Monday, July 2, 2012

Human Health Expert to Lead World Bank through Controversial Coal Projects

During the presidency of Robert Zoellick (2007-2012), the World Bank spent a record sum to finance fossil fuel power projects -- despite its commitment to address climate change. The Bank’s new president, Jim Yong Kim, must immediately decide whether to continue multi-billion dollar coal-fired electricity projects in the global south.

US citizens have always held the World Bank presidency. In 2012, for the first time since the Bank’s founding in 1944, non-US candidates campaigned notably for the position. Columbian Jose Antonio Ocampo and Nigerian Ngozi Okonjo-Iweala attracted considerable media attention, before ultimately yielding to the US nominee.

Yet many progressives see Kim as more radical than his opponents. Kim is an MD and an anthropologist by training, which makes him the first World Bank president without a background in economics or politics. Kim has worked with Paul Farmer in Haiti and has directed the World Health Organization’s HIV/AIDS program. He has a public image of near-celebrity status, as an engaged and caring advocate for the world’s most impoverished people.

Kim’s book, Dying for Growth: Global Inequality and the Health of the Poor (2002), gained attention after his nomination. He wrote, “The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.” The statement opposes, ideologically, much of the World Bank’s privatization and trade liberalization tactics of the past three decades.

Kim will be in charge of the World Bank’s $250 billion dollar budget and over 9,000 staff members. His decision on the future of coal-fired power plants will have serious implications for global health and the environment.

In 2009, the World Bank invested a record $4.7 billion in fossil fuel power projects. During 2010, the Bank continued the trend, investing $3.8 billion in a single coal-fired power station in South Africa. Michael Stulman of Africa Action called the project “one of those stereotypical development disaster stories.” Soon afterwards, the World Bank funded another multi-billion dollar coal-fired project in Kosovo.

In 2011, the Bank decided to direct its coal power outlays away from middle-income countries and to restrict such loans to the world’s poorest nations. Media sources like the New York Times criticized the Bank for the move, saying that it would slow economic growth in many developing nations, sacrificing the welfare of the poor to environmental concerns. This is a false narrative -- one that pits development against the environment, and one that perpetuates business as usual.

The Bank has said it will move ahead with funding of coal-fired power plants in the world’s poorest regions to help with their development. Fossil fuel companies benefit immensely from these projects under the new “restriction,” and the poorest of the poor suffer the resulting health effects.

The poorest countries often have the weakest governments and the least effective environmental regulations.  Companies benefitting from World Bank projects take advantage, gaining easy access to resources and high profit margins. The local community cannot afford to buy the energy generated by these new coal plants. The vast majority of income and benefit goes far away and little returns to the affected community, in schools, in healthcare, or in aid.

The World Bank’s projects commit the local regions to coal for 50 years -- the average life-expectancy of such a plant. This commitment bars investments in alternative energy and holds the region back from adopting new energy technologies.

The Kosovo coal plant and South Africa’s Medupi plant have touched off mass protests in their local communities. Workers, citizens, and children suffer from tuberculosis and asthma as a direct result of the plants’ air pollution. The plants’ waste runs off into local water resources. The United States heavily restricts these technologies domestically, due to harmful health and environmental effects.

Studies show that in the US, coal plants have caused an estimated 13,000 premature deaths and have resulted in over $242 billion in health care costs. The US Environmental Protection Agency has worked with environmental organizations to limit coal power and to close half of existing coal-fired plants. So why aren’t similar concerns addressed in the global south?

The World Bank is not obligated under international law to consider environmental justice or human rights concerns when funding projects, a status that the Bank has used to defend itself from past criticism. Ironically, the Bank continues to push for more international funding of its own environmental programs, seeking to become the world’s foremost lender for environmental projects.  It has already received billions of dollars earmarked for climate change mitigation and adaptation. Over 250 organizations from 50 nations have demanded that the World Bank hand over the climate change funds to the United Nations.

Jim Yong Kim’s presidency will challenge the status quo at the Bank and in the larger multilateral development community. Ocampo and Okonjo-Iweala’s campaigns have shown that the global south has an intense interest in the Bank and its lending programs. Like Zoellick, Kim will face harsh questioning over the coal plants’ effects on human health -- questions that he is expected to address. If Kim instead follows Zoellick’s path,  the new president will have a much more difficult time than his predecessor in making excuses.    

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Wednesday, March 21, 2012

Public Private Partnerships: How Corporations are Influencing the UN

In mid February 2012, 600 CEOs and senior business leaders came together at a meeting to prepare for the upcoming UN Environment Conference in Rio. KPMG, one of the four biggest accounting firms in the world, organized the meeting. Comfortably housed in New York’s five star Sheraton Hotel, the executives grandiosely claimed to solve “the fundamental challenges of our time.” The Summit, co-organized by the UN Global Compact, the United Nations Environment Programme and the World Business Council on Sustainable Development, proposed to “ramp up collaboration” between the private and the public sector. It was also to serve as a preparation for the “Corporate Sustainability Forum,” which will take place only days before the United Nations Conference on Sustainable Development. In his opening speech, Secretary General Ban Ki-Moon encouraged the private sector’s involvement in the Conference, calling for businesses to “show leadership,” and expressing his enthusiastic support for Public Private Partnerships (PPPs). “Today we are together (…) looking for ways to serve the common good,” he stated .

