Monday, December 17, 2012

Canada trade deal threatens Europe's environment

The funniest TV clip I've seen all year was broadcast in January. It featured an interview with Paula Broadwell many months before her affair with David Petraeus became public knowledge and forced his resignation as director of the CIA. "The real controversy here is: is he awesome or incredibly awesome?" The Daily Show host Jon Stewart said to Broadwell's face. With that brilliant put-down, Stewart underscored how her biography of Petraeus was an exercise in fawning.

At least Broadwell can point to how she was sleeping with her subject in mitigation. Lots of journalists have flimsier excuses for why they pander to the powerful. Take Bill Emmott: as editor of The Economist, he displayed his slavish devotion to the British establishment by insisting that the magazine support the war against Iraq.

Today, Emmott chairs the Canada-Europe Roundtable for Business (CERT), along with Roy MacLaren, a former minister in the Ottawa government. The two men want to convince us that a free trade deal between the EU and Canada will bring tangible benefits to ordinary people on both sides of the Atlantic. But why should we take them seriously when both are wealthy elitists? Both are active in the Trilateral Commission, an unelected group of political and business leaders that holds an invitation-only confab about how the world should be run every few months. (This isn't a conspiracy theory; it's a statement of fact).

CERT could soon be celebrating. There are strong signals that the trade deal it covets will be signed in the near future. To show that this is no ordinary deal, it will have a fancy title: the Comprehensive Economic and Trade Agreement (CETA).

Documents that I have seen prove that corporations have been pushing for an accord that will give them the wherewithal to overturn labour and environmental laws which they perceive as barriers to making profit. Xstrata, the mining giant linked lately to Emmott's chum Tony Blair, has made specific proposals about the "dispute resolution" provision that is likely to be part of the trade deal. This provision will allow companies to sue the EU or Canada over measures or decisions they dislike. In a 2011 letter, John Smillie from Xstrata Nickel complained that REACH - the Union's main law on chemicals - can lead to substances being banned from the entire EU market based on the hazards they present.

Demand for "teeth"

"The challenge for any dispute resolution mechanism is how does it engage with a process that has no economic consideration and yet can have a very severe economic impact?" he wrote. "If the dispute resolution mechanism does not have the 'teeth' to deal with these sorts of issues, it is just another tariff-based trade agreement, and not the landmark, comprehensive and ambitious framework agreement that is being claimed and, we understand, both sides want."

Regardless of Smillie's concerns, the deal looks like it will be comprehensive and ambitious. An internal briefing paper written by the European Commission last month indicates that a dispute resolution mechanism will be included but that there was some difference of opinion about what it should cover. There is nothing in the paper to suggest that the Commission has told Xstrata or any other company that rules designed to protect nature and human health cannot be diluted on the say-so of a chief executive and his legal team. On the contrary, EU officials are pushing for a mechanism with "teeth".

CERT has breezily dismissed protests against the trade talks. When the National Union of Public and General Employees and several other Canadian groups called for transparency about what was under negotiation, CERT's Jason Langrish sent a "for your information" note to his contacts in Brussels. "Not a major concern, but shows engagement," he wrote.

Ideological warrior

Langrish is an ideological warrior. In a separate email message, he argued that Ontario's state-controlled alcohol shops should be privatised. "We would like to be able to buy our wine at the corner store at whatever time we want like anywhere else in the world. Most people recognise that the government really shouldn't be in an area where business can do the same job as well, if not better. It isn't health care, after all."

His pay-off line was misleading. CERT and its partner BusinessEurope have seen the trade talks as an opportunity to fundamentally transform Canadian health care. At their behest, the European Commission has advocated that large pharmaceutical companies should enjoy more robust "protections" for their "intellectual property" as a result CETA. Most particularly, the Commission wants Canada to introduce new restrictions of up to a decade on selling non-branded versions of patented medicines. A study carried out for the Canadian Generic Pharmaceutical Association has calculated that the EU's demands could push up the cost of medicine plans by $2.8 billion per year. Most of the extra spending will fall on provincial authorities, which cover 45% of prescription drug spending in Canada, according to the study.

