Category Archives: Natural resources
July 2013by John Donovan.
No one disputes that cancer-causing benzene, explosive methane and other hazardous compounds are present in the abandoned oil waste. But while Shell’s testers argue the chemicals don’t pose major health risks, residents and the investigators representing them say that people and pets have become sick and died from a spectrum of illnesses as a result of living in the community.
By Sandy Mazza, Staff Writer: Posted: 07/19/2013
Carson is on the verge of declaring a local emergency to spur more rapid cleanup of its environmentally contaminated Carousel housing tract, which sits on a former oil tank farm that left untold amounts of petroleum just a few feet below the neighborhood’s 285 homes.
The city filed a claim for damages this week in Los Angeles Superior Court, alleging that Shell Oil Co. is trespassing and creating a public nuisance that is causing injury. On Thursday night, council members told staff to prepare an emergency resolution seeking immediate remediation of the problem.
“Five years is long enough,” Councilman Mike Gipson said. “The people of Carousel tract need some answers now. When will this be resolved? And how? No one is answering that. Everyone is passing the buck while people’s lives are hanging in the balance. It’s not fair.”
It isn’t clear how the regulatory agency overseeing the cleanup — the Los Angeles Regional Water Quality Control Board — will respond to Carson’s declaration. Officials have known about the problem for five years and, as it stands now, actual cleanup won’t begin until next year at the earliest.
“It’s really expressing the city’s concern about the state of the current environmental investigation,” Carson Planning Officer Sheri Repp-Loadsman said. “We’re looking at the best ways to use the (local emergency) resolution as a tool.”
The council will consider adopting the emergency resolution at or before its Aug. 6 meeting, Repp-Loadsman said.
Two years ago, the regional water board ordered Shell to clean the soil to a depth of 10 feet below the residential community. Since then, the company has conducted extensive testing inside homes and below ground to determine whether the oil is turning into hazardous vapors.
No one disputes that cancer-causing benzene, explosive methane and other hazardous compounds are present in the abandoned oil waste. But while Shell’s testers argue the chemicals don’t pose major health risks, residents and the investigators representing them say that people and pets have become sick and died from a spectrum of illnesses as a result of living in the community.
The oil was discovered during soil testing in 2008 near the 50-acre community on the city’s southernmost boundary, near Wilmington. Soon after it was found, Shell investigators began tests to determine how bad the contamination was.
The crude stems from the tank farm that occupied the land from the 1920s through 1966, when construction began on the Carousel tract. Shell used the area to store crude oil and, when the company vacated the property, it demolished oil reservoirs and left the rubble and waste petroleum in the ground. Though the tanks reached a below-ground depth of roughly 10 feet, the oil has leaked at least 50 feet below ground, investigators said.
Since 2008, residents have been warned not to let their children play in backyards. Rigorous testing has temporarily displaced homeowners while investigators take over their homes to test the air quality and sub-slab vapors. In the past year, Shell’s pilot tests have dug up front yards, exposing smelly, oil-soaked soil. The water board has required Shell to submit a so-called Remedial Action Plan by the end of this year to outline the steps it will take to clean the soil and its time line. The actual cleanup is scheduled to begin once the water board approves that plan.
However, attorneys representing the residents and the city argue that Shell’s tentative plan to clean soil to a depth of 10 feet below some homes — and only on land that isn’t developed — is extremely flawed.
The July 16 complaint was filed on behalf of the city by Girardi and Keese, the same law firm representing residents suing Shell. Girardi and Keese and its investigator, Erin Brockovich, battled PG&E in a contamination case involving the desert town of Hinkley, Calif., that was dramatized in a 2000 feature film.
The complaint demands “full and total abatement of the contamination down to approximately 40 feet below the Carousel neighborhood.”
Bob Finnerty, an attorney with Girardi and Keese, said several complaints have already been filed on behalf of 1,008 clients who say they have been physically and financially harmed by living in the neighborhood.
“The soil is contaminated down to 50 feet,” Finnerty said. “The water board is exploring the removal of 10 feet to determine whether or not that would be sufficient. The reality is that would be a simple Band-Aid procedure and, in a few years, residents would have the identical problem of vapor intrusion into their homes.”
@sandymazza on Twitter
“The nation that destroys its soil destroys itself.”
n 1937, when Roosevelt wrote to all US governors imploring them to oversee the implementation of the Uniform Soil Conservation Law, America was in the throes of the Dust Bowl. Overfarming, and its destruction of arable soil, created a chain reaction. Dust would blow from ruined farmland onto neighboring farms, ruining their soil, and so on.
Today, American agriculture relies on biotechnology. Many staple crops are predominantly genetically modified. Eighty-eight percent of corn, 93% of soy, 90% of canola, 90% of sugar beets, 94% of cottonseed, and 75% of Hawaiian papaya are genetically modified, and GM alfalfa was recently deregulated. Monsanto owns 90% of the world’s GMO seeds, and most GMOs are Roundup Ready, designed to resist Monsanto’s signature herbicide.
Could Roundup herbicide and Roundup Ready GMOs ever repeat the kind of environmental damage the Dust Bowl wrought? A studypublished in the Journal of Agricultural and Food Chemistry says GMOs are safe, concluding that “As few as one copy of RR corn genome or one copy of RR soybean genome was detected in the soil DNA extract.” The study was conducted at the University of Guelph in Guelph, Ontario, Canada. Incidentally, Monsanto’s own website lists two Monsanto facilities in Guelph, Ontario. According to Google maps,Monsanto’s “Eastern Business Office” is a 15-minute drive from the university, and its “Soybean Research Facility” is a 5-minute walk. A recent report in the Guelph Mercury reveals that Monsanto and 4 other seed companies “collectively spent just over $780,000 on U of G research last year, most in the area of crop protection.” It’s a safe bet someone from Monsanto has taken that walk.
Monsanto has monopolized agricultural science, as described in Part 2: Corrupt to the Core. According toReuters, in February, 2009, 26 leading academic entomologists (insect scientists) complained to the EPA that Monsanto has made it impossible to do research on its products, saying, “No truly independent research can be legally conducted on many critical questions regarding the technology.” One scientist said, “It would be nice to have independently verifiable information going into EPA’s decision-making beyond just what the company provides.”
We don’t ‘know’ what Monsanto is doing to the soil. Given Monsanto’s history, as described in Part 1: Sowing Dependence, this is terrifying. But independent researchers are discovering alarming evidence of the effects of Monsanto products on the environment.
The key ingredient in Roundup herbicide is glyphosate. A report by thePesticide Action Network UK lists “Independent research findings” that differ from “Monsanto’s claims.” The report finds that glyphosate is toxic to agriculturally beneficial soil organisms. It can linger in soil and sediment and can inhibit normal chemical production in plants for months. It has been found in crops up to a year after application. It can spread, reach lower soil layers and be “carried by soil particles suspended in run off.” This chemical isabsorbed by plant root systems where it squeezes enzymes, blocking the production of amino acids and protein synthesis. It kills plants systemically by depriving their cells of nutrients andblocking their immune response to pathogens. One expert says, “When you spray glyphosate on a plant, it’s like giving it AIDS.” What could large quantities of this botanical AIDS do to America’s soil and plant life?
Glyphosate dominates the herbicide market. In 2007, US farmers used 185 million pounds of glyphosate, double the amount used 6 years earlier. A Chemical Watch Factsheet says, “Data show that glyphosate use has skyrocketed to more than double the amount used five years ago, with 57 million pounds of glyphosate applied to corn fields in 2010 compared to 23 million pounds in 2005 and 4.4 million in 2000.”
This historically unprecedented explosion of a single herbicidal chemical has resulted in “superweeds,” or weeds resistant to glyphosate, evolving on farms across the United States. Mother Jonesdescribes them as ‘stampeding’ through the Midwest. Indeed, a study by Stratus Agri-marketing Inc. showed that between 2010 and 2012, the area infested with superweeds nearly doubled from 32.6 to 61.2 million acres. The study says that glyphosate-resistance is expanding into new weed species and that nearly half of all US farms have superweeds. Some states, especially in the South, are overwhelmed by superweeds. In Georgia, 92% of farms have superweeds. Across the US, farmers have responded to this mushrooming problem by dumping more Roundup and mixing Roundup with other chemicals. Nonetheless, Monsanto claims that using Roundup “on Roundup Ready crops has allowed farmers to … decrease the overall use of herbicides.”
The problem with this situation is that it could be creating a potentially catastrophic feedback loop. Roundup Ready GMO crops are supposed to resist the highly toxic effects of Roundup. But research done outside of Monsanto’s clique questions whether the GMOs resist Roundup at any volume, or whether the cycle of spraying more Roundup, creating more superweeds, spraying more Roundup, etc. could saturate the soil, killing off important micro-nutrients, and saturating crops with a level of Roundup that Roundup Ready GMOs can’t completely resist, making them susceptible to plant diseases. Given the lack of oversight explained in Part 2 of our series, if GMO crops were contracting plant diseases that weren’t readily visible, who would even know?
A report published in the European Journal of Agronomy explores this possibility. It says it is “highly probable” that “Roundup Ready® crops are vulnerable to glyphosate toxicity under at least some conditions. One such condition could arise when the level of glyphosate exceeds the ability of the transgenic enzyme to tolerate it…” Another condition could be if the “transgene fails” to mimic the original gene the way it is intended to if the plant is damaged. “Both of these scenarios are possible and, if they develop, it is very likely they would enhance the vulnerability of Roundup Ready® plants to fungal diseases following Roundup application.” The report adds that temporary spikes in “fungal pathogens” have been observed following application of glyphosate and that this could potentially cause root rot in GMO crops.
Reuters says entomologists are finding that GMO corn engineered to resist rootworms harvested in Minnesota, Iowa, Wisconsin and South Dakota showed “damage and disease.” Other scientists “say there are indications of increased root fungal disease as well as nutrient deficiencies in Roundup Ready crops. They say manganese deficiency in soybeans in particular appears to be an issue in key farming areas that include Indiana, Michigan, Kansas and Wisconsin.” Another scientist says glyphosate appears to affect microbes associated with the growth of plant roots.
