Oil and mining industry: Anti-corruption efforts too slow mandatory regulations needed

Voluntary approaches to increasing transparent and accountable management of natural resources wealth are making sluggish progress, says international aid agency Oxfam. On the eve of the fourth global conference of the Extractive Industry Transparency Initiative (EITI) in Doha, 16-18 February, EITI should be commended for putting in place a strong governance structure, but additional mandatory disclosure rules are needed to make oil, gas and mining industry transparency a true global standard for all countries and companies.

With more than half of the world's poorest people living in countries rich in natural resources, the problems associated with oil, gas and mining booms – increased corruption, conflict and environmental degradation – are pressing concerns for Oxfam and its partners around the world. "These industries generate billions of dollars per year in poor countries," said Bennett Freeman, Oxfam board member and civil society EITI board member. "The revenues amount to far more than official aid flows and could fund health, education and other essential services, but are often squandered or siphoned off by corrupt elites."

The EITI is a voluntary initiative designed to increase transparency of payments by companies to governments. Since October 2006, a strong governance structure has been put in place for EITI, including a multi-stakeholder board including company, government and civil society representatives; a clear process for implementation and for third party verification of performance ("validation"); and significant international assistance to countries willing to undertake the Initiative. Unfortunately, the EITI has had limited reach and, while some progress has been made in many countries, the EITI has yet to be truly tested. "The EITI board's main challenge now is to ensure that the validation process is followed through for signatory countries. This has to be a main goal going forward, and it can only be achieved by guaranteeing the highest level of transparency in the process," said Maria Dolores López Gómez from Oxfam's campaigns and policy department.

Twenty-four countries have become EITI "candidate" countries, but more than fifty developing countries are resource-rich. EITI does not require companies to act unless host governments decide to join the Initiative and the countries that need transparency, and EITI, are those least likely to join or to credibly implement the Initiative. Therefore, other mandatory measures need to be taken – and quickly. The Extractive Industry Transparency Disclosure (EITD) bill was introduced in the US House and Senate in 2008. This legislation, expected for reintroduction in 2009, would require all oil, gas and mining companies disclose their payments to host countries and extend transparency as a truly global standard for company operations. The EITD Act would apply not only to US companies, but to all companies registered with the US Securities Exchange Commission (SEC). This includes European companies, such as Shell and BP, as well as those in emerging markets like China, India and Brazil.

In addition to the US passage of the EITD, other financial jurisdictions in Europe and elsewhere should pass similar legislation. In tight credit markets, extractive industry companies are seeking financing from public sources, including regional development banks and export credit agencies. All international financial institutions – including regional development banks such as the African Development Bank, Asian Development Bank and Inter-American Development – should require the disclosure of payments as a pre-condition for finance. – The next year will be crucial for real progress in the global movement for extractive industries transparency. Faithful implementation of the EITI complemented by new mandatory disclosure requirements will create a new global standard for transparency and help citizens around direct money to poverty reduction efforts that need it the most.

Study: World Bank loans exacerbate climate change

The World Bank has a difficult task at hand; it must continually work to provide the impoverished with access to energy while at the same time, mindfully investing in technologies that do not further compound the effects of climate change. Heike Mainhardt-Gibbs, a consultant with the Bank Information Center (BIC), examines the World Bank’s approach to energy sector investments in her February 2009 study, World Bank Energy Sector Lending: Encouraging the World’s Addiction to Fossil Fuels. The assessment finds that even with important gains in renewable energy and energy efficiency in recent years, the World Bank Group’s overall lending approach to the energy sector does not support developing countries’ transition towards a low-carbon development path.

First, World Bank fossil fuel lending is on the rise. During its 2008 fiscal year, the World Bank and International Finance Corporation (IFC) increased funding for fossil fuels by 102% compared with only 11% for new renewable energy (solar, wind, biomass, geothermal energy, small hydropower). On average, fossil fuel financing by the Bank is still twice as much as new renewable energy and energy efficiency projects combined and five times as much as new renewable sources taken alone. During the last three years, the Bank spent 19% more on coal than on new renewable energy. Bank lending to coal projects will make a low-carbon transition difficult given that coal emits almost twice as much CO2 as natural gas per unit of energy.

Secondly, Bank fossil fuel projects have a clear impact on global CO2 emissions. “When the fossil fuels involved in the World Bank and IFC lending projects for the 2008 fiscal year are combusted, the project lifetime CO2 emissions from this one-year of financing will amount to approximately 7% of the world’s total annual CO2 emissions from the energy sector, or more than twice as much as all of Africa’s annual energy sector emissions,” emphasized Mainhardt-Gibbs. Clearly, the World Bank’s investments in fossil fuel-based energy are far-reaching and yet none of their current climate change initiatives adequately incentivize for a reduction in financing for fossil fuels.

Finally, the Bank must carefully reassess its approach to financing the development of fossil fuels. They share the blame – and thus the shame – for the global climate change crisis. “The Bank’s continued lending focus on fossil fuels commits many developing countries to fossil-fuel based energy for the next 20 to 40 years,” Mainhardt-Gibbs noted. When developing countries eventually take on GHG emissions reduction targets of their own, the World Bank’s current approach to energy will make meeting these targets more difficult and costly for these countries.

Blind optimism on privatized health in poor countries

According to Oxfam International, rich country donors and the World Bank are wasting money and risking lives by continuing to push unproven and discredited private healthcare programs in poor countries. Oxfam’s warning comes in a new report, Blind Optimism: Challenging the myths about private health care in poor countries. The report gives considerable evidence of the poor performance of private sector-led health care initiatives globally. In China, for example, one third of drugs dispensed by private vendors are counterfeit, while in seven sub-Saharan African countries the WHO found that most anti-malarial drugs in private facilities failed quality tests. The World Bank itself has said that the private sector generally performs worse on technical quality than the public sector.