It appears that the EU is attempting to damage Canada's health system - until now, much better than America's. Poverty among Canada's elderly has been rising since the mid-1990s - after two decades of being reduced. The old will inevitably suffer most if medical bills rise. Why do Brussels officials want to make senior citizens poorer? Will the EU simply do anything that Big Pharma asks it to? Is this the kind of behaviour we can expect from recipients of the Nobel Peace Prize?

•First published by New Europe, 16-23 December 2012.

Monday, December 10, 2012

Is Europe starving Iran of vital medicines?

Adolescents cannot be blamed for the policies of autocrats. So why did 15-year-old Manouchehr Esmaili-Liousi have to die because the West wants to punish Iran's leaders?

Manouchehr lost his life when no medicine could be found to treat haemophilia. Iran used to import drugs for this disease but has been unable to recently because it is subject to a trade embargo.

This young boy may be the first victim of sanctions imposed on Iran by America and the European Union. He is unlikely to be the last. In November, The New York Times - not a journal renowned for decrying US imperialism - reported that Herceptin, a cancer medicine, had "disappeared" from Tehran's hospitals and pharmacies. Theoretically, humanitarian supplies are not covered by the sanctions. In practice, the ban on financial transactions with Iran is so comprehensive that it has affected supplies of essential drugs.

The death of Manouchehr serves as a depressing reminder of what happened in neighbouring Iraq. Denied equipment, medicine and even blood, Iraqi doctors struggled and often failed to provide the most rudimentary of care to their patients. UNICEF estimated that 600,000 children died over a decade as a result of sanctions.

According to the official narrative, everything was Saddam Hussein's fault. Saddam was blamed for the sanctions against his country because he wouldn't allow scrutiny of the nuclear and chemical bombs he was suspected to have been developing. Eventually, America invaded Iran based on a pack of lies. Saddam had no weapons of mass destruction. And he had nothing to do with the atrocities committed on 11 September 2001.


Iran has replaced Iraq as the bogeyman we are supposed to fear most. In October this year, the EU's foreign ministers agreed to extend the scope of their sanctions on Iran, citing "deepening concerns" over the country's nuclear programme. The sanctions were "not aimed at the Iranian people," we were told.

If that assurance was genuine (and I don't believe it was), then our governments must immediately lift the embargo. In 2004, EU officials drew up guidelines for the use of sanctions as a tool "to maintain and restore international peace and security". These guidelines state that sanctions should be carefully targeted so that any "adverse humanitarian effects or unintended consequences" can be avoided "to the maximum extent possible".

The EU's sanctions against Iran run counter to those principles. Rather than being focused on the Tehran authorities, they prohibit all dealings between European and Iranian banks, except under "strict conditions". This amounts to economic warfare.

Why has Iran been singled out in this way? The International Atomic Energy Agency (IAEA) recently reported that Iran was not providing it with the "necessary cooperation" to determine whether or not the country's nuclear programme has "military dimensions". That is worrying. But it is hardly poses a greater threat to world peace than what Australia has done this year. Julia Gillard, the Australian prime minister, has clinched a deal with India to supply it with uranium. Whereas Iran has signed the nuclear Non-Proliferation Treaty, India and its enemy-next-door Pakistan have refused to.

An obstacle called Israel

Did the EU introduce sanctions against Australia for giving the key raw material required for nuclear weapons to India? Did it denounce the Canberra elite for helping to exacerbate tensions in South Asia? I've checked all of the statements that the main EU institutions issued about Australia over the past twelve months. Not one of them was critical of Gillard's reckless behaviour.

There is much that the EU could do about nuclear proliferation at home. The NPT requires signatories that have nuclear weapons to get rid of them. Britain and France have ratified the treaty but, the last time I looked, both of them still had nuclear weapons. With the Labour Party still in power, Britain's House of Commons voted in 2007 to renew its Trident nuclear submarine programme. David Cameron has indicated that he remains committed to that objective and that a decision will be made on the matter in 2016. It follows that Cameron is way more dangerous than Mahmoud Ahmadenijad. Yet I haven't seen any EU countries threatening Britain with sanctions over its enduring love affairs with nukes.

