pacific Partnership (TPP), currently comprises 11 countries (a 12th, Japan, is also contemplating joining). But the Obama administration has been clear that if passed, the zone would be open-ended in terms of future expansion.

That broad geographical sweep, together with the simultaneous negotiation of a lengthy but highly secretive list of contentious issues not necessarily related to trade, is leading critics to warn that the scope of any pending agreement could negatively impact on nearly half the globe.

And with the Obama administration now saying it wants to wrap up the negotiations by October, some TPP negotiators are reportedly worried that some of the most controversial issues up for discussion are being pushed to the very end in an attempt to “run out the clock”.

According to a new brief released by MSF, U.S. TPP negotiators are pushing for rules that would “enhance patent and data protections for pharmaceutical companies, dismantle public health safeguards enshrined in international law and obstruct price-lowering generic competition for medicines”.

The result could be restrictions on access to affordable generic medicines for “millions” of people.

Judit Rius Sanjuan, U.S. manager for MSF’s Access Campaign, says her office heard that the last time the TPP negotiations included substantive talks on access to medicines was a year ago. At that time, nearly all negotiating partners reportedly rejected a draft chapter on intellectual property rights, which includes the patent provisions.

And while the White House has stated that it would be resubmitting a revised chapter on this issue, Sanjuan says it appears that access to medicines is once again not on the agenda this week in Singapore.

“We are hearing from other negotiating teams that the pressure to finalise this agreement by October is rising, and they fear that if there is not more time for substantive discussion, this chapter could stand,” she told IPS.

“We share the concern that this delay in presenting an alternative text is a U.S. strategy to focus instead on the less controversial chapters and leave behind debate over access to medicines. But doing so would have huge consequences for developing countries.”

In fact, imposing these types of new restrictions would run counter to previous international agreements and national legislation under which Washington has pledged to expand access to generic medicines.

Any restriction in access to such medicines would also affect the United States’ own global health goals. According to Sanjuan, generics make up some 98 percent of the medicines used by PEPFAR, the United States’ flagship anti-HIV/AIDS programme and the world’s largest.

Half the world

Global health wouldn’t be the only sector impacted by the TPP’s passage. Also on Monday, coinciding with the first day of negotiations in Singapore, around 400 groups from a broad range of backgrounds sent an open letter to the U.S. Congress opposing the abnormally secretive way in which negotiations for the trade area have been run.

“This agreement will impact on how trade and investment are conducted in the Pacific Rim for decades, yet the ramifications aren’t fully understood even by people who know about the TPP,” Arthur Stamoulis, executive director of the Washington-based Citizens Trade Campaign, an advocacy group, and an organiser of the letter, told IPS.

“This is an agreement that wouldn’t just affect the economy and sustainability in these 11 countries, but has the potential to impact the economy and environment for literally half the world.”

In lieu of official consultation, the groups are offering recommendations for draft language on issues from environmental standards and human and labour rights to financial regulation and national sovereignty. Yet the central complaint has to do with lack of oversight and transparency.

“We find it troubling that … U.S. negotiators still refuse to inform the American public what they have been proposing,” the letter states. “Shielding not only proposals but agreed-upon texts from public view until after negotiations have concluded and the pact is finalized is not consistent with democratic principles.”

The groups are calling for an opening-up of the talks to both the U.S. Congress and the public at large. They’re also urging lawmakers not to authorise new “fast track” powers that would allow the president to send Congress trade pacts for straight votes without the possibility of amendments.

Free trade advocates tend to suggest that such powers are necessary to get other countries to agree to large-scale trade agreements in the first place, but President Obama had allowed the “fast track” legislation to lapse. On Friday, however, the administration’s new trade policy agenda noted that the president would work with Congress to re-authorise that authority.

The administration has used similar concerns to rationalise the high level of secrecy surrounding the negotiations, saying that greater transparency would upset delicate discussions.

Yet critics point out that draft trade texts at this point in negotiations are often made public, including by the World Trade Organisation. Similar precedent exists from the Free Trade Area of the Americas, the trade zone agreed to in 2001 covering 34 countries, including the United States.