Anna Marriott, author of the report, said: “Donors’ romantic views of private sector health providers are completely divorced from the facts. In Malawi 70% of private providers are shops. For the most part, private health care in poor countries is made up of unqualified shopkeepers selling out-of-date medicines. Is that what you would want for your sick baby?” Oxfam has found that the World Bank uses its unmatched policy influence worldwide to promote privatized health despite lack of evidence. At the same time its private sector arm, the International Finance Corporation, recently announced it will mobilise $1bn to finance the growth of the private sector’s role in health care in Africa. Many other donors and influential organizations have also increased their efforts to encourage and fund more expansion of private-sector lead health care projects. The United States Agency for International Development (USAID), the Department for International Development in the UK (DFID), and the Asian Development Bank have followed the Bank’s example in spending millions of aid dollars funding large-scale programs to contract-out service delivery to the private sector.

Meanwhile, aid for primary health-care services in poor countries has almost halved in the last decade. Oxfam warns that cuts in public health services are condemning hundreds of millions of people to early preventable death or needless suffering – and a massive scale up in public health spending is required. After years of disinvestment, and with the allocation of aid for primary health-care services in poor countries dropping by almost half in the last decade, the public sector in many instances is weak and badly run. Oxfam’s research shows that scaling up government provided health services has been central to rapidly improving life chances in poor countries.

Development Ministers in Prague: British reluctance on tax havens

The consequences of the financial crisis for developing countries have been discussed at the Informal Meeting of EU Development Ministers held in Prague end of January, attended by European Commissioner for Development and Humanitarian Aid Louis Michel and representatives of the European Parliament Committee on Development. Although the effects of the financial crisis on developing countries are not yet fully visible, they are likely to be considerable, the Ministers declared. It was also observed that, therefore, it is all the more important that the European Union and other developed countries fulfill their obligations in the area of development aid, from the perspective of quantity as well as quality. During the debates on the reform of the international financial architecture, the ministers also evaluated possibilities of taking into consideration developmental aspects, including more influence for the developing countries themselves in the International Financial Institutions.

According to the CIDSE network, particularly disappointing was the reluctance of the British side and of some other member states to undertake any action in favour of combating tax evasion and better regulate and control tax havens. It was also surprising that a new round of debt cancellation has not been given more consideration, given that it could quickly release extra revenues to many developing countries facing serious fiscal pressures.

A major challenge for development (and environment) ministers will be to make sure that their concerns regarding the impact of the financial crisis on developing countries and climate change finance inform the debates of the EU finance ministers and the G20. A proposal for a “support plan for the developing world” is currently being developed by the European Commission, to be finalized together with Development Ministries in March as an input to the EU position for the G-20 summit.

New environmental finance architecture or inflation of climate funds?

A new website, www.climatefundsupdate.org, is online now. The Website, which will be improved and expanded over the next several months going forward, is a joint cooperation project by the Washington Office of the Heinrich Boell Foundation as well as the London-based Overseas Development Institute (ODI) and is a follow up to last Summer’s study on new climate financing instruments (done by the Boell Foundation with WWF US and ODI) and related shifts in the global environment finance architecture.

The site lists descriptions of some 18 multilateral and bilateral funds; some new fund proposal not yet off ground, as well as a database of some 800 projects funded by the new and existing climate funds. The idea for the website is to provide fairly neutral “one-stop” introductory information on some of the complexities of the new climate finance architecture leading up to the discussions at the COP in Copenhagen in December on a post-Kyoto Climate Architecture, of which an agreement on financial will be a crucial prerequisite.

The EU passes climate change burden to world’s poorest

Europe’s refusal to commit money to help poor people cope with climate change could derail the chances of reaching a fair climate deal in Copenhagen, warned Oxfam International today. The EU's Climate Change Communication, published on 28 January and due to be adopted by Member States in March, sets out Europe’s position for the post-2012 negotiations. The proposal recognizes that massive resources are needed to help developing countries adapt to climate impacts and adopt green technologies, and has promising ideas on how to raise the money. But it completely fails to specify how much money the EU and other rich countries will make available. As Commissioner Dimas today acknowledged, finance is a make-or-break part of a global climate agreement. Yet early funding commitments have been stripped out of the final document.

Elise Ford, head of Oxfam International’s EU office, said: “Unless developing countries see hard cash on the table, there is a real danger they will simply walk away. It seems the Commission is pandering to Member States’ expected opposition to put money on the table – fueled by their worries about the impact of the recession.” A year ago, the European Union set a much needed minimum floor for negotiations with a call for a 20-30% mitigation cut by 2020. Now, instead of setting a target for adaptation finance too, the Commission has shrunk from any ambition, let alone responsibility as a major polluter. This seems to be a new EU, one that's signaling it's ready to race to the bottom.

Oxfam estimates that at least €38bn ($50bn) per year is needed to fund adaptation in developing countries, with Europe owing at least €12bn ($16bn). This needs to be managed by the United Nations and come on top of existing aid commitments. This is to ensure donors don’t divert money meant for schools and health services, and pass it off as climate finance they owe as a result of on-going pollution. “Developing countries will be alarmed that the UN – which by rights should be the governor-in-chief of new climate funds – is side-lined in the Communication. This leaves the way open for a spaghetti bowl of money flows, with no trusted referee to ensure countries pay their dues and the funds reach the poorest,” said Hugh Cole, Oxfam's Regional Climate Change Advisor for Southern Africa.

Oxfam welcomed the EU’s strong line that all rich countries should reduce emissions on a just basis, but argued the fairest way to cut the carbon pie by measuring countries’ historic responsibilities (per capita emissions) and wealth.

