Why Don’t They Care? The Kleptogarchy part 10

Posted: August 20, 2022 | Author: | Filed under: Law, Politics, Social inequality | Tags: , , , , | Leave a comment

Why Don’t They Care?

It’s a head scratcher. When the science is now so well understood, why do the planet’s most powerful people not do more to protect their, our, only home?

The geographical and experiential distances between the wealthiest and the poorest, who might as well be in different galaxies, are among the culprits. The Industrial Revolution in the UK, a source of pride during my schooldays, set fossil fuel use on an explosive trajectory. The new industrialists needed workers, who migrated into cities, pushed by the distress of the rural economy after ‘free trade’ became the leaders’ cry, enacted from 1846 onwards. Farmers fell into debt, a trap worsened by landlords’ enclosure of commons that had provided pasture and timber. One of my great-great-great-grandfathers, a farmer on about 40 of his own acres, was in prison for debt when the 1861 census was taken. He had to reinvent himself as a brewer. Britain became the workshop of the world, extracting raw materials from colonies and exporting finished goods. The model was failing after the chaos of the First World War and in terminal decline by the 1980s, when most nations of the British Empire had achieved independence.

The 1980s were years of de-industrialisation, under Margaret Thatcher in the UK and Ronald Reagan in the USA. The British miners’ strike of March 1984 to March 1985, in which Mrs Thatcher and the police defeated the National Union of Mineworkers under Arthur Scargill, was a turning point. Coal is a source of cognitive dissonance for me, because despite its harmful contributions to the carbon dioxide emissions that are heating up the world, since the miners’ defeat in 1984, work on the archipelago of Britain has become more impermanent and precarious. Although demand for industrial workers is slack, even if they wanted to, they cannot return to the self-sufficient agricultural life of pre-Victorian Britain because they cannot afford land.[1] The top-dog elites have less need of workers than hitherto, because robots and artificial intelligence can labour on indefinitely, provided there is power, and they do not require industrial relations departments. If global elites in wealthy countries have less need of workers, why would they want to pay taxes to maintain the public services for and shore up the living standards of people who are no longer central to their world view? They seem to forget that workers are often customers for the producers of goods and services in which they invest.

“Trespassing scum”, thundered an annoyed Robert Venables QC, tax barrister, in an elite gathering in 2012 to mark the retirement of Dave Hartnett from his role as chief executive of Her Majesty’s Revenue and Customs. Mr Hartnett, a proponent of individually negotiated tax payments for multinational corporations, was the target of protestors against tax evasion. To call people who oppose tax evasion “scum” to my mind reveals the gulf between masters of the financial universe and citizens who depend on public services funded from taxation.

The encounter featured in The Spider’s Web: Britain’s Second Empire, a 2017 documentary by independent film maker Michael Oswald. I watched it on Netflix in June 2022. At its height the British Empire governed a quarter of the world’s landmass and a fifth of the population. The agents of empire extracted resources from the colonies and exported finished goods, at a nice profit. The colonies mostly achieved independence by the end of the 1970s. but a few small territories remained, and these became vital to a new form of empire – the ghost financial empire.

The British Virgin Islands, Cayman Islands, Bermuda, Hong Kong, Jersey, Guernsey and the Isle of Man are all among the ‘secrecy jurisdictions’ with links to the United Kingdom. Secrecy jurisdictions, known as tax havens, enabled the shadow banking system, unregulated by central banks like the Federal Reserve in the USA and the Bank of England in the UK, to inflate into a many-headed, dangerous Hydra. Dangerous, that is, to people outside the realm of masters of the financial universe.

The UK has thousands of clever accountants. Of the world’s 2.5 million or so professional accountants when the film was made, 330,000 were based in the UK, The Spider’s Web reported. That is more than one in eight, when the UK’s population amounted to about one in every 113 across the globe. An over-concentration of crack number-crunchers, one can argue, but a huge shadow banking system requires accountants galore. Money itself does not travel, transactions are digital through secrecy nodes, via anonymous trusts and shell companies.

The Spider’s Web calculated that about half of the global wealth ‘kept’ offshore is in overseas jurisdictions of the UK, like the Cayman Islands south of Cuba. The Caymans have a population of about 66,000, but some 80,000 companies are registered there, and it is home to about 75% of the world’s hedge funds.