“There’s a real reason why the draft has been kept secret from the U.S. public – Americans wouldn’t support a huge amount of the agenda that the [Obama administration] has been pushing,” Citizens Trade’s Stamoulis says.

“If they were to negotiate an agreement that put human rights ahead of corporate profit, creating more just and sustainable social policy, the TPP could be a tool for incredible good. But if you look at who has a seat at the table, with the public shut out and more than 600 corporate lobbyists included, there is nothing to indicate that’s the deal we’re going to get.”

The rule of law – an essential element of good governance – is prospering best in the countries of northern Europe and worst in Uzbekistan, Zimbabwe and Cameroon, according to the latest edition of a five-year-old index released here Wednesday by the World Justice Project (WJP).

The Rule of Law Index, which this year assessed conditions in a record 97 countries whose combined population comprises roughly 94 percent of the world’s total, found that higher-income countries, especially in North America and Western Europe, generally respect the rule of law more than poor nations.

But the 233-page report also found strong performance on several of the eight factors the Index uses to quantify its assessments on the part of specific low- and middle-income countries.

Botswana, in particular, scored consistently among the higher-income countries, besting the United States, for example, in three factors: providing fair and equal access to the criminal and civil justice systems, and fair enforcement of regulations.

Another sub-Saharan African country, Ghana, also scored well in several categories, such as government transparency.

South Asia performed most poorly among the major regional blocs, with Pakistan and Bangladesh earning the worst scores.

“The rule of law is the foundation for communities of opportunity and equity – it is the predicate for the eradication of poverty, violence, corruption, pandemics, and other threats to civil society,” said WJP’s CEO, William Neukom, a former president of the American Bar Association, who launched the organisation six years ago with support from, among others, the Bill and Melinda Gates Foundation.

Despite its U.S. origins, the WJP has sought to ensure that its assessment is based on principles that are “culturally universal, avoiding Western, Anglo-America, and other biases”.

The factors used in the Index contain “the basic elements of rule of law that are applicable to any country or culture around the world, from the United States to Liberia,” said Colombian jurist, Juan Carlos Botero, the project director.

A massive undertaking, the Index is unique among its kind in that it relies not only on statistics compiled by governments and independent monitoring groups, as well as the judgements of some 2,500 local and international legal experts.

It also takes account of the views of the general public in the 97 countries to help determine how the law is actually applied to ordinary people. One thousand respondents from the three largest cities in each country were interviewed about their own experience and perceptions regarding rule-of-law issues, such as corruption and discrimination in the legal system against the poor or marginalised groups.

The eight major factors used by the Index to define how well a country respects the rule of law include “limited government powers”, which includes government checks and balances and accountability for abuses by officials; the absence of corruption; the maintenance of civil order and security; respect for fundamental rights, including equal treatment for all; government transparency; fair and timely enforcement of regulations; and access to and the effectiveness of both the civil and criminal justice systems. It also addresses the performance of informal justice systems.

All 97 countries were assessed for these factors, scores for each of which were derived from weighted assessments of three to eight sub-factors. Altogether, 48 sub-factors were quantified.

The Index did not provide an aggregate score and ranking comprising all nine factors for each country, but, rather, only for each of the variables.

“You lose a lot of the richness of the report by providing an aggregate number, because a country may be very good in one category and very poor in another,” according to Alejandro Ponce, WJP’s senior economist. “The strength of the Index is that it is action-oriented; it tells people where improvement is needed.”

Thus, for example, the United Arab Emirates (UAE) scored fifth among the 97 countries, behind Singapore, Hong Kong, Finland and Denmark, on order and security and 12th on criminal justice, but 78th on fundamental rights.

India scored in the top half on limited government and government transparency but among the worst 15 on corruption and second to last (just above Pakistan) on order and security.

The best performers in Latin America on most of the first eight categories, according to the report, were Chile and Uruguay, while Brazil ranked third or fourth in all but order and security. Venezuela was the region’s worst performer six of the eight categories, while Bolivia’s scores also fell close to the bottom.

The Index noted that the region is characterised by strong contrasts, including recent movements towards greater openness and political freedoms at the same time that public institutions remain fragile and government accountability weak. It noted that crime rates in the region are the world’s highest and its criminal justice systems among the world’s worst.

