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mandag den 30. maj 2011

New Report: Captured by Cotton.


Exploited Dalit girls produce garments in India for European and US markets.

"This report highlights several labour rights violations faced by girls and young women employed under the Sumangali Scheme in the Tamil Nadu garment industry. The Sumangali Scheme equals bonded labour, on the basis of the fact that employers are unilaterally holding back part of the workers’ wages until three or more years of work have been completed. In addition, workers are severely restricted in their freedom of movement and privacy. Workers work in unsafe and unhealthy circumstances. Local and international NGOs have reported extensively on the Sumangali Scheme. Inevitably, brands and retailers sourcing from Tamil Nadu have Sumangali workers in their supply chain. ICN and SOMO denounce the Sumangali Scheme as outright unacceptable and are of the opinion that sourcing companies have a responsibility to ensure that workers’ rights are respected throughout their supply chain."

Center for Research on Multional Corporations: Captured By Cotton (pdf).

tirsdag den 2. december 2008

The Great Land Giveaway: Neo-Colonialism by Invitation

"The deal South Korea’s Daewoo Logistics is negotiating with the Madagascar Government looks rapacious…The Madagascan case looks neo-colonial…The Madagascan people stand to lose half of their arable land." Financial Times Editorial, November 20, 2008

"Cambodia is in talks with several Asian and Middle Eastern governments to receive as much as $3 billions US dollars in agricultural investments in return for millions of hectares of land concessions…" Financial Times, November 21, 2008

"We are starving in the midst of bountiful harvests and booming exports!: Unemployed Rural Landless Workers, Para State, Brazil (2003)

December 01, 2008 "Information Clearinghouse" -- Colonial style empire-building is making a huge comeback, and most of the colonialists are late-comers, elbowing their way past the established European and US predators.

Backed by their governments and bankrolled with huge trade and investment profits and budget surpluses, the newly emerging neo-colonial economic powers (ENEP) are seizing control of vast tracts of fertile lands from poor countries in Africa, Asia and Latin America, through the intermediation of local corrupt, free-market regimes. Millions of acres of land have been granted – in most cases free of charge – to the ENEP who, at most, promise to invest millions in infrastructure to facilitate the transfer of their plundered agricultural products to their own home markets and to pay the ongoing wage of less than $1 dollar a day to the destitute local peasants. Projects and agreements between the ENEP and pliant neo-colonial regimes are in the works to expand imperial land takeovers to cover additional tens of millions of hectares of farmland in the very near future. The great land sell-off/transfer takes place at a time and in places where landless peasants are growing in number, small farmers are being forcibly displaced by the neo-colonial state and bankrupted through debt and lack of affordable credit. Millions of organized landless peasants and rural workers struggling for cultivatable land are criminalized, repressed, assassinated or jailed and their families are driven into disease-ridden urban slums. The historic context, economic actors and methods of agro-business empire-building bears similarities and differences with the old-style empire building of the past centuries.

Old and New Style Agro-Imperial Exploitation

During the previous five centuries of imperial domination the exploitation and export of agricultural products and minerals played a central role in the enrichment of the Euro-North American empires. Up to the 19th century, large-scale plantations and latifundios, organized around staple crops, relied on forced labor – slaves, indentured servants, semi-serfs, tenant farmers, migrant seasonal workers and a host of other forms of labor (including prisoners) to accumulate wealth and profits for colonial settlers, home country investors and the imperial state treasuries.

The agricultural empires were secured through conquest of indigenous peoples, importation of slaves and indentured workers, the forcible seizure and dispossession of communal lands and the rule through colonial officials. In many cases, the colonial rulers incorporated local elites (‘nobles’, monarchs, tribal chiefs and favored minorities) as administrators and recruited the impoverished, dispossesed natives to serve as colonial soldiers led by white Euro-American officers.

Colonial-style agro-imperialism came under attack by mass-based national liberation movements throughout the 19th and first half of the 20th centuries, culminating in the establishment of independent national regimes throughout Africa, Asia (except Palestine) and Latin America. From the very beginning of their reign, the newly independent states pursued diverse policies toward colonial-era land ownership and exploitation. A few of the radical, socialist and nationalist regimes eventually expropriated, either partially or entirely, foreign landowners, as was the case in China, Cuba, Indochina, Zimbabwe, Guyana, Angola, India and others. Many of these ‘expropriations’ led to land transfers to the new emerging post-colonial bourgeoisie, leaving the mass of the rural labor force without land or confined to communal land. In most cases the transition from colonial to post-colonial regimes was underwritten by a political pact ensuring the continuation of colonial patterns of land ownership, cultivation, marketing and labor relations (described as a ‘neo-colonial agro-export system). With few exceptions most independent governments failed to change their dependence on export crops, diversify export markets, develop food self-sufficiency or finance the settlement of rural poor onto fertile uncultivated public lands.

Where land distribution did take place, the regimes failed to invest sufficiently in the new forms of rural organization (family farms, co-ops or communal ‘ejidos’) or imposed centrally controlled large-scale state enterprises, which were inefficiently run, failed to provide adequate incentives for the direct producers, and were exploited to finance urban-industrial development. As a result, many state farms and cooperatives were eventually dismantled. In most countries great masses of the rural poor continued to be landless and subject to the demands of local tax collectors, military recruiters and usurious money lenders and were evicted by land speculators, real estate developers and national and local officials.

