WASHINGTON, Aug 18 (IPS) - A global energy plan to be released by the World Bank next month risks squandering scarce resources on so-called clean coal technologies and misses bigger investments in renewable energy, but does address gaps in the energy needs of the poor, according to a new analysis by an environmental group.

World Bank officials will discuss the document, called the “Progress Report on the Investment Framework for Clean Energy and Development”, later this month before it is placed on the agenda of the joint annual meetings of the World Bank and its sister institution, the International Monetary Fund (IMF), next month in Singapore.

A similar programme focusing on longer term country-level activities and global research will be completed by the Group of Eight most industrialised countries at their summit in Japan in 2008.

Rich nations had asked the World Bank, and other international financial institutions, at a summit last year in Gleneagles, Scotland to draft the plan under discussion to combat global warming and help secure future energy supplies.

The World Bank input comes amid heightened concerns about soaring global energy prices and the connection between high energy consumption and climate change.

When the first draft of the document came out at the spring meetings of the World Bank and the IMF, many observers said they were shocked by the lack of references to poor people.

But analysts who have seen a leaked version of the latest report say that it now devotes considerable space to the needs of the 1.6 billion poor people, particularly in Africa and South Asia, who presently lack access to modern energy.

The strategy’s advocates inside the Bank say it goes a long way in dealing with environmental problems and climate change concerns.

“This paper addresses the need to produce energy in a manner that reduces local and regional air pollution and greenhouse gas emissions,” Robert Watson, chief scientist at the World Bank, told IPS.

While acknowledging the improvements, the California-based watchdog group International Rivers Network (IRN) says that the plan misses “the double dividend of renewable energy” — namely, combating climate change and reducing poverty.

In a brief analysis of the document, IRN argues that clean technologies like wind, solar, modern biomass, geothermal and small hydropower are available locally, create jobs and have very low environmental impacts, and could better achieve this dividend.

The group, which presses for wider adoption of renewable energy and fewer environmentally damaging mega-projects, faulted the Bank for prioritising “large regional hydro and thermal generation plants” as the appropriate way to provide energy access.

“This recommendation mirrors the misguided priorities of the World Bank’s energy sector lending, of which in 2005 only 10 percent was allocated to energy efficiency and new renewable energy projects,” it said.

The World Bank counters that the action plan does take a global perspective, and points out that it committed 871 million dollars to renewable energy and energy efficiency programmes in 2006.

In its most recent figures released this week, the Bank said that investments in renewable energy and energy efficiency were now 20 percent of the Bank’s total energy sector commitments in fiscal year 2006, which totaled 4.4 billion dollars for 62 renewable energy projects in 35 countries.

“Renewable energy and energy efficiency can contribute significantly to achieving the Millennium Development Goals,” said Jamal Saghir, who directs the Energy and Water department at the Bank, referring to a United Nations-led plan to cut global poverty in half by 2015.

“In fact, they offer a ‘double dividend’ — meeting the essential energy needs of countries for sustained growth and poverty reduction, while at the same time preserving or enhancing the environment,” he said.

Yet IRN argues that the Bank still favours “advanced fossil-fuel technologies” in the document, such as coal- and gas-fired plants, and non-fossil fuel technologies such as hydropower, wind and nuclear.

This could prove counterproductive since large hydropower projects, especially in tropical regions, emit substantial greenhouse gases that can surpass the emissions of similarly sized thermal power plants.

The group called on the Bank not to waste money subsidising fossil fuel projects and to use soft loans and other funding to buy down the costs of renewable energy technologies.

The World Bank document, critics note, also does not address the need for Northern polluters from rich nations to reduce their own greenhouse gas emissions.

Collectively, the G8 nations, which commissioned the action plan and which represent only 13 percent of the world’s population, are responsible for 45 percent of the world’s greenhouse gas emissions.

The group comprises Russia, France, Germany, Italy, Britain, Japan, the United States and Canada.

The G8 are still promoting fossil fuel extraction in developing nations through international financial institutions such as the World Bank and export credit agencies. Environmental groups have often called on the G8 and the international institutions to phase in public finance for sustainable clean energy. (END/2006)

WASHINGTON, Aug 14 (IPS) - A World Bank plan to merge its environmental and social development units with the department that oversees large infrastructure investment could end up leaving the “wolf guarding the henhouse”, a watchdog group says.

The Bank Information Centre, a Washington-based clearinghouse of information on the institution, argues in a policy brief that the new “Sustainable Development Network” will have to be monitored closely to ensure that the Bank does not wrongly promote oil and gas projects, frequently the target of criticism about negative environmental and social impacts, as “development” or “anti-poverty” projects.

But the World Bank says the plan offers a golden opportunity to embed environmental and social goals in the long-term development agendas of poor nations.

Announced by World Bank President Paul Wolfowitz in late June, it will join the Environmentally and Socially Sustainable Development (ESSD) departments with the infrastructure and energy units. The new branch will be headed by a single administrator, instead of two — current Infrastructure Vice President Kathy Sierra.

According to Wolfowitz, the purpose of the consolidation is to strengthen the Bank’s “focus on sustainability”, and comes as the Bank beefs up lending for infrastructure projects like oil and gas pipelines, mining operations and transportation hubs.

“I know there are concerns that environmental issues in this new arrangement could be submerged by infrastructure,” Wolfowitz acknowledged. “… To this end, I plan to create a new position to be filled by a world-class environmental expert to lead our efforts.”

The announcement was hailed by two major environmental groups, the Nature Conservancy and the World Wildlife Fund (WWF), as a move in the right direction.

“Applying world-class environmental standards to large development projects will enable the Bank to take a significant step towards helping millions of impoverished people escape the curse of poverty,” said Carter S. Roberts, president of WWF, in a statement.

But the Bank Information Centre, and others, note that the Washington-based lender has sometimes ignored recommended changes of course to better accommodate social and environmental needs, and the current reorganisation may not prove to be an exception.

Such reviews — commissioned by the Bank itself — include the World Commission on Dams, a 2000 study that urged the Bank to stay away from mega-projects like dams, and the Extractive Industries Review, which advised the Bank to withdraw from oil, gas and mining investments and redirect the funds towards renewable energy.

