New report reveals: €75bn missing for world’s poor

On 26-27 May 2008, European Development Ministers will meet at the General Affairs and External Relations Council (GAERC) in Brussels to discuss aid and development. Yet as a new report by NGOs campaigners across Europe reveals, European governments’ aid efforts are continuing to fail the poor to the tune of €75bn. The report, No Time to Waste, published by CONCORD, the European confederation of relief and development NGOs whose members represent over 1,600 NGOs supported by millions of citizens across Europe, reveals that on current trends the European Union (EU) will have given €75bn less in aid by 2010 than it promised, threatening progress on the UN Millennium Development Goals set for 2015. If the recent record of slow progress continues, Europe will find it harder to meet its target with every year that passes.

The official statistics, released by the OECD in April, showed that European aid fell sharply in 2007, with Belgium, France and the UK recording falls of 10-30%. According to the OECD, “most donors are not on track to meet their stated commitments to scale up aid and will need to make unprecedented increases to meet the targets they have set.” CONCORD’s report has found that European governments continue to “inflate” their aid statistics with debt relief and refugee costs. The report reveals that the 15 older Member States provided only 0.33% of their gross national income as genuine aid in 2007 – continuing to miss the target set for 2006 of 0.39% of GNI.

The report says the EU must also roll up its sleeves on the quality of its aid, making it accountable and transparent. The EU has committed to make aid work better by making it more predictable, better coordinated, and aimed at promoting gender equality and women’s’ empowerment, but NGOs are concerned that these targets are not being met and that more ambitious commitments are needed. 2008 is a crucial year for aid, testing the credibility of European governments. At the High Level Ministerial Forum on Aid Effectiveness in Accra, Ghana this coming September, the EU will review its progress against crucial commitments made in 2005 in Paris.

When European Ministers will meet next week, members of CONCORD and campaigners of the Global Call to Action against Poverty (GCAP) will stand outside the Council of the European Union in Brussels holding a huge banner to raise their voices against the continuing massive aid gap during. European NGOs join the OECD and the European Commission in calling on European governments to honour their promises and commit to clear, measurable, binding timetables setting out the year-on-year aid increases in aid that are necessary for the MDGs to be met.

Banks urged to stop fuelling harmful agrofuel boom

Many major European banks are funding the rapid expansion of agrofuel production in Latin America, leading to large scale deforestation, increasing human rights abuses and threatening food sovereignty, according to a new report of Friends of the Earth Europe, titled European financing of agrofuel production in Latin America. The report - amid global worries about the increasing impacts of rising food prices - calls for an end to investments by European banks in harmful agrofuel projects. Agrofuels have been blamed as a major factor driving up food prices. According to the UN and the World Bank, 100 million more people are currently facing severe hunger due to higher prices for basic foods.

The report documents how major European banks, such as Barclays, Deutsche Bank, BNP Paribas, Axa, HSBC, UBS and Credit Suisse are investing billions of Euros in the production and trade of sugar cane, soybeans and palm oil in Latin American countries. Fuels from sugar cane, soybeans and palm oil are increasingly used in Europe. Their large scale production in countries such as Brazil, Argentina, Paraguay and Colombia is extremely controversial as it leads to the destruction of the Amazon and other valuable ecosystems, as well as to the contamination of drinking water. Large scale plantations (see photo with burning sugarcane) also lead to human rights violations against peasants, with working conditions on some plantations in Brazil classed as modern slave labour. At the same time agrofuel companies are making record profits, enabled by loans, investments and other financial support from private banks.

All major European banks have invested billions of Euros over recent years in agrofuel producing companies such as Cargill, Bunge, ADM, Cosan and Brasil Ecodiesel. Several of these companies have been involved in, and convicted of, illegal activities in Latin America. Some examples of European banks’ involvement: In 2007 Deutsche Bank owned 35% of the shares of Brasil Ecodiesel. Bunge currently has credit facilities worth more than 1€bn from banks such as Barclays, BBVA, BNP Paris, Deutsche Bank, HSBC, Royal Bank of Scotland, KBC and Credit Suisse. In 2007 Deutsche Bank and Credit Suisse provided financial services totalling more than 1€bn to Cosan.