Neo-Liberalism and the Rise of New Agro-Imperialism

Emblematic of the new style agro-imperialism is the South Korean takeover of half (1.3 million hectares) of Madagascar’s total arable land under a 70-90 year lease in which the Daewoo Logistics Corporation of South Korea expects to pay nothing for a contract to cultivate maize and palm oil for export.1 In Cambodia, several emerging agro-imperial Asian and Middle Eastern countries are ‘negotiating’ (with hefty bribes and offers of lucrative local ‘partnerships’ to local politicians) the takeover of millions of hectares of fertile land.2 The scope and depth of the new emerging agro-imperial expansion into the impoverished countryside of Asian, African and Latin American countries far surpasses that of the earlier colonial empire before the 20th century. A detailed account of the new agro-imperialist countries and their neo-colonial colonies has recently been compiled on the website of GRAIN3.

The driving forces of contemporary agro-imperialist conquest and land grabbing can be divided into three blocs:

The new rich Arab oil regimes, mostly among the Gulf States (in part, through their ‘sovereign wealth funds).
The newly emerging imperial countries of Asia (China, India, South Korea and Japan) and Israel
The earlier imperial countries (US and Europe), the World Bank, Wall Street investment banks and other assorted imperial speculator-financial companies.
Each of these agro-imperial blocs is organized around one to three ‘leading’ countries: Among the Gulf imperial states, Saudi Arabia and Kuwait; in Asia – China, Korea and Japan are the main land grabbers. Among the US-European-World Bank land predators there are a wide range of agro-imperialist monopoly firms buying up land ranging from Goldman Sachs, Blackstone in the US to Louis Dreyfuss in the Netherlands and Deutschbank in Germany. Upward of several hundred million acres of arable land have been or are in the process of being appropriated by the world’s biggest capitalist landowners in what is one of the greatest concentration of private landownership in the history of empire building.

The process of agro-imperial empire building operates largely through political and financial mechanisms, preceded, in some cases, by military coups, imperial interventions and destabilization campaigns to establish pliable neo-colonial ‘partners’ or, more accurately, collaborators, disposed to cooperate in this huge imperial land grab. Once in place, the Afro-Asian-Latin American neo-colonial regimes impose a neo-liberal agenda which includes the break-up of communal-held lands, the promotion of agro-export strategies, the repression of any local land reform movements among subsistence farmers and landless rural workers demanding the redistribution of fallow public and private lands. The neo-colonial regimes’ free market policies eliminate or lower tariff barriers on heavily subsidized food imports from the US and Europe. These policies bankrupt local market farmers and peasants increasing the amount of available land to ‘lease’ or sell-off to the new agro-imperial countries and multinationals. The military and police play a key role in evicting impoverished, indebted and starving farmers and preventing squatters from occupying and producing food on fertile land for local consumption.

Once the neo-colonial collaborator regimes are in place and their ‘free market’ agendas are implemented, the stage is set for the entry and takeover of vast tracts of cultivable land by the agro-imperial countries and investors.

Israel is the major exception to this pattern of agro-imperial conquest, as it relies on the massive sustained use of force against an entire nation to dispossess Palestinian farmers and seize territory via armed colonial settlers – in the style of earlier Euro-American colonial imperialism.4

The sellout usually follows one of two paths or a combination of both: Newly emerging imperial countries take the lead or are solicited by the neo-colonial regime to invest in ‘agricultural development’. One-sided ‘negotiations’ follow in which substantial sums of cash flow from the imperial treasury into the overseas bank accounts of their neo-colonial ‘partners’. The agreements and the terms of the contracts are unequal: The food and agricultural commodities are almost totally exported back to the home markets of the agro-imperial country, even as the ‘host country’s’ population starves and is dependent on emergency shipments of food from imperial ‘humanitarian’ agencies. ‘Development’, including promise of large-scale investment, is largely directed at building roads, transport, ports and storage facilities to be used exclusively to facilitate the transfer of agricultural produce overseas by the large-scale agro-imperial firms. Most of the land is taken rent-free or subject to ‘nominal’ fees, which go into the pockets of the political elite or are recycled into the urban real estate market and luxury imports for the local wealthy elite. Except for the collaborationist relatives or cronies of the neo-colonial rulers, almost all of the high paid directors, senior executives and technical staff come from the imperial countries in the tradition of the colonial past. An army of low salary, educated, ‘third country nationals’ generally enter as middle level technical and administrative employees – completely subverting any possibility of vital technology or skills transfer to the local population. The major and much touted ‘benefit’ to the neo-colonial country is the employment of local manual farm workers, who are rarely paid above the going rate of $1 to 2 US dollars a day and are harshly repressed and denied any independent trade union representation.

In contrast, the agro-imperial companies and regimes reap enormous profits, secure supplies of food at subsidized prices, exercise political influence or hegemonic control over collaborator elites and establish economic ‘beachheads’ to expand their investments and facilitate foreign takeover of the local financial, trade and processing sectors.

Target Countries

While there is a great deal of competition and overlap among the agro-imperial countries in plundering the target countries, the tendency is for the Arab petroleum imperial regimes to focus on penetrating neo-colonies in South and Southeast Asia. The Asian ‘Economic Tiger’ countries concentrate on Africa and Latin America. While the US-Europe Multinationals exploit the former communist countries of Eastern Europe and the former Soviet Union as well as Latin America and Africa.