The London-based Bretton Woods Project, a critic of the World Bank and International Monetary Fund, headlined its description of the integration plan, “Sustainability Dismantled”.

“Surrendering the structural independence of a department dealing with the environmental and social dimensions of development — including indigenous peoples, resettlement, biodiversity — and merging it with a body working on infrastructure such as roads, ports, hydro-electric dams and oil pipelines is hardly an indication that the Bank is serious about protecting ecosystems and livelihoods,” the group said.

A senior official at the Bank strongly argued that such concerns are misplaced. “By promoting economic growth strategies based on expanded infrastructure which are environmentally responsible and socially acceptable, we are bringing a sustainable future closer to today’s reality,” said Robert Watson, chief scientist at the World Bank.

“The integration of the two vice presidencies now gives the environment and social experts unprecedented access to influence the Bank infrastructure strategies and policies …infrastructure development without incorporating environmental and social considerations is unsustainable,” he told IPS.

The Bank Information Centre acknowledges in its policy brief that mainstreaming environmental and social sustainability into Bank operations has been a longstanding goal of internal reformers and external critics for the past 20 years. But the group says certain criteria have to be met before the latest development is celebrated.

The BIC brief, by long-time Bank watcher Bruce Jenkins, warns that “the environmental and social development staff may simply be grafted onto an entrenched agenda without being able to change its content or character.”

By 2008, the Bank plans to increase its infrastructure investment to 10 billion dollars, or about 40 percent of its total portfolio, giving far more weight and influence to the infrastructure department in the Bank’s investments.

But Watson says that this is “a false assumption”. “There is a common vision, and a formidable knowledge base, within the environment and social departments and they are given every opportunity to express their view,” he told IPS.

“The new sustainable development vice presidency allows for a much more efficient management structure and the elimination of stovepipes. It will allow discussion of critical issues and streamlining of management at all levels in both the headquarters and in the regions and to produce better sustainable results on the ground,” he said.

The BIC paper also charges that the pervasive culture among the Bank staff and economists is such that environmental and social issues take a backseat in project planning, especially among senior officials, and that “sustainability is often reduced to mitigation — ‘cleaning up’ the negative social and environmental impacts of already-hatched plans.”

While Jenkins believes that many may now “feel comfortable” with the new head of the Sustainable Development Network, Kathy Sierra, her position could eventually be taken over by a “mega-infrastructure guru with little interest in sustainability.”

“The already weak internal checks and balances system will become ever more dependent on personal predilections,” he said.

Watson strongly defended Sierra’s leadership. “She is an outstanding manager, with integrity,” he said. “She recognises the importance of investments in infrastructure, but recognises that environmental and social issues are equally important to poverty alleviation and economic growth.”

A final concern is that it could be an invitation to bureaucracy. The Sustainable Development Network will be by far the largest department, comprising nearly 60 percent of the Bank’s portfolio and requiring more staff and greater hurdles to quick and smooth decisions.

Environmentalists and independent analysts say they will keep a close watch on the details of the reorganisation — very few of which have been publicly released so far, and which sources say are still being debated within the Bank — and particularly the 2008 budget, as it will show whether there will be any shift of resources from environmental and social development functions.

The most telling indicator, of course, will come with the announcement of new “sustainable” infrastructure initiatives.

“It will indeed be curious to observe how the Bank rolls out its next transnational oil pipeline project with Exxon or [another] oil major under the label of ’sustainable development’,” BIC said. (END/2006) ]]> http://www.prodigalscribe.com/world-bank-revamp-needs-close-scrutiny.htm/feed/ http://www.prodigalscribe.com/oil-field-closure-revives-energy-policy-debate.htm http://www.prodigalscribe.com/oil-field-closure-revives-energy-policy-debate.htm#comments Fri, 18 Aug 2006 20:49:46 +0000 admin Prodigalscribe.com http://www.prodigalscribe.com/oil-field-closure-revives-energy-policy-debate.htm Emad Mekay

WASHINGTON, Aug 8 (IPS) - Despite rhetoric from Washington that the United States must wean itself from dependence on oil, the shutdown of a BP oil field in the state of Alaska has shown how far the country remains from that goal and the lack of a consensus on how beat to achieve it.

BP Exploration Alaska, Inc. announced on Monday that it has begun a phased shutdown of the important Prudhoe Bay oil field, the largest in the U S., following the discovery of unexpectedly severe corrosion and a small spill from a Prudhoe Bay oil transit line. BP operates 22 miles of oil transit pipeline at Prudhoe Bay.

The shutdown will reduce Alaska North Slope oil production by an estimated 400,000 barrels per day, or about eight percent of U.S. production.

Already hit by turmoil in the Middle East and Nigeria, and concerns over Venezuela, world oil futures shot up by about two dollars to 77 dollars a barrel for crude oil. Gas prices in the U.S. have already begun to rise as much as five cents a gallon in some cities.

The U.S. Energy Department is now preparing to tap into the country’s strategic petroleum reserves to deal with the shutdown.

Conservatives in the United States and Republicans from President George W. Bush’s party have insisted that the solution to future disruptions is to pursue new drilling and exploration, including in the protected Arctic National Wildlife Refuge.

“This problem, like the hurricanes last fall, underscores the pressing need to expand domestic oil and gas production. We are living too close to the supply margins and have been for too long,” Senator Pete Domenici, a Republican from New Mexico, said in a statement.

“While both houses are working to expand production, we expect the private sector to sharply step up its investment in its own critical infrastructure,” he said.

But a number of civil society groups say that the real debate should centre on the need to adopt available technology and mandate a significant increase in fuel economy standards for cars, trucks and utilities. They also propose cutting the record profits of oil companies and channeling the savings to consumers or to investments in alternative energy sources.

According to the Union of Concerned Scientists (UCS), the U.S. will spend at least an additional 24 million dollars a day on oil imports as a result of the price spike, with 10 million dollars going to OPEC, the oil cartel that the U.S. increasingly views with suspicion.

The UCS estimates that if fuel economy standards were tightened to make all U.S. cars and trucks on the road get one extra mile per gallon, the country would not even need the 400,000 barrels per day BP has halted.