Advocates have done what they can to alert the USDA to the observed increase in soil degradation and plant disease. According to Grist, The USDA’s research arm, NIFA, is run by Roger Beachy, “a man with long-time links to the ag-biotech industry and an openly hostile attitude toward organic farming.” Under his guidance, the NIFA’sresponse to these kinds of alarming findings has been “subdued.”
Apart from ensuring regulators’ indifference, Monsanto forces its products onto America’s farms through cynical manipulation of patents, farmers’ contracts, seed monopolization and seed propagation. In the documentary,Seeds of Death, Daniel Ravicher, Executive Director of the Public Patent Foundation, says that although Monsanto tells the USDA and FDA that its GMOs are no different from natural food, it tells the Patent Office, “‘We’ve invented something brand new. It’s radically different and it’s so inventive we deserve not just one patent, we deserve entire portfolios of dozens and dozens of patents.’”
These patents, combined with Monsanto’s farmer contracts, lock farmers into using ever more Monsanto GMO crops and herbicide. A Western Organization Resource Councils Factsheet explains how Monsanto’s contracts describe an almost feudalistic relationship between Monsanto, or its proxy seed companies, and the farmer. The factsheet says a farmer accepts the terms of the contract simply by opening a bag of Monsanto seed. The farmer waives all Privacy Act rights, and agrees to allow Monsanto full access to their records. Monsanto will only honor its obligations if the farmer uses Monsanto seeds and herbicides together. The farmer cannot save or share any seeds. The farmer assumes all liability, Monsanto assumes none. Monsanto will pursue damages and fees in any violation of the contract. Monsanto arbitrates any disputes, the contract has no time limit, and does not expire even if a farmer discontinues using Monsanto products.
Monsanto has gobbled up dozens of seed companies, running a virtual seed monopoly in many agricultural areas of the country. The patents, contracts and seed monopolization ensnare farmers as consumers of Monsanto’s agricultural monopoly. In the documentary, GM Crops Farmer to Farmer, Michael Hart, UK farmer and international family farming advocate, interviews several farmers across the US. In North Dakota, he talks to Rodney Nelson, who says he tried to grow organic soybeans to export to Japan. Nelson bought conventional seeds, but they were increasingly contaminated with GMO seeds. He says about 50% of his loads were being rejected because of contamination. He couldn’t buy seeds without contamination and the seed companies told him that contamination was inevitable. He says, “We didn’t have any choice but to go back and start planting Roundup Ready crops. There was no choice.” He also says that for farmers who use GM crops, Monsanto has a “rewards program” that insures damaged seeds will be replaced at a discount. If farmers use conventional seeds, then they’re on their own. “They’re forcing you to use their chemical,” he concludes.
In Nebraska, Corky Jones sprays a cocktail of several herbicides several times to kill his weeds. Referring to Monsanto’s claim that a single pass of Roundup kills all weeds, Jones says, “We’ve heard the ‘single pass’ for so long. Well, you won’t hear that from an actual producing farmer. He knows by now that that’s a fallacy.” Hart asks him why American farmers don’t go back to conventional seeds. Jones says the seed company only supports GM crops. Hart asks, “so it’s availability that’s the issue?” Jones replies, “That is right. That is right.”
Hart speaks to a farmer who chooses not to reveal his location or identity. The anonymous farmer says that glyphosate is marketed at a low price, and then once everyone is using is, the price goes up “once they’ve got everybody trapped.” He says the same thing happened with corn seed, and the price tripled in 2 years. “Once this all happened, all research and technology on any other herbicides just completely came to a halt. So if the system gets to the point where it’s at now and if it continues to deteriorate, where it doesn’t control the problem weeds that we have, there hasn’t been any new research and development hardly done on any new products in ten years. We don’t have any alternatives, other than to put on more glyphosate.”
Hart asks the anonymous farmer whether he would suggest to UK and European farmers to start using GMO crops. He says, “I would not. For the first few years, it’ll be cheap and economical, and once everybody has switched to it, you’ll lose your choices, you’ll no longer have a choice to raise conventional products, and you’ll get yourself into a trap where you’re paying royalty fees to companies that own traits and chemicals and they’ll continue to raise those fees every year. Even if you didn’t buy glyphosate-tolerant canola, somebody spilled some on the road, or it cross-pollinated and you’ll end up with some in your field and they’ll own that and you won’t be able to keep seeds back any longer.” Michael Hart says farmers could then possibly end up in court. He replies, “Not possibly. You’ll end up in court.”
Ravicher says that Monsanto has brought 140 lawsuits against farmers, including “those farmers who wanted nothing to do with Monsanto’s genetically modified seed.” The documentary Food Inc. explains how Indiana seed-cleaner Moe Parr was sued by Monsanto, he says, “on the basis that I’m ‘encouraging the farmer to break the patent law’ by cleaning their own seed.” Another anonymous farmer says he settled out of court because he couldn’t afford the legal costs of fighting Monsanto, which were in the hundreds of thousands of dollars. Troy Roush, Vice President of American Corn Growers Association says that Monsanto sends investigators around the country, looking for people either saving seeds or growing GMO crops on their land, whether they knew it or not, to sue them.
Roush also explains that “public plant breeding is a thing of the past. There virtually are no public seeds anymore.” The reason that public seeds are disappearing is that Monsanto has monopolized seeds and the land-grant colleges that used to breed crops as a public service. In the documentary, Seeds of Death, Mark Dunau, owner of Mountain Dell Farm in New York, says that GMOs “have completely blown out conventional breeding in our land-grant colleges. And we only in this country have 10% of the vegetable seeds that were available to our forebears 100 years ago. Our seed stock is going down the toilet and we can’t even use our land-grant colleges to breed in the standard way because there’s no money for it. And that is a huge, huge, huge threat to the future of agriculture, to lose the skill of breeding standard, which is, in fact, what all that food you see on your grocery shelves. All those vegetables came from thousands of years of farmers sharing their seeds.”
Another aspect of Monsanto’s strategy, whether by design or by accident, is how its seeds spread. Monsanto was reported to have “pulled the plug” on GMO wheat in 2004. The wheat was never approved for commercial use, but was recently found growing in Oregon fields nearly a decade later. In GM Crops Farmer to Farmer, Todd Leake in North Dakota says it’s becoming impossible to grow only organic crops. He says that no matter how much you try to segregate GMO and conventional crops, it’s impossible to prevent cross-pollination. In cases where patented seed contamination goes to court, the burden of proof is always on the farmer, not on Monsanto. Monsanto has recently won an important case against a farmer who accidentally used Monsanto seed, and won another case in which organic farmers sued Monsanto for contaminating their organic crops with GMO crops. Collectively, the American justice system has determined that when it benefits Monsanto, seed contamination is allowed and when it doesn’t benefit Monsanto, contamination is illegal.
Monsanto claims that its products improve farm yield. But a major study by the Union of Concerned Scientists entitled Failure to Yield demonstrates that 20 years of GMO farming have resulted in no significant change in farming yield. Monsanto has no real interest in improving yield, in saving farmers time, labor or money, in feeding the world or advancing scientific progress, as it claims. Monsanto’s only interest is in profit.
In pursuit of profit, the MONSANTOpoly traps farmers into frighteningly lopsided contracts. It uses patent law and the courts to sue any farmers that don’t do what Monsanto wants. Monsanto monopolizes seeds, seed research and seed production, leaving farmers no choice but to use Monsanto products. Even when farmers try to avoid GMOs, contamination can force farmers into using Monsanto products, or force them out of business. This system has created an overreliance on a single chemical product. Glyphosate is creating a rash of superweeds across America. In turn, farmers have little choice but to dump more glyphosate. Evidence shows that this is sickening crops and destroying the nutrients in the soil. Monsanto is threatening American agriculture with a chemical Dust Bowl.
Next up, Part 4: Harvesting Disease will explore what happens when Monsanto products work their way from the crops up the food chain and into your body…..To Follow
by Marc Belisle | Staff Writer | The Everlasting GOP Stoppers
The World Bank‘s policies for land privatization and concentration, have paved the way for corporations from Wall Street to Singapore to take upwards of 80 million hectares of land from rural communities across the world in the past few years, according to a press release from National Family Farm Coalition.
Giulia Franchi from the Italian-based Campaign for the Reform of the World Bank (Campagna per la Riforma della Banca Mondiale) said during a teleconference with reporters that the principles the bank is promoting, (RAI), is an attempt to justify and support transnational corporations’ attempts to grab farmland.
“It’s an attempt to make it look like a responsible deal, as something that can be done in a transparent way with the support of the local community, and something that will improve local communities. But there’s no way the expropriation of people’s land, however it’s done, can be a responsible deal.”
Franchi said corporations are using diversified financial vehicles such as pension funds, commercial banks, and investment banks, as well as foreign governments, to acquire millions of hectares of land worldwide for producing food and agrifuels for international export.
“This is all being done with the backing of international financial institutions, and most of all, of the World Bank.”
Franchi said the World Bank for decades has been promoting land concentration and privatization policies.
“It has been promoting land titling programs in many countries in the world, which has transformed customary and traditional land rights into titles which can be marketed, traded, and sold.”
As the World Bank presents the global takeover of farmland as the promotion of responsible agriculture, Via Campesina and its international allies are calling upon the bank to comply with the Extra Territorial Human Rights Obligations of States.
“The bank cannot continue to act in full impunity as it has up to now,” Franchi said.
Bob St. Peter directs Food For Maine’s Future and is a board member of the National Family Farm Coalition. He describes himself as a small-scale family farmer. He said he and his family rent, borrow, and lease about 4 acres of land for largely subsistence and small, direct-market production.