Bahrain has grabbed land in Pakistan, the Philippines and Sudan to supply itself with rice. China, probably the most dynamic agro-imperial country today, has invested in Africa, Latin America and Southeast Asia to ensure low cost soybean supplies (especially from Brazil), rice production in Cuba (5,000 hectares), Burma, Cameroon (10,000 hectares), Laos (100,000 hectares), Mozambique (with 10,000 Chinese farm-worker settlers), the Philippines (1.24 million hectares) and Uganda.

The Gulf States are projecting a $1 billion dollar fund to finance land grabs in North and Sub-Saharan Africa. Japan has purchased 100,000 hectares of Brazilian farmland for soybean and maize. Its corporations own 12 million hectares in Southeast Asia and South America. Kuwait has grabbed land in Burma, Cambodia, Morocco, Yemen, Egypt, Laos, Sudan and Uganda. Qatar has taken over rice fields in Cambodia and Pakistan and wheat, maize and oil seed croplands in Sudan as well as land in Vietnam for cereals, fruit, vegetables and raising cattle. Saudi Arabia has been ‘offered’ 500,000 hectares of rice fields in Indonesia and hundreds of thousands of hectares of fertile land in Ethiopia and Sudan.

The World Bank (WB) has played a major role in promoting agro-imperial land grabs, allocating $1.4 billion dollars to finance agro-business takeovers of ‘underutilized lands’. The WB conditions its loans to neo-colonies, like the Ukraine, on their opening up lands to be exploited by foreign investors.5 Taking advantage of neo-liberal ‘center-left’ regimes in Argentina and Brazil, agro-imperial investors from the US and Europe have bought millions of acres of fertile farmlands and pastures to supply their imperial homelands, while millions of landless peasants and unemployed workers are left to watch the trains laden with beef, wheat and soy beans head for the foreign MNC-controlled port facilities and on to the imperial home markets in Europe, Asia and the US.

At least two emerging imperial countries, Brazil and China, are subject to imperial land grabs by more ‘advanced’ imperial countries and have become ‘agents’ of agricultural colonization. Japanese, European and North American multinationals exploit Brazil even as Brazilian colonial settlers and agro-industrialists have taken over wide swathes of borderlands in Paraguay, Uruguay and Bolivia. A similar pattern occurs in China where valuable farmlands are exploited by Japanese and overseas Chinese capitalists at the same time that China is seizing fertile land in poorer countries in Africa and Southeast Asia.

Present and Future Consequences of Agro-Imperialism

The re-colonization by emerging imperialist states of huge tracts of fertile farmland of the poorest countries and regions of Africa, Asia and Latin America is resulting in a deepening class polarization between, on the one hand, wealthy rentier Arab oil states, Asian billionaires, affluent state-funded Jewish settlers and Western speculators and, on the other hand, hundreds of millions of starving, landless, dispossessed peasants in Sudan, Madagascar, Ethiopia, Cambodia, Palestine, Burma, China, Indonesia, Brazil, the Philippines, Paraguay and elsewhere.

Agro-imperialism is still in its early stages – taking possession of huge tracts of land, expropriating peasants and exploiting the landless rural workers as day laborers. The next phase which is currently unfolding is to take control over the transport systems, infrastructure and credit systems, which accompany the growth of agro-export crops. Monopolizing infrastructure, credit and the profits from seeds, fertilizers, processing industries, tolls and interest payments on loans further concentrates de facto imperial control over the colonial economy and extends political influence over local politicians, rulers and collaborators within the bureaucracies.

The neo-colonized class structure, especially in largely agricultural economies are evolving into a four tier class system in which the foreign capitalists and their entourage are at the pinnacle of elite status representing less than 1% of the population. In the second tier, representing 10% of the population are the local political elite and their cronies and relatives as well as well placed bureaucrats and military officers, who enrich themselves, through partnerships (‘joint ventures’) with the neo-colonials and via bribes and land grabs. The local middle class represents almost 20% and is in constant danger of falling into poverty in the face of the world economic crises. The dispossessed peasants, rural workers, rural refugees, urban squatters and indebted subsistence peasants and farmers make up the fourth tier of the class structure with close to 70% of the population.

Within the emerging neo-colonial agro-export model, the ‘middle class’ is shrinking and changing in composition. The number of family farmers producing for the domestic market is declining in the face of state-supported foreign-owned farms producing for their own ‘home markets’. As a result market vendors and small retailers in the local markets are falling behind, squeezed out by the large foreign-owned supermarkets. The loss of employment for domestic producers of farm goods and services and the elimination of a host of ‘commercial’ intermediaries between town and country is sharpening the class polarization between top and bottom tiers of the class structure. The new colonial middle class is reconfigured to include a small stratum of lawyers, professionals, publicists and low-level functionaries of the foreign firms and public and private security forces. The auxiliary role of the ‘new middle class’ in servicing the axis of colonial economic and political power will make them less nation-oriented and more colonial in their allegiances and political outlook, more ‘free market’ consumerist in their life style and more prone to approve of repressive (including fascistic) domestic solutions to rural and urban unrest and popular struggles for justice.

At the present moment, the biggest constraint on the advance of agro-imperialism is the economic collapse of world capitalism, which is undermining the ‘export of capital’. The sudden collapse of commodity prices is making it less profitable to invest in overseas farmland. The drying up of credit is undermining the financing of grandiose overseas land grabs. The 70% decline in oil revenues is limiting the Middle East Sovereign Funds and other investment vehicles of Gulf oil foreign reserves. On the other hand, the collapse of agricultural prices is bankrupting African, Asian and Latin American elite agro-producers, forcing down land prices and presenting opportunities for imperial agro-investors to buy up even more fertile land at rock-bottom prices.