If the Union was serious and consistent about tackling the radioactive menace, it would be overseeing disarmament within its own borders. That would put it in a strong moral position to advocate the establishment of a nuclear-free zone in the Middle East. There is one major obstacle to giving the Middle East this status. It is Israel, another NPT rejectionist. Declassified documents show that the US has known that Israel possessed nuclear weapons since at least 1975. In 1999, the US Defence Intelligence Agency estimated that Israel possessed between 60 and 80 nuclear weapons. Others believe it has more. Yet William Hague, the British foreign secretary, has stated in recent days that there is no appetite among the Union's governments to penalise Israel. He was speaking about Israel's ongoing colonisation of the West Bank. The same double standards apply to nuclear weapons.

The most plausible explanation for why Iran is being harried is that it refuses to act as the West's doormat. In 1953, Mohammad Mossadegh's government was overthrown as it had the audacity to suggest that Iran's oil resources didn't belong to Western firms. Europe and the US are hoping for another regime change today. To bring it about, they are robbing pills from cancer wards.

•First published by New Europe, 9-16 December 2012.

Thursday, December 6, 2012

Comment l'Europe courtise l'industrie d'armament israélienne

Haneen était âgée de 10 mois, Omar 11, Ibrahim 1 an. Pour avoir commis le crime de vivre reclus dans Gaza, ces enfants ont été tués à l’aide de missiles israéliens dits ‘à précision guidée’.

Quelques jours avant leur mort, la Commission Européenne parrainait ‘la 2nde conférence internationale sur la sécurité intérieure’ tenue à Tel-Aviv. Lors de ce qui ressemblait plus à un bazar qu’à un lieu d’échange, l’évènement a fait la part belle aux sociétés israéliennes leaders en matière d’armement et leur a permis d’exposer leur arsenal. Lors de l’allocution de clôture, le président Israélien, Shimon Peres, a profité de cette auguste occasion qui lui était donnée, pour se vanter, tel un trafiquant d’armes pour adolescents, d’être ‘impliqué dans la création des entreprises israéliennes de défense’. Puis Peres d’ajouter qu’il était ‘ravi de voir les innovations en matière de développements technologiques leaders dans le domaine de la sécurité intérieure’ et enfin d’exprimer la fierté qui était la sienne d’être à la tête ‘d’une nation riche en créativité, sagesse, courage et culot’.

A ma connaissance, l’implication de l’Union Européenne à ce salon est passée inaperçue dans les médias. Ce qui est en soit très déconcertant. Cela dénote que la Commission peut soutenir des firmes qui tirent profit de bombardements sur des enfants palestiniens sans que personne ne sourcille.

Les responsables qui ont donné leur aval à la participation de l’UE au salon de Tel-Aviv ne peuvent nier le lien avec la dernière offensive sur Gaza. Toutes les deux ont fourni là l’occasion pour l’industrie de l’armement de promouvoir ses produits : dans le premier cas dans une salle de conférence, dans le second sur le ‘champ de bataille’. Defense News, un magazine bien connu des vendeurs d’armes, a rapporté que Rafael, la société publique d’armement israélienne,‘a lancé des opérations urgentes et intenses’ pour pouvoir répondre à une demande en forte hausse pour l’acquisition de l’Iron Dome, un système ‘intercepteur’ de missiles qui est récemment venu compléter l’arsenal israélien.

Ce n’est pas non plus un cas isolé. Les institutions européennes sont régulièrement représentées lors de salons ou l’industrie israélienne de l’armement a la possibilité de mettre en avant ses dernières ‘innovations en matière de développements technologiques’, selon les termes employés par Peres. En Septembre dernier par exemple, l’Agence de Défense Européenne a offert son aide à l’ILA – un salon aéronautique proche de Berlin - au cours duquel la susnomméeRafael tenait un stand. En juin, plusieurs firmes israéliennes prirent part à Eurosatory, un salon de l’armement organisé à Paris ; des délégations de l’UE et de l’OTAN étaient également présentes.

Fricoter avec ceux qui tirent profit de la guerre n’est en soi pas répréhensible. Mais octroyer des subventions à ces mêmes profiteurs revient à cautionner le non-respect des droits de l’homme dont dépend leur résultat de bas de page. Israël prend actuellement part à 800 projets de recherches scientifiques subventionnés par l’Union Européenne, pour un montant total évalué à 4,3 Milliards d’euros. Israël lorgne déjà sur une part encore plus grande de Horizon 2020, le prochain pactole mis à disposition par l’Union.