“The U.S. would spend 50 million dollars a day less on gasoline priced at three dollars a gallon,” said David Friedman, research director of UCS. “Over the course of a year, that would be 18 billion dollars that could be spent strengthening our economy and creating jobs across the country.”

Consumer groups say the incident shows the incoherence of U.S. energy policy, which they say penalises consumers and rewards oil companies. Oil giants Exxon-Mobil, Shell and Chevron all reported record profits this year.

BP alone announced two weeks ago that its second quarter earnings rose 30 percent to a record 7.32 billion dollars.

“As gasoline prices and oil industry profits hit record high levels, so too has public frustration and concern,” said Ann Wright, senior policy analyst for the Consumers Union. “The oil companies continue to be the largest benefactors of our nation’s energy policy — not the American public.”

The group says that oil companies will make more money this year than they did from 1995 to 1999 combined. Comparing oil industry profits to Standard and Poor’s Industrial index, the industry will have 120 billion in excess profits in the 2001-2006 period..

“Cash flow has increased so fast that the industry simply cannot absorb it. Cash flow has exceeded net new investment by 120 billion dollars, yet Congress continues to lavish favours on the industry,” said Mark Cooper, director of research at the Consumer Federation of America.

An energy bill signed by President Bush last year provided billions of dollars in new tax breaks, royalty-free drilling rights, and special regulatory exemptions for the oil industry.

On Tuesday, Congressman Edward J. Markey, a Democrat who is also a senior member of the House Energy and Commerce and House Resources Committees, said he wanted to know why BP did not spend its profits to maintain its pipelines.

“We learned yesterday that BP hasn’t even spent its bulging profits on basic pipeline maintenance, forcing a complete shutdown of their Prudhoe Bay operations due to a massive buildup of sludge in BP pipelines that have not been cleaned for as long as 15 years,” he said.

Some groups have proposed cutting into the industry’s huge profits by raising oil drilling fees. The funds would then be invested in expanded use of existing technologies, the development of improved and new technologies, and bringing alternative fuel and energy technologies to the market faster.

In the U.S. state of California, proponents say it would direct four billion dollars to reduce California’s dependence on gasoline and diesel by 25 percent over the next 10 years. But oil companies are fighting the plan. (END/2006) ]]> http://www.prodigalscribe.com/oil-field-closure-revives-energy-policy-debate.htm/feed/ http://www.prodigalscribe.com/corruption-and-violence-slow-us-led-reconstruction.htm http://www.prodigalscribe.com/corruption-and-violence-slow-us-led-reconstruction.htm#comments Fri, 18 Aug 2006 20:49:13 +0000 admin Prodigalscribe.com http://www.prodigalscribe.com/corruption-and-violence-slow-us-led-reconstruction.htm Emad MekayWASHINGTON, Aug 2 (IPS) - The much-touted U.S. reconstruction effort in Iraq is floundering under threats from rampant corruption and deteriorating security, a U.S. government watchdog says.

“The first democratically elected government to take office in Iraq now faces the daunting challenges of sustaining its infrastructure, fighting corruption, and enforcing security in an increasingly hostile environment”, says Special Inspector General for Iraq Reconstruction (SIGIR) Stuart Bowen.

Bowen’s office, tasked by Congress to oversee the reconstruction efforts, released two reports on Tuesday and one on Wednesday that cited figures showing Iraq losing four billion dollars to corruption every year since the U.S. invasion of the Arab country in March 2003.

Bowen, who addressed the Senate Homeland Security and Government Reform Committee on Wednesday, says he found that Iraq now has more than 1,400 criminal corruption cases open, involving about five billion dollars.

One of the reports cites a recent poll conducted in Iraq in which one-third of the Iraqi respondents reported that they have paid bribes for products or services this year. The report uses the poll as evidence of popular mistrust of the U.S.-backed police and army, who are believed to be unable or unwilling to enforce the rule of law.

“Corruption is a virtual pandemic in Iraq,” says the report while urging international support for fighting corruption in Iraq.

“More resources and stronger support will be needed for Iraq’s anticorruption entities to battle corruption effectively,” says the IG office.

The World Bank is lending a helping hand. In late July, the multilateral lender whose current president was a leading architect of the war against Iraq, hosted an anticorruption workshop in neighbouring Dubai that brought Iraqis and donors together to examine how the Bank and others can more effectively assist in the anti-graft fight.

But the main message of the two reports is that corruption in Iraq, along with the deteriorating security situation, has deterred international investment and eroded trust in the government.

In the strategically important oil sector, for example, the inspector general says corruption threatens not only Iraq’s capacity to fund new capital investment, but also its ability to sustain and increase oil production.

Most corruption in this sector is motivated by the high profitability of smuggling oil and refined fuels.

The Ministry of Oil Inspector General reported in April 2006 that smuggling includes transferring imported oil products or stolen local crude to neighbouring countries, channeling products supplied to government facilities to the black market, and taking advantage of lax oversight at loading stations.

At least 10 percent of refined fuels are sold on the black market and about 30 percent of imported fuels are smuggled out of Iraq, it says.

The report also detected many examples of waste, fraud and abuse. It reported that the IG’s criminal investigators are working on 82 cases. Their work has so far resulted in five arrests and two convictions, and another 23 cases are awaiting prosecution.

One example of the corruption cases is that of a U.S. contractor arrested in March. He is charged with offering a bribe to a police official for assistance in facilitating the purchase of armored vests and equipment for about one million dollars along with a separate 28,000-35,000 dollar gift to process the contracts.

In his testimony Wednesday, Bowen faulted some U.S. policies in Iraq, including the no-bid system, initially created by World Bank chief Paul Wolfowitz when he was number two at the U.S. Department of Defence, in some contracts in Iraq.

“The use of sole-source and limited competition contracting in Iraq should have virtually ceased after hostilities ended,” said the Inspector General.

He also said the involvement of different U.S. government bodies led to their development of ad hoc operating systems and procedures which hampered efficiency and caused inconsistent contracting documentation.

Bowen also said assigning major corporations to handle small contracts created waste in Iraq and recommended that the U.S. avoid using expensive design-build contracts to execute small-scale projects.

“Most projects in Iraq were smaller and could have been executed through fixed-price direct contracting,” he said.