“The Cayman Islands imposes no taxation on the income or capital gains of investment funds or their investors, and no transfer taxes on the transfer of interests in investment funds. Exempted companies, LLCs, limited partnerships and unit trusts can obtain undertakings from the government that if any such taxation is introduced during a 20-year period (companies) or 50-year period (limited partnerships, LLCs and unit trusts), as applicable, from the date of the undertaking (or date of creation of the unit trust), such taxation will not apply to the entity to which the undertaking is given”, according to The Asset Management Review in September 2001. [2]

Quite an incentive. How much money is sheltered in the Cayman Islands? In 2019 there were US$4.229 trillion just in mutual funds, according to the Cayman Islands Monetary Authority. For comparison, the entire annual GDP of the United Kingdom in 2020 was $2.76 trillion, the World Bank reported.[3] If even 0.5% tax were paid on the Cayman Islands’ $4.229 trillion, it could yield more than $21 billion, or nearly 25 times more than the UK spends annually on fighting economic crime. But who should tax the funds recorded as lodged in tax havens? How should such a tax be distributed? Theoretical questions, because if funds in tax havens were disclosed and routinely taxed, they would be considerably less attractive to investors and their agents. Investors who use tax havens can accumulate money faster than people who do not try to escape tax, and the chasm between the two groups yawns wider.

Author Nicholas Shaxson, who appears in The Spider’s Web, has made a deep study of tax havens and their wider impacts. In his view, the tax haven circuit works against the interests of small and medium-sized enterprises because:

“It subsidises multinationals by helping them cut their taxes and grow faster, making it harder for the innovative minnows to compete. And when small innovative firms do emerge they become targets for predators who seek to ‘unlock value’ from ‘synergies’ created by bringing the small firm into the bigger, more diversified one. Some synergies may be useful – economies of scale, for instance – but too often the predator unlocks value simply by being better at obtaining abusive, unproductive offshore tax privileges.”[4]

When escaping tax is a priority, no surprise that there is resistance to the abandonment of a currently lucrative system in favour of measures to mitigate global heating impacts, for which the costs and effectiveness would be unknown.

Leaders are far more likely than the population at large to show psychopathic personality traits, such as a will to dominate regardless of the consequences. Désiré G C Palmena, Emile W KolthoffbJan and J L Derksenc proposed in the journal Aggression and Violent Behavior that:

“…we hypothesize that the need for domination may be the core motivational trait for those psychopathic individuals who pursue positions of leadership in business and politics. Because for psychopathic leaders the need for domination may have value in of itself [sic], we hypothesize that this motivational trait may best clarify the estimated high prevalence of psychopathic leaders.”[5]

The authors point out that “[s]tudies on those high in psychopathy have shown that they are not motivated by moral traits such as honesty, consideration for others, and fairness”. Their struggles to the top are for their perceived benefit, not for humanity in general:

“…those high in psychopathy score low on appreciating moral values and collective values and instead value the enhancement of oneself. What are the goods, aspirations, and goals psychopathic individuals want for themselves? Studies have found that they are looking for rewards, they enjoy risk-taking, are in need of stimulation, are looking for thrills and adventures, and are experience seekers.”

Leaders are less likely than those they dominate to prioritise a liveable planet. As many as 20% to 25% of leaders are reckoned to show psychopathic traits, compared with 4.5% in the general population (including leaders).[6] The threat of total war, as Earth and its life forms suffer from climate breakdown, shortages and unrest, is dangerously close. Kleptocracy and war are closely aligned, because the whole point of a kleptocracy is to acquire resources that others also need or want. Alex de Waal, executive director of the World Peace Foundation at the Fletcher School, Tufts University, studied governance in South Sudan, leading to a paper titled ‘When Kleptocracy Becomes Insolvent: Brute Causes of the Civil War in South Sudan’.[7] South Sudan exhibited a neo-patrimonial system of governance, in which “political office is used primarily for personal and factional advantage”, wrote de Waal. Quoting Stanislav Andreski, author of the 1968 book The African Predicament: a Study in the Pathology of Modernisation,[8] de Waal added that the “essence of kleptocracy is that the functioning of the organs of authority is determined by the mechanisms of supply and demand rather than the laws and regulations”. Economics before law – a similar concept to the ‘law and economics’ viewpoint that decisions based on justice are subordinate to those informed by economic cost-benefit analyses. (See ‘The Cold Philosophy of Law and Economics’, The Kleptocracy part 7.)

South Sudan seceded from Sudan on July 9th 2011 after civil war and a referendum, but without strong institutional checks and balances. According to de Waal, South Sudan’s president since independence, Salva Kiir Mayardit, rewarded aides’ loyalty with “licence to commit fraud” and the new country was a kleptocracy from the beginning. In 2012, the president “acknowledged that at least $4 billion and possibly much more had been diverted by leading figures in government and taken abroad”.[9]

Tax havens are, of course, ideal for laundering funds obtained dishonestly. South Sudan is one example among many, where sequestration of funds by elites is accompanied by force, or the threat of it, and by instability that elites attempt to regulate through force.