EU development ministers in Prague

The EU development ministers meet today and tomorrow in Prague for the first time in 2009. On the occasion of the meeting, CIDSE, the solidarity network of catholic aid agencies, urges the ministers to implement financing commitments and ensure that the needs of poor communities in developing countries are addressed in the global discussion on the financial crisis. The network of 16 development organisations from Europe and North America asks that EU member states should make sure that developing countries are given an equal voice in policy making to address the present crises and to prevent future ones.

CIDSE asks the EU development ministers to implement the commitments laid out in the European Council Conclusions of 10-11 November 2008 and the Doha Outcome Document. Moreover, it reckons that they should clearly call for the equal participation of developing countries in discussions on the reform of the international financial architecture, from a development perspective – one of the issues the Czech Presidency has put on the agenda of the Prague meeting. In particular, the network urges EU member states to:

1. Publish binding timetables on aid targets, as committed in the May GAERC council conclusions, by end 2009, to ensure that the EU meets the 0.56% ODA/ GNI commitment by 2010, and 0.7% by 2015;
2. Support the implementation of impartial and transparent debt workout mechanisms in order to deal efficiently and equitably with future debt crises. As expressed in the European Parliament report on FFD, the EU should also address the issue of odious and illegitimate debts;
3. Strengthen “international cooperation to combat tax evasion and tax havens” in order to ensure effective taxation to mobilise resources for development. To this effect, it is crucial to:
* take concrete measures to end all bank secrecy jurisdictions and tax havens;
* agree upon “principles of transparency, exchange of information and fair tax competition” such as country-by-country reporting standard for multi-national corporations;
* take specific measures and commit the necessary resources to “strengthen institutional arrangements, including the United Nations Committee of Experts on International Cooperation in Tax Matters”;
* lead on the “drafting and urgent finalisation of the United Nations Code of Conduct on cooperation in combating international tax evasion.”
4. Ensure financial reforms are participatory of all world governments; inclusive, comprehensive, and transparent. The current financial and economic crisis shines light on the need for far-reaching reforms of the international financial architecture. These reforms must see all world governments participate. The UN conference “at the highest level on the world financial and economic crisis and its impact on development” agreed in Doha provides a unique opportunity to take this process forward. Therefore, CIDSE urges EU governments to provide the political leadership and necessary resources to make this conference a milestone in the process towards a fairer and democratic international financial architecture which works for the world’s poor.

Trade Unions call for a new growth model

On the occasion of the World Social Forum in Belem, the International Trade Union Confederation (ITUC) has released a statement on the global economic and financial crisis. For the ITUC, the financial markets of today are characterised by the reckless pursuit of quick profits against a background of unbridled economic and financial liberalisation. Casino capitalism is clearly to blame for the scale of the crisis. The financial markets have failed their primary mission, which is to ensure the financing of the real economy. Another key factor underlying the crisis are the imbalances arising from excessive market deregulation and the non-intervention of States.

On the fringe of the WSF, the ITUC, ITUC-CSA (Trade Union Confederation of the Americas) and the Brazilian trade union organisations CUT, FS and UGT are organising a World Trade Union Forum from 28-30 January. It is open to all the organisations and movements present in Belem. The Decent Work Alliance, led by the ITUC, the ETUC, Solidar, the Global Progressive Forum and Social Alert, is also organising events during the WSF on the following themes: a new financial architecture to ensure decent work; a global welfare state; and the decent work, decent life campaign.

The ITUC underlines that without a social dimension, globalisation has forced workers from the North and South to compete with each other to attract multinationals and private equity funds whose profits were constantly soaring until the onset of the current credit crisis. "A new model of growth must be developed without further delay; a model based on market regulation and that generates green growth, which will spawn huge opportunities in terms of job creation," said Guy Ryder, general secretary of the ITUC. The ITUC defends the idea of an economic system that is ecologically sustainable, socially just, geopolitically balanced, and that takes on board the proposals of the trade union movement and other civil society actors.

To read the full statement: >>> here.

Global food crisis will worsen - 1bn people need help now

Urgent action is needed to prevent hundreds of millions more people slipping into hunger as a result of volatile food prices and increasing energy and water scarcity, said international agency Oxfam today. Decades of underinvestment in agriculture coupled with the increasing threat of climate change mean that despite recent price falls, future food security is by no means guaranteed, and in fact the situation could get worse, said Oxfam on the opening day of a UN conference in Madrid to address the issue. Oxfam’s warning comes on the day that two new reports are published, detailing the threats to global food security and exposing the lack of adequate coordinated international action to tackle hunger.

The reports, A Billion Hungry People and The Feeding of the Nine Billion are published by Oxfam and the UK think tank, Chatham House respectively, and together are a call to action to politicians, and representatives from the private sector and civil society meeting to discuss the implementation of the UN Taskforce’s response. Although global food prices have fallen in the last few months, they are not back to previous levels, and are likely to rise sharply again in the future. Furthermore, price volatility itself is a problem, and more needs to be done to address the underlying structural issues that cause the chronic hunger affecting 1 in 6 people in the world today, according to Oxfam. Current severe food shortages in Afghanistan, Ethiopia, Kenya, Mozambique and Zimbabwe are evidence that the global food crisis is far from over. Even before recent price rises, there were over 850m people classified as undernourished. Now, there are nearly a billion, as a result of the price rises, alongside other factors such as political instability and conflict.

“Not enough has been done to tackle the situation. There is a lack of coordination at all levels and the opportunity for root and branch reform of the aid system has not yet been taken. International institutions and donors must reverse decades of under-investment in agriculture and scrap blatantly distortionary polices such as biofuels mandates that make things worse,” said an Oxfam representative, who is attending the conference. “The recent decision by the EU to reinstate export subsidies for dairy is the direct opposite of what’s needed: a retrograde step that calls into question their commitment to longer term reforms,” he added.

