* The fact that the economy is now officially back in recession vindicates those of us once referred to as economic illiterates. read full article
Cuts effective immediately and figure represents savings to be made by the end of the year read full article
GREECE has three days to reassure its lenders it can deliver on conditions attached to its international bailout in order to receive the next tranche of aid, four euro zone officials wa read full article
The OECD figures show Ireland has fewer doctors than most European countries, though more per head of population than in the US or Canada . Ireland has a relatively high number of nurses, though the report warns about comparing data as nurses and midwives can be categorised differently. read full article
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)
There appear to be “remarkable similarities” between fish deformities found downstream from Alberta’s oilsands and those observed after the Exxon Valdez oil spill in Alaska and after Florida’s Deepwater Horizon disaster, says a renowned ecologist.
David Schindler of the University of Alberta has written an open letter to two federal cabinet ministers pointing out the recent research findings from scientists as far afield as the Gulf of Mexico.
“Given the parallels in the cases from various locations, it seems likely that some chemical or suite of chemicals in crude oil is causing the malformations,” Schindler wrote.
He’s proposing that Canada take the lead in researching the issue by isolating the various chemical compounds and introducing them to fish stocks in a controlled setting.
And Schindler says the federal Experimental Lakes Area – which has been shut down by Ottawa for a savings of about $2 million annually – is the ideal natural laboratory for the work.
In a letter Wednesday to Fisheries Minister Keith Ash-field and Environment Minister Peter Kent – copied to a number of U.S. scientists and some news media – Schindler praised the monitoring work of government scientists in the Athabasca River.
But he said such monitoring can’t possibly determine which chemicals may be affecting aquatic life due to the “complex chemical soup” found downstream from industrial oilsands development.
What’s required, the scientist said, “would be whole ecosystem experiments where small amounts of selected chemicals are applied to whole lakes, and the effects determined on several key species in the food chain.”
It’s tailor-made for the federal Experimental Lakes Area in northwestern Ontario, a remote region of 58 pristine lakes that have been used since 1968 for groundbreaking freshwater studies on everything from nutrient-loading and mercury exposure to acid rain.
The Harper government announced last year it was closing the world-renowned facility as a cost-saving measure – although insiders say the operating cost of the facility is only $600,000 annually, of which a third comes back in user fees.
Fully funded independent researchers have been refused access to the site to continue their research this summer, although Ottawa is in negotiations with the province of Ontario and other parties to transfer management.
Linking the closure of the Experimental Lakes Area – a cause celebre among Canada’s scientific research community and environmentalists – with oilsands pollution is a potentially toxic political mix for the government.
Activists have already claimed climate-change research at the ELA is the real reason the Conservatives closed the facility.
A spokeswoman for Ashfield did not directly address Schindler’s proposal when reached for comment, but said in an email “the government continues to actively work toward establishing a new operator for the ELA site so that research there can continue.”
Erin Filliter added that “freshwater science continues to be conducted across Canada at multiple facilities which more than adequately meets the needs of government research.”
Similarly, Rob Taylor at Environment Canada said by email that “Minister Kent is very engaged in the environmental monitoring of the oilsands region.” “The Canada-Alberta joint scientific monitoring program has been put in place to study any impact on air quality, water quality and biodiversity,” said Taylor.
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.
The international clothing companies may not be directly liable; yet they cannot evade responsibility. Notably, Ireland’s Primark (with operations across Europe) and Canada’s Loblaw have been remarkably swift in offering compensation to victims and their families. But compensation can alleviate suffering only very partially as the industry thrives on exploitation. As it turns out, the collateral cost to meet the high-street’s appetite for cheap clothes ~ on either side of the Atlantic ~ can be hideously catastrophic.
THE scale of the garments factory disaster in Bangladesh is much too horrifying to contemplate, and will probably turn out to be much greater in the weeks ahead. Overall, it testifies to the scant regard for the working class in a booming industry with a literally readymade offshore clientele. The death toll had touched 1127 till last Monday afternoon. And the in-parallel decision of the country’s cabinet to dramatically revamp the labour laws, pre-eminently to ensure the legitimate rights of workers in the garments industry, is a horribly belated initiative for a country that attained nationhood four decades ago. It is more than obvious that the human factor was accorded a calculatedly minor rating as successive governments have oscillated between perceived secularism and fundamentalist design.