The findings of the report stoked worry among U.S. lawmakers who said the reports by the IG showed how flailing the Iraq reconstruction efforts are, given the proven cost overruns, accounting irregularities, unfinished work, and evidence of waste and corruption.

“The reports of the Inspector General indicate that while billions have been spent, reconstruction has fallen far short of promised outcomes,” said Senator Susan Collins, a Republican from the north-eastern state of Maine who chairs the committee. “Funds that should have been used to build schools and health clinics, improve electricity access, and repair the oil infrastructure have been squandered.”

One instance of wasted funds and uncompleted projects detailed in the hearing was the case of the Basrah Children’s Hospital. Senator Joseph Lieberman (Democrat from Connecticut) referred to how the IG office found that the United States Agency for International Development (USAID) used “accounting tricks” to hide ballooning costs and significant schedule delays in the project.

According to the IG, the hospital’s original completion price tag was set at 50 million dollars with an opening date in January 2006.

But the latest estimates range from 149.5 million to 169.5 million dollars and the projected completion date is now July 31, 2007 — more than a year and a half late.

(END/IPS/NA MM IK/IF IP CU BW DV/EM/LD/06)

In a speech on the IMF’s role in developing countries, the head of the IMF said the planned increase in voice and representation will not only benefit the so-called emerging countries, a term that describes major developing nations that have followed economic prescriptions from the IMF and the World Bank, but will also include poor nations.

IMF Managing Director Rodrigo de Rato said he will make concrete proposals to widen those nations’ representation in the Fund before the IMF holds its high-profile joint annual meeting with the World Bank in Singapore in September.

“Low-income countries as well as clearly under-represented emerging market economies have reason to be concerned about their voice and representation in the Fund,” de Rato told the Washington-based Centre for Global Development, a think-tank, on Monday.

“I will be making specific proposals on how to take these governance issues forward in the run-up to our annual meetings in September in Singapore, and I hope to secure the support of the membership for these,” he said.

De Rato gave a glimpse into his proposal by saying that the increase will be in the number of “basic votes,” which are the minimum and equal number of votes, unrelated to quota size, to which each member in the the 184-member IMF is entitled.

The original proposal for greater representation was widely viewed as one that will only give powers like China and South Korea greater say rather than poorer nations.

During the IMF and the World Bank’s semi-annual meetings in April, rich nations, which dominate the two organisations, approved a sweeping plan by de Rato, the Fund’s Medium-Term Strategy (MTS), to recommend measures to restore the IMF’s role in the international economy and shore up its loans and increase representation.

Critics of the IMF say the organisation is not relevant any more to middle income countries and even sometimes to poor nations as many of them accumulate their own reserves or borrow from the commercial market that lends without the much-despised policy conditions and economic advice that the IMF requires of its borrowers.

Poor nations and many non-governmental development organisations often complained that the IMF policies are so skewed in favour of rich nations that dominate the board and against poor nations who have little or no voice in how the Fund, theoretically an international organisation, makes its decisions.

In his speech, the IMF’s top official also charted another role for the Fund vis-à-vis poor nations. He said his institution will work to make sure that those nations that are receiving debt relief from international donors do not fall quickly back into debt.

He said the Fund’s task for them would be “to ensure that there is not another debt crisis.”

“There is a serious risk that the hard-won gains from debt relief will be lost if the countries concerned borrow to finance expenditures that are not growth-promoting, and thus replace the debt that has been removed with large amounts of new debt, possibly on worse terms,” he said.

The IMF says there are already signs of new lenders — some private, some official like India and China — rushing in now that debt has been reduced.

According to de Rato’s plan, the Fund and its sister institution the World Bank will work to help those nations understand the “risks of a rapid build-up of debt” and will help them design medium-term debt strategies aimed at avoiding unsustainable debt.

De Rato said the Washington-based Fund can also sound the alarm to official creditors when debt or debt service levels are likely to become a problem.

The IMF also urged rich nations to give poor nations more aid as a source of alternative fundng.

He further proposed that donors offer those nations substitute debt sources, however, through grants and highly concessional loans “to enable them to finance development without relying on expensive debt,” a proposal that may find resistance in the U.S Congress, which oversees U.S. funding for the Fund and the World Bank.

But Jim Saxton, chairman of Joint Economic Committee in the U.S. House of Representatives said that budget problems that the IMF faced recently were actually exacerbated by excessive IMF interest rate subsidies.

Saxton, whose country is the main power broker in the fund, has long called for reform of the IMF and an end to IMF loan subsidies.

“The IMF offers loans with below-market interest rates conditioned upon policy changes required of borrowing countries. These conditions are often avoided or resisted by borrowers,” Saxton said.

“If the IMF raised interest rates and relaxed additional conditions that are often problematic, perhaps it could better support itself over time.”

But de Rato’s proposals are not without fans either.

Kemal Dervis, the administrator of the United Nations Development Programme (UNDP), who was in attendance when de Rato made his speech, welcomed de Rato’s support of the IMF’s involvement in low-income countries and the pledge to address governance issues.

“I strongly welcome the managing director’s words… on governance, voice and greater weight for poor countries in the IMF board,” he said.

Liliana Rojas-Suarez, an analyst with the Centre for Global Development, said de Rato’s proposals are met with a mix of “welcome and caution” in the development community and echoed views that doubt there is a culture at the IMF that would actually allow change.

“Welcome to your efforts… and caution because people still question the extent to which the current institutional environment can change as quickly as you would like,” she told de Rato.

(END/IPS/WD/IF DV MD/EM/LD/06)

The talks, dubbed the Doha Development Agenda (DDA) when they were launched in the Qatari capital in 2001, were suspended on Monday after the world’s richest nations failed to agree on a formula to cut their highly contentious farm subsidies and open their own markets.

U.S. and European companies that invested much time and effort in prodding their government officials to conclude a deal that would expand global markets for their products were visibly alarmed. But now these groups are coming together to try to resuscitate the sweeping deal, which covers goods ranging from farm products to textiles and electronics, as well as services like architecture, voice-mail telecommunications and space transport.

“The suspension of the talks could lead to a failure of the Doha Round, which would undermine the promise of economic growth inherent in the DDA, and result in the loss of opportunities for WTO members to gain the tremendous benefits that accrue from trade liberalisation,” said a joint statement by seven of the world’s largest business groups.