Ghana and Botswana were the top performers, along with South Africa and Senegal, among the 18 sub-Saharan countries covered by the Index this year. Zimbabwe and Cameroon, on the other hand, received lowest or second lowest scores in most of the categories.

The report noted that most African countries do relatively well in protecting fundamental freedoms, despite a loack of checks on government power, but public institutions, including the courts, are generally inefficient and vulnerable to corruption.

After Western Europe and North America, East Asian countries generally gained the highest scores among all world regions, although there wide variations between countries.

The wealthy nations of Australia, New Zealand and Japan ranked among the top 15 globally in nearly all categories and South Korea and Singapore within the top 25. Globally, Singapore also ranked first in order and security, third in criminal justice, and fourth in civil justice.

The worst Asian performer, on the other hand, was Cambodia, which received the lowest score in the region in four out of eight categories. The report also noted that Vietnam, China, and Malaysia need to do more to ensure judicial independence and respect fundamental rights, including labour rights.

Of the seven countries covered in the Middle East and North Africa, the UAE and Tunisia generally gained the highest scores in most categories. Morocco topped the list on government transparency even as it was ranked worst on corruption.

Lebanon topped the list on fundamental rights, as did Jordan and Iran on their civil justice systems. Iran scored the worst in three of four categories, including government transparency and checks and balances.

*Jim Lobe’s blog on U.S. foreign policy can be read at http://www.lobelog.com.

Lobby groups representing the oil industry filed a lawsuit in Washington court on Wednesday that seeks to halt the implementation of a new set of rules requiring U.S.-registered extractives companies to disclose all payments made to foreign governments.

The move drew strong reaction from the bipartisan duo that sponsored the rule, with senators Ben Cardin and Richard Lugar blasting the lawsuit as “expected” and “frivolous”.

“The U.S. economy and our values substantially benefit when our companies are working in oil, gas and mineral-rich states,” Senator Lugar said Thursday. “But the benefits will not be realised if investments serve to entrench authoritarianism, corruption and instability. With oil prices high and volatile, our economy needs more transparent markets, not less.”

The new rule, known as Section 1504, is part of a suite of new economic regulations, passed in 2010, known as the Dodd-Frank Act. Section 1504 was approved in late August by the U.S. government’s primary finance regulator, the Securities and Exchange Commission (SEC), following nearly a year of delay and behind-the-scenes wrangling.

Its passage, by a 2-1 vote, has been seen as an important victory by pro-transparency activists, who suggest that the new rules can help to lift the “resource curse” in some resource-rich, governance-poor developing countries.

“Oil companies and industries lobbied heavily against this provision, and were likely disappointed when the SEC came out with strong final rules,” Jana Morgan, with Global Witness, a watchdog, told IPS. “People have to ask themselves what these oil companies are trying to hide. The oil industry needs to stop supporting secrecy and move towards transparency.”

Section 1504 would require around 1,100 oil, gas and mining companies to disclose payments of more than 100,000 dollars made to foreign governments during the course of developing commercial projects. Supporters say the new rule will cut down on corruption and do more to ensure that U.S. capital does not support fraudulent and authoritarian regimes.

“We are greatly disappointed that the oil industry is trying to use the courts to bully the SEC and push for secrecy in their payments to governments,” Ian Gary, a senior policy manager with Oxfam America, a relief group, said Thursday.

“We call on companies, such as BP, Exxon, Chevron and Shell, who are hiding behind industry associations to do their dirty work while espousing transparency rhetoric, to disassociate themselves from the lawsuit.”

In e-mails to IPS, Chevron stated that it supports the recent litigation, while BP declined to comment.

Undue burden

The American Petroleum Institute (API), which filed the lawsuit (available here and here) together with the U.S. Chamber of Commerce, the country’s largest industry lobby group, and other business groups, is arguing that the SEC failed to carry out a thorough analysis of the costs and benefits of enforcing Section 1504, which it says would place an undue burden on U.S. companies.

Although a new report by the nonpartisan Government Accountability Office found the SEC’s analysis to have been sound, the SEC has conceded that the new rule could cost companies at least a billion dollars at first and up to 400 million dollars thereafter to comply. But the lawsuit says the SEC underestimates these costs, suggesting that the ultimate price for U.S. companies would be far higher due to lost competitiveness.