The essay towards the welfare of the worker has been announced in the aftermath of the worst industrial disaster in the subcontinent after the Bhopal gas leak in December 1984. Aside from a hike in salaries, garment workers will be allowed to form trade unions without permission from factory owners. This is quite the most critical feature of the government’s blueprint, which will have to be approved by parliament. Additionally, factories will have to be modernised and workers provided with direct deposits to bank accounts to guard against such “abuses” as withholding or delaying salaries as expressions of vindictiveness. Effectively, it amends the 2006 Labour Act by lifting restrictions on forming trade unions in most industries. The old law required workers to obtain permission before they could form unions. Not that the law enacted in 2006 disallowed trade unions; they do exist in many of Bangladesh’s other industries. Yet the owners of garment factories never did allow them; they remain an oddity both in terms of exploitation and human rights in a purported democracy.
The welfare handout is seemingly benevolent, but it will be hard for the Awami government to dispel the dominant impression that it is an afterthought after enough have died and many more incapacitated. It isn’t quite embedded in the Benthamite doctrine of the greatest good of the greatest number. If it were so, humane conditions would long ago have been in place, transcending seemingly secularist and decidedly fundamentalist blather. The government’s initiative, announced at a meeting presided over by Prime Minister Hasina, is essentially a direly embarrassed administration’s response to one of the worst industrial disasters in South Asia in the year before the national elections. The war-cry at Shahbag Square against the Pakistan army’s repression in 1971, perfectly valid though it is, chimes oddly with the industrial oppression 40 years after freedom was attained.
The visuals almost defy belief. Reshma, the employee of a garment factory who was rescued after 17 days beneath the rubble, personifies the underbelly of a range of entities in Bangladesh ~ the booming real estate enterprise, the oppressive garment factories, the greedy Western clientele, and a largely impervious government. Collectively, they cannot evade responsibility. The collapse of Rana Plaza at Savar on the outskirts of Dhaka has been more than just a high-rise cave-in. This is much too palpable as the grim drudgery of digging bodies and rescuing the survivors would suggest. It has been a horrific disaster, the deadliest in the history of the clothing industry. Hence the international focus on the dangerous conditions in the factories that produce clothes for North America and Europe… and in the process showcase industrial exploitation at its worst. For a single day’s absence, the predominantly female workers suffer a pay-cut for three days; even women in an advanced stage of pregnancy had to report for duty when the building had started cracking up. Worried workers were threatened with the sack if they failed to turn up.
Given the enormous foreign exchange potential of the sweat-shops ~ a cruel irony if ever there was one ~ it was some time before the government eventually woke up to a grotesque trampling of human rights in this commercial complex, one that caters to the Western brands with the “made in Bangladesh” tag. Western companies happen to be major clients and this is the grim message from the rubble in Savar ~ one that we hope will cross oceans. The brands using these facilities must be named, and their goods boycotted. This is the only way to battle greed. The international clothing companies may not be directly liable; yet they cannot evade responsibility. Notably, Ireland’s Primark (with operations across Europe) and Canada’s Loblaw have been remarkably swift in offering compensation to victims and their families. But compensation can alleviate suffering only very partially as the industry thrives on exploitation. As it turns out, the collateral cost to meet the high-street’s appetite for cheap clothes ~ on either side of the Atlantic ~ can be hideously catastrophic.
The Savar tragedy places the Awami League government ~ now contending with an Islamist backlash ~ on test. It cannot evade its culpability for having failed to enforce town planning and building regulations, a failure that it shares with administrations on this side of the border as well. A prickly sense of nationhood alone explains why Dhaka has turned down offers of assistance in rescue operations from the international community. Arguably, more lives might have been saved and Reshma rescued long before she actually was. Having seen daylight after spending 17 days beneath the debris, she can only thank her destiny… and not the government or its disaster management wing, such as it exists.
Given the scale of the disaster, the amendment to the labour laws must of necessity conform to international standards. The government will have to contend with the grim working conditions of the $ 20 billion industry that covers 5,000 factories across the country and 3.6 million garment workers. There must be a Rana Plaza too many dotting the Bangladesh landscape. The exploitation, therefore, has been overwhelming. Altogether a lethal cocktail of official corruption and ineptitude, desperation for jobs matched with desperately cheap labour, and the industry’s negligent nonchalance. Over time, Bangladesh has emerged as the world’s third largest exporter after China and Italy. Theoretically, this might testify to the resilience of the garments industry, one of the major props of the national economy. Yet the collateral cost ~ appalling at any given point of time ~ can turn out to be still more devastating as the tragedy has unfolded since 24 April.