The current world capitalist recession is adding millions of unemployed rural workers to the hundreds of millions of peasants dispossessed during the expansion period of the agricultural commodity boom during the first half of the current decade. Labor costs and land are cheap, at the same time that effective consumer demand is falling. Agro-imperialists can employ all the Third World rural labor they want at $1 dollar a day or less, but how can they market their products and realize returns that cover the costs of loans, bribes, transport, marketing, elite salaries, perks, CEO bonuses and investor dividends when demand is in decline?

Some agro-imperialists may take advantage of the recession to buy cheaply now and look forward to long-term profits when the multi-trillion dollar state-funded recovery takes effect. Others may cut back on their land grabs or more likely hold vast expanses of valuable land out of production until the ‘market’ improves – while dispossessed peasants starve on the margins of fallow fields.

The new agro-imperials are banking on the new imperialist states committing resources (money and troops) to bolster the neo-colonial gendarmes in repressing the inevitable uprisings of the billions of dispossessed, hungry and marginalized people in Sudan, Ethiopia, Burma, Cambodia, Brazil, Paraguay, the Philippines, China and elsewhere. Time is running out for the easy deals, transfers of ownership and long-term leases consummated by local neo-colonial collaborators and overseas colonial investors and states. Currently imperial wars and domestic economic recessions in the old and emerging imperial countries are systematically draining their economies and testing the willingness of their populations to sacrifice for new style colonial empire building. Without international military and economic backing, the thin stratum of local neo-colonial rulers can hardly withstand sustained, mass uprisings of the destitute peasantry allied with the downwardly mobile lower middle class and growing legions of unemployed university-educated young people.

The promise of a new era of agro-imperial empire building and a new wave of emerging imperial states may be short-lived. In its place we may see a new wave of rural-based national liberation movements and ferocious competition between new and old imperial states fighting over increasingly scarce financial and economic resources. While downwardly mobile workers and employees in the Western imperial centers gyrate between one and another imperial party (Democrat/Republican, Conservative/Labor) they will play no role for the foreseeable future. When and if they break loose…they may turn toward a demagogic nationalist right or toward a currently invisible (at least in the US and Europe) ‘patriotic nationalist’ socialist left. In either case, current imperial pillage and the subsequent mass rebellion will start elsewhere with or without a change in the US or Europe.

tirsdag den 7. oktober 2008

This Green Subsidy for Car Makers Is Just a Disguised Corporate Bailout

Having long sabotaged eco-innovations, the motor industry is now demanding billions to cut its carbon emissions

by George Monbiot

While all eyes were fixed on the banking bail-out, a bucketload of public money was quietly sloshed into the pockets of another undeserving cause. Last week, George Bush agreed to lend $25bn to US car manufacturers. It's a soft loan, which will cost the government $7.5bn. Few people noticed; fewer fought it. The House of Representatives approved the measure by 370 votes to 58. The great corporate bail-out is spreading like the plague.

It has already crossed the Atlantic. Yesterday European car makers demanded that the EU hand them €40bn ($54bn) in cheap loans to match the US subsidy. Where will the public spending spree end?

The motor companies in both Europe and the US claim they need these loans to help them go green. They will invest the money in a new generation of environmental technologies, which will allow them to meet the efficiency standards their governments are setting. There is more joy in heaven over one sinner who repents ... but how strange this green enthusiasm seems, now that there's the smell of public money in the air. For the past 10 years the car manufacturers have driven every useful green initiative into the wall.

In 1998 European car makers promised to show that they could cut their greenhouse gases voluntarily. By the end of 2008, they pledged, they would reduce the average emissions produced by their cars from 190 grams of carbon dioxide per kilometre to 140. How well have they done? By the end of last year they had cut average pollution to 158g/km across Europe and 165g/km in the UK: they will miss their target by some 40%.

Discerning, only 10 years too late, that lobby groups' promises are worth as much as a share in Lehman Brothers, in 2006 the European commission announced that it would set compulsory standards: by 2012 all manufacturers would have to reduce their average CO2 emissions to 120g/km. It looked like progress, until you remembered that 120g was the target proposed by the EU in 1994, to be met by 2005. It was repeatedly delayed by industry lobbying.

Last year the 2012 target fell to the same forces. Angela Merkel, lobbying on behalf of companies such as DaimlerChrysler and BMW, demanded that the European commission put the brakes on. (Ironically it was Merkel, as the idealistic young German environment minister, who had first proposed the target of 120g/km by 2005.) The commission agreed to revise the figure to 130g, and to cover the gap by raising the contribution from biofuels. Since then we've seen hard evidence that most biofuels, as well as spreading starvation, produce more greenhouse gases than petrol; but the policy remains unchanged.

Now the pollutocrats are whingeing that they can't meet the 130g target either. A month ago they persuaded the European parliament's industry committee to take up their case: it proposed postponing the target until 2015, reducing the fines if they don't comply, and allowing manufacturers to offset eco-innovations against the target even if these don't actually reduce emissions. These invertebrates, in other words, proposed to grant official approval to industry greenwash. Fortunately this scam was rejected two weeks ago by the parliament's environment committee.

In the US, manufacturers have still not reached the standard (an average of 27.5 miles per gallon) that they were supposed to have met, under the Energy Policy Conservation Act, by 1985. The average car sold in the States today is less efficient than the 1908 Model T Ford.