“There may be bubbles of integrity, due to the efforts of committed and influential individuals to carve out a sphere of public spiritedness, but they are fragile and subordinate to the kleptocratic operation of the broader system,” de Waal concluded.[10]

Kleptocrats don’t care, because they can achieve economic dominance through force, and they often value wealth for themselves and their circle above a liveable planet for the populations they control.

[1] See Chapter 4 in The Kleptogarchy, to be published here later.

[2] The Asset Management Review: Cayman Islands, by Tim Coak, Malachi Sweetman and Michael Richardson, Maples Group, September 27th 2021. https://thelawreviews.co.uk/title/the-asset-management-review/cayman-islands, accessed June 23rd 2022.

[3] https://data.worldbank.org/country/united-kingdom?view=chart, accessed June 23rd 2022.

[4] Treasure Islands: Tax Havens and the Men Who Stole the World, by Nicholas Shaxson, 2011. Quote from p.190 of the 2012 Vintage Books edition.

[5] ‘The Need for Domination in Psychopathic Leadership: a clarification for the estimated high prevalence of psychopathic leaders’ in Aggression and Violent Behavior Vol.61, November–December 2021. https://www.sciencedirect.com/science/article/pii/S135917892100104X, accessed June 26th 2022.

[6] Estimate of psychopathy in the general population from ‘Latest Estimate of Psychopathy in the General Population’, Sapien Journal, November 28th 2021. https://sapienjournal.org/latest-estimate-of-psychopathy-in-the-general-population/, accessed June 26th 2022.

[7] In African Affairs Vol.113 No.452 pps.347-369.

[8] The African Predicament was published in New York by Atherton Press.

[9] ‘When Kleptocracy Becomes Insolvent: Brute Causes of the Civil War in South Sudan’ by Alex de Waal, p.358.

[10] Ibid p.349.

The Cold Philosophy of Law and Economics: The Kleptogarchy part 7

Posted: August 17, 2022 | Author: | Filed under: Economics, Law, Ethics | Tags: , , , , | 1 Comment

The Cold Philosophy of Law and Economics

The uncounted ‘externalities’ of production like toxic waste from oil drilling, and emissions of greenhouse gases, are not the only source of ‘profit’ but it is alarming to consider other profit sources and to realise how often they result in harm. To the old examples of tobacco, alcohol and other mind-altering drugs, we can add highly processed fat-rich, salt-rich and sugar-rich foods causing such conditions as obesity, diabetes and high blood pressure which, like lung damage from smoking and liver damage from alcohol, impose unnecessary costs on medical services all over the world. Addictive behaviours make money for those feeding the addictions, whether it is gambling, gaming, sex, social media or shopping. Encouragement of addiction can destroy the lives of purchasers but makes money for the sellers, who can count on new customers emerging from anxious, dispossessed populations. When the mantra is ‘Growth’, to maintain the fiction than continuous growth on a finite planet is possible, activities that used to be voluntary are commercialised. First you encourage all parents to get paid work, and then expand commercial childcare, cleaning, ready meals, delivery services, elder care and so on, to create the illusion of growth. Doubtless some people, but by no means all, would prefer to be at work rather than looking after their own children, or their own frail relatives, but even so, commercialisation cannot expand beyond the sum total of activity.

Growth has depended on fossil energy, which still dominates the world’s largest companies by revenue. Five of the top ten in the Fortune Global 500 for 2020 were oil companies: China’s Sinopec Group in second place, revenues of $407 billion; China National Petroleum, fourth, $379 billion; Royal Dutch Shell of the Netherlands and the UK, fifth, $352 billion; Saudi Arabia’s Saudi Aramco, sixth, $330 billion; and the UK’s BP, eighth, $283 billion. The largest company by revenue, Walmart of the USA with $524 billion, fulfils households’ daily and weekly needs but the logistics operations are energy-intense and the food products often travel hundreds, even thousands of miles. Two of the remaining four in the top ten are automobile companies: Germany’s Volkswagen at seventh, $283 billion and Japan’s Toyota, tenth, $275 billion. The auto industry owes its existence to fossil fuels.

The remaining two companies in the 2020 top ten were State Grid Corporation of China and Amazon of the USA. State Grid Corporation, third, had reported revenues of $384 billion. State Grid distributes electricity, more than 60% of which is generated using coal. Amazon.com Inc, ninth, recorded revenues of $281 billion revenues. Amazon, like Walmart, depends on highly complex, energy-hungry logistics networks.

Giant organisations are obstacles to the radical changes necessary for the future of life as we know it. Their spending buys, among much else, professorships and higher education courses that reinforce capitalist dogma.