The writer is a Senior Editor, The Statesman
via special article.
via special article.
by John Hill, Mohawk Nation News, mohawknationnews.com, May 2013
A great loss to the people, to the nation, to the resistance, anti-imperialist movement right across Great Turtle Island.
On March 13th, Dacajeweiah, Splitting-the-Sky, 61, left us forever when he passed away in his home in Adams Lake, British Columbia. Dac’s colonial name was John Boncore Hill, from Six Nations. “From Attica to Gustafsen Lake,” and thereafter, he was a warrior, a comrade, a brother, a father, a grandfather, a friend.
We deeply mourn his loss.
The family will release a biographical statement and details of memorial arrangements in due course. With deepest love to his wife, She-Keeps-the-Door, and children. We stand with Dac’s many many co-fighters and friends. He loved the People.
As European Union (EU) member states consider the implications of environmentally risky shale gas development (fracking), negotiations are underway for a controversial EU–Canada Comprehensive Economic and Trade Agreement (CETA) that would grant investors the right to challenge governments’ decisions to ban and regulate fracking.
This briefing by Corporate Europe Observatory, the Council of Canadians and the Transnational Institute highlights the public debate around fracking, the interests of Canadian oil and gas companies in shale gas reserves in Europe, and the impacts an investment protection clause in the proposed CETA could have on governments’ ability to regulate or ban fracking. It examines the case study of the company Lone Pine Resources Inc. versus Canada, which, using a similar clause, is challenging a fracking moratorium and suing the Canadian government for compensation, and warns this could be the state of things to come in Europe. It recommends that the investor–state dispute settlement mechanism should not be included in CETA.
Fracking in the EU: regulators play catch-up
Fracking – short for hydraulic fracturing – is a newly popular technology to extract hard-to-access natural gas or oil trapped in shale and coal bedrock formations. The rock must be fractured and chemicals, sand and water propelled in to allow the gas or oil to migrate to the well. Each stage of the extraction process has considerable environmental risks, especially in terms of water contamination.1
Environmental and public health problems related to fracking have created popular distrust and resistance, to the extent that the majority of countries concerned with shale gas endowments in Europe (see map on page 3 in PDF version of this briefing) are taking positions against fracking. France and Bulgaria have already banned it, while Romania, Ireland, the Czech Republic, Denmark and North-Rhine Westphalia in Germany have proclaimed moratoria. As in the Netherlands, the UK and Switzerland, projects in the listed countries with moratoria have been suspended until further environmental risk assessments are done. In Norway and Sweden fracking has been declared economically unviable. Projects in Austria and Sweden have been cancelled for the same reason, though without legislative measures.
But powerful gas corporations are constantly pushing back against regulation.2 Despite citizens mobilisation, unconventional gas projects are underway in much of Spain and Poland. Even when a moratorium or a ban exists as in France, the industry exploits legal loopholes to push through its operations.
These struggles for the democratic right to decide environmental regulation are all the more important as to date there is no political consensus at the EU level regarding fracking. The issue is under debate, however: in September 2012 the European Parliament brought an amendment calling for a European moratorium on fracking that was supported by a third of Members of European Parliament (MEPs). The EU currently lacks clear regulation on fracking and it rests mainly on member states’ shoulders to legislate on the issue.
CETA threatens fracking bans
The EU and Canada are currently negotiating a free trade agreement that could threaten the ability of countries to implement fracking bans and regulations. There are many oil and gas companies with headquarters or offices in Canada who have already begun exploring shale gas reserves in Europe, particularly in Poland (see box 1). Though many of these firms are not strictly Canadian, a subsidiary based in Canada would allow them to challenge fracking bans and regulations through CETA. Moreover, there is ample evidence that firms will shift their nationalities in order to profit from such a treaty.