“American oil and natural gas companies must compete against foreign, state-owned oil companies for access to resources around the world,” Karen Herbert, with the U.S. Chamber of Commerce, said Thursday. “The SEC’s ‘extraction rule’ will require them to turn over their playbooks for how they bid and compete.”

Indeed, disclosing such payments is specifically forbidden in certain countries, and the lawsuit complains that the SEC has included no exemptions for such cases.

According to the API’s president and CEO, Jack Gerard, API member companies “strongly support payment transparency” and have done so “for a decade”. On Wednesday, he touted ongoing efforts to work with the U.S. government in implementing a programme, currently in 36 countries, called the Extractive Industries Transparency Initiative (EITI), which Gerard says “would more effectively increase transparency without harming competitiveness”.

Yet according to Global Witness’s Morgan, the idea that compliance with Section 1504 would be tantamount to giving away company secrets is a “red herring”, as most of these companies are already required to make similar payments disclosure through EITI. “So, it’s blatant hypocrisy for these companies to say they don’t want to reveal payments.”

The difference between these systems is that EITI relies on member countries to provide information, despite the fact that many resource-rich countries – for instance, Angola – are not party to the agreement.

Section 1504, on the other hand, would put the onus on the companies themselves to provide this information, thus offering a much broader reach. (Citing the “hot potato” nature of the lawsuit and indicating that the EITI board is currently split on the issue, an EITI spokesperson declined to comment.)

Confidential disclosure?

Still, API has suggested that the entire rule might not need to be tossed out.

“With reasonable changes, the SEC could have achieved the goal of increased transparency while also remaining faithful to its core mission to protect American investors,” API’s Gerard says. “The rule should allow our companies to report their payments confidentially to the SEC and allow the agency to aggregate that information and publicly report payments by country.”

But Morgan says the idea of confidential disclosure is an “oxymoron”.

She notes that one of the most important reasons for passing Section 1504 was specifically to allow investors to understand the risks of their investments, to know how extractives companies are operating in unstable regions – a sentiment publicly backed by several high-profile investors, including George Soros and Bill Gates.

The rule’s aim is also to allow locals in developing countries the opportunity to hold their government to account for how they’re using money from multinational companies – much of which, watchdog groups say, is siphoned off in resource-rich developing countries before it can be used for development or social expenditure.

But such goals would be undercut by confidential disclosure of payments, which would not offer additional information for use by either investors or local communities.

“Some companies, including Talisman Energy, Statoil, AngloGold Ashanti and Newmont Mining, already disclose payments in every country of operation and in some cases they volunteer this information at a project level,” says Oxfam’s Gary. “If transparency truly hurt their bottom line, they simply wouldn’t be doing it.”

Likewise, Senator Cardin noted Thursday: “Increased transparency will not put companies that comply at a competitive disadvantage but it will reduce the risks for U.S. investors and it will allow citizens in resource-rich countries to hold their leaders accountable.”

By Milagros Salazar
LIMA, Mar 21 2012 (IPS)

In Peru, where over half of the national territory is covered by forests and the logging industry is marred by corruption, transparency and good forest management are closely linked.

Twenty government agencies related to forest management were evaluated by a non-governmental institution in 2011 to determine whether they complied with a legal requirement to operate websites and to what degree they provide the public with access to information.

The study found that the number of responses to requests for information has increased yearly. The percentage of requests fulfilled rose from 67 percent in 2010 to 75 percent in 2011. Nevertheless, the percentage of responses provided later than the legally mandated deadline rose from 22 percent to 23 percent over the same period.

Within the national government, the Ministry of Environment showed considerable improvement. However, according to specialists, the steps taken by regional governments were even more significant, because within the framework of decentralisation in Peru, it is these agencies which are increasingly responsible for forest governance, particularly in the Amazon region.

Two of the six regions that now are now responsible for controlling, monitoring and granting forest concessions – formerly the excusive domain of the national government – showed the greatest progress: San Martín and Loreto, both in northern Peru.