Law and economics is one such field of academic endeavour, and a critical one for corporations. Law-and-economics has the premise that laws must be evaluated for their efficiency, meaning their economic impacts. In this mode of thought, justice is merely a financial calculation: a right in law should belong to the party willing to pay most for it. Theories of legal efficiency are quite abstruse but are based on an understanding of human activity as dependent on continuous cost-benefit calculations, with the law coming into play as arbiter between competing calculations. Efficiency and ethics might coincide, but need not do so, and if they clash, the cost-benefit calculations usually win out.

“In simple terms, a legal situation is said to be efficient if a right is given to the party who would be willing to pay the most for it”, wrote American economist Paul H Rubin.[1]

He explained: “Law and economics stresses that markets are more efficient than courts. When possible, the legal system …… will force a transaction into the market. When this is impossible, the legal system attempts to ‘mimic a market’ and guess at what the parties would have desired if markets had been feasible.”

In the law-and-economics world view, private property is sacrosanct. Rubin expounded: “The characteristics of efficient property rights are universality (everything is owned), exclusivity (everything is owned by one agent), and transferability. Law and economics can also explain the results of inefficient property definitions. For example, because no one owns wild fish, the only way to own a fish is to catch it. The result is overfishing.”[2]

The claim that everything should be owned, ideally by a single agent, because this is ‘efficient’, ignores the past – how were property rights obtained? – and future – what happens if owners of wealth decide to use it for malevolent ends, for example? Nothing, it appears, because in law-and-economics issues of ethics are subordinate to money-power. Rights to ownership are determined by capacity to pay for those rights. The argument implies that if one individual or corporation claimed rights to all the fish in the sea, over-fishing would stop because that person/corporation would appreciate the need to conserve stocks for the long term. The owner-as-conservator argument does not stand up in reality because ‘owners’ in substantial numbers have depleted oil wells, coal mines, soil, forests and other resources they ‘own’, and continue to do so. The Steven Donziger story (part 6 above) shows the extreme determination with which a corporation can employ lawyers to disclaim responsibility for harmful consequences of its activities. Law-and-economics arguments can be and are applied to limit compensation payments.

The law-and-economics concept was marketed to judges in the USA, in the expectation that they would think twice about enforcing environmental regulations if lawyers convinced them that it was not ‘efficient’ to do so. Jane Mayer, in her gripping book Dark Money,[3] reported that about 40% of federal judges took part in law-and-economics seminars sponsored by the John M Olin Foundation before it dissolved in 2005, a dissolution specified by John Olin himself before he died. The Olin Corporation and its subsidiaries manufacture chemicals and ammunition, and they have committed many environmental and safety offences – 80 since 2000, incurring penalties of almost $5 million, according to the website Violation Tracker[4] — and so setting out to influence judges was a logical move for them. The John M Olin Foundation gave $5.5 million, Jane Mayer wrote, to the Federalist Society for Law and Public Policy Studies, founded in 1982 by conservative-minded students from the law schools at Harvard, Yale and Chicago. By 2021, six of the nine justices on the Supreme Court had ties to the Federalist Society, said Professor Noah Feldman in the Harvard Gazette of March 4th 2021. Professor Feldman’s list included all three nominated by President Trump: Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett, as well as Samuel Alito, Clarence Thomas and Chief Justice John Roberts.

The big money conservative and libertarian donors have, contrary to a free-market free-for-all outlook, organised tightly, expertly, and in a highly disciplined way, to protect their short-term interests. Long-term interests are a different matter, because if the Earth becomes uninhabitable it will not make exceptions for billionaires. The fascinating blog hosted by ABC Finance Ltd of Cannock, Staffordshire, has investigated how billionaires are seeking immortality, or something close, even if an apocalypse is on the way.[5] Their possible methods include blood transfusions from younger people; or cryonics (as in the film Don’t Look Up, in which newly unfrozen bigwigs dismount from their spaceship into a verdant landscape grazed by large long-beaked birds, one of which bites off the head of the former President of the USA); or optimistically stockpiling survival gear to ride out the apocalypse; or in future uploading their brain digitally into the Cloud (if it still exists); or even setting up colonies on another celestial body (if they can work out how to get there, and how to stay alive once they have landed).

These ‘options’ are variously exploitative, far-fetched, self-centred, or unachievable. Set within the reality of a fragile planet, billionaires’ asset mountains are crazy exhibitions of hubris. The super-wealthy continue to fund programs to convince the public that capitalism is common sense and the only possible way of organising the life of human communities. Jane Mayer wrote[6] that in 2015 the Charles Koch Foundation[7] was subsidising programs in 307 higher education institutions in the USA and had plans to extend to 18 more. The institutions included the Providence, Rhode Island-based Brown University where in 2009 the foundation gave $147,154 to the Political Theory Project, teaching students about free market economics. At West Virginia University the foundation provided $965,000 to set up the Center for Free Enterprise. The foundation had a role in staff appointments; one of the professors was Russell Sobel, who argued in his 2007 book Unleashing Capitalism that mine safety and clean water regulation hurt workers because the costs of regulation came from their (theoretical) earnings.[8] 

Everyone has their price, so the saying goes. Academics who refuse to play the game, who stay outside the libertarian tent, deny themselves access to plentiful funding. The billionaires’ institutes, dressed in academic neutrality and housed at prestigious universities, deliver powerful public relations.