Box 1: North American Energy Giants Lead Fracking in Europe
Total, a French corporation with a subsidiary in Canada, has invested in Denmark, Poland and France. In 2010, the Danish government issued two exploration permits to Total and despite a moratorium the company began exploratory drilling in that country. Total has one Polish concession. The company also invested in France prior to the moratorium and filed a legal appeal against its license being withdrawn.
Chevron, a US-based company with subsidiaries in Canada, owns and operates four shale concessions in southeast Poland and since 2012 has been drilling exploratory wells. Before the Romanian moratorium, Chevron had the gigantic Barlad Shale concession. Chevron also had a 50% stake in an exploration and production company in Lithuania.
In early 2013, Shell signed the biggest shale gas contract in Europe – a $10 billion deal in the Ukraine where it will drill 15 test wells.
In 2011, ExxonMobil signed an agreement with Ukraine’s state energy company, Naftogaz. The company is pursuing shale gas potential in Germany, and in response to a moratorium in North-Rhine Westphalia, Exxon has developed a website to address public concern.
In partnership with Lane Energy, Texas-based Conoco Philips is assessing the reserves of 1.1 million acres in northern Poland.
Other North American companies interested in Europe’s shale gas reserves are Halliburton, Enegi, Talisman and Encana.
The proposed CETA includes several chapters that would limit environmental, health or consumer protection regulations. These include chapters on so-called Technical Barriers to Trade and Regulatory Cooperation that will give the Canadian government more influence in how and when European governments act to protect the public good. Canada is already disputing the European seal product ban at the World Trade Organisation (WTO), claiming it is an illegal technical barrier to trade. Canada has also threatened to challenge the proposed European Fuel Quality Directive at the WTO if it labels fuel from tar sands as more polluting than conventional oil. One of the world’s largest deposits of the controversial tar sands is located in the Canadian province of Alberta.
CETA will also include a process through which a Canadian investor can settle disputes with the EU or a member state outside of the regular court system. This process, called investor–state dispute settlement, is increasingly controversial globally as mining and energy firms use it to challenge environmental, public health or other government measures that, in their terms, indirectly lower their profit expectations – or, in other words, run counter to their financial interests.
This investment protection provision will enable energy and extractive companies with an office in Canada to challenge fracking bans, moratoria and environmental standards for fracking sites across the EU – and potentially pave the way for millions of Euros in compensation to be paid to these companies by European taxpayers. Precedents already exist for these types of challenges under a similar provision in the North American Free Trade Agreement (NAFTA), where a US energy firm, Lone Pine Resources Inc., is challenging a moratorium on fracking in the Canadian province of Quebec.
Investor rights trump democracy: the alarming case of Lone Pine vs Canada
North American governments are under enormous pressure from natural gas and energy firms to embrace fracking. While production is more advanced in the US, several energy firms are staking out claims to Canada’s large shale gas basins across the country. The Utica basin in the province of Quebec, sitting underneath the St. Lawrence River and Valley, is estimated to contain around 181 trillion cubic feet of natural gas.
But public resistance to fracking in Quebec, as well as growing documentation about water pollution, forced Quebec’s government of the day to be cautious. Public consultations on fracking resulted in the creation of a strategic environmental assessment committee. In 2011, based on the recommendations of a study by Bureau d’audiences publiques sur l’environnement, the Quebec government placed a moratorium on all new drilling permits until a strategic environmental evaluation was completed. Finally, a new provincial government was elected in 2012, promising to extend the moratorium to all exploration and development of shale gas in the entire province. At this point, Lone Pine Resources Inc. decided to use the investor rights chapter in the NAFTA to challenge the Quebec moratorium and demand US$250 million (€191 million) in compensation.
Lone Pine claims the Quebec moratorium is an “arbitrary, capricious, and illegal revocation of [its] valuable right to mine for oil and gas.” The firm says the government acted “with no cognizable public purpose,”3 even though there is broad public support for a precautionary moratorium while the environmental impacts of fracking are studied. Milos Barutciski, a lawyer with Bennett Jones LLP, who is representing Lone Pine in the arbitration, described the moratorium as a “capricious administrative action that was done for purely political reasons – exactly what the NAFTA rights are supposed to be protecting investors against.”4 It may seem unbelievable but this lawyer may be correct that Lone Pine’s right under NAFTA to make a profit is more important than the right of communities to say no to destructive and environmentally dangerous resource projects.