What makes this dithering so frustrating is that to be talking, in 2008, about targets of 130 or 120g/km is a bit like discussing whether modern computers should have 10 rows of sliding beads or 100. In 1974 a stripped-down 1959 Opel T-1 managed 377 miles to the US gallon (160km/l), which equates to 15 grams of CO2 per kilometre. There is no technical reason why the maximum limit for mass-produced cars shouldn't be 50g/km.

Nor is there a good commercial reason. A poll by the Newspaper Marketing Agency shows that 80% of car buyers say economy is now more important to them than performance. The car industry's technological failure results entirely from lobbying by the companies now demanding public money to go green. They want to squeeze every last drop from existing technologies before switching to better models.

Their sabotage of green technology has been both subtle and comprehensive. The film Who Killed The Electric Car? shows how the manufacturers, working with oil companies and corrupt officials, sank California's attempt to change vehicle technologies. Having bumped off battery power, they persuaded the federal government to pour money instead into hydrogen vehicles, aware that the technological hurdles are so high that a cheap, mass-produced model might never be possible. Electric cars, by contrast, have been ready for the mass market for almost a century. The $1.2bn that the US government is spending on research and development for hydrogen cars - like the €2bn pledged to the same quest by the European Union - is a subsidy for avoiding technological change.

Now, after so much procrastination, the car makers have the flaming cheek to demand public money to pursue the policies they have spent 50 years and millions of dollars crushing. Of course, the "green loans" they are soliciting are nothing of the kind. Funding better environmental performance is simply an excuse for bailing out another failing industry. As a result of the credit crunch and high oil prices, new car registrations in the UK fell by 21% last month. In the US, sales by the major manufacturers have declined this year by between 20 and 35%.

There is no need to spend a penny of public money on greening the motor industry. As a recent report by the House of Commons environmental audit committee shows, you could achieve the same outcome by creating a bigger differential between vehicle tax bands: it proposes that people buying the least efficient cars should pay around £2,000 more per year than those buying the most efficient. This would kill the market for gas guzzlers and force the industry to make the changes it has long resisted.

But the government has taken all the flak a good tax policy would have generated for very little gain. Its controversial new vehicle tax banding will save a mere 0.16 million tonnes of CO2 per year: a drop in the acidifying ocean. At scarcely greater political cost it could have hammered emissions and generated much of the money it needs to revolutionise public transport. Again there has been a great historical slide: between 1920 and 1948 cars were taxed at £1 per horsepower: in real terms (and in some cases in nominal terms) a far higher rate for gas guzzlers than today's.

But subsidies are what governments pay when regulation doesn't happen. If you don't have the guts to force companies to do something, you must bribe them instead. It's a fair guess that European car makers will still fail to meet their environmental targets, even if they get the money they're demanding. The greenest thing governments could do is to allow these foot-dragging, planet-eating spongers to go under.

Starbucks Wastes Millions of Litres of Water A Day

Coffee giant's running-tap policy contradicts its claimed green credentials

by Angela Balakrishnan

Environmental campaigners have attacked Starbucks after the discovery that millions of litres of water are wasted in its coffee shops every day, contradicting its much-boasted green credentials.

[Starbucks signs are seen outside one of its stores in New York July 3, 2008. (Chip East/Reuters)]Starbucks signs are seen outside one of its stores in New York July 3, 2008. (Chip East/Reuters)
An investigation by the Sun revealed that over 23.4m litres of water are poured down the drains of 10,000 outlets worldwide due to a policy of keeping a tap running non-stop.

It is enough daily water for the entire 2 million population of Namibia in Africa, which has severe droughts, or to fill an Olympic pool every 83 minutes.

A single Starbucks tap left running for just over three minutes wastes the amount of water one African needs to survive for a day in drought conditions.

Each Starbucks has a cold tap behind the counter that runs into a sink known as a "dipper well" - used to wash utensils.

Under the company's health and safety rules, staff are banned from turning the water off because management claim that a constant flow of water prevents germs breeding in taps.

Water companies joined green activists in criticising the firm for harming the environment and wasting a vital natural resource. Experts said leaving taps running for hygiene reasons was "nonsense".

Water shortage is one of the world's biggest problems. Australia is in the grip of a seven-year drought - the worst in a century.

In the UK, Starbucks has 698 branches, each open for 13 hours a day. Even a slow tap flows three litres of water a minute, meaning Starbucks in the UK is wasting an estimated 1.63m litres a day - enough to supply Matlock village in Derbyshire.

The running water policy was revealed after a Starbucks executive wrote back to a couple who complained about the tap at their local branch.

Lisa Woolfe, 39, of Cuffley, Hertfordshire, said: "I noticed a small sink behind the counter had its tap running. The assistant said the store was told to keep it running as it cleaned the pipes.

"I could not believe it but when we contacted head office, they confirmed the taps were left on and the water was not recycled.

"It is an absolutely astonishing waste of water, especially for a company which prides itself on its green credentials."

Speaking to staff at Starbucks outlets around the world, the Sun found that many did not use the running tap or even know what it was for.

Peter Robinson, of the environmental charity Waste Watch, said: "Leaving taps running all day is a shocking waste of precious water. And to claim you are doing it for health and safety reasons is bonkers.

"Tap water comes from rivers and groundwater and wasting it can cause great harm to the environment and wildlife. Big companies should set an example."

Jacob Tompkins, of the independent water efficiency agency Water Wise, said: "If they are doing all their basic cleaning procedures, I fail to see why they would need to do this. There are a lot of other ways to stop a build-up of bacteria.

"The chance of a build-up in the spout is extremely remote. And if there is one they're not cleaning the tap properly."