PPPs have been booming since the ‘90s. Under constant pressure from the UNs most powerful member states, and in a precarious financial situation, the UN increasingly invited corporations from the private sector. At the same time, changes in the business environment encouraged Transnational Corporations (TNCs) to find ways to boost their company and brand reputation, with a particular emphasis on their social and environmental performance. The ‘90s saw high-profile world citizen campaigns, which highlighted the activities of TNCs and demanded socially and environmentally just behavior. Fearing consumer boycotts, corporations sought to project an image of social and environmental responsibility to the world. “A good public image is a key political resource and […] legitimacy and credibility is ‘capital’ in modern societies”. PPPs enable corporations to project such an image of public service while at the same time negatively influencing the polices of governments and other public institutions like the UN.

As former UNICEF Director Carol Bellamy pointed out, however, “it is dangerous to assume that the goals of the private sector are somehow synonymous with those of the United Nations, because they most emphatically are not.” While the UN’s raison d’être is to promote development and human rights, corporations’ efforts to “uphold ethical standards” are a means to improve their brand reputation so as to maximize profit. The implications of this difference are vast. Companies can pursue pro-environment and human right rhetoric, while engaging in deeply destructive practices.

KPMG International, the main organizer of last month’s Summit, clearly illustrates the extent to which corporations are able to deflect criticism and boost their image while not fundamentally changing their way of doing business. KPMG joined the Global Compact when former Secretary General Kofi Annan first established it in 2000. Its commitment to the Compacts’ ten principles, however, did not keep the company from setting up fake tax shelters for its wealthiest clients. In 2003, an investigation by US attorneys found that, by actively creating tax heavens, KPGM had deprived citizens from $2.5 billion in tax dollars . Clearly, signing the Compact’s 10th principle to “work against corruption in all its forms" did not prevent KPMG from being accused of accounting fraud and of obstruction of justice for hampering investigation. Adding to the irony, KPMG became part of the 10th principle’s working group, which “is to provide strategic input on anti-corruption and to define the needs of the business community in implementing the 10th principle.”

As the divide between KPMGs rhetoric and practices suggests, the UN urgently needs to move beyond the immensely naïve or intentionally deceitful position that PPPs are “win-win” relationships in which both, the UN and TNCs, work towards the fulfillment of the UN’s founding ethical principles. While for the former the rightful implementation of socio-environmental principles is an end in itself, for the latter it is a means at best.

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Monday, March 19, 2012

US Jurisdiction over Corporations under International Law

The Alien Tort Claims Act (ATCA) was signed into law by President Washington in 1789. It states, “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” The US Supreme Court is currently reviewing this jurisdiction in the case of Kiobel v. Royal Dutch Petroleum (Shell), and the ruling will have serious implications on both the status of corporations and the reaches of US’ jurisdiction.

Lawyers have interpreted ATCA to give non-US citizens the right to sue non-US offenders of international law in a US federal court. ATCA was hardly acknowledged for 190 years, until human rights lawyer Peter Weiss used it to try a Paraguayan police official residing in Brooklyn for torturing the son of the dissident. Since then, lawyers have used ATCA to sue transnational corporations, such as Chevron and General Motors, for violations against international law in countries with weak judicial systems. Many human Rights lawyers have cited ATCA as an important civil law to hold corporations accountable for their actions.

The plaintiffs in Kiobel v. Royal Dutch Petroleum are members of the Ogoni people in Nigeria’s Niger Delta. In the 1990s, Shell allegedly assisted the Nigerian government in executing Ogoni activists who threatened to disrupt Shell’s environmentally harmful drilling practices. A US appellate court initially ruled in favor of Shell, a decision that led to the Supreme Court’s review. The ruling stated that corporations were not accountable under international law, which binds only “nations and people.”

But the appellate court’s decision holds corporations to a serious double standard. In Citizens United v. Federal Election Commission, the Supreme Court recognized corporations’ political rights under the first amendment, letting corporations make unlimited political contributions as if they were people. Then, the appellate court’s decision in Kiobel v. Royal Dutch Petroleum gave corporations immunity from international law, a status that exceeds the rights of people.

On March 5, 2012, Justice Samuel A. Alito made another statement to weaken the case of the Ogoni victims. He asked, “What business does a case like this have in the courts of the United States?” Giving US Courts jurisdiction over such matters may encourage other nations to try breaches of international law by US companies, such as illegal US drone operations. That is, however, the point of international laws and doctrines, such as universal jurisdiction: to hold actors accountable for the gravest crimes against humanity. London, for example, has a history of exercising universal jurisdiction to try offenders, such as Nazi collaborator Anthony Sawoniuk, Afghan warlord Faryadi Sarwar Zardad, and Chilean dictator Augusto Pinochet.