“Coming at this as a new farmer in the United States, and looking out to what’s about to happen over the next 20 years, there is set to be a very large transfer of productive farm land in this country. The older generation of farmers are set to retire and we have not been developing the farmers that are going to be able to replace them.”
St. Peter said many farmers are in debt and likely will sell their land and equipment to have some money as they retire and some money to leave to their children.
“We’re in the position now of having to stave off what is likely to be a very significant rush for farm land in this country. Those of us who would like to farm the land”are not in the position to purchase it at the prices that the older generation is going to need to get themselves out of debt to secure their retirement. There aren’t enough land trust or philanthropic dollars to make up the difference. So, what is likely to happen is there will be investment groups–and we’re starting to see this already—speculators as well as corporations purchasing these farm lands.”
St. Peter said this is going to exacerbate problems related to industrialized agriculture. He calls for not only low interest loans, but a transfer of wealth of some kind so new farmers have access to land without repeating the cycle of chronic debt where they have to depend on corporations just to stay in business.
“We don’t have a plan for that yet, but if we don’t stave off the farmland grab that is happening in other parts of the world, we’re likely to see that happen here.”
St. Peter calls for local food enthusiasts to look into the systemic issues involved with their cause.
“There’s been this change in the food industry. There’s been this political economy established to favor corporate agribusiness and that model has been replicated around the world. So the small-scale farmer —in Maine I am literally competing in my local community with cheap imported food from all over the world, produced in conditions we don’t generally support.”
He said people who are only focused on their local food system would be well served by looking deeper and wider.
“(They should look at) how the global food industry manipulates markets and uses international financial institutions and trade organizations to basically pit us against each other and undercut and undermine all of us. There’s a situation in Mexico, for example, of people being displaced from their land because of dumping. It also happens in our country, in our local communities. That’s why we have a local food movement in the first place. It’s because that’s been taken from us and we need to put it back. But we can’t do that without understanding both the solidarity aspects and the way the political economy works.”
Rafael Alegria, coordinator for Via Campesina for Central America said during the tele-press-conference that in Honduras and other countries in the region the re-concentration of the control of land under the auspices of the government, the transnational corporations, and the World Bank, has displaced small producers and family farmers.
“The situation in the countryside in Honduras, Guatemala, Nicaragua, El Salvador is similar. It’s very grave poverty in the countryside but this does not only affect the countryside but also the urban areas.”
Alegria said the US used free trade agreements to dump many tons of rice on the Honduran market, making it impossible for local producers to sell at a reasonable price. (See Oxfam briefing paper, A Raw Deal For Rice Under DR-CAFTA)
He said this is causing serious agrarian and rural conflicts in Honduras.
“In the region of Bajo Aguan on the Atlantic coast of Honduras, large numbers of campesinos have been hurt and killed in conflicts with a large land owner named Miguel Facusse, who owns agribusiness firm Quimicas Dinant. This company has been in the sites of the World Bank. The World Bank has been trying to give them $30 million in loans. He and Reynaldo Canales—these two men in private industry—have taken over almost all of the arable land. They have displaced thousands of small producers and family farmers and replaced their diverse cultivation methods with monocultures of African palm for export.”
Facusse makes his fortunes by producing palm oil used for snack foods.
Alegria said, “We’ve been able to document that Mexican corporations and private interests from other neighboring countries, as well as the United States, have taken over large tracts of land in Honduras. That’s why on the April 17th Via Campesina decided to do an international struggle to highlight the problem of land grabbing.”
He said that on that date campesinos and small family farmers in Honduras decided to do a land reclamation.
“They reclaimed 12,500 hectares of publicly own land that is now being taken over by private corporations and private interests. But the government and private interests have been actively evicting farmers and farm workers from these land reclamations, and today (April 23) there was a predawn attack by private guards from the sugar company.”
As a result of the attack, the leader of Movimiento Campesino de San Manuel (MOCSAN) is hanging between life in death in a hospital in San Pedro Sula , said Alegria.
“The minister of agrarian reform and the minister of security and the Honduran president Porfirio Lobo Sosa refused to talk with Via Campesina and the Honduran campesino movement. So, we declare that those government representatives are responsible for all of the bloodshed.”
Alegria said Via Campesina in Central America denounces the media campaign to defame his leadership and the leadership of all of the local and regional campesino movements in Honduras.
“We demand the World Bank stop promoting land grabbing being done by private interest. We call on the World Bank to support comprehensive land reform strategies like the one we put forward before the legislature of Honduras in October 2011.”
Alegria said there has been no legislative progress. He asked that food sovereignty activists around the world increase their solidarity with campesinos in Central America and all those who are struggling in Honduras. He said in the 1970s the Catholic Church was in solidarity with peasants fighting for land reform, but that more recently they have not received any kind of support from the official churches, either the Catholic, the Evangelical, or Protestant.
“We’ve only received support from the very small community-based churches from the Protestant and Evangelical side.”
Alegria said the land reclamations threaten monopoly capitalist’s interests in the northern areas of Honduras. He said powerful people in the banking industry and large landowners on the northern coast of Honduras have ties to the owners of the country’s newspapers , such as Diario del Tiempo.
“Those high level business interests and the owners of the main newspapers, Diario La Prensa and The Herald and Tiempo, they all work together. Their interests are entwined. This media campaign is one where they attempt to defame my character, painting me as if I were a terrorist. This is try to undermine my credibility with the people. They are very conservative business leaders who are really only interested in making profits and increasing their wealth but they don’t see the dire poverty of the family farmers, the campesinos, and farm workers in Honduras.”
He said large corporations want to control not only their land but also their forests, mining industry, and water.
“It’s really grave for our country. The large-scale foreign investment interests are pressuring the government and the government’s response is to put up for public auction all of our natural resources for sale to the highest bidder in order to cover both our internal and external debt. The external debt for a small country like Honduras is already is more than $4 billion and the internal debt is $50 billion.”
For a century, Shell has explored the Earth to make our lives more comfortable. But in its wake, says Andrew Rowell, lies corruption, despoliation and death
The Queen and the Duke of Edinburgh went to the Shell Centre on the Thames riverside near Waterloo last Tuesday, to crown the company’s centenary celebrations. Critics claim the timing of the Queen’s visit was slightly unfortunate: it came just one day after the second anniversary of Ken Saro-Wiwa’s death in Nigeria: he was campaigning against Shell’s oil exploitation in the region.
The Shell Transport and Trading Company (STTC) has risen from its humble roots in a cramped office in the East End to become one of the most successful corporations of the century. What we collectively know as “Shell” is in fact more than 2,000 companies. Last year, the Shell Group’s profit was a record pounds 5.7 billion, the proceeds from sales of pounds 110 billion. “Were our founder, Marcus Samuel, to reappear today, I do not think he would be displeased with what has grown from his efforts,” says Mark Moody-Stuart, STTC’s chairman.
As part of the centenary celebrations, the cream of the City were invited to a reception at the Guildhall. There is also to be a commemorative book. Whilst it may mention the Shell Better Britain Campaign, and even the controversy over Brent Spar, not everyone will agree with the authorised biography’s version of Shell’s history. Here is a less authorised approach.
After it merged in 1907 with its rival Royal Dutch, the Royal Dutch Shell company was formed; its first chairman was the Dutchman Henri Deterding. By the 1930s, Deterding had become infatuated with Adolf Hitler, and began secret negotiations with the German military to provide a year’s supply of oil on credit. In 1936, he was forced to resign over his Nazi sympathies.
During the early 1940s, as the world waged war, Peru and Ecuador had their own armed border-dispute – over oil. Legend in Latin America says that it was really a power struggle between Shell, based in Ecuador, and Standard Oil in Peru. The company left a lasting reminder of its presence in the country: a town called Shell. Activists in Ecuador are seeking to get the town renamed Saro-Wiwa.
In the post-war years, Shell manufactured pesticides and herbicides on a site previously used by the US military to make nerve gas at Rocky Mountain near Denver. By 1960 a game warden from the Colorado Department of Fish and Game had documented abnormal behaviour in the local wildlife, and took his concerns to Shell, who replied: “That’s just the cost of doing business if we are killing a few birds out there. As far as we are concerned, this situation is all right.”
But the truth was different. “By 1956 Shell knew it had a major problem on its hands,” recalled Adam Raphael in the Observer in 1993. “It was the company’s policy to collect all duck and animal carcasses in order to hide them before scheduled visits by inspectors from the Colorado Department of Fish and Game.” After operations ceased in 1982, the site was among the most contaminated places on the planet, although Shell is now trying to make it into a nature reserve.
At Rocky Mountain, Shell produced three highly toxic and persistent pesticides called the “drins”: aldrin, dieldrin and endrin. Despite four decades of warning over their use, starting in the 1950s, Shell only stopped production of endrin in 1982, of dieldrin in 1987 and aldrin in 1990, and only ceased sales of the three in 1991. Even after production was stopped, stocks of drins were shipped to the Third World.
Another chemical Shell began manufacturing in the 1950s was DBCP, or 1,2 -Dibromo-3-Chloropropane, which was used to spray bananas. This was banned by the US Environmental Protection Agency in 1977 for causing sterility in workers. In 1990, Costa Rican workers who had become sterile from working with the chemical sued Shell and two other companies in the Texan Courts. Shell denied that it ever exported the chemical to Costa Rica and denied that it exported it to any other country after the ban in 1977. The case was settled out of court.
Just as people had begun to question Shell’s products, so they began to challenge its practices. In the 1970s and 1980s, Shell was accused of breaking the UN oil boycott of Rhodesia (now Zimbabwe) by using its South African subsidiary and other companies in which it had interests. Shell, singled out by anti-apartheid campaigners for providing fuel to the notoriously brutal South African army and police, responded by hiring a PR firm to run an anti-boycott campaign.
By the 1980s criticism of Shell’s operations was spreading. From Inuit in Canada and Alaska, to Aborigines in Australia and Indians in Brazil, indigenous communities were affected by Shell’s operations.