As for lawyers, they enable hard, cold law-and-economics arguments to percolate through the world’s courts, arguments that appeal to litigants of many kinds who seek to enforce rights obtained in both honest and dishonest ways (not that law-and-economics eschews dishonesty). The extent to which theft and fraud can be legitimised in the courts is dramatically illustrated by the Financial Times journalist Tom Burgis in his 2020 book Kleptopia,[9] focusing on tentacles stretching out from post-Soviet Kazakhstan. Despite his careful research for the book, Tom Burgis faced a libel claim in London brought by ENRC (Eurasian Natural Resources Corporation), an entity owned by Luxembourg-registered company Eurasian Resources Group, in which the Kazakhstan Government has a 40% holding. High Court judge Mr Justice Nicklin found the claim against Tom Burgis to be wholly flawed, and he stopped the case, awarded £50,000 costs against ENRC, and refused the corporation permission to appeal.[10]

The alarming global sway of theft and fraud networks indicates that profits made in conventional commercial ways may now be increasingly hard to obtain. As for externalities like global heating and ruined environments, in a world of law-and-economics, the enabling philosophy for a kleptogarchy, social responsibility falls off the bottom of the agenda.

[1] ‘Law and Economics’ by Paul H Rubin, in the Library of Economics and Liiberty, https://www.econlib.org/library/Enc/LawandEconomics.html, accessed May 16th 2022.

[2] Ibid.

[3] Dark Money was published by Scribe Publications in 2016.

[4] https://violationtracker.goodjobsfirst.org/

[5] https://abcfinance.co.uk/blog/how-billionaires-plan-to-live-forever/, accessed January 28th 2022.

[6] Dark Money, p.155.

[7] See The Kleptogarchy part 5, Unholy Alliances, for more on the Koch family.

[8] Quoted by Jane Mayer in Dark Money.

[9] Kleptopia: How Dirty Money is Conquering the World, by Tom Burgis, published by William Collins in London and HarperCollins Publishers in Dublin, 2020 and 2021.

[10] ‘Journalist Wins ‘Kleptocrat’ Book High Court Libel Case’, by Dominic Casciani, BBC News, March 2md 2022. https://www.bbc.co.uk/news/uk-60595266, accessed May 16th 2022.

Jailing Steven Donziger: The Kleptogarchy part 6

Posted: August 16, 2022 | Author: | Filed under: Corporations, Environment, Law | Tags: , , , , | Leave a comment

Jailing Steven Donziger

Steven Donziger was not a familiar name to me until I saw posts on Twitter and realised that he was under house arrest in New York. His crime, at base, was to have angered oil company Chevron by assisting lawyers in Ecuador to mount a prosecution against the corporate giant for polluting its former well sites in Orellana province, amid the Amazon rainforest. Back in 1969, the US oil company Texaco, with Petroecuador, found oil in Orellana. As they drilled, toxic waste was dumped in pools that were later covered with soil. Waste continued to leak into water courses. In 1990 the companies agreed to spend between US$8 million and $13 million on a clean-up. The bill became larger in 1995, when the Ecuador Government got Texaco to agree to pay $40 million. By then Steven Donziger, a crusading lawyer in his early 30s, had represented some 30,000 Ecuadorians in a class action lawsuit against Texaco, filed in the USA in 1993. Nothing much happened. In 2000 Chevron did a deal to buy Texaco for a reported $38.7 billion, and so Chevron became the accused in the Ecuadorian dispute, which reached a wider audience in 2009 with the release of the Joe Berlinger film Crude. The film highlights the legal get-outs employed by Chevron to deny responsibility for environmental damage, such as pointing out that the toxic waste carried no trademarks or logos tying it to Texaco/Chevron; that the local partner Petroecuador had been solely responsible for waste after Texaco withdrew from Ecuador in 1992; that Texaco had paid $40 million for cleaning up, and that the Ecuadorian Government had released the company from further liability. Kent Robertson, in 2022 Chevron’s General Manager, Public Affairs, was media relations adviser when Crude showed him lambasting the litigants as a “group of conmen”.