The Feeding of the Nine Billion, published by Chatham House and part-funded by Oxfam, predicts demand for food will increase as the world’s population grows by 2.5bn to 9.2bn by 2050. It also notes a UN prediction that climate change will increase the number of undernourished people worldwide by between 40m and 170m. Meanwhile, Oxfam’s A Billion Hungry People includes recommendations for reform of the humanitarian aid system and makes a strident call to poor countries to do their bit by investing more in agriculture, targeting women and small-scale producers. Developing countries must increase social protection measures for vulnerable populations – including cash payments and employment creation programs for those at risk of hunger. Rich countries must ensure long-term predictable funding to developing countries for investment in agriculture and climate change adaptation.

The Paris Declaration: Confronting the crisis from below

More than 150 representatives of trade unions, farmers’ movements, global justice groups, environmental groups, development groups, migrants’ groups, faith-based groups, women’s groups, the have-not movements, student and youth groups, and anti-poverty groups from all over Europe gathered on 10 and 11 January 2009 in Paris to analyse collectively the current crises, to develop joint strategies and to discuss joint demands and alternatives in response to these crises. Participating organizations have also been Attac, Friends of the Earth Europe, Oxfam, and the German and Italian trade unions Verdi and CGIL. Together, they endorsed a ‘Paris Declaration’ which says:

“As the financial and the economic crises intensify, millions of women and men are losing their jobs, houses and livelihoods. Tens of millions more are forecast to join the 1.4 billion people already living in extreme poverty. The crises worsen the social, ecological, cultural and political situation of the majority of people on our planet.
Despite the evident and foreseeable failure of the current economic model, world leaders are responding by trying to preserve the system that is responsible for the crises. Governments have been quick to bail out bankers, corporate share holders and their financial backers with hundreds of billions in public money. To solve the problem, they put into place bankers and heads of corporations: the same actors that created the crises. The workers, the jobless, the poor – all those affected have received no help in their daily struggle to make ends meet, and to cap it all, they are now supposed to pay the bill.
Governments´ proposals to deal with the unfolding economic crisis do not address the other dimensions of the crisis we face today – global justice, food, climate and energy – and with it the need to transform the economic system towards one that allows us to satisfy the basic needs of all people, to implement all human rights and to restore and preserve the ecological basis of life on our planet.

It is time for change!
We can build a system that works for people and the environment, a system to serve the needs of the many, a system based on the principles of public benefit, global equity, justice, environmental sustainability and democratic control.
As a first step, immediate measures must be implemented to address the social impacts on people, whilst supporting the ecological conversion of the economy.
We call upon all social movements in Europe to engage in a process of change.”

The meeting supported mass mobilisation for a central demonstration in London on 28 March 2009 ahead of the G20 meeting: ”20 governments cannot decide on the future of the global financial system and economy.” It called to undertake a day of action in the week of the G20 meeting, preferably on the 1 April (Financial Fools' Day) all across the world, exposing unaccountable financial power and promoting democratic control of finance. Participants said the meeting was a further step in a long-term process of building spaces for European networks to meet. A follow-up event is planned for 18-19 April 2009 in Frankfurt am Main, Germany.

Trade Unions urge World Bank and IMF to take action against unemployment

An 80-strong high-level delegation of trade union representations from around the world is meeting with the International Monetary Fund Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick, as well as Board members and several other officials of the two bodies, this week in Washington to push for further immediate anti-recession measures and effective global regulation to ensure future global economic stability. The delegation is led by ITUC (International Trade Union Confederation) President Sharan Burrow and General Secretary Guy Ryder. Top of the list of union concerns is the spectre of spiralling global unemployment, as more and more employers cut staffing in the face of the credit squeeze.

"Action by governments and the international financial institutions to support decent jobs is essential in the face of the expected world-wide employment crisis, and will lay the foundation for economic recovery. While the IMF has been encouraging industrialised countries to adopt vigorous fiscal stimulus polices, which we believe it is correct in doing, it has been putting forward a much more traditional 'fiscal discipline' approach in its advice to most developing countries. Developing and transition economies are now rapidly beginning to suffer from the global economic crisis and the IMF and the World Bank should jettison failed policies of the past and focus their efforts on maintaining and creating employment, both to deal with the present crisis and to lay the foundations for economic recovery," said ITUC General Secretary Guy Ryder.

The IMF has agreed to emergency loans to several countries particularly affected by the economic crisis. While the conditionality of these loans is not as complex and onerous as that imposed during the Asian financial crisis of 1997-98, ITUC affiliates are concerned by the some of the conditions or required "prior actions" that feature in many of these, such as interest rate and utility price hikes, restrictions and even reductions in wages, particularly in the public sector, and reductions of pension payments other public spending cuts. All of these will dampen the level of activity of economies already in recession and lead to a reduction in workers' living standards, and are inconsistent with the fiscal stimulus polices the IMF is encouraging rich countries to adopt. The ITUC is particularly concerned with the some conditions of a loan agreement that the IMF just concluded with the authoritarian government of Belarus. In exchange for a $2.46bn emergency loan, the government of Belarus, which has been condemned by the ILO for violating fundamental workers' rights, has promised to apply wage restraint throughout the broad public sector, increase utility prices and pursue privatization. Belarus is also required to reform its the social safety net and focus assistance on "the most vulnerable groups", which could result in reduced social protection for many workers since they cannot express and defend themselves freely due to repression of trade unions carried out by the Lukashenko regime.

The union delegation is putting forward a comprehensive and practical recovery and reform package, based on the "Washington Declaration" presented to the November G20 leaders meeting in Washington. The package stresses that governments need to be prepared to ensure further coordinated cuts in interest rates and to front-load investment in infrastructure, education and health to help stimulate demand growth and reinforce public services. This needs to be accompanied by tax and spending measures to support the purchasing power of low- and middle-income earners, and concrete steps to launch investment in green goods and services, to help address climate change.