“In order to avoid this situation, we strongly hope that the negotiations will resume as early as possible,” it added.

The organisations include the Business Roundtable, the United States Chamber of Commerce and National Association of Manufacturers, all powerful business pressure groups from the United States.

The Confederation of European Business, which represents more than 20 million companies in the European Union, also signed the statement.

The Business Council of Australia, the Australian Services Roundtable and Nippon Keidanren, a key Japanese pressure group, along with the Brazilian National Confederation of Industry and the Federation of Industries of the State of São Paulo (FIESP), the only two groups from a developing country, all joined in as well.

Earlier, the Paris-based International Chamber of Commerce (ICC) called for a quick resumption of the Doha talks, warning that the breakdown opens the door to a surge in bilateral trade agreements, more trade disputes and a resurgence of protectionism and the possible weakening of the effectiveness and authority of the Geneva-based WTO.

“Historically, it has been the multilateral trading system that has generated global economic growth. We will continue to fight for that system,” said ICC Chairman Marcus Wallenberg, who is also the chairman of Saab and of SEB, the Swedish banking giant.

What these business organisations fear most is a new wave of protectionist measures that could erode their power and access to markets and therefore lower profits.

“ICC firmly believes there is no substitute for a strong rules-based, non-discriminatory multilateral trading system,” the group said.

Norman Sorensen, chairman of the Coalition of Service Industries (CSI) in the U.S., says that because “trade liberalisation is essential for the U.S. and global economies,” the Doha talks must rebound. Otherwise, “The opportunity to obtain new commercial opportunities across the range of service sectors is in danger of being lost.”

With services accounting for about 40 percent of global employment, and 80 percent of the jobs and economy in the United States alone, it is little wonder his group is keen to restart the talks. CSI estimates that liberalising the global trade in services has potential profits of 1.7 trillion dollars.

The Business and Industry Advisory Committee, which advises the Paris-based Organisation for Economic Cooperation and Development (OECD), urged the countries involved to “avoid any new protectionist measures during the period of suspension.”

“OECD business urges governments to keep the present offers on the table and to seek new political initiatives to restart these negotiations as soon as possible,” it said.

Most of these groups urged what they called “fresh approaches” to resume the Doha Round negotiations as soon as possible and on the basis of the progress already achieved.

The United States seemed to be the most responsive to their calls. U.S. Trade Representative Susan Schwab is already in Brazil on the first of several trips that her office says are aimed at sustaining support for the global trade and development goals of the WTO’s agenda.

Washington hopes to win concessions from Brazil, a major player in rallying opposition to the current WTO rules that many critics say favour industrialised countries.

“The spirit of Doha lives even if a formal agreement eludes us at this time,” said Schwab.

In August, Schwab will meet with trade ministers from the Association of South East Asian Nations. In September, she and U.S. Secretary of Agriculture Mike Johanns will visit members of the Cairns Group of agricultural-exporting nations in Australia.

In November, Schwab will accompany Secretary of State Condoleezza Rice to a meeting of trade ministers and other leaders of the Asia-Pacific Economic Cooperation group.

U.S. President George W. Bush also lent his support to the failing process. He told the National Association of Manufacturers on Thursday that he remained a big believer in free trade.

“We’ll continue to work on this agreement,” he said. “Secretary of Agriculture Mike Johanns, as well, will continue to reach out to other nations to achieve our objectives.”

On Friday, WTO chief Pascal Lamy appeared to be reading from the business groups’ pages.

“We must now ensure that this progress does not unravel,” he said, pledging to do his best to “permit a resumption of the negotiations”.

*****

+World Trade Organisation (http://www.wto.org/)

+TRADE-INDIA: Rare Unity Against West’s Farm Subsidies (http://ipsnews.net/news.asp?idnews=34116)

+TRADE: Cheers and Fears Follow Doha Collapse (http://www.ipsnews.net/news.asp?idnews=34091)

+TRADE: Noisy Collapse for Doha Round (http://ipsnews.net/news.asp?idnews=34082)

(END/IPS/WD/NA/IF/DV/EM/KS/06)

WASHINGTON, Jul 12 (IPS) - A senior U.S. official has vehemently defended a recently uncovered U.S. programme that tracks suspected terrorist financing and which sparked controversy over privacy rights and freedom of the press, saying that the disclosure was harmful to his country’s anti-terror efforts.

“The benefits of the Terrorist Finance Tracking Programme have been incalculable,” Stuart Levey, under secretary of the U.S. Treasury for terrorism and financial intelligence, told a congressional hearing on Tuesday. “This programme provides a unique and powerful tool that has enhanced our efforts to track terrorist networks and disrupt them.”

The U.S. Terrorist Finance Tracking Programme, which monitors suspected foreign terrorists through international monetary flows, came to light when the New York Times and other newspapers published details of the secret programme, drawing strong condemnation from the George W. Bush administration and hawkish congressional members.

Some of the administration’s most vociferous supporters went so far as to accuse the Times of treason.

The story showed how Washington was poring over millions of transactions within the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the premier messaging service used by banks around the world to issue international transfers.

The revelation came amidst a debate about the extent of the executive powers the Bush administration has amassed in the name of fighting terror after the Sep. 11, 2001 attacks on the World Trade Centre and the Pentagon almost five years ago.

A series of disclosures of similar clandestine efforts has roiled privacy advocates both in the United States and overseas, who are concerned that the United States may be using its global influence to push other nations towards rights restrictions without enough oversight.

During Tuesday’s hearing, Levey confirmed that not only the U.S. Congress knew about the programme but also members of the Group of 10 most industrialised countries, who consult and cooperate on economic, monetary and financial matters.

The Group of Ten is actually made up of 11 industrial countries; Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, Britain and the United States.

Senior officials from the Group of Ten usually meet once a year in connection with the autumn meetings of the International Monetary Fund and the World Bank, where they have over the past five years called on international financial institutions to help monitor and disrupt suspected terrorist transfers.

“Members of the Congressional intelligence committees were briefed about this programme, and our colleagues in the central banks of the G-10 countries were likewise informed,” Levey told the hearing.