The International Journal of Epidemiology published a paper in 2002 comparing the incidence of cancers in populations within and outside oil extraction areas in Amazonian Ecuador. The key messages included “significantly higher incidence of cancer for all sites combined in both men and women living in proximity to oil fields” and “urgently recommended” an ”environmental monitoring and cancer surveillance system in the region”.[1] In Crude, Chevron’s Sara McMillen, Chief Environmental Scientist, maintains there was no evidence of an increase in the cancer death rate. Maybe her words were very carefully chosen, as there was evidence of a rise in cancer occurrence.

Chevron’s tactics were to stop a hearing in the USA and transfer it to Ecuador. This happened in 2002 when Chevron agreed it would accept the decision of the Ecuadorian court. The case, with Donziger advising, moved through the court system, slowly. In 2011 a provincial court awarded damages of $18 billion, reduced to $9.5 billion by Ecuador’s National Court of Justice. But Chevron never paid, and moved assets out of the country so they could not be seized. Instead, Chevron counter-sued Donziger under the USA’s Racketeer Influenced and Corrupt Organizations (RICO) Act, accusing him of bribing an Ecuadorian judge. In the USA, Judge Lewis A Kaplan agreed with Chevron and in 2014 recused the company from paying anything to Ecuador, and ordered Donziger to pay $800,000 to Chevron. The oil company had relied heavily on testimony from a former Ecuadorian judge, Alberto Guerra, whom the company accommodated and paid in the USA. Guerra later said that he lied.

When Donziger refused to hand over his phones, computers and any other electronic devices to Chevron, which said it needed them to search for assets that could be seized to pay the $800,000, he was charged with contempt of court. Judge Kaplan wanted the US Attorney’s Office of the Southern District of New York to prosecute, but his request was turned down. Then Judge Kaplan recruited the private law firm Seward and Kissel, although the firm had recently represented Chevron. The case, heard by Judge Loretta Preska, resulted in Donziger’s conviction and in October 2021 was sentenced to six months in jail. Two months later he was released to serve out the term under house arrest.

This is a headline condensation of a process that started half a century ago with toxic waste. The waste is still there. Chevron has not paid the reparations ordered by the National Court of Justice in Ecuador. Chevron turned the tables on Donziger, the lead US lawyer representing the blighted communities, by accusing him of fraud. Judge Kaplan cited racketeering, extortion, wire fraud, money laundering, obstruction of justice, judicial bribery, coercion, witness tampering, and arranging for experts’ reports to be ghostwritten, much of the evidence coming from former Ecuadorian judge Alberto Guerra, who subsequently admitted to lying. Many in the legal world disagreed with the sledgehammer used on Donziger; in September 2020, the National Lawyers Guild and International Association of Democratic Lawyers reportedly filed a complaint against Kaplan, because of the way Donziger had been treated.

No doubt that Chevon’s business was and is lucrative for lawyers. Probably there is a bias in favour of US corporations when they are pursued in court by foreigners with limited resources. But the injured parties in the Ecuadorian Amazon are left with a toxic environment. The oil profits were privatised, but no one is willing to pay for a proper clean-up.

Meanwhile, Donziger tweeted on April 14th 2022: “Video of my ankle bracelet being cut at the halfway house yesterday. The U.S. government shackled this metal to my skin 24/7 for almost 3 years. I showered with it, slept with it, ate with it, and charged it with a battery at least once per day. Still not free; 11 days to go.” Donziger was 60 years old in 2021. The battle against Texico, then Chevron, has overshadowed 30 years of his life. Profits extracted at the expense of people and the environment will come to an end when Earth is uninhabitable, but it’s surely better to stop the rot right now.

[1] ‘Geographical differences in cancer incidence in the Amazon basin of Ecuador in relation to residence near oil fields’ by Anna-Karin Hurtig and Miguel San Sebastián, International Journal of Epidemiology, Vol.31 No.5, October 2002, pps. 1021–1027. https://academic.oup.com/ije/article/31/5/1021/745815, accessed April 18th 2022.

Post-Brexit Environment Regulator to be Tiny and Toothless

Posted: November 10, 2020 | Author: | Filed under: Environment, Law | Tags: , | 1 Comment

Far from strengthening environmental protections, the present Westminster Government seems set on diluting them into oblivion.

The Natural Capital Committee issued its final report last month, October 2020. The Natural Capital Committee has been axed. It will be replaced in 2021 by the Office for Environmental Protection, the OEP.

The OEP is to be a very small organisation, reported as likely to have between 60 and 120 staff, covering the whole of England and perhaps Northern Ireland too.[1]  

By way of comparison, my local council, Carmarthenshire in Wales, employs about 8,300 people.

The OEP is supposed to take over the environmental protection work that has been overseen by the European Union. To do that, I feel sure it will need more staff and an adequate budget. The budget has not yet been published, despite our closeness to 2021. When it is known, it will cover five years.