Noting that the IMF was called upon by the G20 to assume a major role in designing a new regulatory framework for the global financial system, the international trade union delegation will insist that they must have a seat at the table in a re-regulation process that puts the real economy, not the interests of global financial speculators, as the central priority. The union delegation is also urging the World Bank to help contribute to avoiding a repetition of the catastrophic impact of the recent food price crisis on poor countries' populations by going beyond providing emergency relief loans and helping developing countries increase their food security. In so doing, both IFIs must reverse some of the policies they encouraged poor countries to adopt in the past, such as the reduction of state aid to agriculture through low-cost seeds and fertilizer, the dismantling of public grain stocks, and the shift from food to bio-fuel production.

Oxfam: An ambitious deal in Copenhagen is still possible

The conference in Poznan was meant to be a key milestone between the start of negotiations in Bali last year and their conclusion at Copenhagen next year. But it has exposed a shameful lack of progress. By Poznan, developed nations (“Annex 1”) were meant to have submitted proposals on emissions reductions, finance and technology; they have failed to do so. They have tried to delay, shift the blame, and in the case of Canada, renege on their climate change obligations. In contrast, many of the developing countries came to Poznan with clear proposals, a willingness to show flexibility, and, in the case of countries such as South Africa, Mexico and China, national action plans to reduce climate emissions.

An ambitious deal in Copenhagen is still possible, and is needed more than ever, but it will need far more rapid progress than over the past year, says Oxfam in its analyses of the outcomes of COP-14 in Poznan. Specifically, it will need Annex 1 countries to come to the negotiations early in 2009 with far more political will and flexibility in negotiations. The only area of progress in Poznan was on adaptation. In response to the recognition that climate change is already impacting on the lives of millions of people, the conference agreed to start up an Adaptation Fund. However, after exhaustive negotiations, the developed countries rejected the strong push for additional funds. This was condemned vehemently by developing counties, citing the urgent needs of vulnerable people suffering from a crisis they did not cause.

The following provides an overview of the Poznan negotiations and what is needed to reach Copenhagen with the required preparation and political will.

Setting the long term goal

There was no agreement on a long term goal to avoid dangerous impacts of climate change…
* New scientific evidence shows an ambitious goal will be needed to avoid massive suffering.
* Tuvalu and other small island nations called for urgent action and a goal of below 1.5°C.
* The lack of proposals for intermediate emission reduction targets from Annex 1 countries meant that no agreement was possible.

A deal in Copenhagen will need a goal to keep global warming well below 2°C…
* Strong and ambitious proposals on the goal need be put forward as soon as possible.

Emissions reductions

Targets for emissions reductions were not agreed…
* Instead of proposals, Annex 1 countries arrived pleading for their special circumstances.
* They tried to shift the blame through calling for cuts by developing countries.
* The IPCC has called for Annex 1 countries to make cuts of 25-40% from 1990 levels by 2020; this should have been agreed in Poznan.
A deal in Copenhagen will need proposals by February and then expedited negotiations.

Adaptation finance

Developing countries failed to push through key measures to secure more adequate funding on favorable terms…
* In the face of bitter resistance from rich countries, an Adaptation Fund was finally agreed.
* Annex 1 countries failed to live up to their moral obligation to provide increased adaptation funding through new mechanisms, such as proceeds from auctioning emissions permits.
* At last, over a decade after negotiations started, an Adaptation Fund that is actually responsive to developing country needs has been given the go-ahead.
* This is an important step: it will help cut through red tape and ensure poor countries have a greater say in the terms under which funds are provided.
* Voluntary contributions of funds announced by Sweden and other countries are welcome, but no substitute for arrangements that guarantee adequate and predictable sources.

A deal in Copenhagen will need agreement on massively scaled up funding for adaptation.
* The funding needs to be delivered through mechanisms under the UNFCCC (such as the Adaptation Fund), with transparency, democratic accountability and civil society involvement.

The Adaptation Fund was established under the Kyoto Protocol in 1997 and rules were agreed in the 2001 Conference of Parties (COP) in Marrakech. The principles for operation for the fund were agreed at the 2006 COP in Nairobi and the Fund was formally established in Bali at the UNFCCC COP last year. The Adaptation Fund Board has met three times in 2008 and will meet again immediately following the Poznan COP. Oxfam has made a proposal for adaptation funding in its briefing paper “Turning Carbon into Gold” entailing the auction of allocated emissions.

Technology transfer and finance

There was no progress towards developing and sharing clean technology or finance…
* Developing countries submitted new proposals in August 2008, but there has still been no constructive response from developed nations.
* A deal in Copenhagen will need proposals from Annex 1 countries by February to help developing countries to move towards a low carbon development path.

Deforestation

Negotiations on avoided deforestation were held but are causing deep concern…
* Canada, Australia, New Zealand and the US opposed provisions to protect indigenous peoples’ rights.

A deal in Copenhagen will need major changes to the draft agreement on deforestation…
* The agreement will need to respect the rights of indigenous peoples, local people and communities, protect biodiversity and address the causes of deforestation.

The road from Poznan to Copenhagen

Progress has been slow over the past year and little has been achieved in Poznan …
* The work program calls for proposals in February and a negotiating document by June.
* Heads of State will meet in September at the opening of the UN General Assembly.

A deal in Copenhagen will need a step change in the level of urgency and political commitment …
* The role of the UN Secretary-General will be crucial, working with Heads of State who are committed to an ambitious agreement, including vulnerable countries.
* If there is not significant convergence in positions by March, there will need to be a Conference of the Parties around mid-year, in order to finally agree the political mandate.
* Annex 1 countries must change their approach to negotiations to accept their responsibilities to move first and furthest and support efforts by developing countries.
* The aim must be to agree a full negotiated text, not merely a political declaration.