However, not all legislators were in the loop. “Many people in Congress who should have been briefed by the administration were not,” complained Rep. Sue Kelly of New York, a Republican and chairwoman of the House Financial Services subcommittee on oversight. “What else is it that we don’t know?”

She said she would seek an investigation of the programme by the Government Accountability Office, the investigative arm of Congress.

Privacy activists have also been alarmed at the news. Privacy International has said the Belgium-based banking consortium violated European Union privacy laws when it supplied Washington with the records of millions of bank transactions.

The London-based group filed complaints with data protection and privacy regulators in 33 European countries against SWIFT, contending that it acted “without regard to legal process under Data Protection law.”

The complaints warn that the data could be used by U.S. authorities for a range of unrelated activities, even espionage.

The American Civil Liberties Union, which has filed lawsuits related to another warrantless spying programme in the U.S., also expressed concern about SWIFT. “Privacy rights are being violated on both sides of the Atlantic — and we welcome a European investigation to get to the bottom of this,” said Barry Steinhardt, director of the ACLU’s Technology and Liberty Project.

On Friday, the European Parliament adopted a resolution demanding explanations from EU governments and institutions regarding their complicity in the SWIFT transfers of financial data to the U.S.

But Levey denied that the programme violated privacy rules and said searches were targeted at suspected terrorist financing.

He said his staff was not engaged in “data mining” or trolling through the accounts provided by SWIFT, which serves 7,800 financial institutions worldwide, to fish for other irregularities like tax evasion or economic espionage.

“The programme contains multiple, overlapping layers of governmental and independent controls to assure that the data is only searched for terrorism purposes and that all data is properly handled,” he said.

“I have on my staff a group of intelligence analysts who spend their days in a secure room poring over information to unmask the key funders and facilitators of terrorist groups.”

While acknowledging that the overall programme was in the public domain well before the news reports, he said that the disclosure by the New York Times and other U.S. newspapers is likely to complicate efforts by the U.S. and its allies to disrupt the money flows to terrorist organisations, as it gave specific details about the SWIFT operation.

“This disclosure compromised one of our most valuable programmes and will only make our efforts to track terrorist financing — and to prevent terrorist attacks — harder,'’ he said.

The official faced almost no questions about concerns by privacy advocates in the wake of the disclosure from his congressional questioners. In fact, the programme got strong backing from the Congressional leaders despite some grievances that Congress was not fully briefed.

“We are at war,” said House Financial Services Chairman Michael G. Oxley, who on Jun. 30 sponsored a non-binding measure to condemn leaks of classified information to the public.

“I commend the efforts of the Bush administration in the financial war against terror. We depend on classified programmes and classified information in order to successfully prosecute that war,” he said.

*****

+Privacy International (http://www.privacyinternational.org/) 

+American Civil Liberties Union (http://aclu.org/)

+POLITICS-US:
Courts, Congress Resist Growing White House Power (http://ipsnews.net/news.asp?idnews=33818)

(END/IPS/NA/EU/WD/IF/IP/HD/BW/EM/KS/06) ]]> http://www.prodigalscribe.com/finance-washington-defends-banking-surveillance.htm/feed/ http://www.prodigalscribe.com/dr-congo-minerals-flow-abroad-misery-remains.htm http://www.prodigalscribe.com/dr-congo-minerals-flow-abroad-misery-remains.htm#comments Fri, 18 Aug 2006 20:46:47 +0000 admin Prodigalscribe.com http://www.prodigalscribe.com/dr-congo-minerals-flow-abroad-misery-remains.htm Emad Mekay

WASHINGTON, Jul 5 (IPS) - International companies and local elites in the Democratic Republic of Congo (DRC) are pocketing revenues from copper and cobalt production instead of sharing it with local communities or spending it to reduce poverty, a watchdog group charged Wednesday.

A new report by the London-based Global Witness says that despite being one of the richest copper- and cobalt-producing areas in the world, the province of Katanga in southeastern DRC remains severely poor and the population has little or no infrastructure or public services.

“The profits are serving to line the pockets of a small but powerful elite — politicians and businessmen who are exploiting the local population and subverting natural riches for their own private ends,” says the report, whose authors based their findings on field research in November and December last year.

The 56-page report also scrutinises the role of local regulators, international donors and multinational firms. It says that government officials are actively colluding with mining companies to skirt regulations and the payment of taxes.

The report, “Digging in Corruption”, explains that a significant share of the copper and cobalt is mined informally and exported illicitly from the African nation, representing a major revenue loss for the Congolese economy and a lost chance to reduce poverty.

A local source quoted in the report estimated that at the end of 2005, at least three-quarters of the minerals exported from Katanga were leaving illicitly. Since the DRC’s recorded copper and cobalt exports were estimated at 390 million dollars last year, that means the illicit trade could amount to as much as 1.1 billion dollars.

And since most of the products mined by hand are exported in raw form, even when these exports are declared, the DRC is losing out on the higher prices it could obtain if it processed the minerals before export.

Global Witness urged the international community to seize the opportunity of the Jul. 30 elections to press for real reform.

“In the run-up to elections, politicians and companies have been scrambling to get their hands on ever-greater shares of the lucrative mineral trade, with little or no regard for the welfare of the Congolese population,” said Patrick Alley, director of Global Witness.

“The plunder of the DRC’s natural resources continues to undermine the country’s opportunities for peace, stability and development,” he said.

The world’s appetite for minerals is rapidly growing. Copper is sought after for use in power transmission and generation, building wiring, telecommunications, and electrical and electronic products. Cobalt is used in super-alloys to make parts for gas turbine aircraft engines and demand is continuing to soar as it is used for rechargeable batteries in globally popular mobile phones and devices.

It is also used to make magnets, tire adhesives and catalysts for the petroleum and chemical industries.

The price of copper has quadrupled since 2001, standing at 7,603 dollars per tonne in May this year.

Resource-hungry Western nations have viewed the interest in copper and cobalt from rising industrial powers like India and China with worry. The two Asian giants suffer from scarce domestic resources.

World production of copper is expected to increase by six percent and total use by five percent in 2006, with the areas on the border between DRC and Zambia playing a major role.