The Government has just amended the overarching legislation, the Environment Bill, to weaken the OEP. It will be empowered to investigate only “serious” breaches of environmental protection law. What is “serious”? The government will reserve to itself the right to decide.  The bill is not law yet — this month it is at the committee stage in the House of Commons – but the Conservatives’ 80-seat majority means that it is unlikely to be altered in any way counter to the wishes of the Cabinet.

The chair and board members of the OEP are to be appointed by the Secretary of State for Environment, Food and Rural Affairs, currently the Rt Hon George Eustice, MP for Camborne and Redruth in Cornwall. The OEP is supposed to hold the Secretary of State to account, but that is tricky if you are the boss’s appointee.

The instruction, to investigate environmental breaches, disasters and catastrophes only if government says they are serious enough, is deeply troubling – particularly because the final report of the Natural Capital Committee shows that England’s environment is in danger, and we might be even more worried about it if there were not so many gaps in our knowledge.

Lots of concerns. Will the Westminster Government find the money to resolve them?

The report, 486 pages long, assembles data on the health or otherwise of natural capital, by which is meant the air, land, water and living organisms of our planet – without which we cannot live. In many cases the data does not exist, the report says, and where it does, it often reveals deteriorating standards. This simple statement, “…the government is not on course to achieve its objective to improve the environment within a generation”, suggests to me that a small office controlled by the government is not the answer, and could indeed be used to cover environmental decay with greenwash.

Professor Dieter Helm, chair of the terminating Natural Capital Committee (NCC), wrote this in his message at the front of the report:

“A previous Defra Secretary of State, Michael Gove, specially requested that the NCC scrutinises the 25 YEP [25 Year Environment Plan] annual reports, paving the way for the Office for Environmental Protection (OEP) to undertake this function from 2021.

“The Committee provided an assessment of the government’s first Progress Report in 2019. In the absence of a natural capital baseline, the Progress Report focused on a long list of actions, with very little evidence of improvements in the state of our natural capital.

“Many of these mistakes have been repeated in the government’s 2020 Progress Report. The NCC’s interim response to this report, published earlier this year, highlights that the integrated, systems based approach the 25 YEP demands is at real risk of being lost.”

That is quite a warning.

The committee’s members are all highly qualified academics. Dieter Helm, Professor of Energy Policy at the University of Oxford, is also a Fellow of New College, Oxford, and Professorial Research Fellow at the Smith School of Enterprise and the Environment.

The six other members are all professors: Chris Collins, Environmental Chemistry at the University of Reading; Colin Mayer, Management Studies, Saïd Business School, University of Oxford; Ian Bateman, Environmental Economics, University of Exeter; Kathy Willis, Biodiversity, University of Oxford; Melanie Austen, Science for the Sea and Society, Plymouth Marine Laboratory; and Paul Leinster, Environmental Assessment, Cranfield University.

The number and range of their recommendations should alarm everyone. They draw attention to lack of resources for their work: “It should be noted that the following areas of analysis were not feasible given resource constraints: i) identifying and analysing all available data; ii) an assessment of the overall environmental system/future trajectories; and iii) the potential impact of the change in natural assets (stocks) on important ecosystem service flows. Such comprehensive analysis is critical for informing whether or not the government will meet the environmental ‘significant improvement test’ that it has set itself in the Environment Bill and developing optimal policy interventions across not only the ten 25 YEP goals, but also for attaining net zero by 2050. The NCC advises that the OEP should be properly resourced to undertake a comprehensive assessment of all available data and the environmental system, including by prioritising the development of a natural system model/decision support tool to determine the impact of changes in the environment on ecosystem service flows and associated societal benefits.”

There are huge gaps in the data: “A key building block for assessing progress robustly is to develop a natural capital baseline. The Committee’s analysis indicates that a number of existing datasets could be used for some of these baseline asset measurements, in particular those for atmosphere and freshwater. For several of the assets, however, and in particular soils and marine, data is very limited. The NCC strongly recommends that Defra [Department for Environment, Food and Rural Affairs] ensures that the planned Natural Capital and Ecosystem Assessment pilot, and any subsequent fully developed baseline exercise, focuses on identifying and measuring the extent and condition of all natural capital assets across England, as per the NCC’s detailed advice – not just habitats. Consideration should also be given to incorporating a substantial citizen science component. The baseline should comprise an agreed set of metrics for each asset, measured at an agreed spatial resolution throughout England. The timing of the measurements should also coincide to create an environmental census that can be repeated at regular intervals to determine trends over time.”