Rich countries still need to prove that poor countries are not being left out in the cold

The international community’s decision to convene a UN Conference to discuss the financial crisis and its impacts on development is important. However, it will only prove its value if it receives the support of all eco-political power blocks, especially the G20. The convening of a UN Conference on the financial crisis and its impact on development in 2009 was a key decision made at the three-day International Conference to Review the Monterrey Consensus which concluded in Doha today.

According to the Catholic network IDSE, the UN Conference on the Financial Crisis to be convened in 2009 will be the first test of political commitment to the outcomes of the Doha Financing for Development Conference. Industrialised countries and particularly the new US Obama administration will be under close scrutiny. Serious and high level participation in the Conference will be fundamental to achieve an outcome that reinforces the Monterrey Consensus’ commitment to ‘promote sustainable development as we advance to a fully inclusive and equitable global economic system.’

The political will to see this Conference succeed is all the more significant in the face of the general weakness of the Doha Conference’s outcome. "Poor deals on trade, debt, to concretely reach ODA targets, and to follow-up on the Monterrey Consensus have been the casualties of the long and discordant negotiations during the Doha Conference. It is at least fortunate that tax evasion, a curse for poor countries’ revenues, has been recognised for what it is," observed Jean Saldanha, Policy Officer in CIDSE. The Conference’s failure to strengthen efforts to gear political support for innovative resources for development, and especially the glaring absence of a mention of a Currency Transaction Tax sets back the progress in demonstrating its feasibility and value since the Monterrey Conference in 2002. The Conference’s feeble outcomes fly in the face of the plea for urgent action made by many countries in Doha who have been hard hit by the financial crisis. For CIDSE the big question now is whether the UN Conference on the Financial Crisis will be able to succeed to turn around the fundamental problems of global architecture that is perpetuating today’s financial crisis.

A human rights approach is the only way to overcome the current crisis, argues the new Social Watch Report

The unusual combination of financial crisis, food crisis, energy and climate crisis requires a new approach based on human rights, argues the international Social Watch coalition in its 2008 report, launched during the United Nations Conference on Financing for Development in Doha. Next 10 December, as the report remembers the 60th Anniversary of Universal Declaration of Human Rights will be commemorated and the title of the new report is, precisely, “Rights is the Answer”. The report documents how governments are falling short in their commitment to eradicate poverty and achieve gender equity through the testimony of civil society groups in 59 countries. Its main message is that the multiple crises currently affecting the world require a “rights-based approach” and provides examples on how the current financial architecture has ignored or openly violated those rights and triggered spiralling inequity all around the world.

The growing income inequalities both within and between countries spurred by capital flight, tax evasion, and privatization have slowed down the progress on key social indicators to a near halt over the last two decades. According to the Social Watch calculations, universal compliance with the Millennium Development Goals is now an impossible feat, if the world governments maintain a “business as usual” attitude. The grassroots activists and civil society analysts from around the world that contributed to the report show how the pervasiveness of extreme poverty and gender inequity is intimately linked to the immediate effects of the current triple crisis and to longer term structural issues ingrained in the global financial architecture. The report documents the widespread, haphazard implementation of policies promoting economic liberalization and deregulation having provoked the curtailment of peoples´ economic and social rights around the globe. That liberalization and deregulation now curtail the ability of many governments to comply with their international commitments to end poverty and achieve gender equality.

Trade unions demand new effort to successfully conclude Doha conference

As negotiations reach an impasse at the International Conference on Financing for Development in Doha, Qatar, the ITUC has expressed its concern that crucial commitments to mobilise financial resources for development could be compromised. “At the current stage, the trade union delegation is working hard to convince official delegations at all levels not to back down on core issues pertaining to Decent Work and to ensure that there is a strong follow-up mechanism under the auspices of the United Nations,” said ITUC General Secretary Guy Ryder.

Key questions, including, the impact of international trade on development, the future of the international financial system and the urgency of confronting climate change are provoking major debate between the G77 group, the US, the EU and Australia, Canada, New Zealand and Japan. There are three major issues on which disagreement persists: First, opposition was voiced by the US and to a certain extent by the EU to strong draft language on the way trade policies affect development. Second, there is no consensus among governments on the way forward to review the international financial and monetary architecture and global economic structures. Third, a number of countries, such as the US and Russia, contend that the issue of financing climate change belongs to the UN’s climate change (UNFCCC) process and should be excluded from the discussions.

“It is of the utmost importance that the world listens to the aspirations of the developing world, because they suffer the worst impact of the current crises: job losses, downward pressure on working conditions and deterioration of living standards,” Ryder added. Apart from actively lobbying government officials at this critical point, the ITUC delegation together with the other members of the Decent Work, Decent Life Campaign hosted a parallel side-event “Financing Decent Work – An Imperative for Sustainable Development” at the Conference.

Bretton Woods II? We Need a Second UN Finance and Monetary Conference

Closing Remarks by Jens Martens to the Civil Society Forum Doha

1. Let me start with a quote from the Draft Outcome Document:
“The environment for Financing for Development has improved over the past 6 years, primarily due to a significant improvement in domestic savings of developing countries but also because of a sustained expansion in world trade, record private capital flows, higher remittances, a reduction in debt burdens especially in heavily-indebted poor countries and a reversal in ODA from earlier declines. The development impact of these flows is enhanced by a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets and efficient, effectively regulated financial systems. These principles are essential to economic growth and prosperity and have lifted millions out of poverty and have significantly raised the global standard of living.” (para 2bis)

This paragraph is not agreed and hopefully will never be agreed, but I am wondering: Do the delegates who drafted these sentences live in a parallel universe, when they praise the “efficient and effectively regulated financial systems” that have lifted millions out of poverty? At least additional 75 million people are forced to live in hunger and poverty this year due to the global food crisis. What would they think when they had to read these sentences?