The so-called copperbelt running through Katanga and Zambia contains 34 percent of the world’s cobalt and 10 percent of the world’s copper. Since 2004, there has been a massive influx of foreign companies pouring into Katanga on the DRC-Zambia border.

The study says operations have been marred by price fixing in contract negotiations in the capital Kinshasa, where politicians have quickly approved several large contracts with multinational companies, leaving only a small share for the state mining company, Gécamines.

The Kamoto copper mine, the Dima-Kamoto Concentrator and the Luilu hydro-metallurgical plant are one example, with Kinross-Forrest inking a deal with Gécamines that gave the former a 75 percent share and Gécamines 25 percent. The main shareholders of Kinross-Forrest are George Forrest International in Britain and the Canadian company, Kinross Gold Corporation.

International companies have been returning to the country prompted by high copper and cobalt prices, and by the gradual decrease in conflict in DRC over the last two years. The establishment of a transitional government in 2003 and the advent of elections in 2006 have all contributed to creating a more attractive climate for international investment.

Those companies and banks include the Canadian mining firm First Quantum Minerals Ltd, the Rand Merchant Bank in Johannesburg, and Adastra, a Canadian company with its head office in Britain.

The report also examines the ties between international mining firms and global public lenders such as the World Bank. It says the World Bank is involved in copper and cobalt mining in DRC and in promoting foreign investment despite classifying the country in one of its publications as the worst country in the world in which to do business.

The International Finance Corporation (IFC), the World Bank’s private investment arm, has provided financing for a feasibility study carried out by Adastra, which is hoping to establish a copper and cobalt project in Kolwezi.

The IFC now has a 7.5 percent stake in Adastra’s project that was taken over by First Quantum, another Canadian mining company.

The report called on private companies to help reform the sector and declare all mineral exports, pay the appropriate taxes and ensure that the working conditions of the estimated 150,000 miners who supply them meet minimum health and safety standards — or refuse to buy products originating from those mines.

The average miner in Katanga earns about two or three dollars a day. Most work without protective clothing, equipment or training, and scores die every year in preventable accidents, the report says.

“We know that the Congo is rich. But despite this, we don’t even have enough to eat. Only one category of people profits,” one miner told Global Witness. (END/2006) ]]> http://www.prodigalscribe.com/dr-congo-minerals-flow-abroad-misery-remains.htm/feed/ http://www.prodigalscribe.com/finance-banks-adopt-fortified-green-principles.htm http://www.prodigalscribe.com/finance-banks-adopt-fortified-green-principles.htm#comments Fri, 18 Aug 2006 20:46:29 +0000 admin Prodigalscribe.com http://www.prodigalscribe.com/finance-banks-adopt-fortified-green-principles.htm Emad Mekay

WASHINGTON, Jul 6 (IPS) - Dozens of commercial banks and lenders, including global heavyweights like Citigroup, JP Morgan Chase and Standard Chartered, signed an updated set of environmental and social safeguards on Thursday that binds them to shoulder more responsible lending in the future.

Under the programme, more than 40 international financial institutions have committed to financing only those projects that comply with the Equator Principles (EP), a set of voluntary environmental and social standards that seek to uphold the rights of people displaced by projects and to protect endangered ecosystems.

Signatories, including big-name banks such as ABN AMRO, HSBC, Barclays, Crédit Lyonnais, Credit Suisse Group, Dresdner Bank and Royal Bank of Canada, sometimes co-finance projects with public multilateral lenders such as the World Bank in mining, oil, gas and related sectors, often associated with pollution and major population dislocations.

The move underlines the growing pressures on private banks and public lenders to invest in more environmentally and socially friendly projects.

The Equator Principles, named for the geographic region below the equator where developers traditionally had disregarded the social and environmental impacts of their projects, derive from the newly recast environmental and social performance standards of the World Bank’s private arm, the International Finance Corporation (IFC).

Although the commercial banks have been using the IFC’s environmental and social standards as the benchmark for their project lending since 2003, they have now accepted the whole host of new IFC guidelines that were crafted in February.

The new guidelines differ from those in 2003 in that they require companies to integrate environmental and social considerations in their management systems and have expanded to cover financial advising for projects and not just loans.

The new standards call for signatories to apply the principles on projects costing only 10 million dollars or more, rather than projects worth 50 million dollars or more as was the case under the 2003 principles.

The lenders would be required to report on the progress and performance of Equator Principles’ implementation on an annual basis and have more vigorous public consultation standards.

The banks say the guidelines give them a framework and a single set of clear standards that they can adopt, rather than having to craft their own, to go with the popular push for better environmental and social conduct.

“The Equator Principles provide a sound framework for the project finance industry worldwide,” said Johnny Cameron, chief executive officer of the Royal Bank of Scotland (RBS) Corporate Markets.

“They have given an additional rigour to the way in which the social and environmental impacts of major infrastructure projects are assessed both before and during their implementation.”

Together, the banks who signed the principles form a formidable financial force, operating in more than 100 countries and representing more than 80 percent of the project-finance market worldwide.

The IFC, which is the largest multilateral provider of financing such as loans, equity and risk management in the developing world, called on other private banks and financial institutions such the Export Credit Agencies, and banks in emerging markets such as those in China and India, to also adopt the Equator Principles.

“This shows that Equator Banks, instead of shying away from difficult projects, understand the business case for encouraging their client companies to undertake thorough environmental and social due diligence,” said Lars Thunell, executive vice president of the IFC.

But while the principles won the applause of many critics, some still say that the Equator Principles, launched by the World Bank Group in 2003, have yet to alter how multinationals conduct business across the globe, often to the detriment of the environment and local communities.

Non-governmental organisations consulted about the process have complained that their most significant proposals to create robust governance and compliance systems, including an accountability mechanism, were not taken up in the guidelines.

Environmentalists who worked for many years to secure strong social and environmental standards for development projects financed by the World Bank say that committing to the principles still doesn’t mean that those banks will be either transparent about the projects they fund or that they will cease funding harmful projects.

Nine of the banks on the list are funding the highly controversial 1,000-mile-long Baku-Tblisi-Ceyhan oil pipeline project, which runs from Azerbaijan to Turkey.