In the Peruvian rainforest, where Shell conducted exploration activities, an estimated 100 hitherto uncontacted Nahua Indians died after catching diseases to which they had no immunity. Shell denies responsibility, and says that it was loggers who contacted the Nahua. By the end of the decade, the company’s image was suffering in the US and UK, too.
In April 1988, 440,000 gallons of oil was discharged into San Francisco Bay from the company’s Martinez refinery, killing hundreds of birds. The following year, Shell spilt 150 tons of thick crude into the River Mersey, and was fined a record pounds 1 million.
But by now, the company was responding to growing international environmental awareness. “The biggest challenge facing the energy industry is the global environment and global warming,” said Sir John Collins, head of Shell UK, in 1990. “The possible consequences of man-made global warming are so worrying that concerted international action is clearly called for.”
Shell joined the Global Climate Coalition, which has spent tens of millions of dollars trying to influence the UN climate negotiations that culminate in Kyoto next month. “There is no clear scientific consensus that man-induced climate change is happening now,” the lobbyists maintain, two years after the world’s leading scientists agreed that there was.
At the same time, the company has taken its own preventive action on climate change and possible sea-level rise by increasing the height of its Troll platform in the North Sea by one metre. By 1993, as Shell’s spin-doctors were teaching budding executives that “ignorance gets corporations into trouble, arrogance keeps them there”, 300,000 Ogoni peacefully protested against Shell’s operations in Nigeria. Since then 2,000 have been butchered, and countless others raped and tortured by the Nigerian military.
In the summer of 1995 there was the outcry over the planned deep-sea sinking of the redundant oil platform Brent Spar, and in November Ogoni leader Ken Saro-Wiwa was executed, having been framed by the Nigerian authorities. At the time Shell denied any financial relationship with the Nigerian military, but has since admitted paying them “field allowances” on occasion. This year in Nigeria, the three-million-strong Ijaw community started campaigning against Shell, leading to another military crackdown.
“The military governor says it is for the purpose of protecting the oil companies. The authorities can no longer afford to sit by and have the communities mobilise against the companies. It is Ogoni revisited,” says Uche Onyeagucha, representing the opposition Democratic Alternative. In Peru, Shell has returned to the rainforest. It acknowledges “the need to consider environmental sustainability and responsibility to the people involved”, but the move is still criticised by more than 60 international and local environmental, human-rights and indigenous groups.
“Shell has not learnt from its tragic mistakes,” says Shannon Wright from the Rainforest Action Network, which believes there should be no new fossil-fuel exploration in the rainforest: “They continue to go into areas where there are indigenous people who are susceptible to outside diseases.” Meanwhile, Shell publicly talks of engaging “stakeholders”.
It hopes that we, as consumers, will continue to give it a licence to operate. However, for each barrel produced, the ecological and cultural price increases exponentially. Everyone knows we need to reduce our consumption of oil: but Shell’s very existence depends on selling more of it. Senior executives are said to be “girding our loins for our second century” because “the importance of oil and gas is likely to increase rather than diminish as we enter the 21st century”. Can we let that happen?
A farmer fills his planters with seed corn using a leading Monsanto brand.
Oops. The World Food Prize committee’s got a bit of egg on its face—genetically engineered egg. They just awarded the World Food Prize to three scientists, including one from Syngenta and one from Monsanto, who invented genetic engineering because, they say, the technology increases crop yields and decreases pesticide use. (Perhaps not coincidentally, Monsanto and Syngenta are major sponsors of the World Food Prize, along with a third biotech giant, Dupont Pioneer.)
Monsanto makes the same case on its website, saying, “Since the advent of biotechnology, there have been a number of claims from anti-biotechnology activists that genetically modified (GM) crops don’t increase yields. Some have claimed that GM crops actually have lower yields than non-GM crops… GM crops generally have higher yields due to both breeding and biotechnology.”
Heinemann, a professor of molecular biology at the University of Canterbury in New Zealand and director of the Center for Integrated Research in Biosafety, says he first began looking into the matter after he heard a remark made by Paul Collier in 2010. Both Heinemann and Collier, an Oxford economics professor and author of the bestselling book The Bottom Billion, were speaking at a conference in Zurich.
Collier “made the offhand remark during his talk that because Europe has shunned GMOs [genetically modified organisms], it’s lost productivity compared to the US,” Heinemann recalls. “That seemed odd to me. So while he was talking, I went to the FAO [UN Food and Agriculture Organization] database and I had a look at yields for corn. And over the short term, from 1995 to 2010, the US and Western Europe were neck and neck, there was no difference at all. So his assertion that lack of GMOs was causing Europe to fall behind didn’t seem true.”
Heinemann attempted to ask Collier for the source of his facts through the conference’s Internet-mediated audience Q&A system, but he never got an answer. He continued poking around for data and stumbled upon what he calls “the textbook example of the problems that come from a low genetic diversity in agriculture” – the 1970 Southern corn leaf blight epidemic.
“Really what happened by 1970 was that upwards of 85 percent of the corn grown in the US was almost genetically identical,” explains Heinemann. “The US is the world’s biggest producer of corn and both geographically and in quantity, so when you cover that much land with a crop of such a low genetic diversity, you’re simply asking for it to fail… In 1970 a previously unknown pathogen hit the US corn crop and the US almost lost the entire crop. It was a major crisis of the day. The only thing that saved the corn crop was that the weather changed in 1971 and that weather change wasn’t as favorable to the pathogen, so it gave farmers and breeders and extra year to swap over the corn germplasm to a variety that wasn’t as vulnerable.”
All told, the epidemic cost an estimated five trillion kilocalories in lost food energy, making it “many times larger than the Irish potato famine,” said Heinemann.
“Now that was in a day where biofuels were not being made from corn. So there was no competition for those food calories… Fast-forward to the drought of 2012. How many food calories were lost because of it? In kilocalories, it’s 89 trillion just from the drought. That’s just from an annual variation due to weather… The U.S. is the biggest producer and exporter of corn.”
When the U.S. corn crop fails, the entire world feels the pain.
Given the stakes, Heinemann decided to look at the productivity and sustainability of the U.S. agricultural system. And when examining sustainability, he means it in a very literal sense: can this system be sustained over time? Is U.S. agriculture resilient or is it highly susceptible to variations in weather, pests or other stressors?
Instead of examining North America alone, he chose to measure it against Western Europe. Therefore, he is able to measure not just whether North American agriculture improved over time, but whether or not it improved more or less than a similar region. Agriculture on both sides of the Atlantic is fairly similar, with the major exception the adoption of GE crops.
Both the U.S. and Canada were early adopters, whereas Western Europe did not adopt GE crops. The study compared crops that are common to both regions: corn and wheat in the U.S. and Western Europe, and canola in Canada and Western Europe. Almost all of the corn and canola grown in North America is genetically modified, whereas no GE wheat is grown in either region studied. Therefore, the study could isolate whether any increases in yields were thanks to genetic engineering or simply due to conventional crop breeding.
Even in genetically engineered plants, most of the genes in the plant come from conventional breeding. Think about the new sheep genetically engineered by scientists in Uruguay to – no joke – glow in the dark. Its DNA contains genes that tell its cells to make wool, hooves, four legs, a head, and everything else that makes it a sheep. Only a few genes – the ones that make the sheep glow in the dark – were inserted via genetic engineering. If the sheep happens to have the best wool for making sweaters or it produces the best milk for making cheese, that’s due to conventional breeding and not genetic engineering.
The same is true for crops. One or more genetically engineered traits can be added to any variety of corn, soybeans, or canola. Most of those crops’ traits come from conventional breeding. If a GE crop does particularly well or particularly poorly, the success or failure could be due to the genes inserted via genetic engineering… or it could be due to all of its other conventionally bred genes.
Heinemann’s group found that between 1985 and 2010, Western Europe has experienced yield gains at a faster rate than North America for all three crops measured. That means that the U.S., which grows mostly GE corn, and Canada, which grows mostly GE canola, are not doing as well as Europe, which grows non-GE corn and canola. The increases in corn yields in the U.S. have remained relatively consistent both before and after the introduction of GE corn. Furthermore, Western Europe is experiencing faster yield gains than America for non-GE wheat.
What does this mean? “There’s no evidence that [GE crops] have given us higher yields,” says Heinemann. “The evidence points exclusively to breeding as the input that has increased yields over time. And there is evidence that it is constraining yields in the North American agroecosystem.” He offers two potential reasons why. First, he says, “By making the germplasm so much narrower, the average yield goes down because the low yields are so low.”
In other words, the lack of biodiversity among major crops today results in bigger losses during bad years.
Companies that make GE crops benefit from a relatively new law, passed in 1994, allowing for much stricter intellectual property rights on seeds. Previously, a company had the rights to sell its seed. A farmer could buy that seed and cross it with other seeds to produce locally adapted varieties. He or she could then save and replant those varieties. Now, the company can patent the genes inside the plant. It doesn’t matter if a farmer breeds Monsanto’s corn with a local variety and produces a brand new type of corn. If the resulting seeds have Monsanto’s patented gene in them, then Monsanto owns them. The farmer cannot save his own seeds.
This means that seed companies now control the amount of biodiversity available to farmers. And the number of varieties they sell has been going down. For example, the study found that in 2005, farmers could choose from nearly 9,000 different varieties of corn. The majority (57 percent) were GE, but farmers still had over 3,000 non-GE varieties to pick from. By 2010, GE options had slightly expanded, but non-GE options plummeted by two thirds. Similar reductions in varieties sold were seen in soybeans and cotton, too. By 2010, only 17 percent of corn varieties, 10 percent of soybean varieties, and 15 percent of cotton varieties available in seed catalogues were non-GE.
But these numbers make the U.S. seed supply look more biodiverse than it actually is. Within all of those thousands of corn varieties sold, one single variety, Reed Yellow Dent, makes up 47 percent of the gene pool used to create hybrid varieties. All in all, corn germplasm comes from just seven founding inbred lines. More than a third come from one of those seven, a line called B73.