All combined, these six regions account for 86 percent of Peru’s Amazon rainforest cover.

The “2011 Annual Report: Transparency in the Peruvian Forestry Sector”, presented Mar. 14 in Lima, was produced by the non-governmental organisation (NGO) Derecho, Ambiente y Recursos Naturales (Law, Environment and Natural Resources), better known by the Spanish acronym DAR.

DAR has been conducting these evaluations since 2009 as part of an international effort coordinated by the British NGO Global Witness, which encompasses four African countries, Cameroon, the Democratic Republic of the Congo, Ghana and Liberia, and three Latin American countries, Ecuador, Guatemala and Peru.

“Making information more transparent contributes to eradicating bad practices and bad management, because it allows the authorities to organise their information, which makes management much more efficient,” Javier Martínez, lead author of the report and coordinator of the DAR Ecosystems Programme, told Tierramérica.

The government of San Martín, for example, operates a special section of its website that provides access to documentation related to logging permits and forest concessions, as well as maps to locate these concessions and determine the tree species that can be legally harvested.

“Over the last year we have managed to post the greatest amount of information possible, but it isn’t easy. There is never enough time, because a great deal needs to be done,” the director of the Department of Natural Resources of San Martín, Miguel Alva, told Tierramérica.

This regional agency earned high praise from DAR for the progress it has achieved. But Martínez noted that they still face the challenge of publishing information on the volume of timber harvested on each concession, so that the public can monitor the sale of this resource.

This would make it possible to confirm “whether logging activity complies with permitted quotas, and can contribute to formalising the sector,” he explained.

The Amazon region of Loreto in northeastern Peru comprises almost a third of the country’s territory. The regional government’s website features an environmental information system with figures on the volume of timber exported and the areas deforested, among other data.

The public can also report wrongdoings online.

In the coming months, DAR hopes to obtain results reflecting greater transparency in the eastern regions of Madre de Dios and Ucayali, after signing agreements with their respective governments.

But Martínez stressed that the challenges faced vary from one region to another.

Authorities in San Martín and Loreto told Tierramérica that their efforts are constrained by insufficient resources to hire more staff and a lack of equipment.

In San Martín, Alva has a staff of 34 people to oversee 1.5 million hectares of forests with non-stop logging activity, a task that requires at least double that number of personnel.

In Loreto, the director of the Regional Natural Resources Management Programme, Abel Benites, told Tierramérica that 87 employees must contend with monitoring 36 million hectares of forest.

In 2010, the Ombudsman’s Office reported that the agencies responsible for supervising the Amazon region were seriously understaffed.

Numerous operational shortcomings were also detected in 38 offices attached to the national Ministry of Agriculture and regional offices in charge of forest governance. Motor vehicles in good condition were found in only three, and just one was equipped with a boat, despite the essential importance of river transportation in the Amazon region, according to the report, “Forestry Policies and the Peruvian Amazon: Advances and obstacles on the path to sustainability”.

This degree of informality has allowed both officials and users to falsify information, with timber transport permits “laundered” to permit the sale of trees harvested in unauthorised areas, it added.

“If resources are scarce, what are the possibilities for these authorities to place priority on transparency? It needs to be demonstrated that more organised and freely available information contributes to making better decisions,” Elena Castro, the commissioner for the environment, public services and indigenous peoples at the Ombudsman’s Office, commented to Tierramérica.

The national government provides the regions responsible for forest management with only 25 percent of the money earned through the sale of rights to the exploitation of forest resources, stressed the governor of Loreto, Yván Vásquez.

Moreover, some municipalities receive very little of the so-called forest levy, the share of income and revenues obtained by the national government for the exploitation of natural resources that is allocated to regional and local governments.

The district of Tres Unidos in San Martín receives an average of two dollars a month through this forest levy, reported Alva.

Representatives of DAR and the Ombudsman’s Office emphasise the need to find ways of increasing the budget available for the colossal task of guarding the forest. One possibility is raising the fees for the rights to forest resource exploitation, which have not been adjusted in over a decade, despite the requirement to do so established by the regulations of the country’s forest law.

*The writer is an IPS correspondent. This story was originally published by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme, United Nations Environment Programme and the World Bank.

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