2. The world faces an unprecedented crisis of the current financial and economic system. But the negotiations on the Doha outcome document seem to continue as if nothing has happened. We miss any sense of urgency in the negotiations. What we need now is creative thinking and collective multilateral action instead of following the business as usual and muddling through approaches of the past.

3. Two weeks ago, the leaders of the 20 most powerful countries of the world met in Washington as the G-20. After three and a half hours they adopted a declaration on “Financial Markets and the World Economy” – a preliminary “to-do-list” to solve the current financial crisis. Without doubt, some of the 47 announced measures might be useful and necessary. But the G-20 failed to really address the root causes of the crisis. Instead, they primarily intend to stabilize the current financial system – a system that has been characterized for the last 20 years as “casino capitalism”. But we don’t need better rules for the casino. The casino has to be closed down!

4. That the Washington summit took place at the level of the G-20 and not the G-7 or 8 reflects the changing realities of the world and is a step in the right direction. But it would be a grave mistake to stop there and to exclude 172 governments and the global civil society from the decision making process about the future financial and economic system.

5. About 20 years ago the G-7 took the lead in promoting the Washington Consensus and its neo-liberal ideology of deregulation and privatization – the same ideology that caused the current crisis. We don’t need a new Washington Consensus of the new G-20, which primary goal is to stabilize the present system, without taking into account the needs and demands of the people who are most affected by the crisis and the structural causes of this crisis.
(The G-20 leaders made “a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems.”)

6. What we need instead is a new global consensus, name it New York, Geneva or Nairobi Consensus, of the G-192 – the members of the United Nations. This is the reason, why we are here in Doha at a conference of the United Nations.

7. We are not naïve. We are aware of the weaknesses and limitations of the UN. Its decision making process is painfully slow and its results are based on the lowest common denominator. This was the reason, why many Civil Society Organisations declared in Monterrey 6 years ago that they are not part of the Monterrey Consensus. The Monterrey Conference was important, but its outcome didn’t respond adequately to the urgency of the economic and social situation in the world. Since then, the situation has become even worse.

8. However, the UN is the only universal forum that is inclusive, the forum where nearly all governments of the world have voice and vote, and where civil society organizations have participatory rights. Therefore it’s worth to fight for the strengthening of the UN.

9. This brings me back to the draft outcome document of the Doha conference. The existing draft is weak and the negotiations proceed again painfully slow. But the text contains at least a few elements – although not agreed yet - which could bring incremental progress, for instance
* the upgrading of the United Nations Committee of Experts on International Cooperation in Tax Matters to an intergovernmental body of the UN (para 8)
* the proposal for new ad hoc forums to explore sovereign debt work-out mechanisms and the possibility of crafting permanent debt mediation or arbitration procedures (para 46), and particularly
* the proposal to convene a major international conference, under the UN auspices, to review the international financial and monetary architecture and global economic governance structures ( one of 4 and my favourite versions of para. 58).

The adoption of this paragraph would in fact mean to bring not only the global discourse but also the decision making process on the reform of the economic and financial system back to the United Nations.

10. You may ask, why back to the UN? Was it ever there? Yes, 64 years ago, when the first United Nations Monetary and Financial Conference took place – better known as Bretton Woods Conference. The preparation of this conference took nearly 3 years and the conference was attended by delegates from 44 countries – by the way more than twice the membership of the G-20.

What we need now is a second United Nations Monetary and Financial Conference. Doha could mark the first step towards it.

Civil Society supports UN-led Summit on finances

As one of the lead elements proposed for recommendation to the Financing for Development Review Conference, the Civil Society Forum supports an international summit on financial and economic architecture and global economic governance structures, in 2009. The Forum position challenges the proposal of some governments that the Bretton Woods Institutions organize an event, as well as moves to concentrate decision-making in the G-20 group of governments. Speaking to the plenary, Rana Al Sairafi, a civil society delegate from Bahrain, said “instead of focusing on ad hoc mechanisms like the G20, such a conference should be under the umbrella of the United Nations with the inclusive principles that govern the Financing for Development process, including the active participation of civil society organizations.” In preparation for the event, the UN should be asked to prepare a comprehensive review of the existing global financial architecture.

There are currently four alternate proposals (para.58) regarding the conference in negotiations for the Review Conference. The Forum recommendation supports the UN-led option. Addressing the Forum regarding the locus and purpose of economic governance, Jens Martens, Global Policy Forum (Germany) noted “The G20 failed to really address the root causes of the crisis. Instead, they primarily intend to stabilize the current financial system - a system that has been characterized for the last 20 years as “casino capitalism”. “We don’t need better rules for the casino,” Martens concludes. “The casino has to be closed down!”

Forum delegates spent Wednesday in sessions focusing on the six agenda items of the Review Conference, followed by intense workshops and caucuses on specific issues, including: women setting the agenda, addressing climate change, achieving the health MDGs, the Currency Transaction Tax, among others. Women, trade unions, and other sector-specific caucuses have met as well. Further recommendations on finance reform include support for the upgrading of the UN Committee of Experts on tax to become an inter-governmental body, moves to make international financial flows fully transparent, ending illicit transfers of resources, and ensuring rapid fulfillment of aid commitments and enhancement of quality and accountability of aid.

Civil Society Forum at Doha: The US a failed state?