Amicus briefs filed in support of Ogoni victims were made by human rights activists, top law scholars and professors, economist Joseph Stiglitz, the Brennan Center for Justice, and the US government. Supporters of Shell include other large corporations, as well as British, Dutch, and German governments.

The US’ Alien Tort Claims Act is a rare legal tool to maintain TNC accountability across the world. Its examination under Kiobel v. Royal Dutch Petroleum has made transparent unaddressed issues concerning both the nation-states role in maintaining international law, and the corporation’s status within that law.

If international law does not hold TNCs accountable, and if US courts refuse to monitor TNC violations, then TNCs will be free to exploit and profit off human rights violations in vulnerable nations.


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Wednesday, February 29, 2012

War and/or peace: How the private military and security industry is trying to rebrand itself as a humanitarian actor

As the wars in Afghanistan and Iraq are winding down, Private Military and Security Companies (PMSCs) are looking to diversify and expand into new markets. They have identified NGOs and international organizations like the UN as a promising new area for their services. In recent years, both the UN and NGOs have increasingly used these companies for logistics and security services. Not only do PMSCs assist these traditional humanitarian organizations in the delivery of aid, they are even ready to entirely replace them, and perform work for a profit that used to be the domain of non-profit groups. For these companies, relief and development work can provide lucrative opportunities.

In a concerted public relations campaign, these companies are repositioning themselves as “humanitarian actors.” This rebranding process is part of a larger effort that includes the creation of “codes of conduct” and “ethical guidelines” for the industry, all aimed at improving these companies' public image.

The private military and security industry is keen to adopt humanitarian imagery and language to win over a skeptical public. The lobby group for PMSCs in the US is called “the International Stability Operations Association” (ISOA), and used to be named the “International Peace Operations Association.” Such feel-good description obscures the fact that many of the ISOA’s members produce military equipment and provide military services that include the operation of weapons systems, intelligence collection and analysis, special operations and interrogation of detainees. Regardless of this background, the ISOA asserts that its members provide “humanitarian aid” and “disaster relief.” This discourse signals a dangerous trend, where the military-security industry is in effect merging with a nascent humanitarian industry.

Take the example of International Relief and Development (IRD), one of the ISOA’s members. The company defines its mission goal in the following terms: “to reduce the suffering of the world’s most vulnerable groups and provide tools and resources needed to increase their self-sufficiency.” IRD is a major implementer of US foreign assistance, and claims that it has “provided over $1.75 billion in humanitarian assistance to vulnerable populations around the world” since it was created in 1998. Despite these philanthropic claims, IRD is part of a group that also comprises BAE Systems and L-3 MPRI, two big providers of military equipment and services to the US and UK militaries.

Military and “humanitarian” activities are sometimes combined within the same firm. DynCorp International, a notorious military contractor, has also invested in the development field. DynCorp is one of the US military’s biggest military contractors and is well-known for its controversial role in many conflict areas. In Colombia, DynCorp is officially in charge of the US’ drug eradication program but has allegedly engaged in direct combat with rebel groups. DynCorp was also involved in a sex trafficking and rape scandal in Bosnia in the late 90s, a case that was recently brought to the screen in the movie “The Whistleblower.” In spite of this checkered record, in early 2010 DynCorp entered the aid market by acquiring Casals & Associates, a company which had supported US development programs for two decades. On its website, DynCorp describes the three pillars of its new activities as “justice and governance”, “stabilization and reconstruction” and “humanitarian assistance.” These words could be taken from a description of the UN’s mission. This is not an accident.

PMSCs’ claims to humanitarian ideals not only ring hollow, they also represent a dangerous trend. These companies’ growing interest in the humanitarian sector is adding to an already complicated situation on the ground. In many conflict zones, soldiers and relief workers are difficult to tell apart. In Afghanistan, NATO’s controversial “winning hearts and minds” campaign has made humanitarian action an appendix of military strategy. Some NGOs, including the International Committee of the Red Cross, have denounced this “militarization of humanitarian aid,” arguing that it puts aid workers at risk. As the lines between military aims and humanitarian work blur, employees of aid organizations have increasingly become the target of attacks by insurgents who see them as tools of Western militaries. The problem is particularly acute in Afghanistan, but also exists in other countries, including Somalia and Iraq.

The growing confusion between military action and humanitarian work is worsened when aid is delivered by for-profit organizations, especially if these companies also happen to offer military services to states involved in the conflict. Can a company operate the US’ drone program in Pakistan in the morning and distribute food in Afghanistan in the evening? The takeover of the humanitarian realm by PMSCs seriously threatens two key humanitarian principles, the concepts of independence and impartiality. By blurring the lines between military, political and humanitarian aims, these companies’ interest in the aid sector seriously threatens the reputation and security of traditional nonprofit aid groups.

The use of PMSCs by the UN and NGOs is also a worrying trend. By hiring PMSCs to support their activities, these organizations legitimize companies’ claims to humanitarianism and jeopardize their own legitimacy. Serious scrutiny is needed to hold these organizations to account and ensure that humanitarian aid does not become a for-profit activity used to further political and military goals.


GPF is currently working on a major report on the use of PMSCs by the UN

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