Essentially, this means companies in shale gas exploitation have their considerable investment risks reduced to near zero. If affected communities speak out against fracking, or the government changes its mind, it is the taxpayer who picks up the tab, not the firm – sometimes even if the government wins the investment dispute or settles beforehand. In investment arbitration, legal costs aren’t always awarded to the winning party.
The Lone Pine case is extremely significant for the EU and member states. It shows that governments are highly susceptible to investor–state disputes related to fracking and other controversial energy and mining projects, and that those firms eager to establish or expand shale gas exploration and extraction in Europe will be able to undermine precautionary measures in the public interest – as long as they have a subsidiary or an office in Canada. An investor–state dispute settlement in the proposed CETA would create needless risk to European communities weighing the pros and cons of fracking.
The right to pollute, the right to profit
EU member states already have experience with investor–state disputes undermining green energy and environmental protection policies. More than 1200 existing international investment treaties signed by EU member states allow companies to challenge public policy at private international tribunals. Germany has been sued by energy company Vattenfall for environmental restrictions on a coal-fired power plant, claiming more than €1.4 billion (US$1.8 billion) in compensation. The case was settled out of court after Germany agreed to water down the environmental standards, thus exacerbating the impact that Vattenfall’s power plant will have on the environment.5
Despite this negative experience, the EU is negotiating free trade and investment agreements that will allow foreign investors to bring similar legal claims against member states, including over measures to protect the environment and public health. If ratified, CETA will be the first EU-wide agreement to grant foreign investors such far-reaching rights enshrined in international law for Europe and Canada, which, even if eventually cancelled by either party, will remain in force for 20 years.6
Based on Canada’s negative experience under NAFTA’s investor–state dispute process – it is the 6th most sued country in the world and currently faces over US$5-billion (€3.8 billion) worth of NAFTA investment claims – the Canadian government is trying to limit when a company can invoke investment arbitration in CETA. However, EU negotiators are pushing back and seeking much more investor-friendly definitions for key terms in the treaty such as what would count as “direct” or “indirect expropriation,” or what would contravene an investor’s “fair and equitable” treatment (see box 2).
In the general context of controversy over fracking at both EU and member state levels, investor–state dispute settlement is a real threat to governments’ sovereignty. In cases where member countries already have a ban or a moratorium, such a process would allow these to be challenged. For countries moving towards permitting projects related to shale gas, or without a strong protective legal framework, the mere threat of an investor–state dispute could freeze government action. Evidence under NAFTA suggests that the threat of a dispute has a chilling effect when policy-makers realise they have got to pay to regulate.
The present EU regulatory framework concerning fracking is at an early and fragile stage, which could be severely undermined by investment rules within the CETA agreement. They are in potential conflict with democratic efforts to regulate and roll back fracking activities at both EU and member state levels.
Box 2: The Devil in the (Free Trade Treaty) Details
“Indirect expropriation”: Allows investors to claim compensation as a result of a regulation, law, policy, measure or other government decision that has the effect of reducing or eliminating profit-making opportunities for the firm. Since almost any government measure can fit that definition when seen from a certain (investment-biased) point of view, legitimate public policies have faced investor–state lawsuits globally.
Canada is proposing to include exceptions so investors cannot sue against regulations to protect public welfare, such as health, safety and the environment. Thus, Canada hopes to create more freedom to regulate without the fear of being sued.
According to the leaked CETA investment text, the EU, on the other hand, would apply both “necessity” and “effectiveness” tests to such public welfare measures, in other words placing a very big burden of proof on governments to justify any measures such as fracking moratoriums or strict regulations on energy projects.
“Fair and equitable treatment”: A vaguely defined minimum standard of treatment for foreign investors found in almost all bilateral and multilateral investment treaties. Because this clause is so vague and arbitrators tend to interpret it in an investor-friendly way, it is the clause most relied on by investors when suing states. It is cited in all of the current NAFTA claims against Canada.7
For example, a Canadian oil or gas company could argue that it was under the impression, given favourable signals from the EU or member state governments, that a fracking project was going to go ahead. This is exactly what happened in the Quebec case where the project was only halted by strong community resistance. Under CETA, a Canadian firm would be able to challenge this kind of moratorium or ban.
