The Dominion - Rob Maguire

US, EU reject self-determination in South Ossetia

Tue, 05 Dec 2006 13:43:09 +0000

Last month in the mountainous Caucasus region, the people of South Ossetia voted overwhelmingly in favour of independence from the former Soviet Republic of Georgia. Despite the high turnout in which 99 per cent of the population casted their ballot in support of secession, the Georgian government declared the poll illegal, while the international community rejected the referendum as "unnecessary" and "counterproductive."

The United States, which provides military aid, training and weaponry to the Georgian republic, refused to recognize the referendum, as did the European Union. Although the Organization for Security and Co-operation in Europe (OSCE) refused to monitor the vote, a team of 34 international observers did oversee the polls, including members from Germany, Austria, Sweden, Ukraine and Venezuela.

The day before the election, the South Ossetian State Security Committee uncovered an alleged attempt to assassinate the Ossetian separatist leader Eduard Kokoity and to carry out a coup d'état in the region. Although the Georgian government denies the accusation, Alan Parastayev, the chairman of the Supreme Court, turned himself into the State Security Committee and confessed to being involved in the plot.

With the exception of a handful of villages controlled by the Georgian government in Tbilisi, South Ossetia is a de facto independent state. An autonomous territory of Georgia in the then-Soviet Union, South Ossetia first declared independence in September 1990. Open warfare between Georgia and Ossetian separatists soon followed, ending with a 1992 ceasefire agreement. Most South Ossetians desire reunification with North Ossetia, currently part of Russia, from which they were separated during the Soviet period.

Rob Maguire

Qurban Hussain

Sapporo's takeover of Sleeman leaves little in local hands

Mon, 11 Sep 2006 22:11:27 +0000

Trouble is brewing for Canadian beer makers as the trend towards foreign ownership continues unabated. Sleeman Breweries has accepted a buyout offer of $17.50 per share from Sapporo Breweries of Japan, valuing the deal at nearly $400 million.

The last of Canada's three large breweries to accept foreign ownership, Sleeman is strongly advising shareholders to approve the agreement. Analysts believe approval to be highly likely as the offer represents a 50 per cent premium over the price of Sleeman shares on May 11, the day before Sleeman announced it was seeking a buyer. Both companies expect the deal to close by mid-October.

Controlling seven per cent of the domestic beer market, Sleeman's buyout will reduce the market share of Canadian-owned breweries to roughly five per cent. This is all "part of a pattern in Canada," notes Robb Steward of Dow Jones Newswires, one that saw corporate beer giants Molson and Labatt effectively cede control over the past several years to the Colorado-based Coors, and Belgium's InBev, respectfully.

In a bid to reduce costs and drive up profits, Sleeman has cut about one-fifth of its labour force over the past year, including 40 jobs only days before the announcement of the purchase agreement. When asked by reporters if the change in ownership would mean further job cuts, Sleeman CEO John Sleeman was non-committal. "I don't think it's fair to paint Sapporo into a corner and say that everyone is going to keep their job," Sleeman told the Toronto Star.

According to industry sources, Molson Coors, Labatt and Dutch brewer Grolsch were also interested in the acquisition. However, Sleeman already brews and distributes Sapporo's beer in Canada, and there is speculation that Sapporo was eager to purchase Sleeman in order to prevent their existing arrangement from being annulled by a new owner.

The Gold Standard

Thu, 06 Jul 2006 23:42:26 +0000

Chileans fight to protect their environment from Canada's Barrick Gold

In what direction is Barrick's Pascua Lama mine headed? photo: Mining Watch

In the face of local grassroots opposition, the Chilean government has given Canadian mining giant Barrick Gold the go-ahead for its controversial Pascua Lama mine. Chile's National Environmental Commission heard only two of the nearly 50 complaints filed against Barrick before giving the project its approval.

Founded in 1983 by Saudi arms dealer Adnan Khashoggi, Barrick is the foremost gold mining corporation in the world, with sales exceeding $2.6 billion in 2005 and the largest reserves in the industry, at nearly 90 million ounces.

High in the Andes Mountains, the Pascua Lama mine straddles the border of Chile and Argentina and represents a $1.5 billion investment for Barrick. The company plans to extract 615,000 ounces of gold, 30 million ounces of silver and 5,000 tons of copper annually over the 21-year lifetime of the open-pit mine.

Despite all the wealth that will soon be extracted, few Chileans are likely to benefit. Thanks to a combination of favourable tax legislation, legal loopholes and corporate malfeasance, no Canadian mining corporation paid any Chilean income taxes in the 1990s.

The mine is located in the Huasco Valley, a semiarid ecosystem that is entirely dependent upon the mountains for water. Residents argue that the mine will poison the land upon which they depend, endangering their health and jeopardizing their agriculture-based livelihoods.