Il est intéressant de noter que, plus tôt dans le mois, le salon de Tel-Aviv mettait l’accent sur la manière dont les équipements de surveillance pouvaient être utilisés lors d’évènements sportifs majeurs comme les Jeux Olympiques. Lorsque Londres a accueilli les jeux au cours de l’été, l’UE a financé les tests d’un nouveau système de sécurité menés à l’aéroport d’Heathrow. Elbit, un fabricant de drones largement utilisés ces derniers temps pour survoler le territoire gazaoui, constituait l’un des ‘partenaires’ de ces tests.

Il y a comme une ironie sordide de la part de l’UE derrière cette recherche de conseils auprès d’Israël pour rendre nos aéroports plus sûrs. En 2001, Israël détruisit le seul aéroport de Gaza. Il avait été construit avec 9,5 Millions d’euros d’aides de l’UE. Chris Patten, alors en charge des Relations Extérieures au sein de la Commission Européenne, refusa de poursuivre Israël pour ces faits. Il essaya de justifier son inaction en prétendant qu’une fois les chèques remis à l’Autorité Palestinienne, l’Union Européenne n’en n’était plus la propriétaire.

L’an dernier, à la même époque, la Commission publia une liste de 82 bâtiments détruits par Israël et financés à l’aide de subventions de l’UE. Les responsables ont évalué le préjudice subi par l’Union Européenne à 30 Millions d’euros. Et pourtant, la bureaucratie bruxelloise n’engagera aucune action en justice qui rendrait Israël responsable ; lorsque Israël lança la dernière offensive majeure contre Gaza en 2008 et 2009, l’UE débloqua des fonds d’urgence pour réparer les dommages causés par Israël à l’aide de composants et d’armes européens et amé y a fort à parier que le schéma se reproduira très prochainement.

Pour quelles raisons l’UE est-elle si encline à supporter la machine de guerre israélienne ? Un indice réside dans le ‘plan d’actions’ en faveur ‘de la compétitivité de l’industrie de la sécurité’ publié en Juillet dernier par Antonio Tajani, Commissaire Européen pour l’entreprise. On peut y lire que le marché de la sécurité représenta en 2011 plus de 100 Milliards d’euros -soit dix fois plus qu’en 2001.

Les responsables bruxellois savent qu’Israël est le sixième exportateur en matière de biens de ‘sécurité’. Coopérer avec Israël est donc nécessaire, disent-ils, pour permettre à l’Europe de développer sa propre industrie de la ‘sécurité’. Cirer les pompes du gouvernement de Benjamin Netanyahu leur permet d’espérer que les firmes européennes pourront signer de juteux contrats. A titre d’exemple, l’italienne Finmeccanica a arraché au cours de cette année, un accord d’un Milliard de dollars pour la livraison à Israël d’avions d’entrainement.

Et lorsque l’Europe vient à manquer d’armes, elle fait appel à Israël. L’agence en charge du contrôle aux frontières, Frontex, caresse le doux rêve de commander des drones israéliens pour contrôler les demandeurs d’asile. On rapporte que le Danemark a fait l’acquisition de bombes israéliennes après qu’elle ait épuisé son stock lors de sa participation à la guerre menée par l’OTAN contre la Lybie. Le mois prochain, l’Union Européenne recevra très officiellement le Prix Nobel de la Paix à Oslo. On nous vantera les engagements de l’Union Européenne en faveur des Droits de l’Homme & d’autres ‘valeurs’. Le spectacle ne manquera pas d’être nauséeux. Le soutien indéfectible de l’Union Européenne à l’égard d’Israël prouve que ces ‘valeurs’ qui sont vraiment chéries peuvent être quantifiés en termes monétaires. Au nom de quoi l’Union Européenne ne continuerait-elle pas à aider ceux qui gagnent à mettre Haneen, Omar & Ibrahim dans de petits cercueils ?


Monday, December 3, 2012

EU takes tax advice from Enron's auditor

Would a mafia godfather be trusted to end organised crime? Would a wife-beater be the right man to ask about how domestic violence should be punished? Would an auditor to Enron be the best source of advice on making companies pay more tax?