Because of how broadly investment tribunals tend to interpret minimum standards of treatment, Canada is trying to narrow the definition of the so-called fair and equitable treatment standard in CETA. But again, the EU favours a more expansive, pro-investor definition in line with the type of investment treaties favoured by Germany and the Netherlands.8
No excessive corporate rights in CETA
The negative environmental impacts of fracking have been well documented and serious concern over the practice is widespread. Many governments are currently considering moratoria or exploration bans, especially in light of public health and environmental protection. These democratic proceedings and communities’ rights to self-determination ought to be respected, if not protected, and policy-makers should ensure that no treaties or laws can interfere with that process. In the case of fracking, moratoria are fully in line with the long-standing EU respect for the precautionary principle.
Clearly CETA, and in particular its planned investment chapters, will give corporations unreasonable and undemocratic rights to challenge fracking bans and to frustrate public interest regulation. CETA may also give EU-based energy companies with an interest in fracking the ability to skirt European laws by pretending to be Canadian to access the investor–state dispute settlement process.
In June 2011 a European Parliament resolution on the EU–Canada negotiations stated that, “given the highly developed legal systems of Canada and the EU, a state-to-state dispute settlement mechanism and the use of local judicial remedies are the most appropriate tools to address investment disputes.”9 In July that year, the Commission’s own Sustainability Impact Assessment of CETA came to the same conclusion, recommending a state-to-state dispute process only.10
The case of Lone Pine Resources Inc. suing Canada over a fracking ban shows that government policies on environmental issues can be undermined by granting investors the right to sue at international tribunals. Like their US competitors, Canadian energy firms and the Canadian government are eager to establish a strong presence in emerging European markets for shale gas. They, as well as US and European energy firms with substantial operations in Canada, could access CETA’s investor rules to file compensation claims similar to Lone Pine’s NAFTA case.
The mere possibility of a lawsuit based on investor–state arbitration can be enough to deter strong public health and environmental protection. Where fracking is concerned, it is unacceptable that the public should bear all the risks of extraction and the resulting environmental damage, as well then running the risk of having to pay compensation to energy firms for the right of communities to say no to fracking.
This situation brings new urgency to the need to exclude the investor–state dispute settlement provisions from CETA, and to rely on Canadian and European courts to settle disputes between foreign investors and host states.
- 1.For more general information about fracking see Transnational Institute (2013): Old Story, New Threat. Fracking and the global land grab, February.
- 2.See, for example: Corporate Europe Observatory (2012): Foot on the gas. Lobbyists push for unregulated shale gas, November.
- 3.See Lone Pine’s Notice of Intent to Submit a Claim to Arbitration Under Chapter Eleven of the North American Free Trade Agreement, 8 November 2012.
- 4.Quoted in: Gray, Jeff (2012): Quebec’s St. Lawrence fracking ban challenged under NAFTA, in: The Globe and Mail, 22 November.
- 5.In a similar case, Germany is currently being sued by Vattenfall because, after the Fukushima nuclear disaster in 2011, the German government decided to phase out nuclear energy. Vattenfall is seeking €3.7 billion (US$ 4.8 billion) for lost profits.
- 6.According to a leaked version of the consolidated investment chapter in the CETA from 7 February 2013.
- 7.Public Citizen (2012): Memorandum. “Fair and Equitable Treatment” and Investors’ Reasonable Expectations: Rulings in U.S. FTAs & BITs Demonstrate FET Definition Must be Narrowed, September 5.
- 8.Note that even Canada’s more cautious approach has proven futile in practice, where arbitration panels have ignored the common international law definition and used decisions of past tribunals instead, which will inevitably create pressure for increasingly pro-investor decisions. See, Porterfield, Matthew C. (2013): A Distinction Without a Difference? The Interpretation of Fair and Equitable Treatment Under Customary International Law by Investment Tribunals, in: Investment Treaty News, March 22.
- 9.European Parliament resolution of 8 June 2011 on EU-Canada trade relations.
- 10.A Trade SIA Relating to the Negotiation of a Comprehensive Economic and Trade Agreement (CETA) Between the EU and Canada, Trade 10/ B3/B06, June 2011, p. 19.