Ian Barker, the head of water resources at the Environment Agency, said: "We are already taking too much water from the environment and are seeing reduced river flows."

A spokeswoman for Starbucks said that the company's water use adhered to the World Health Organisation, US and EU environmental directives for in-store water supply standards. But she acknowledged the company could cut its water use.

She defended its dipper well system, saying the technique was common and accepted in the industry.

"Starbucks' challenge is to balance water conservation with the need for customer safety," the spokeswoman said. "The dipper well system currently in use in Starbucks retail stores ensures that we meet or exceed our own and local health standards."

She said the company had tested alternative methods such as the use of an ice bath but it was not successful. It was considering other alternatives and cut its water use per square foot this year.

Starbucks is known for its campaigns and instore advertising boasting how it gives back to communities and the environment.

In the company's latest corporate social responsibility report, it says: "From promoting conservation in coffee-growing countries to in-store 'green teams' and recycling programs, Starbucks has established high standards for environmental responsibility.

"By taking steps to reduce waste from our operations and recycle, we can preserve the Earth's natural resources and enhance the quality of lives around the globe.

"Starbucks actively seeks opportunities to minimise our environmental impact."

This is not the first time the Seattle-based firm has come under fire over its social and environmental credentials. In 2006, the Guardian reported how the US coffee giant has used its muscle to block an attempt by Ethiopia's farmers to copyright their most famous coffee bean types, denying them potential earnings of up to £47m a year.

As a result, Starbucks negotiated an agreement with the Ethiopian government to give the country more ownership and a better price for its coffee beans.

søndag den 5. oktober 2008

How Multinational Corporations Avoid Paying Their Taxes

Drug companies and other multinational companies based in the U.S. systematically avoid paying tax in the U.S. on their profits. The companies elect to realize profits in low-tax countries and because of this the rest of us have to pay billions of unnecessary taxes to make up for the shortfall, writes Peter Rost, an ex-pharmaceutical executive.

By Peter Rost

11/22/06 "Information Clearing House" -- -- The biggest tax scam on earth has a very innocent sounding name. It is called “transfer prices.” That almost sounds boring. It is, however, anything but boring. Abuse of transfer prices is a key tool multinational corporations use to fool the U.S. and other jurisdictions to think that they have virtually no profit; hence, they shouldn’t pay any taxes.

Corporations involved in this scam are “model corporate citizens,” or so they would like us to believe. The truth is that they rob us all blind. The money we lose can be estimated in the tens of billions, or possibly hundreds of billions of dollars every year. We all end up paying higher taxes because rich corporations make sure they don’t.

But don’t take my word for this.

A few weeks ago U.K.-based GlaxoSmithKline (GSK), one of the largest pharmaceutical companies in the world, together with the Internal Revenue Service (IRS) announced that GSK will pay $3.4 billion to the IRS to settle a transfer pricing dispute dating back 17 years. The IRS alleges that GSK improperly shifted profits from their U.S. to the U.K. entity.

And U.K. pharmaceutical companies are not alone with these kinds of problems. Merck, one of the largest U.S. drug companies, also this month disclosed that they face four separate tax disputes in the U.S. and Canada with potential liabilities of $5.6 billion. Out of that amount, Merck disclosed that the Canada Revenue Agency issued the company a notice for $1.8 billion in back taxes and interest “related to certain inter-company pricing matters.” And according to the IRS, one of the schemes Merck used to cheat American tax payers was by setting up a subsidiary in tax-friendly Bermuda. Merck then quietly transferred patents for several blockbuster drugs to the new subsidiary and then paid the subsidiary for use of the patents. The arrangement in effect allowed some of the profits to disappear into Merck’s own “Bermuda triangle.”

I have described many more ways the global drug industry cheats and defrauds our government in my recent book, “The Whistleblower, Confessions of a Healthcare Hitman.” In this article, however, I’m going to focus on how they, and other rich multinationals, use the tax system to defraud us.

So what’s going on here, how have multinational drug companies been able to gouge us for years selling expensive drugs and then avoid paying tax on their astronomical profits?

The answer is simple. For companies in certain businesses, such as pharmaceuticals, it is very easy to simply “invent” the price a company charges their U.S. business for buying the company’s product which they manufacture in another country. And if they charge enough, poof; all the profit vanishes from the US, or Canada, or any other regular jurisdiction and end up in a corporate tax-haven. And that means American and Canadian tax payers don’t get their fair share.

Many multinational corporations essentially have two sets of bookkeeping. One set, with artificially inflated transfer prices is what they use to prepare local tax returns, and show auditors in high-tax jurisdictions, and another set of books, in which management can see the true profit and lost statement, based on real cost of goods, are used for the executives to determine the actual performance of their various operations.

Of course, not every multinational industry can do this as easily as the drug industry. It would be difficult to motivate $6,000 toilet seats. But the drug industry, where real cost of goods to manufacture drugs is usually around 5% of selling price, has a lot of room to artificially increase that cost of goods to 50% or 75% of selling price. This money is then accumulated in corporate tax-havens where the drugs are manufactured, such as Puerto Rico and Ireland. Puerto Rico has for many years attracted lots of pharmaceutical plants and Ireland is the new destination for such facilities, not because of the skilled labor or the beautiful scenery or the great beer—but because of the low taxes. Ireland has, in fact, one of the world’s lowest corporate tax rates with a maximum rate of 12.5 percent.