With farmers in nearly every state planting such genetically similar corn, farmers experience booms and busts together. Farmers in Mexico, the birthplace of corn, plant a fantastic variety of corn. The plants differ in color, height, ear size, drought tolerance, maturity time, and more. If bad weather shows up late in the season, the early maturing varieties still provided a harvest. If it’s dry, the drought tolerant varieties survive. If a new disease shows up, some of the corn is bound to have some resistance to it whereas other varieties will be more susceptible to it. Biodiversity acts almost like an insurance system.
Planting genetically identical crops results in the opposite. It’s like betting all of your money on one lottery number. And when U.S. corn farmers lose the lottery, they all lose together so the national yield plummets.
Second, Heinemann adds, “Another possibility is that it’s not genetic engineering per se but it’s the innovation policy through which genetic engineering is successful that is causing the U.S. agroecosystem to invest in the wrong things. So the innovation strategy gives signals to the industry to produce things that can be controlled by strict property rights instruments, but these things are not contributing to sustainable agriculture. The problem is that the biotechnologies that the US is invested in are limiting the sustainability and productivity of the agroecosystem.” (Heinemann means “biotechnologies” in a very broad sense, as in any technology humans use in agriculture, even something as simple as using mulch or composting.)
“Western Europe has gone for a different kind of innovation strategy,” he continues. “Because Europe has had to innovate without using genetic engineering,” due to its laws that do not allow GE crops, “it does so in a way that rewards the plants. They’re getting greater yield and using less pesticide to do it. But the way the US is innovating, it’s penalizing all plants whether they are genetically engineered or not.”
Yep, that’s right. In addition to increasing crop yields faster, European nations have also reduced pesticides more than we have.
“The US and US industry have been crowing about the reduction in chemical insecticide use with the introduction of Bt crops [GE crops that produce their own pesticide],” says Heinemann. “And at face value, that’s true. They’ve gone to about 85 percent of the levels that they used in the pre-GE era. But what they don’t tell you is that France went down to 12 percent of its previous levels. France is the fourth biggest exporter of corn in the world, one of the biggest exporters of wheat, and it’s only 11 percent of the size of the U.S.
“So here is a major agroecosystem growing the same things as the US, corn and wheat, and it’s reduced chemical insecticide use to 12% of 1995 levels. This is what a modern agroecosystem can do. What the US has done is invented a way to use comparatively more insecticide.” Comparatively more than what? “More than it should be!” exclaims Heinemann. “It should be down to 12% too!”
Toxic pollutants released by oil sands mining operations are accumulating in freshwater ecosystems, research by Canadian scientists suggests.
A study of sediment in nearby lakes showed the level of pollutants, known as PAHs, had risen since the 1960s when oil sands development began.
However, the researchers added that PAH concentrations were still lower than those found in urban lakes.
The findings appear in the Proceedings of the National Academy of Sciences.
PAH refers to polycyclic aromatic hydrocarbons – a group of chemicals that have been shown to affect aquatic organisms and birds. PAHs have also been described as being responsible for damaging food crops.
The chemicals occur naturally in coal, crude oil, and petroleum; they are also present in products made from fossil fuels, such as creosote and asphalt.
PAHs also can be released into the air during the burning of fossil fuels and organic matter – the less efficient the burning process, the more PAHs are given off. Forest fires and volcanoes produce PAHs naturally.
Digging the dirt
Using sediment cores from five lakes within a 35km (22-mile) radius of major oil sands facilities and one remote lake (90km/56 miles from the facilities), the researchers assessed the ecological impact of oil sands developments on freshwater ecosystems.
Core samples showed a rise in PAH concentrations since the development of oil sands mining
Analysis of the samples showed that PAH levels were now 2.5-23 times greater than levels from about 1960.
Core samples showed a rise in PAH concentrations since the development of oil sands mining
In their paper, the team wrote: “PAH ratios indicate temporal shifts from primarily wood combustion to [decomposed organic material] sources that coincide with greater oil sands development.
“Canadian interim sediment quality guidelines have been exceeded since the mid-1980s at the most impacted sites.”
Oil sands, also known as tar sands, have only recently considered to be a viable component of the world’s oil reserves as a result of rising energy prices and the development of technology that has made its processing profitable.
These factors has resulted in a marked increase in the extraction and processing of oil sands in northern Alberta and Saskatchewan, which account for 97% of the nation’s proven reserves and is the world’s third largest reserve.
The researchers say that in 1980, daily production was 100,000 but has grown to about 1.5 million barrels a day, It is projected to reach 3.7 million barrels by 2025, they added.
The development of the oil sands sector has been controversial, prompting polemic between those in favour of utilising the resource to cushion the Canadian economy from shocks in global energy prices and those who say the environmental costs are too high.
Press secretary for Environment Minister Peter Kent
In 2010, The Star newspaper reported that concerned residents on the shores of Lake Athabasca (downstream from one of the region’s major oil sands facilities) had called for the federal government to commission an independent study to assess the impact on the area’s water bodies.
The call came after local people said a growing number of landed fish where showing signs of deformities.
They voiced concern that there was not an effective system of environmental monitoring was in place.
At the time, the federal environment minister said he was listening to calls for a monitoring programme.
The researchers behind the PNAS study said that there was conflicting findings among the few long-term PAH datasets that existed, with some suggesting increases in limited areas, while other recording no increase between the 1950s and 1998.
“Establishment of background PAH concentrations and historic loadings is essential and would allow the impacts of development, including industrial PAH contributions, to be compared with the natural range… in lake sediment from the region,” they wrote.
“As noted repeatedly in previous assessments of the impacts of the Alberta oil sands operations, insufficient monitoring data and a poor understanding of pre-development conditions have attempts to determine the scope of pollution from oil sands development.”
The team concluded that the findings from their study had to be considered in a wider environmental context.
“As a consequence of climate warming, the physical processes that lakes experience can be altered,” they said.
“Longer ice-free season and enhanced thermal stability, coupled with higher surface-water temperatures and the redistribution of nutrients within the water column, contribute to greater algal production within many lake ecosystems.”
They concluded: “Analyses of sediment cores from five lakes near major oil sands operations and remote Namur Lake demonstrate that modern PAH concentrations and fluxes, including DBTs, are well above ‘natural’ pre-development levels.”
But, they added: “The ultimate ecological consequences of decades-long increases in aquatic primary production, coupled with greater PAH loadings to lakes in the oil sands region, are unknown and require further assessment.”
Adam Sweet, press secretary for Canada’s Environment Minister Peter Kent, said the Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring, announced in February 2012, was committed to a “scientifically rigorous, comprehensive, integrated, and transparent environmental monitoring program for the region.
“It is important to note that the results in this paper come from field studies that were conducted prior to the announcement of the Joint Plan,” he told BBC News.
“In fact, the Joint Plan was created, and implemented, to address the very concerns raised by such studies – it was designed to provide an improved understanding of the long-term cumulative effects of oil sands development.
“Canada has strong rules and regulations in place to ensure that the Canadian environment is protected, and our government will continue to ensure that Canada’s oil sands are developed responsibly.”
Fish living downstream of Alberta’s oil sands have lesions resembling those found on Gulf fish after the BP oil spill, warns a Canadian ecologist.
Three years ago this April, BP’s Deepwater Horizon oil spill catastrophe killed 11 workers and spewed nearly 5 million barrels (158,000,000 gallons) of crude into the Gulf of Mexico.
Mutant crabs and tumor-laden fish later turned up in the waters of the region.
ANALYSIS: Mutant Crabs Turning Up in the Gulf
Finding similar lesions on Canada’s fish, David Schindler of the University of Alberta has suggested that the chemical cocktail in crude oil may be responsible for the deformities, reported the Canadian Press. Schindler pointed to similar lesions on fish found in Prince William Sound after the Exxon Valdez spill as further evidence of oil’s effects on aquatic wildlife.
ANALYSIS: Record Dolphin, Sea Turtle Deaths Since Gulf Spill
The lakes of Alberta, Canada contain a toxic legacy after a half century of Athabasca oil sands drilling, according to research published in the Proceedings of the National Academy of Sciences. Polycyclic aromatic hydrocarbons levels in six lakes in the region increased by up to 23 times their 1960 levels.
Schindler wrote a letter to Canadian Fisheries Minister Keith Ashfield and Environment Minister Peter Kent calling for Canada to take the lead in studying the effects of oil contamination on fish. Schindler also suggested the Canadian government renew funding for the Experimental Lakes, a set of 58 lakes used for studies of freshwater ecosystems since 1968.
NEWS: Are Dolphins Doomed?
The Canadian government announced the end of funding for the Experimental Lakes last year, supposedly to save $2 million. However, the Huffington Post reported that the facility only cost $600,000 per year and that a third of that was covered by users’ fees. Some activists believe that political motivations against climate change research were the real reason for the lakes’ closure.
IMAGE: Syncrude’s base mine in the Athabasca oil sands region. (TastyCakes, Wikimedia Commons)
Historians may look back and write about how willing we are to sacrifice our children and jeopardize future generations with a massive experiment that is based on false promises and flawed science just to benefit the bottom line of a commercial enterprise.” So said Don Huber in referring to the use of glyphosate and genetically modified crops. Huber was speaking at Organic Connections conference in Regina, Canada, late 2012.
Huber is an emeritus professor in plant pathology at Purdue University in the US and has worked with the Department of Homeland Security to reduce the impact of plant disease outbreaks. His words are well worth bearing in mind given that a new study commissioned by Friends of the Earth Europe (FoE) and GM Freeze has found that people in 18 countries across Europe have been found to have traces of glyphosate in their urine (1).
Friends of the Earth Europe commissioned laboratory tests on urine samples from volunteers in 18 countries across Europe and found that on average 44 percent of samples contained glyphosate. The proportion of positive samples varied between countries, with Malta, Germany, the UK and Poland having the most positive tests, and lower levels detected in Macedonia and Switzerland. All the volunteers who provided samples live in cities, and none had handled or used glyphosate products in the run-up to the tests.