In recent years, BP has spent a lot of money trying to convince the world it had moved ‘Beyond Petroleum’. But having junked its solar energy programme, and been responsible for one of the largest oil spills in history, the only thing left that’s green about this huge multinational corporation is its famous logo. With its entrance into the tar sands, it’s safe to say that Beyond Petroleum has gone Back to Petroleum…
BP has recently dived into its first big Tar Sands extraction venture. The Sunrise Project, a partnership with Husky Energy, will pump out a planet-destroying 3 billion barrels of oil, whilst polluting the local environment and creating serious health and safety concerns for local First Nations communities.
Despite opposition from environmental groups, First Nations communities, climate activists, pension groups and concerned UK citizens they have decided to go ahead with the Sunrise Project. However, no oil will be extracted until at least 2013, so there is still time to stop the project from going ahead.
The Sunrise Project is set to produce 200,000 barrels per day by 2014. Sunrise will use so-called SAG-D (Steam Assisted Gravity Drainage), where water is superheated into steam with vast amounts of natural gas, then injected deep into the earth to melt” the oil from the sand and clay.
Mark Carney has been the Governor of the Bank of Canada since 2007. During his time as Governor, the main chartered banks were injected with “liquidity” totaling about $114 billion because of the financial crisis of 2008. The Prime Minister denied that this injection was a “bailout.” The Canadian banks also borrowed from the US Federal Reserve discount window–one bank alone borrowed $10 billion.
Canadian banks have gradually been deregulated and now are getting bigger than ever before. They can sell insurance, make investments and take deposits where previously they had been just boring depository banks. They are also getting bigger through acquisitions of other banking institutions.
Mark Carney gets credit for keeping Canadian banks from failing during the crisis but it was mostly luck (“horsehoes”) or previous regulation that actually kept the financial system stable. Carney and Finance Minister Flaherty frequently warn Canadians to get out of debt even though savings earn very little interest with our low interest rate policy and wages are stagnant or decreasing while prices continue to increase. Debt levels in Canada reflect the conditions of our economy. At the same time, the government has decided to impose austerity on the population by reducing expenditures across the board by 10% including loss of government jobs.
Here’s a little song for Mark Carney as he leaves Canada to become Governor of the Bank of England:
“When I was a Lad” (Carney Style)
By Polemic – Macro Man
After prompting from a reader and getting bored of guessing Italian election outcomes, we have adapted Messrs Gilbert and Sullivan’s “When I was a Lad” from “HMS Pinafore“. Instead of the Queen’s Navy, we think the B.o.E is more topical.
“When I was a Lad” (Carney Style)
When I was a lad I served a term
As a junior trader at the Goldman firm.
I cleaned the books and soon wasn’t poor,
As I traded debt and made the profits soar.
He traded debt and made the profits soar.
I traded debt so carefully
That now I am the Governor of the B.o.E
He traded debt so carefully
That now he is the Governor of the B.o.E
As trading boy I made such a fee
That they gave me a post in the ministry
As Canadian minister with no recourse
I introduced a tax on income trusts at source.
He introduced a tax on income trusts at source
I introduced the tax when at the ministry
So now I am the Governor of the B.o.E
He introduced the tax when at the ministry
So now he is the Governor of the B.o.E
In raising tax I made such a name
That a central bank governor I soon became
I saw a crash, chose policies to suit
To prevent Canada becoming destitute.
To prevent Canada becoming destitute.
I passed so well through the G.F.C
That now I am the Governor of the B.o.E
He passed so well through the G.F.C.
That now he is the Governor of the B.o.E
Of central bank skills I acquired such a grip
That they took me into the partnership.
Bernanke, Merve and then Draghi
All showed me the way to play the great Q.E.
All showed him the way to play the great Q.E.
Balance Sheet Constraint won’t apply to me
Now that I am the Governor of the B.o.E
Balance Sheet Constraint won’t apply to he
Now that he is the Governor of the B.o.E.
I grew so known that I was sent
By a select committee into Parliament.
I always voted for the strong growth call,
I never thought of thinking of inflation at all.
He never thought of thinking of inflation at all.
I thought so little, they rewarded me
By making me the Governor of the B.o.E
He thought so little, they rewarded he
By making him the Governor of the B.o.E
Now bankers all, (don’t look at me Moody)
If you want to rise to the top of the tree,
If your soul isn’t bothered by a ratings fall
Be careful to be guided by this golden rule.
Be careful to be guided by this golden rule.
Preach growth, restraint yet huge Q.E.