“Is the United States a ‘failed state’? Its financial mismanagement has triggered a worldwide crisis.” Thus, Social Watch coordinator Roberto Bissio challenged some 300 civil society delegates, who are meeting since yesterday at the Ramada Plaza Hotel. The Civil Society Forum leading to the Financing for Development Review Conference is addressing the international crises that threaten our climate, development and social justice, developing recommendations for change to carry into the official Conference. The Draft Declaration to be considered by the Forum states:

“The world is consumed by an urgent triple crisis of energy, food and finance that not only threatens the realization of the MDGs, but also the stability of the world’s economies. The Northern governments and financial system are responsible for the current financial crisis, but the costs and the impacts are paid for by the entire world and by the poorest countries in particular. Moreover, climate change is threatening the lives and livelihoods of hundreds of millions of people, in the North and the South.”

Barbara Adams, a former UN official and Senior Fellow with the Global Policy Forum introduced delegates to the state of the negotiations, which continue in New York and will be finalized in Doha before 2 December. The final agreement must address decent work, growing inequality and continuing imbalances in the global economy and polity, she noted. Perhaps the most significant major issue remaining is the nature and organizing body for a “Bretton Woods II” international conference for a new global economic architecture, she pointed out. Many civil society delegates stress that such a follow-up event should be organized by the universally-based United Nations and not by the existing Bretton Woods Institutions.

The Forum is the penultimate step leading to the UN Financing for Development follow-up Conference convening at the Sheraton Hotel November 29. The Forum was opened by H. E Mohammed Abdullah Mutib Al Rumaihi, Deputy Minister of Foreign Affairs for Qatar and Dr. Ali Ben Samiekh El Marri, General Secretary of the National Human Rights Committee of Qatar. The Civil Society Forum continues through Thursday, November 27, when a final declaration for delivery to the official Conference will be agreed.

IMF head should not evade UN

While initially scheduled to attend the Doha Financing for Development Review in Doha, the IMF Managing Director Mr. Dominique Strauss-Kahn has hinted he is no longer planning to attend. This is very unfortunate and difficult to explain, especially given the extraordinary influence that has been given to the IMF in the drafting process (in fact, the IMF is on record making suggestions on the same footing with member states, even though only member states are supposed to formally make drafting suggestions and even though its intervention, with such representation regime, means an unfair advantage for some large developed countries in the negotiation). By withdrawing representation at the highest level, the gesture would send a political signal that seeks to undermine the strength of the UN process as it enters into critical matters of reform of international finance and at a very critical juncture in the negotiations addressing such issues at this moment in New York. In an open letter NGOs worldwide are urging Strauss-Kahn to attend.

The letter:

Dear Mr. Strauss-Kahn,
We, the undersigned, are writing to urge you to attend the Doha Review Conference on Financing for Development.
On November 29, governments of the world will gather in Doha, Qatar, to reassert their 2002 Monterrey Consensus commitments to “eradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable global economic system,” and evaluate progress.
The Monterrey process was unique in that it represented a new and fresh type of multilateralism, one that sought to build bridges across governments, global institutions with different economic responsibilities, such as the one you head, development responsibilities, civil society and the private sector. Its multi-stakeholder nature generated the open, fresh approach needed for facing the challenges of global policy-making in a changed—and changing-- world. More importantly, in the collective agreement to build those bridges at the global level it also paved the ground for building those bridges at the domestic levels of governments.
In this sense, the Monterrey Consensus represented not a static, one-off event, but a dynamic one. It established an innovative process for dialogue: dynamic enough to allow for the adjustments that any learning process brings, but solid enough to ensure the continuity of a global partnership.
Though unforeseen at that time, the Doha Review Conference will take place at a time when those principles and commitments are more relevant than ever. A global financial crisis, the largest anyone alive has seen, is threatening to undo progress in poverty reduction and achievement of MDGs of several decades. The Conference also takes place amidst global crisis in food, energy and climate. The Monterrey follow-up offers the best hope of harvesting the broad-based knowledge, ownership, and political support that a response to these exceptional times call for. But it cannot work without all the partners at the table.
It is, therefore, with the utmost concern that we write to you to urge you to attend the Doha Financing for Development Review. We understand you are seriously considering not to attend this conference, even though you had committed at a very early stage. We believe were you to delegate this responsibility, it would send the wrong signal about the seriousness with which the IMF takes the challenges that we face, and how it perceives its role as a partner in solidarity with the international community of nations and organizations. It would certainly undermine its claims to leadership in global financial crisis response efforts.

To sign click >>> here.

UN Task Force on reform of global finance stands ready

On the eve of the World Financial Summit in Washington, General Assembly President Miguel D’Escoto announced the full composition of a high-level task force he is setting up to examine possible reform of the global financial system, including the International Monetary Fund (IMF) and the World Bank. Joseph Stiglitz (see photo), who won the Nobel Prize for Economics in 2001 and is a former chief economist at the World Bank, will chair the Commission of Experts on Reforms of the International Monetary and Financial System, which will suggest steps that Member States can take to secure a more stable global economic order. The commission’s other members are:

* Jomo Kwame Sundaram, the current Assistant Secretary-General for Economic Development and the UN Department of Economic and Social Affairs (DESA);
* José Antonio Ocampo of Colombia, who is a former Under-Secretary-General for Economic and Social Affairs;
* Zeti Akhtar Aziz, the Governor and Chairman of Malaysia’s Central Bank;
* Jean-Paul Fitoussi, Professor of Economics at the Institute d’Etudes Politiques de Paris in France;
* Avinash Persaud of Barbados, who is Chairman of Intelligence Capital Limited;
* Yaga Venugopal Reddy, former governor of India’s Reserve Bank;
* Eisuke Sakakibara of Japan, who is currently Professor at Waseda University in Tokyo;
* Chukwuma Soludo, the Governor of Nigeria’s Central Bank;
* Yu Yongding of China, the Director of the Institute of World Economics and Politics.

When D’Escoto announced the formation of the panel last month, he noted that “there is growing recognition that the current turmoil in the financial system cannot be solved through piecemeal responses at the national and regional levels but requires a coordinated effort at the global level.”