The Influence of the Biotech Sector on Safety and Regulation
Although ‘weedkiller in urine’ sounds alarming, Tom Sanders, head of the nutritional sciences research division at King’s College London, says the levels found are unlikely to be of any significance to health because they are 300 times lower than the level which might cause concern. Alison Haughton, head of the Pollination Ecology Group at Rothamsted Research, said that if FoE and GM Freeze want their work to have scientific credibility and provide a genuine contribution to the debate on pesticide residues, they should submit their work for publication in a peer-reviewed journal.
Valid points, you might think. But FoE believes that there is sufficient evidence to suggest environmental and health impacts from glyphosate warrant concern. It wants to know how the glyphosate found in human urine samples has entered the body, what the impacts of persistent exposure to low levels of glyphosate might be and what happens to the glyphosate that remains in the body. New research published in the journal Entropy sheds disturbing light on such concerns (discussed later in this article).
In 2011, Earth Open Source said that official approval of glyphosate had been rash, problematic and deeply flawed. A comprehensive review of existing data released in June 2011 by Earth Open Source suggested that industry regulators in Europe had known for years that glyphosate causes birth defects in the embryos of laboratory animals. Questions were raised about the role of the powerful agro-industry in rigging data pertaining to product safety and its undue influence on regulatory bodies (2).
In the same vein, FoE says there is currently very little testing for glyphosate by public authorities, despite its widespread use, and authorities in Europe do not test for glyphosate in humans and tests on food are infrequent. Glyphosate was approved for EU-wide use in 2002, but FoE argues that the European regulatory agencies did not carry out their own safety testing, relying instead on data provided by the manufacturers.
Of course there are certain scientists (usually with links to the agro-industry) who always seem to be strident in calling for peer-reviewed evidence when people are critical of the biotech sector, but then rubbish it and smear or intimidate the scientists involved when that occurs, as has been the case with Dr Arsad Pusztai in the UK or Professor Seralini in France. It is therefore quite revealing that most of the data pertaining to glyphosate safety came from industry studies, not from peer-reviewed science, and the original data are not available for independent scrutiny.
With references to a raft of peer-reviewed studies, FoE also brings attention to the often disturbing health and environmental dangers and impacts of glyphosate-based herbicides throughout the world (1). The FoE study also highlights concerns around the increasing levels of exposure to glyphosate-based weed killers, particularly as the use of glyphosate is predicted to rise further if more genetically modified (GM) crops are grown. It is after all good for business. And the biggest producer of glyphosate is Monsanto, which sells it under the brand name ‘Roundup’.
“The figures don’t lie; GMOs drive glyphosate sales.” (3)
Despite its widespread use, there is currently little monitoring of glyphosate in food, water or the wider environment. The FoE commissioned study is the first time monitoring has been carried out across Europe for the presence of the weed killer in human bodies. FoE Europe’s spokesperson Adrian Bebb argues that there is a serious lack of action by public authorities and indicates that this weed killer is being widely overused.
This certainly needs to be addressed not least because the prediction concerning increasing exposure to glyphosate is not without substance. The introduction of Roundup Ready crops has already resulted in an increase of glyphosate use. Using official US government data, Dr Charles Benbrook, research professor at the Center for Sustaining Agriculture and Natural Resources at Washington State University, states that since 1996 the glysophate rate of application per crop year has tripled on cotton farms, doubled in the case of soybeans and risen 39 percent on corn (4). The average annual increase in the pounds of glyphosate applied to cotton, soybeans, and corn has been 18.2 percent, 9.8 percent, and 4.3 percent, respectively, since herbicide tolerant crops were introduced.
Glyphosate is used on many genetically modified crops. 14 new GM crops designed to be cultivated with glyphosate are currently waiting for approval to be grown in Europe. Approval of these crops would inevitably lead to a further increase of glysphosate spraying. In the US, biotech crops, including corn, soybeans, canola and sugarbeets, are planted on millions of acres annually.
Evidence suggests that Roundup could be linked to a range of health problems and diseases, including Parkinson’s, infertility and cancers, according to a new peer-reviewed report, published recently in the scientific journal Entropy (5). The study also concluded that residues of glyphosate have been found in food.
These residues enhance the damaging effects of other food-borne chemical residues and toxins in the environment to disrupt normal body functions and induce disease, according to the report, authored by Stephanie Seneff, a research scientist at the Massachusetts Institute of Technology, and Anthony Samsel, a science consultant. The study says that negative impact on the body is insidious and manifests slowly over time as inflammation damages cellular systems throughout the body.
In 2010, the provincial government of Chaco province in Argentina issued a report on health statistics from the town La Leonesa. The report showed that from 2000 to 2009, following the expansion of genetically-modified soy and rice crops in the region (and the use of glyphosate), the childhood cancer rate tripled in La Leonesa and the rate of birth defects increased nearly fourfold over the entire province (6).
Professor Huber also notes the health risks associated with the (increasing) use of glyphosate. He says a number of plant pathogens are emerging, which when consumed could impact human health. Based on research that he alludes to (he refuses to make his research public or identify his fellow researchers, who he claims could suffer substantial professional backlash from academic employers who received research funding from the biotechnology industry), Huber notes that the use of glyphosate changes the soil ecology, killing many bacteria, while giving other bacteria a competitive advantage. This makes plants highly susceptible to soil borne diseases. At the same time, glyphosate has a negative effect on a number of beneficial soil organisms (7).
Huber’s concerns about the impact of long term use of glyphosate on soil sterility are similar to concerns expressed by Elaine Ingham, a soil ecologist with the Rodale Institute, and also research carried out in by Navdanya in India (8).
As for GM crops, Huber says they have lower water use efficiency, tend to be nutrient deficient, have increased bud and fruit abortion and are predisposed to infectious diseases and insect damage. He suggests that Roundup Ready crops, treated with glyphosate, have higher levels of mycotoxins and lower nutrient levels than conventional crops.
“… you could say that what you’re doing with glyphosate is you’re giving the plant a bad case of AIDS. You’ve shut down the immune system or the defense system.” Professor Ron Huber (7)
He concludes that, when consumed, the GM crops were more likely to cause disease, infertility, birth defects, cancer and allergic reactions than conventional crops.
Huber claims that consumption of food or feed that was genetically modified could bring the altered genes in contact with the microbes in the guts of the livestock or people who eat them. He feels this increases diseases, such as celiac disease, allergies, asthma, chronic fatigue syndrome, diabetes, gluten intolerance, irritable bowel disease, miscarriage, obesity and sudden infant death syndrome.
While none of these findings conclusively prove that plant (or animal) diseases are caused by the glyphosate, Huber feels safety evaluations have been inadequate, suggesting that previous (GM sector) research was substandard and extremely misleading in its interpretation of results – or worse.
With some hugely powerful players involved here, many of whom have successfully infiltrated important government and official bodies (9), much of the science and the ensuing debate surrounding glyphosate is being manipulated and hijacked by vested interests for commercial gain.
“… publishing in this area can also be difficult. I know from the International Symposium on Glyphosate that they had to find a journal publisher outside this country (the US) to publish the research data and symposium proceedings. It’s pretty hard to get it published in the States. There are also some hazards to publishing if you’re a young researcher doing research that runs counter to the current popular concepts. A lot of research on safety of genetic engineering is done outside of this country because it’s difficult to gain access to the materials, or the statements you have to sign to have access to those materials stating that you won’t publish without permission of the supplier. I think the 26 entomologists who sent their letter to EPA in 2009 stated it aptly when they said that objective data wasn’t available to the EPA because the materials haven’t been available to them or that they’re denied the opportunity to publish their data.” Professor Ron Huber (7)
The most hated company in the world right now isn’t a member of Big Oil. It’s not a shady Internet company or a bailed-out megabank. Populist discontent toward dirty energy, high-tech snoops, and greedy bankers has occasionally been fierce, but it’s never been laser-focused like the outrage that drew an estimated (by the organizers) 2 million protesters to anti-Monsanto rallies in more than 50 countries at the end of May.
Think about that. If those numbers are accurate, a single private company drew almost as many protesters in a single day as the worldwide Occupy movement at its peak. Monsanto didn’t even have to bankrupt any economies or leech billions of dollars off taxpayers. All it took was three little letters: GMO.
What is GMO?
You probably know something about GMOs, which stands for genetically modified organisms, since it’s as closely associated with Monsanto as “IRS” is with taxes. The popular definition of a GMO is (according to Wikipedia) “an organism whose genetic material has been altered using genetic engineering techniques.” If you want to get pedantic about this definition, humankind has been genetically modifying organisms ever since the first nomads settled down to grow crops, since virtually nothing we eat today is the same exact plant or animal (or Twinkie) it was 10,000 years ago. But that’s not why everyone’s afraid of Monsanto. Monsanto is scary because — in the eyes of detractors — it’s compressing 10,000 years of genetic adaptations into 10 years of mad science.
The history of commercialized GMO foods as we now know them began just two decades ago, with an “enhanced” tomato that was so unprofitable to produce that its developer wound up selling itself to Monsanto. Since then, other developments have embedded GMOs into a rather substantial part of the world’s food supply.
Source : ISAAA Brief on Global Status of Commercialized Biotech Crops, 2012.
Total global cropland, by comparison, amounts to roughly 1.5 billion hectares, so GMOs now take up more than 11% of all cropland in the world. ISAAA — the International Service for the Acquisition of Agri-Biotech Applications, a pro-GMO nonprofit supported in part by Monsanto’s funding — says that GMOs have made 100-fold gains in terms of planted cropland since 1996. The United States, Brazil, Argentina, Canada, and India comprise the lion’s share of GMO cropland, as more than 152 million of the world’s 170 million GMO hectares are found in those five countries.