The answers to these questions hardly need to be spelled out. Unless they repent or display signs of remorse, wrongdoers are not usually consulted by policy-makers tasked with addressing the harm they cause. For some reason, though, an exception is made for accomplices to corporate misdeeds.

Before the end of this year, the European Commission will publish an action plan for tackling tax avoidance and evasion by large firms. As I've been trying to deepen my knowledge of taxation issues for a while, I was eager to learn who the EU executive has turned to for guidance. To my astonishment, I found out that the Commission's tax department has hired PricewaterhouseCoopers (PwC) to write a number of studies in recent times.

PwC is world's biggest auditor. Although Arthur Andersen may be the accountancy firm generally associated with Enron, PwC was also deeply implicated in that scandal a decade ago. It provided advice on off-balance sheet transactions both directly to the Houston giant and to partnerships run by Andrew Falstow, its chief finance officer. That was despite how ethical standards applying to the accountancy profession require a degree of objectivity when dealing with different clients.

As if that wasn't bad enough, PwC gave a clean bill of health to the accounts of banks and other financial service operators that engaged in highly risky activities before the global crisis. PwC was the auditor for American Insurance Group for many years, yet did not disclose a "material weakness" in AIG's accounting methods until 2008. By that time, AIG was involved in a dispute over "collateralised debt obligations" with Goldman Sachs. PwC was also the auditor for the "vampire squid", to use Rolling Stone journalist Matt Taibbi's colourful description of Goldman Sachs.


Meanwhile, PwC confessed in 2011 that it failed to detect flaws in the accounts of JP Morgan over many years. In a separate case, it agreed last year to fork out $7.5 million to settle charges by the US Securities and Exchange Commission over the deliberate inflation of revenue by India's Satyam Computer Services. Because of the scale of the misreporting, the affair has been dubbed "India's Enron".

And, of course, PwC has handled Mitt Romney's accounts since 1990. Documents unearthed during the US presidential election campaign indicated that Romney availed of legal loopholes to dramatically reduce his tax bill over a 15-year period.

In his book on tax havens Treasure Islands, Nicholas Shaxson calls major auditors like PwC "the private police force of global capitalism". The limitations of private police forces were highlighted when the Olympic Games came to London during the summer: G4S was unable to perform tasks traditionally done by the public security forces. The same can be said of PwC. Is it right to give a for-profit auditor the sole responsibility for signing off the accounts of the globe's most powerful corporations?


PwC clearly serves the interests of its masters. It helps ensure that the super-rich pay a much smaller proportion of income tax than the rest of us. PwC is active in those tax havens that EU officials profess to abhor. In Jersey, it even wrote a law designed to shield auditors from scrutiny.

On the surface, it appears absurd that the European Commission has hired PwC to provide expert analysis on such subjects as business tax reform and the links between tax avoidance and global poverty. Yet if you work from the assumption that the Commission is undertaking no more than a window-dressing exercise, things begin to make more sense.

The EU executive has indicated that the forthcoming action plan on tax avoidance is part of its work on "corporate social responsibility" (CSR). We are supposed to believe that by working in tandem with big business, the Union's governments and institutions can convince them to cough up a bit more so that future generations will have good quality schools and hospitals.

Yet CSR is about as meaningless as putting a picture of a dolphin on a tank replete with toxic chemicals. As Joel Bakan explains in his book The Corporation, the laws of most countries are clear about the role of big business. Under these laws, the overriding responsibility of corporate decision-makers is to maximise corporate gains. "The law forbids any other motivation for their actions," Bakan writes. "Corporate social responsibility is thus illegal - at least when it is genuine."

As it happens, PwC is not the only "expert" with a less than pristine record advising the Commission's tax department. Michael Devereux is one of those to have contributed to a data-heavy study on the "effective tax levels" paid by corporations, which has been prepared at the Commission's request. He is director of the Oxford University Centre of Business Taxation. The centre's website thanks a number of corporations for their "generous" financial support. Among them are Vodafone, a British telecommunications company that paid no corporate tax in Britain last year.

Depriving EU countries of an estimated 1 trillion euros per year, tax evasion and avoidance is one of Europe's most pressing problems. Turning to those who benefit from this problem for "expert" advice is one sure way of preventing a solution.

•First published by New Europe, 2-8 December 2012.