In Puerto Rico, over a quarter of the country’s gross domestic product already comes from pharmaceutical manufacturing. That shouldn’t be surprising. According to the U.S. Federal Tax Reform Act of 1976, manufacturers are permitted to repatriate profits from Puerto Rico to the U.S. free of U.S. federal taxes. And by the way, the Puerto Rico withholding tax is only 10%.

Of course, no company should have to pay more tax than they are legally obligated to, and they are entitled to locate to any low-tax jurisdiction. The problem starts when they use fraudulent transfer pricing and other tricks to artificially shift their income from the U.S. to a tax-haven. According to current OECD guidelines transfer prices should be based upon the arm’s length principle – that means the transfer price should be the same as if the two companies involved were indeed two independents, not part of the same corporate structure. Reality is that standard operating procedure for multinationals is to consistently violate this rule. And why shouldn’t they? After all, it takes 17 years for them to pay up, per the GSK example above, even when they get caught.

Another industry which successfully exploits overseas tax strategies to cheat us all is the hi-tech industry. In fact, Microsoft Corp. recently shaved at least $500 million from its annual tax bill using a similar strategy to the one the drug industry has used for so many years. Microsoft has set up a subsidiary in Ireland, called Round Island One Ltd. This company pays more than $300 million in taxes to this small island country with only 4 million inhabitants, and most of this comes from licensing fees for copyrighted software, originally developed in the U.S. Interesting thing is, at the same time, Round Island paid a total of just under $17 million in taxes to about 20 other countries, with more than 300 million people. The result of this was that Microsoft's world-wide tax rate plunged to 26 percent in 2004, from 33 percent the year before. Almost half of the drop was due to “foreign earnings taxed at lower rates,” according to a Microsoft financial filing. And this is how Microsoft has radically reduced its corporate taxes in much of Europe and been able to shield billions of dollars from U.S. taxation.

But remember, this is only one example. Most of the other tech companies are doing the same thing. Google recently also set up an Irish operation that the firm credited in a SEC filing with reducing its tax rate.

Here’s how this is done in the software industry and any other industry with valuable intellectual property. A company takes a great, patented, American product and then develops a new generation. Then, of course, the old product disappears. Some, or all, of the cost and development work for the new product takes place in Ireland, or at least, so the company claims. The ownership of the new generation product and all income from licensing can then legally be shared between the U.S. parent company and the offshore corporation or transferred outright to the tax-haven. The deal, to pass IRS scrutiny, has to be made using the “arms-length principle.” Reality is that the IRS has no way of controlling all these transactions.

Unfortunately those of us working and paying tax in the U.S. can’t relocate our jobs and our income to Ireland or another tax haven. So we have to make up the income shortfall. In the U.S. we have a highly educated society with a very qualified workforce, partly supported by our tax payers. This helps us generate breakthrough products. But once a company has a successful product, they have every incentive to move the second generation of a successful product overseas, to Ireland and a few other corporate tax havens.

There is only one problem for U.S. companies with this strategy, and that is that if they repatriate this money to the U.S. they have to pay full corporate taxes. In fact, according to BusinessWeek, U.S. multinational corporations have built up profits of as much as $750 billion overseas, much of it in tax havens such as the Ireland, Bahamas, and Singapore to avoid the stiff 35% levy they'd face if they repatriated the funds back into the U.S.

But of course, Congress, which is basically paid for by our multinational corporations, generously provided for a one-time provision in the corporate tax code, so that they could repatriate profits earned before 2003, and held in foreign subsidiaries, at an effective 5.25% tax rate.

And so the game goes on.

In the end, multinational corporations live in a global world which allows them to pretty much send their money to corporate tax havens at will, and then repatriate this money almost tax free, with the help of the U.S. Congress.

The people left holding the bag are you and me. If you want to know learn more about the corruption in the drug industry, read my new book, "The Whistleblower, Confessions of a Healthcare Hitman."

Peter Rost, M.D., is a former Vice President of Pfizer. He became well known in 2004 when he emerged as the first drug company executive to speak out in favor of reimportation of drugs. He is the author of “The Whistleblower, Confessions of a Healthcare Hitman" See: http://the-whistleblower-by-peter-rost.blogspot.com/

Study says most corporations pay no U.S. income taxes

Tue Aug 12, 2008 12:54pm EDT


WASHINGTON (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.


The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.

The report did not name any companies. The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries.

With the U.S. budget deficit this year running close to the record $413 billion that was set in 2004 and projected to hit a record $486 billion next year, lawmakers are looking to plug holes in the U.S. tax code and generate more revenues.

Dorgan in a statement called the report "a shocking indictment of the current tax system." Levin said it made clear that "too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

The study showed about 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts, the senators said. About 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year, they said.

(Reporting by Donna Smith, Editing by David Wiessler)

tirsdag den 20. maj 2008

For Profit

By Malcolm Martin

19/05/08 "ICH" -- - Our children are taught that the United States of America is a democracy. As the tale is told, at the founding of the nation, a government “of, by, and for the people” was established. Four score and seven years later, a President Abraham Lincoln called the nation’s people to join and die in a great civil war that such a form of government might not perish from the earth and their eventual victory preserved American democracy into the future.

Those children can someday refer to the sermons of the Rev. Jeremiah Wright for the full story. But aside from how closely this lesson is in accord with the historic truth, the idea has today become an outright lie and an utter absurdity. The United States of America is now better described as a corporatocracy. The government is owned and the people are dictated to by these capitalist creations whose God is Mammon. Ironically as Lincoln spoke his immortal words at Gettysburg, the Industrial Revolution had begun to generate these entities that would have completely removed any vestige of American democracy seven score and five years later.