In order to process the ore at Pascua Lama, Barrick will use 7,200 kilograms of cyanide and 10 million litres of water per day. Cyanide contamination of water resources can be devastating -- cyanide concentrations as little as 1 microgram (one-millionth of a gram) per litre can be fatal to fish. Barrick's site manager, Julio Claudeville, insists that cyanide is innocuous.

One report on mining in northern Chile found high levels of arsenic in the region's ecosystems. Health problems directly linked with arsenic exposure include cancer, deformation, miscarriage and underweight children. Other toxic contaminants found in nearby water supplies include sulphuric acid, diesel oil, urine and faecal matter.

After discovering dead fish floating in the San Juan River in 2004, locals found Barrick trucks dumping waste from their nearby Veladero mine into the adjacent wetlands. Barrick admitted to the practice, but argued that the waste was treated and posed no harm to the environment. No explanation was given for the dead fish.

Deeply concerned about the environmental dangers posed by the new mine, locals formed the Coordination for the Defence of the Valley of Huasco. Several demonstrations took place in 2005, culminating in thousands gathering in the Chilean capital of Santiago for a vibrant protest. In November, a petition signed by 18,000 valley residents and people opposed to Pascua Lama was delivered to President Lagos.

Seeking an international intervention, the Chilean Consumers' Organization filed a complaint with the Organization of American States alleging that the mine represents a great risk to the subsistence rights of the local indigenous population and that Chile would be breaking its international commitments by allowing the Barrick project to go ahead. More recently, the environmental group Oceana held a demonstration outside of the Canadian embassy in Santiago, arguing that the mine would enrich the Canadian corporation but would "do nothing for Chile except destroy its environment."

The president of Barrick Gold South America acknowledged the local resistance, pointing out that sustained opposition to the company was by no means unique to the Pascua Lama project. "The biggest challenges we are facing by far, in both South America and Africa, are social in nature."

Although the mine is still slated to go ahead, these grassroots efforts have proven successful. Initial plans for the mine included the "relocation" of three glaciers that form the basis of the valley's water system. In its first environmental impact assessment, Barrick withheld this information from the Chilean government, who remained ignorant of the plans until residents brought the situation to their attention.

In approving the Pascua Lama mine, the Environmental Commission stipulated several conditions, including one that prevents Barrick from "intervening" in the glaciers. According to Argentinian biologist Raúl Montenegro, "it is absurd to pretend you can just move glaciers, as if it were a sustainable practice." Opponents of Pascua Lama are claiming this as a significant victory and only hope that there are more to come.

Chileans worry the Pascua Lama mine will pollute their water and destroy their way of life. Rob Maguire learns that Canada is involved.

Reconstructing Disaster

Tue, 22 Nov 2005 22:14:36 +0000

Profiteers and Pink Slips Ravage the Gulf Coast

George Bush and Joe Allbaugh in 2001. Formerly Bush's campaign manager and FEMA head, Allbaugh now works as a lobbyist. photo: FEMA

Three months have passed since Hurricane Katrina, and the high drama of disaster has been replaced by the less glamorous task of rebuilding lives and communities. While the people of New Orleans struggle to adjust, wealthy corporations are reaping the rewards of reconstruction.

The US Congress has already approved US$62 billion for reconstruction in the Gulf Coast, with earmarked funds expected to exceed $200 billion. Much of this money has already found its way into the hands of corporations with close ties to the Bush administration. This has come as no surprise to critics, including Federal Communications Commission Inspector General H. Walker Feaster. "When so much money is available, it draws people of less than perfect character," said Feaster.

Soon after funding was approved, contractors gathered in Washington for a "Katrina Reconstruction Summit." Hosted by Republican Senator Mel Martinez and sponsored by Halliburton, the conference brought together some 200 corporate representatives, lobbyists and government bureaucrats to network and receive advice on "opportunities for private sector involvement" in the reconstruction efforts.

Several well-connected multinationals have already cashed in, securing lucrative reconstruction contracts. Two such corporations are the Shaw Group and Halliburton. Both firms currently employ the services of lobbyist Joe Allbaugh, George W. Bush's former campaign manager, past head of the Federal Emergency Management Agency, and, according to a headline in the online magazine Slate, America's foremost "disaster pimp."

Allbaugh's Shaw Group stands to receive at least $200 million in contracts from FEMA and the Army Corps of Engineers for housing management, construction and engineering services. News of the reconstruction contracts propelled Shaw's stock to a three-year high. It also spurred the following announcement on their web site: "Hurricane Recovery Projects: Apply Here!"

Halliburton subsidiary Kellogg, Brown & Root has been contracted to rebuild navy bases at three separate Mississippi facilities. The work is part of a $500 million contract signed between Halliburton KBR and the US Navy. Since the storm, Halliburton shares have risen over 10 percent to $65. US Vice President Dick Cheney, who formerly served as Halliburton's CEO and received nearly $200,000 in deferred pay from the company in 2004, is the official in charge of evaluating the Bush administration's response to the disaster.