All of this adds up to big business. The six largest seed-and-weed companies — which typically pair specially engineered seeds with herbicides that often eliminate any plants not attuned to their unique chemical structure — accounted for close to $50 billion in global sales across their various product lines in 2009, the last year for which complete data was available:
Seed + Trait Sales
Global Seed Market Share
Global Agrochemical Market Share
Total Agro-Tech R&D Spending
Fear of a mod planet
A quick search of “GMO” will turn up all sorts of scaremonger websites, with all sorts of frightening claims that when you eat a Monsanto-developed crop, you’re consigning yourself to a short, sickly life of gastrointestinal (or just general) agony. Cancer, allergic reactions, liver problems, sterility, and even the unnatural modification of your genes — these are just the claims I found on the website of the Institute for Responsible Technology, which purports to be a leading anti-GMO advocacy group. I won’t go into some of the anti-Monsanto conspiracy theories you’ll find bandied about on less reputable corners of the Internet.
It may not be easy to debunk all of these claims, but thanks to extensive national medical records, we can at least see how close to the mark they may strike. Since America was the earliest adopter of GMO foodstuffs, and is now the world’s predominant grower and consumer of GMO crops, it should be experiencing the worst of the purported GMO health problems.
Are we more cancerous today than we were in 1996? Actually, not by a long shot:
The results are even more pronounced when focusing on cancers of the stomach, colon, and rectum, which all show a persistent and significant downtrend throughout the entire tracked period across race and gender divisions. If we’re eating ourselves to death, shouldn’t our digestive systems be the most damaged by these Frankenfoods? Cancer statistics don’t back up anti-GMO claims at all, and with more than 16 years in the food supply, you’d expect there to be a statistically significant change. The one statistically significant spike on these graphs, occurring around 1990, is often blamed on the Chernobyl disaster.
There has been an increase in death rates from chronic liver disease and cirrhosis in recent years, by about one person per 100,000 from 1999 to 2010 — but keep in mind that these liver problems are typically alcohol-related. Simply noting a slight statistical uptick isn’t enough to blame on modified crops. People might just be binge-drinking more.
Food allergies, however, might be a different story:
The little disclaimer at the bottom reads “statistically significant trend,” and the prevalence of food allergies among children increased by 18% from 1997 to 2007. That’s rather notable. The average number of food-allergy-related hospital visits per year also spiked toward the end of the tracking period, from only 2,600 per year in 2000 to more than 9,500 in 2006. On its own, this may not be enough to blame on GMOs — except for soy, none of the foodstuffs on the CDC’s list of common food allergens is a known GMO crop (although wheat appears headed in that direction). The body may react to one type of food by increasing its reaction severity to other types, but the interplay between these factors is complex and not easily reduced to a simple cause-and-effect relationship.
Other noted health problems — here I refer to a long essay by Earth Open Source, no more an impartial observer than the ISAAA (impartiality is all but impossible to come by in the GMO debate) — include toxin contamination from the overuse of herbicides on GMOs modified for herbicide resistance, stomach lesions, and adverse immune reactions in mice, liver and kidney abnormalities in rats … well, it goes on like this. You can read about the effects in detail at this link, beginning on page 37 (PDF opens in new window). If you can name an ailment, there’s probably a study somewhere that has traced its cause to GMOs. Yet the world continues to live longer. U.S. life expectancy has increased from 76 years in 1996 to 78.6 years in 2011, and global life expectancy has increased from 66.4 to nearly 69 years in the same time period. If we’re less healthy, we sure are coping with it more effectively.
There has to be a reason farmers keep using GMOs. The most obvious would be that the end product — that is, the stuff you eventually eat — would yield more per planting (that is, per acre), which should result in lower costs at the consumer level. To the extent that this is true, it can’t be credited to the adoption of GMO seed, as yield improvements and price declines began long before Monsanto got into the seed business:
Soybean yields haven’t grown quite as impressively but have still doubled on a per-acre basis over the same time frame. Cotton yields have also soared over the past several decades. GMO crops had nothing to do with it — old-fashioned hybridization, improved production techniques and infrastructures, and the spread of these two important developments around the world created a modern agricultural revolution after the Second World War. GMO crops might be in the process of extending that revolution today, but they may not. Few processes are so simple that a simple tweaking of one element can completely explain a change in another.
GMOs can’t claim to have reduced crop costs through efficiency gains, either. Since commercial introduction in 1996, two of the three major crops planted have nearly doubled in price:
Ultimately, this is probably good for farmers, but bad for everyone else. Not only are you buying Frankenfoods that will wreck your health, but you’re also paying twice as much for the privilege. Agriculture can be so cruel. (Yes, that was tongue-in-cheek.)
Monsanto itself claims that GMOs benefit farmers through increased yield, greater insect and disease protection, and drought and heat resistance. The modified crops also conserve the soil, minimize the use of herbicides, and reduce the energy used in the growing process.
I’ve already shown that yields have been increasing for decades, so Monsanto is at best merely continuing a long-running trend, and at worst piggybacking on other improvements to make disingenuous claims. Herbicides and fertilizers have shipped in more than 35% greater quantities this year over the volumes seen in 1996. Fertilizer, as you might expect, is one significant part of increasing crop yields. Since fertilizers are quite energy-intensive to make (many are derived from natural gas) and can be damaging to soil quality over time, this one factor tends to disprove a number of Monsanto’s claims:
The increased use of herbicide designed to work with GMOs (and vice versa) appears to be creating strains of “superweeds” that actively resist the chemicals. Nature tends not to sit idly by while scientists try to pound it into submission. The long-term consequences of an arms race between chemical-cum-GMO producers and the invasive species they want to push out of farm fields could very possibly result in damages beyond the circumstantial ones I’ve already highlighted.
The only real claim that I can’t disprove (or at least weigh down with caveats) is that of drought and heat resistance, mostly because it’s not easy to find data on the claim in either direction. Reducing water use is no small feat in a world quite obviously enduring a period of abnormal heat and drought. However, this alone can’t answer for the fact that something should be done about widespread droughts beyond the creation of GMOs that drink just a little bit less water — particularly if these GMOs result in the indirect use of more water by herbicide-resistant weeds.
How do you solve a problem like Monsanto?
It’s tempting to reduce complex issues into outraged sound bites, like “GMOs are killing people!” or “GMOs are feeding the world!” The truth, as always, isn’t quite so easy.
The threat of tainted food — whether by chemicals or through genetic manipulation — is a cause that arouses outrage at a pitch few other causes will ever muster. The threat of a shadowy corporation with its fingers buried in the heart of our food supply only heightens this outrage, and Monsanto’s heavy-handed efforts at control have done nothing to soften its public image. However, the science of GMOs has been carried out in a highly ideological way on both sides, which doesn’t help when all you want is the truth.
It seems that GMOs will inevitably become a larger part of our food supply, because the corporate motivator in the United States has proved to be stronger than the citizen motivator in recent years. A few protests won’t change that. It will take concerted, long-running national efforts to change diets and attitudes before Monsanto and its peers are forced to loosen their grip on American farmlands. If you choose to be one of the people on the vanguard of that effort, make sure that you understand the science as it is, and not as you’d like it to be.
Are we less healthy today than we were two decades ago? It’s possible, even though most of the statistics don’t show that. Is it all Monsanto’s fault? Probably not.
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The article Why Is Monsanto the Most Hated Company in the World? originally appeared on Fool.com.
There’s no shortage of food, no shortage of wealth to solve social crises. The problem is a system that enriches a few and starves multitudes.
We hear day in day out about the massive poverty and hunger that exists in the world. NGO’s and various non-profits have been around for decades appealing for assistance in feeding the world’s poor. In the third world, water is as precious as gold. Sewage and water sources run parallel in the streets due to the lack of modern infrastructure systems.
More often than not, the experts in the universities and think tanks of the 1% drag the age-old Malthusian explanation out of the closet. There is simply an overpopulation problem. It is the poor that are to blame, if only they’d have fewer children.
But as I have pointed out in previous blogs, it is not too many people that are the problem. It is not the lack of medical knowledge or technical expertise that leads to staggering infant and adult death rates in some parts of the world. It is the lack of social infrastructure and the capital needed to provide it.
The world produces enough food to feed everyone according to Hunger Notes —17% more calories today than it did 30 years ago. But food is a commodity and its production does not take place if the end product cannot be bought and the value added during the production process realized. The capitalist class would call this lack of demand. But in the world of the market, if you can’t pay you can’t play. No money for food, then you starve.
This is the absurdity of capitalism that Marx wrote about, that we starve amid plenty. He wrote in 1848:
“It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce.”
Unicef estimates that between 2000 and 2010 92 million children died form hunger and diseases, “…many of the illnesses and conditions that children suffer are easily preventable, technically.” says Global Issues, in other words, they are really what we might refer to as “man made” deaths. They are in actuality, market induced deaths. Almost 2 million children a year die form diarrhea due to lack of safe drinking water, another market induced crisis with which even the UN seems to agree:
“We reject this [Malthusian perspective that global water problems are a problem of scarcity and population growth]. The availability of water is a concern for some countries. But the scarcity at the heart of the global water crisis is rooted in power, poverty and inequality, not in physical availability.” (2006 UN Human Development Report, p.2)
The cost of bringing people safe water is negligible when compared to the concentration of wealth. “The world’s billionaires — just 497 people (approximately 0.000008% of the world’s population) — were worth $3.5 trillion (over 7% of world GDP).” According to the World Bank. The world’s richest, Business Week claims, have a collective net worth of $2.8 trillion.
Anyway you measure it, there is plenty of money in the world. These characters spend half their time hiding this wealth to protect it, form ex-wives, estranged children and the rest of us. But how do they get it?
Russian billionaire Dmitry Rybolovlev, who is squabbling with his wife over a $9 billion nest egg and who has his cash stashed all over the world, made most of his money (including $500 million in art, $36 million in Jewelry and an $80 million yacht) “…from the sale of two potash fertilizer companies for a combined $8 billion…” Business Week adds.