Corporations are, of course, different from people. They are devoid of human emotion. They are constitutionally unable to generate empathy. They feel nothing if people suffer exploitation, if people live in misery, or if people die horribly. Union Carbide was unaffected by the thousands dead and dying in Bhopal. It registered only on a balance sheet as a $470-million loss taken for the sake of future corporate viability under a new name, Dow Chemical. The corporation cannot be reasoned with, pleaded with, or shamed into changing course even in times like these, when life on the planet hangs in the balance. McDonald’s is in the process of teaching Starbucks that even the pretense of a social conscience is too expensive a marketing ploy.

The corporation recognizes and reacts only to threats to its air supply—profits. So figuratively speaking; corporations do share something with human beings. They have an instinct for self-preservation and if they are deprived of a life giving element they die. While human beings must have oxygen and water, the corporation’s lifeblood is those quarterly profits. The corporation must make a profit and then continue making ever greater profit. Corporate profits must grow, forever! Irrational, impossible, unsustainable but that is in the nature of the beast—much as lemmings are pushed into the sea.

The largest US oil corporations ExxonMobil, ConocoPhillips, and Chevron have registered world record profits for the last several years. But Big Oil cannot afford to rest! Beating those records is now a fight for survival into the future. The price of gas, nearing $4.00 per gallon, must continue upwards. The government regulatory agencies must continue to “accidentally” give up oil royalties revenue, the President must continue pushing for exploration in the Alaskan wilderness and off the Gulf Coast, the Congress must continue making theatrical calls for price-gouging investigations and stay away from actual windfall profits tax legislation. Damn public opinion, the US military must remain in Iraq and must soon assault Iran to secure the Middle East’s vast oil reserves.

The parameters are the same in every corner of the global economy. The maximum profit is a product of the greatest possible productivity and the lowest possible wage. US corporations have moved everything that isn't nailed down to lower wage countries. Nothing is made in today’s de-industrialized United States. American consumer's service calls are answered in Ireland and India. Major League baseballs are made in Haiti. AirJordan’s come out of Nike's sweatshops in Indonesia. Microsoft conducts 85% of its research in the US so Bill Gates wants to lift H-1B visa restrictions to bring the low wage workers here. Halliburton is now headquartered in Dubai and preparing to receive its old boss, Dick Cheney, in his retirement years.

To survive under their profit imperative, corporations must undertake a never ending process of consolidation. There is consolidation by horizontal integration. For instance, numerous US corporations once dotted the auto making landscape. In the recent past it was down to the Big Three. Today Chrysler is doomed, Ford is on life support, and General Motors is on its knees. In the corporate world of the near future cars will be made in Japan, or China, or India. Ultimately, the industry will settle in one corporate entity.

Then there is consolidation by vertical integration and its heavyweight champion is Wal-Mart, the world’s largest corporation. Wal-Mart has made a partner of the Chinese government. Working together, the partners have turned China into a vast subsistence-wage labor camp. China supplies Wal-Mart so it has no need of domestic vendors like the now destroyed Rubbermaid. Armed with the lowest production costs, Wal-Mart’s rise up on every other street corner selling every commodity imaginable and every service the corporation can get its hooks into. Wal-Mart lays waste to local economies and then picks up the pieces to become the only butcher, baker and candlestick maker in town. The corporation recently moved to provide banking services in its stores.

The US government has been hollowed out during the rise to absolute power of the corporations. Elections have become an elaborate “reality show” that plays out on corporate television for viewers entertainment. If you watch FOX, the reality is filtered through Rupert Murdoch’s Newscorp, NBC is General Electric news, CNN is Time/Warner news, ABC brings you into Disney’s world, and Viacom regularly checks the iconic CBS news department to make sure Edward R. Murrow is still dead and buried under a mountain of infotainment. That is when Viacom is not preparing America’s youth for slavery and death through MTV and B.E.T.

The actual counting of the American people’s votes is done by the corporations—giant defense contractor United Technologies recently moved to take the job off Diebold’s hands. Corporate sentinels, the lobbyists, roam the halls of government enforcing discipline among the hired hands, allowing the most servile to feed longest at the public trough. So the Congress has not passed legislation and the Supreme Court has not decided a case, in which significant wealth was involved, in favor of the people in thirty years. Each and every decision of all three branches of the US government now transfers wealth from the people to their corporate masters.

The corporations now have in their sights the last remaining institutional pillars of American democracy. The Business Roundtable, the Gates Foundation and the Walton Family Foundation are working mightily to smash the public schools. Wall Street is funding the effort to gain control of the Social Security trust fund for its investment bankers. And the whole corporate gang is intent on “starving the beast” or killing state and local governments. Their success in this effort is probably best expressed in California’s $17.4 billion budget deficit and Florida’s crushing $5 billion revenue shortfall this fiscal year.

Then finally, there is the most ominous development of all. The corporations have begun forming their own Praetorian Guard. The massacre of Iraqi civilians and the patrolling of the hurricane ravaged streets of New Orleans have made Blackwater Worldwide, formerly Blackwater USA, the most famous of the rising corporate armies. Contrary to any notion of cost effectiveness, Blackwater mercenaries protect US State Department personnel in Iraq instead of the regular military. It seems not to make sense, unless the corporatocracy is looking ahead to a day when they can no longer trust the US military to carry out attacks on an American people’s democratic resistance striking at their profits—their air supply.