Friends of the Earth Europe says banks should immediately stop their investments in such harmful agrofuel development. The NGO is also calling on the European Commission to revise its plans for a mandatory 10% target for the use of agrofuels in transport by 2020, which it says will exacerbate the problems associated with the production of agrofuels.

Health insurance is no substitute for rich country aid, NGOs say

As governments from all over the world meet in Paris to discuss social health protection in developing countries, a group of NGOs has issued a report warning that health insurance continues to exclude the poor. The argument that health insurance could fill financing gaps to ensure health care in poor countries is now being strongly promoted by northern governments and international institutions. The paper, Health insurance in low income countries: Where is the evidence that it works?, says that while these insurance schemes can have a positive effect on the accessibility and on reducing catastrophic health expenditure for parts of the population, they can also pose a threat to equity and efficiency of health systems.

In its report, the NGOs argue that even insurance mechanisms made specifically for developing countries often exclude the poorest and most vulnerable groups. NGOs argue that most health insurance schemes developed for the poor seem unable to finance a comprehensive benefits package. Therefore poor people often continue to depend on the ability to pay 40% of their health needs – out-of-pocket – even when they are a member of an insurance scheme. “Far from being a magic bullet, health insurance schemes can exclude the poorest from health services. The money for health must not come from the pockets of poor people. The best way for countries like France and Germany to provide healthcare for the poor is by delivering on the aid they’ve promised,” said Luc Lampriere of Oxfam France - Agir Ici.

NGOs also call on countries and donors to respect their commitment to boost investments in health care. Only about a third of sub-Saharan African countries are allocating ten per cent or more of their national budgets to the health sector – despite a previous commitment known as the Abuja target, to invest 15 percent spending on health. The report says that all countries and donors should evaluate insurance mechanisms not just in terms of advantages to the populations they serve but also with regards to the contribution they make towards universal access.

“Health Insurance mechanisms are often promoted based on the assumption that they can fill financing gaps and contribute positively to universal coverage. But without significant public funding for the health sector and strong government stewardship, insurance mechanisms can actually increase inequity,” said Nicolas Guihard of Médecins du Monde. A specific focus is needed, the report continues, on the needs of vulnerable groups, such as women, poor and elderly people, and people living with HIV, who are most likely to be excluded by insurance mechanisms must also remain at the centre of any schemes and the overall debate.

Trade unions at CSD: Food prices, green jobs and decent work

A 50 member trade union delegation commenced its work at UN Commission on Sustainable Development (CSD) in New York this week by asking member countries to consider ‘decent work’ a vital part of any agenda for sustainable agricultural and rural development. Trade Unions, one of nine Major Groups under Agenda 21, are meeting with governments and international agencies this and next week to review progress made towards Sustainable Development since the 2002 World Summit in the following theme areas: agriculture, desertification, drought, land, rural development and Africa.

Initial remarks prepared for the Opening Session, Thierry Dedieu, Confederal Secretary of the ‘Confédération Française Démocratique du Travail (CFDT) reminded that although world attention is focused on the disastrous effect of escalating food prices, the major players in the agricultural industry, the millions of waged and informal workers that bring the food to our tables, should not be forgotten. “The ILO Agenda for Decent Work is critical for the agricultural sector,” said Dedieu. “Large segments of the industry currently encompass all aspects of precarious employment; unacceptable pay levels, unhealthy & unsafe work, insecure employment prospects, and numerous other substandard terms and conditions. In 2007, for example, over 170,000 agricultural workers died because of their work. During the next two weeks, trade union delegates will report on progress made by trade unions to render industries related to agriculture and rural development more sustainable,” he said. “We have been able to bring health and safety to millions of workers through worksite negotiations and international Framework Agreements, at the same time as we continue to promote such international agreements as ILO Convention 184 on Health and Safety in Agriculture.”

Green & Decent’ employment policies in agriculture and the global food system can yield a high payoff as solutions to deal with drought, desertification and rural development, especially when combined with energy conservation and environmental protection, he said. A progress on a ‘Green Jobs’ report by the United Nations Environmental Programme (UNEP), in collaboration with the International Labour Organisation (ILO) and International Trade Union Confederation (ITUC) will be unveiled in a high-level luncheon with country delegates next week.