There must be enough money to do the job: “The NCC recommends that the Treasury should ensure that the baseline assessment is properly funded at the next Spending Review – there are huge economic opportunities to be realised from understanding the state of England’s natural assets. The OEP will be unable to carry out its 25 YEP scrutiny function effectively without a natural capital baseline.”

The remit for the new Office for Environmental Protection has to be wide enough: “The NCC advises that OEP’s remit needs to be expanded in the Environment Bill so that the government must consider and respond to its advice on setting and any revisions to interim and long term targets/Environmental Improvement Plans. Without such a role for the OEP, the ambition to significantly improve the environment could be softened in favour of other government priorities and lead to further stalling of progress in meeting the 25 YEP objectives, undermining public confidence in the government’s green commitments.”

Since the publication of this report, the Conservative Government has done exactly what the committee feared, and has narrowed the OEP’s remit to those issue that the government itself admits are “serious”.

The state of the environment is summarised in these words: “The NCC’s overall assessment of progress against the 25 YEP, across seven natural assets…. atmosphere, freshwater, minerals and resources, marine, soils, land and biota, highlights starkly that the government is not on course to achieve its objective to improve the environment within a generation. None of the assets are rated ‘Green’, a number of assets are assessed as ‘Red’ (e.g. freshwater, soils, biota and land), and several assessed as ‘Amber’ (e.g. atmosphere and minerals and resources).”

The Westminster Government may give more importance to immediate issues like staving off pandemic-induced unemployment and business collapses, but in the end there can be no economy in a dead environment, not even for major donors to political parties and their beneficiaries.

PDR

[1] ‘Why the Chair of the Office for Environmental Protection will have their work cut out’ by Ruth Chambers, greenallianceblog.org.uk, August 11th 2020.

Britain’s dangerous social divide

Posted: April 6, 2014 | Author: | Filed under: Law, Politics | Tags: , , | 1 Comment

Culture secretary Maria Miller’s over-claimed mortgage interest says a great deal about the social divide in Britain – a divide that is accentuated by the power which wealth gives to buy the services of solicitors, accountants and other expensive professionals.

Despite all the negative publicity about MPs’ expenses since journalist Heather Brooke, writing in the Daily Telegraph, revealed multiple abuses in 2009, the dominance of legalism over an accepted ethical code seems to send highly paid people on a quest for loopholes.

People struggling from day to day on small, inadequate incomes are corralled outside loophole land, which is home to “The New Few”, as Ferdinand Mount terms Britain’s oligarchy in his 2012 book Power and Inequality in Britain Now: The New Few or a Very British Oligarchy. Ferdinand, more formally William Robert Ferdinand Mount, 3rd Baronet, is cousin to David Cameron’s mother Mary, and thus at the heart of Establishment Britain. He knows the world of privilege.

He writes: “It is only in our own time, though, that a sharpening inequality of income has been accompanied by a pervading contempt for those who are at the bottom of the ladder and may have less chance of climbing a few rungs than their parents had – and less inclination to try, too. The problem is not just that social mobility has slowed down in recent years. Even if equality of opportunity were more fluid and effective than it is today, it would not be enough. A reasonably contented society must have a sense of relationship between all its citizens”. [1]

The loophole-lookers often, too often, give the impression that they don’t care what those outside the charmed circle think of their income-maximising activities. They have lost a sense of fellow feeling with those who are less fortunate financially.

This rupture may be increasing the pressures which are cracking the United Kingdom apart, a possibility to which the oligarchs may not devote much attention. Not that Maria Miller MP is anything like an oligarch, of course. Her mortgage interest claims would have seemed pretty routine in the days before Heather Brooke’s investigations, and according to the parliamentary Committee on Standards, there are only minor errors with them when examined under current rules.

It is not so much the minister’s claims under the Additional Costs Allowance scheme that reflects Mr Mount’s two nations (of very unequal size), but the well-documented efforts made by her representatives to stonewall the investigation, and to attempt to warn off, ever so politely but very firmly, the journalist Holly Watt, who was working on a report for the Daily Telegraph.

Mrs Miller agreed to repay £5,800 (although the Parliamentary Standards Commissioner had recommended £45,000, which was deemed too harsh by the Committee on Standards, composed of five Conservative MPs, four Labour and one LibDem, plus three lay members), but there is no fine, no form of censure other than a short apology in the House of Commons. Contrast that with the official attitude to “benefit cheats”: fines of £350 to £2,000 plus paying the money back, loss of benefits for up to three years, and in some cases prison. But then most “benefit cheats” can’t afford a personal solicitor, and are certainly not allocated a “special adviser” paid from public funds.

The chasm between the charmed circle and everyone else is growing so vast that notions of equity and justice are rocking on their insecure foundations.

 

[1] Pps 257-8 in the 2013 edition, published by Simon & Schuster UK Ltd.