But how did he come to own these huge operations; and in such a short period? It’s quite simple really and one of the reasons Gorbachev was so popular with the B movie actor and US president Ronald Reagan and the global 1%. Gorbachev was a former leading Stalinist bureaucrat. He was General Secretary of the Communist Party of the Soviet Union during the period when one of the most repressive totalitarian regimes in history began to draw its last breath and collapse under its own bureaucratic weight.
Gorbachev and his old buddies including many former KGB thugs like Putin who reached the ranks of Lieutenant Colonel, wasn’t about to go down with the sinking ship. What happened in a nutshell, and why we see so many prominent Russian millionaires and billionaires is that the old KGB and moribund party men appropriated the collective and collectivized wealth of the Soviet and Russian people.
The US capitalist class welcomed the plunder and their former KGB credentials were a thing of the past as long as capitalism could flourish. That’s where Rybolovlev and other Russians like him got their wealth.
No doubt readers are getting a bit bored with it but there is a need to hammer it home to counter the propaganda of the world’s bourgeois that there is not enough money to feed, clothe, house and provide humanity with a decent and productive life. I am talking about the claim by the Tax Justice Network that wealthy individuals, (we’re not talking corporations here) stashed as much as $32 trillion in offshore accounts in 2010 in order to avoid taxes. This amounts to the combined GDP of the U S and Japan. “Fewer than 100,000 people own $9.8 trillion of offshore assets,” BW claims. This exists as more than 9 million people die worldwide each year because of hunger and malnutrition; 5 million of them are children.
This situation is not something that cannot change. It is not an insoluble dilemma. It is not the fault of the victims, of “human greed” in the abstract or of “natural disasters” or the by-product of supernatural squabbling between a benign god and his disgruntled fallen angel.
It is a very simple; the Russian billionaires for example attained their rapid billionaire status simply through the transfer of the collective wealth of society to individuals including the means for generating that wealth.
We solve the problem by transferring collective wealth, and more importantly, the means by which it is created, the ownership of the means of production, distribution and exchange, from private individuals to the collective.
Through this process, we can emerge from the depths of depravity to the apex of civilization. True freedom.
The Severn Trent takeover – corporate profiteering and tax avoidance on Britain’s water supply | openDemocracy
To the people of Ireland please note this is the future direction of your water system. Is this what you want?
Severn Trent is the latest water company to be targeted for takeover by a motley group of investment funds. An analysis of their past deals reveals huge profits, meagre tax bills and a seemingly casual approach to ethical concerns. Once again public assets are turned into wealth for the few.
As more and more people struggle to pay their water bills, the financial world has been getting itself into a lather over the attempted takeover of Severn Trent, the company supplying water across the Midlands and parts of Wales, by an investment consortium called LongRiver Partners. Severn’s board has so far rejected two offers but financial commentators reckon LongRiver will keep coming back until they get what they want (they have until 11 June to make a final offer).
People living in the areas that Severn Trent is ‘serving’ haven’t been asked about any of this, and they’re not going to be. The decision rests with Severn Trent’s board and shareholders, not the eight million people they call “customers”. As the water supply is a captive market (odd, given that privatisation is generally meant to get rid of monopolies and increase competition) they have no choice over who profits from them each time they turn on their taps.
But should they be worried? LongRiver is an unimaginative front name for a grouping of three investment funds: Borealis Infrastructure Management, the Universities Superannuation Scheme and the Kuwaiti Investment Office. Let’s look at each in turn.
Borealis, with its obscure name, central London office and slick website, at first glance looks like a typical investment fund, run to make some already-very-rich people even richer. But there’s a twist. It is actually owned by the Ontario Municipal Employees Retirement System, the pension fund for over 400,000 municipal workers of the Canadian province. Unfortunately its previous UK investments suggest it doesn’t take a public service ethos into its work.
In the last few years, Borealis has bought three other companies providing important services and infrastructure to various parts of the UK: Scotia Gas, which supplies gas to Scotland and other parts of England, Associated British Ports, which owns and operates 21 ports in England, Scotland, and Wales, and HS1, which operates the rail link between London and the Channel Tunnel. Their accounts show Borealis and its fellow owners (different for each company) are using financial structures that means huge payouts for them, but meagre amounts for the public purse.
All three companies have borrowed huge amounts to finance investment – around £4 billion for each company. The exorbitant debt levels of water companies privately owned by investment funds have been criticised by a range of bodies, coincidentally including Severn Trent, which even wrote a report about it.
However, it is the identity of some of the lenders that should raise eyebrows highest in the case of Borealis’ three companies. Look further into their accounts and it turns out they have borrowed huge amounts from subsidiaries of Borealis and their other owners. Scotia Gas and HS1 each owe around £500 million, while Associated British Ports owes over £2 billion. And the interest rates on these loans are far higher – between 10 and 12% – than they are paying to banks or other third parties for the rest of their debt.
The interest payments – around £70m for Scotia and HS1 in 2012, and £255m for Associated British Ports – on these loans help to slash, and sometimes completely wipe out, the companies’ taxable UK profits. Their corporation tax bills are therefore significantly reduced – and sometimes non-existent – while the interest is accrued annually to Borealis and the other owners whether or not the company has had a good year. This isn’t the only way to invest – Borealis and co could have put the money into the company as equity, and received dividends instead of interest. But dividends are paid after a company has been taxed, so do nothing to reduce that bill.
It gets trickier. If Borealis was lending from its home in Canada, HMRC would keep 10% of the interest payments through what is called “withholding tax”. But the loans have been made through the Channel Islands Stock Exchange. Thanks to a loophole HMRC knows about but refuses to close (called the “quoted Eurobond exemption”), no tax is withheld.
Perhaps unsurprisingly, this type of financing is already popular in the water industry. A Corporate Watch investigation earlier this year found seven companies are using this loophole. It is popular with a range of companies, from private healthcare company Spire to Classic FM owners Global Radio. But the most dispiriting thing about all may be that it is being done to ensure service workers in another part of the world can have as comfortable a retirement as possible.
Which leads us onto the Universities Superannuation Scheme. As its name suggests, it too is a pension fund, for university staff across the UK. The USS describes itself as an “active and responsible” investor that says its will take “material corporate, governance, social, ethical and environmental issues” into account when making investment decisions.
Its track record though, doesn’t provide much hope for the people who may soon be relying on it for their water supply. Its investment portfolio contains a range of companies not generally known for their social, ethical or environmental principles. Oil giants Shell and BP, currently under investigation for oil and petrol price fixing, to add to their other various misdeeds, are both in the top five, as is HSBC, itself being investigated for money laundering. There’s also Vodafone, which could teach even Borealis a thing or two about tax bills, arms company BAE, British American Tobacco and notorious mining giants BHP Billiton and Rio Tinto. The USS has also been criticised for its investments in companies profiting from illegal Israeli settlements in Palestine, for example Astom, a French company involved in the construction of a light railway in occupied East Jerusalem (see here for more details).
And don’t hold out too much hope that the Kuwait Investment Office, a sovereign wealth fund set up with the country’s oil revenues, will be keen to ensure water drinkers get a good deal. The fund’s managers may have first met their USS counterparts at the BP AGM, where they are a major shareholder. The fund also has a hugely valuable property portfolio, especially in the City of London, and bought sizeable stakes in both Citigroup and Merril Lynch when the credit crunch first hit, later selling its Citigroup stock for a tidy profit two years later.
So things aren’t looking good for Severn Trent “customers”. But are they that good anyway? The company’s shares are currently traded ‘publicly’ on the stock exchange, and a lot is being made in the press of the difference between the listed water companies and those owned by consortia like LongRiver, with massive debt and tax avoidance schemes more popular with the latter (download an ownership table here). But the similarities are greater than the differences.
It’s true that Severn Trent’s bills are lower than many of their peers, but they’re still pretty damn high – £311 a year is a lot to be paying for water. Bills have increased by 50% in real terms since privatisation in 1989. A parliamentary briefing produced last month estimated 23% of households across England and Wales “now spend more than 3% of their income on water and sewerage bills” and suggested water bills “might not be affordable for a large number of people”.
Rising bills – approved by the government regulator OFWAT – are justified as necessary for investment in creaking infrastructure. But the money is also going to satisfy shareholders’ demand for a return. Severn Trent paid out dividends of almost £160m in 2012 and has said they will be higher this year. There’s a reason its current management are holding out for more than a 16% premium on its current share value: they know guaranteed rising prices for monopoly control of a resource everyone needs is a deal they can charge extra for.
Add to this chief executive Tony Wray’s £1 million remuneration in 2012 – the second highest of all the water companies – and the £300 million it paid in interest on its £4bn of borrowings in 2012 and the investment figures start to look less impressive (there are no Borealis-style related party loans, but their banks and bondholders are charging them around 6% on average). And Severn Trent’s public listing hasn’t kept it scandal free. It had to pay a record £36m fine and promise to cut customer bills in 2008 after orchestrating what the Independent newspaper called “one of the largest customer overcharging scandals ever perpetrated in the UK”. It was fined £2m in the same year for falsifying leakage data.
So perhaps the choice we should be talking about is not private or publicly-listed, but private or public. Earlier this year, Corporate Watch calculated that £2 billion a year could be saved – or £80 per household – if the water supply was in public ownership. The government can borrow much cheaper than the companies and there would be no private shareholders demanding their dividends (see here for the full piece).
This isn’t to say that a public supply would automatically work well – the pre-privatisation supply was criticised for under-investing and lack of accountability – but there are many examples from around the world of water supplies being run more efficiently and democratically when public (see a short video on this here). And there’s certainly no shortage of examples from around the world of privatisation failing to provide a decent or equitable service,*. England’s water supply**, currently, is one of the them.
* See the Public Services International Research Unit website for more information
** Scotland, Northern Ireland and the rest of Wales have public or not-for-profit- supplies.