Trade unions at the CSD will also highlight the need to integrate climate change, water issues, as well as public and occupational health as key cross-sectoral issues. Trade unions will encourage the CSD to harness the full participation of workers and trade unions in decision-making for workplace solutions and in building support for the aggressive policies that are needed at the community level. See >>> information kit

Oil industry undermines emissions reduction, says FoE

Oil companies have the potential to achieve more than 10% cuts in greenhouse gas emissions by 2020 without using agrofuels, reveals a report launched last week by Friends of the Earth Europe. Released on the day Shell and BP announced combined quarterly profits of 14.4billion US dollars, Extracting the truth: Oil industry efforts to undermine the Fuel Quality Directive uses industry's own data to show how oil companies are falsely claiming that the target proposed by the European Commission in revisions to the Fuel Quality Directive is unachievable. It shows that at least 10% reductions in greenhouse gas emissions could be realised through reduced gas flaring, improved energy efficiency and fuel switching at refineries, and without the need for agrofuels which can have negative environmental and socials impacts and have not been proven to reduce emissions overall.

Friends of the Earth Europe's report calculates that reductions in greenhouse gas emissions of between 10.5% and 15.5% are possible through measures including less flaring and venting, energy efficiency improvements and fuel switching in refineries. The report comes at a time of record profits for oil companies and increasing attempts to portray themselves as environmentally responsible. In 2007, ExxonMobil, Royal Dutch Shell, Chevron, TOTAL, BP and ENI together earned together over 125billion US dollars.

The analysis puts oil industry attempts to obstruct the Fuel Quality Directive in the context of increased 'greenwashing'. Behind the scenes oil companies are lobbying against environmental legislation whilst in public they use advertising to suggest that they are reducing emissions. In 2007 Shell was found guilty of misleading advertising for an advert in which it claimed it used waste CO2 to grow flowers. A FoE speaker said: “Oil companies are not serious about their environmental performance. While they brand themselves as environmentally responsible, their CO2 emissions continue to rise. In reality the emissions of almost all of them are rapidly increasing and they are all investing heavily in energy-dirty tar sands, while their investments in renewable energy remain negligible or decrease.”

PWYP: Companies must go beyond their rhetoric

In the wake of a recent report published by Transparency International, showing that leading oil and gas companies should be doing more to fight corruption and poverty in resource-rich countries, Publish What You Pay calls on companies to publicly disclose how much money they pay to governments for the right to extract. “The report’s key findings and recommendations reaffirm longstanding demands by PWYP for greater transparency of revenue flows earned by resource-rich governments from extractive industries. Without this information, citizens cannot track how the revenues are being reinvested back in the country,” said Radhika Sarin, International Coordinator of PWYP.

In the 2008 Report on Revenue Transparency of Oil and Gas Companies, TI, a key member of the PWYP coalition, evaluates how 42 international and national oil and gas companies publicly report their operations in a total of 21 countries. Of those companies, only a third are categorised in the findings as ‘high’ performers and only a selected group report on a country-by-country basis, a reporting format identified as best practice. “The fact that leading oil and gas companies can retain competitive advantage while still reporting their operations on a country-by-country basis sets a standard for others to follow. It's time for companies to go beyond their rhetoric and start disclosing payments in the disaggregated format that citizens want," said Sarin.

The report recommends that:
* Companies should proactively publish what they pay to governments on a country-by-country basis;
* Governments, stock exchanges and regulatory agencies should urgently consider mandatory reporting for companies operating in-country and abroad;
* Governments from oil and gas producing countries should introduce legislation mandating revenue transparency by all companies operating in their territories;
* Regulatory agencies and companies should agree to publish information in a uniform and accessible format.

The recommendations show that encouraging companies to report their revenues transparently is not the only mechanism to achieving the overall goal of responsible government spending. Governments in both resource-rich countries and those who are home to oil and gas companies, in addition to regulatory agencies should introduce legislation mandating revenue transparency by all companies. “This report is an invaluable advocacy tool. PWYP coalitions around the world will be using the findings to challenge companies, governments and regulatory authorities over their responsibility to reduce corruption and in turn poverty,” said Ingilab Ahmadov, Director of the Public Finance Monitoring Center in Azerbaijan.