The French Bank Calyon is still under fire for bidding to finance the controversial Botnia paper mill project in Uruguay, while ABN AMRO is also bidding for the Sakhalin II oil project in Russia that threatens the last remaining population of Western Gray whales in the world.

“So the EP banks unfortunately have failed to use this revision process to correct some of the fatal flaws associated with the Principles,” said Michelle Chan-Fishel of Friends of the Earth-U.S.

“And given the fact that NGO scepticism of the ultimate effectiveness of the EPs is rather high, due largely to the fact that as we speak, the majority of the banks bidding on Sakahlin II are EP banks, ensuring EP compliance and accountability should have been a high priority,” she said. (END/2006) ]]> http://www.prodigalscribe.com/finance-banks-adopt-fortified-green-principles.htm/feed/ http://www.prodigalscribe.com/trade-poorest-nations-warned-against-aid-traps.htm http://www.prodigalscribe.com/trade-poorest-nations-warned-against-aid-traps.htm#comments Fri, 18 Aug 2006 20:45:53 +0000 admin Prodigalscribe.com http://www.prodigalscribe.com/trade-poorest-nations-warned-against-aid-traps.htm Emad Mekay

WASHINGTON, Jun 22 (IPS) - A much-touted “development package” offered recently to the world’s least developed countries is “rife with tricks” and could be far more limited than originally publicised because the United States maintains the right to deny the promised duty-free access to some of those countries’ most important exports, a new study says.

The development package was announced at the December 2005 World Trade Organisation (WTO) ministerial meeting in Hong Kong. It has made headlines as a breakthrough in the stalled talks and was trumpeted by officials from rich nations as evidence that the negotiations have a development component.

Under the deal, rich countries offered 32 so-called Least Developed Countries (LDCs) in Africa, the Caribbean and Pacific regions 97 percent duty-free access to agricultural products such as bananas, sugar and tea by 2008.

The package also includes an increased infusion of funds for the “aid for trade” programme, designed to increase poor countries capacity to trade.

But the report by two development groups, ActionAid International and the Washington-based Public Citizen, says the plan was actually designed to soften up countries that have resisted opening their markets as part of the global free trade talks, known as the Doha Round, to imports from rich nations.

“LDCs would do well to abide by the precautionary principle, and ‘first, do no harm’ to their countries’ interests by not trusting empty U.S. government ‘Development Package’ promises in the Doha Round trade negotiations,” says the report.

“These are designed to divide the developing countries so as to ease the completion of a Doha Round that has been broadly predicted to harm developing countries even more than the decade of existing WTO damage.”

The 24-page analysis shows that Washington maintains the right to exclude certain products under a “three percent” loophole, in effect giving only minimal additional market access to the poorest nations.

“By focusing the three percent exclusion on the tariff lines under which the greatest value of LDC exports enter the U.S. market, the United States could maintain tariffs on a significant share of total LDC exports that now face tariffs,” says the report. The study, “The WTO’s Empty Hong Kong ‘Development Package’”, finds that under WTO most-favoured nation (MFN) rules or various unilateral preference programmes, 27 of the 32 LDCs who are members of the WTO already have, or could have, duty-free access to the U.S. market on more than 97 percent of their exports.

Of the 1,538 products, worth 16.3 billion dollars, that LDCs sell to the U.S. market, 1,007 products, worth nearly 11 billion, are automatically duty-free under either WTO MFN rates or preference programmes such as the African Growth and Opportunity Act, the Caribbean Basin Initiative or the Generalised System of Preferences.

The report’s authors caution that the package may not benefit poor nations because many of their export earnings are concentrated in only one or two products that could be barred under the three percent provision.

It explains that the top-selling 46 items which make up the top three percent of tariff lines among the 1,538 different products accounted for 92 percent of the total value of the LDC exports, or 15 billion dollars.

Textile and apparel exports from Bangladesh, Cambodia and the Maldives, which do not now have duty-free entry, are precisely the categories that the United States is seeking to exclude in the three percent of tariff lines in the package despite being the most important exports for those poor nations.

The report also criticised promises made at the Hong Kong meeting for 2.8 billion dollars in “aid-for-trade” funding by 2010. It says rich nations double counted some commitments that were already made and applied “fuzzy math” that considers some government expenditures as “trade capacity building”.

In addition, it notes that Japan is actually doling out loans rather than “aid”, while the U.S. pledges remain subject to congressional approval, which is unlikely under the current climate of war expenditure and deficit.

“Given that the ‘aid-for-trade’ funding proposal is contingent on a Doha Round being completed effectively, the proposal involves short term quantitative offers of money to ‘buy’ permanent qualitative policy changes on trade that may not be in the long-term interest of the poor countries involved,” says the report.

The LDCs are the world’s poorest nations and their economies are so fragile that locking them into a privatisation and liberalisation agreement could wipe out their local industries and agriculture, development activists warn.

The world’s 50 LDCs — 34 of which are in Africa — comprise about 12.5 percent of the world’s population, but their contribution to world trade hovers at just half a percent. They include Angola, Benin, Burkina Faso, Djibouti, Gambia, Guinea Bissau, Haiti, Myanmar Togo, Uganda, Zambia.

Rich nations, however, appear determined to crack open resistance to the Doha Round free trade deal. On Wednesday, the U.S.-European Union summit in Vienna concluded by saying the two most important economies in the world will work together on global trade liberalisation.

Both EU and U.S. business lobbies continued to press developing countries, notably Brazil and India, to break the logjam and reach agreement on meaningful cuts in tariffs and other trade barriers on manufactured goods, agricultural products and services.

Ministers plan to meet in Europe at the end of this month.

*****

+”The WTO’s Empty Hong Kong ‘Development Package’”
(http://www.citizen.org/documents/development_package.pdf)

+TRADE: African Nations Wary of Closer Embrace with U.S.
(http://www.ipsnews.net/news.asp?idnews=33543)

+WTO-SPECIAL: More Aid-for-Trade Carrots Offered Poor Nations
(http://www.ipsnews.net/news.asp?idnews=31402)

(END/IPS/WD/NA/EU/IF/DV/MD/EM/KS/06) ]]> http://www.prodigalscribe.com/trade-poorest-nations-warned-against-aid-traps.htm/feed/