And you all may be Governors of the B.o.E
Preach growth, restraint yet huge Q.E.
And you all may be Governors of the B.o.E
VATICAN CITY (SatireWire.com) — Here are the leading candidates to replace Pope Benedict XVI, arranged in random order, unless you don’t believe in random, in which case the first guy is the next pope. Obviously.
COUNTRY – Ghana
CURRENT JOB — President of the Pontifical Council for Justice and Peace
PROS – Would be first black African pope; could finally have first cool pope name (T. Pope X?); racist Italian soccer fans will at least have to end offensive chants with, “…with the exception of His Holiness the Pope.”
CONS – Donald Trump will demand to see his ordination certificate.
CHANCES – World not ready as neither Danny Glover nor Morgan Freeman has paved the way by playing a black Pope in a movie.
CARDINAL Marc Ouellet, 68
COUNTRY – Canada
CURRENT JOB — Prefect of the Congregation for Bishops.
PROS — Although Canadian, U.S. natural gas companies would refer to him as the “North American Pope.”; would also be our “politest” pope.
CONS — Born in La Motte, Quebec, Ouellet would come from the coldest climate of any Pope in history; supplicants’ lips may get stuck while kissing papal ring.
CHANCES: Slim. Canadians not strongly religious; most only believe in God because they worry it’s rude not to.
CARDINAL Oscar Rodriguez Maradiaga, 70
COUNTRY – Honduras
CURRENT JOB — Archbishop of Tegucigalpa
PROS – Has openly criticized Ricky Martin, doesn’t matter for what; past anti-Semitic remarks will make for smooth transition from current Hitler Youth pope; although from Honduras, U.S. natural gas companies would refer to him as the “Central and North American Pope.”
CONS – When he visits U.S., Congressional leaders will give him gardening tools and tell him to “get to work” out of habit.
CHANCES: Probably not. At 70, he is much too young to be pope.
CARDINAL Angelo Scola, 71
COUNTRY – Italy
CURRENT JOB — Archbishop of Milan.
PROS – Locally grown pope would have smaller carbon footprint; being Italian, would better understand corruption.
CONS – and perfect it.
CHANCES – Scola tics every box: he’s old, Italian, and has strongly denounced contraception, feminism and homosexuality. If cardinals wore panties they’d be throwing them at him.
CARDINAL Timothy Dolan, 63
COUNTRY – U.S.
CURRENT JOB — Archbishop of New York
PROS – Face already papal red; after two hurricanes and a blizzard in last 18 months, best chance New York has of convincing God to give it a rest.
CONS – Born in Missouri, the “Show Me” state; “Show Me” not usually something you want to hear from a priest.
CHANCES: None. The Vatican thinks a pope from a “superpower” is too threatening, especially since popes wear a missile silo on their heads.
CARDINAL Odilo Pedro Scherer, 63
COUNTRY – Brazil
CURRENT JOB — Archbishop of São Paulo
PROS — With a Brazilian, could be first pope to look decent in a bikini.
CONS – Rumor that he only wants to become pope to lose the name ‘Odilo.’
CHANCES – Scherer’s Facebook fan page only has 10 “Likes.” Cardinal Dolan’s Facebook fan page has 21,374 Likes. You do the math.
Schonborn (L) and Hurt (R). Or the other way around.
CARDINAL Christoph Schonborn, 67, or actor William Hurt, 62
COUNTRY – Austria or Washington, D.C.
CURRENT JOB — Schonborn is Archbishop of Vienna while William Hurt has signed up for the TV Series “Bonnie and Clyde” on Lifetime.
PROS – Would help heal the schism between the Church and Hollywood.
CONS – Schonborn was once accused of covering up abuse; Hurt starred in the movie “Lost in Space,” which is almost as bad.
CHANCES – Depends on how many in the College of Cardinals saw “Lost in Space.”
CARDINAL Luis Antonio Tagle, 55
COUNTRY – Philippines
CURRENT JOB – The “diminutive” Archbishop of Manila.
PROS – Little fella would be the youngest pope in more than 200 years.
CONS – Having Dwarf pope may damage tenuous Catholic-Elf relations.
CHANCES – His Facebook fan page has 116,000 Likes. We may have a winner!
via PAPAL FRONTRUNNERS EXPOSED (not like that) | SatireWire | dot.com.edy.