Other corporate beneficiaries include California-based Bechtel Corporation, which has received a $100 million FEMA contract to provide short-term housing. Bush named Bechtel's current CEO to his Export Council and placed its former chief executive in charge of the Overseas Private Investment Corporation. AshBritt Environmental secured the largest Katrina contract thus far, worth up to $1 billion, for debris removal. AshBritt head Randal Perkins has donated tens of thousands of dollars to Republican politicians, including the host of the Katrina Reconstruction Summit, Florida Senator Mel Martinez.

One of the Carnival cruise ships paid for by a no-bid $236 million FEMA contract. It is housing displaced New Orleans residents. photo: FEMA

A particularly poor deal for taxpayers came in the form of a $236 million no-bid contract that FEMA signed with Carnival Cruise Lines to house evacuees on ships for six months. Assuming the ships will be filled to capacity with 7116 people, this works out to $1275 per person per week--entertainment notwithstanding. This far surpasses the cost of an actual seven-day cruise from Carnival, which can be had for $599.

While these deals have left shareholders smiling, Washington has done little for the 53,000 families still displaced from the storm. For example, FEMA refuses to pay shelter costs beyond December 1 for most evacuees. Unemployment is another critical problem. Forty percent of Louisiana's businesses have been damaged or destroyed, leaving nearly half a million people without work.

With the massive amount of reconstruction work to be done, and billions in federal funds at play, the potential for economic growth and job creation is tremendous. Rather than ensuring that federal funds support local businesses and create decent jobs, the Bush administration has focused on paying political dividends to their powerful corporate backers by helping them maximize profits during the reconstruction phase.

Bush unilaterally repealed the Davis-Bacon Act, legislation requiring federal contractors to pay workers "prevailing" wages for the region. Although the prevailing wage in New Orleans is a mere $9 an hour for construction work, contractors may now pay as little as the federal minimum wage, currently five dollars and fifteen cents.

Other government departments have played along, dropping sanctions for companies who hire illegal workers, suspending requirements concerning the employment of women and minorities and exempting industries in the region from environmental regulations. Bush also plans $2 billion in tax breaks for corporations operating in the "Gulf Opportunity Zone."

Edward Sullivan, president of the Building and Construction Trades Department of the AFL-CIO, the largest labour union federation in the US, called the measures "legalized looting of these workers who will be cleaning up toxic sites and struggling to rebuild their communities, while favoured contractors rake in huge profits from FEMA reconstruction contracts."

In its handling of the Gulf Coast reconstruction efforts, the Bush administration has successfully facilitated a significant transfer of wealth from workers to well-connected multinationals. By favouring subsidies and high profit margins for its corporate allies, the White House has exacerbated the suffering of those affected by Hurricane Katrina and is jeopardizing the region's chances of a successful recovery.

Rob Maguire looks at who is benefitting from federal reconstruction contracts in New Orleans after Hurricane Katrina

Extinguishing the Post Cold War Dream

Thu, 30 Sep 2004 20:02:50 +0000

World Bank-Mandated Energy Privatization Taxes Armenia's Poor

Late last month, an independent Armenia became a teenager. Food, fireworks and a festive atmosphere commemorated the 13th anniversary of its independence, declared on September 21, 1991. As the first Soviet republic to proclaim sovereignty during the collapse of the USSR, Armenians have reason to rejoice—after decades of cultural and political oppression they may finally flout their language, heritage and national identity without fear of reprisal.

A boy heading home from school in Karabagh, Armenia. photo: Rob Maguire

Many in this tiny republic, however, have little else to celebrate. While civil liberties were subject to Soviet-style constraints, the Armenia of the 1980s enjoyed a strong economy, a healthy and highly educated public, and one of the most egalitarian distributions of wealth in the USSR. Once the newly independent government began to adopt market reforms and neoliberal values, gross domestic product plummeted, prices for basic needs such as food and water increased dramatically, while public goods like health care and education began to crumble.

Over a decade later, GDP has finally returned to pre-reform levels. Who has benefited from renewed economic growth, however, is not so clear. Spending on education and health remains low. Real wages are less than one-eighth of what they were in 1990, and economic inequality in Armenia has become extreme. In Yerevan, Armenia's capital, the number of BMWs seen rolling along city streets has mushroomed; and so have the ranks of panhandlers roaming those very same urban boulevards.

Poverty has indeed become widespread in Armenia. Affecting roughly fifty percent of the population, it has quickly become an epidemic that shows little sign of subsiding.

An old man in Shushi, a village in Karabagh, a part of Armenia isolated from the rest of the country during long border disputes. photo: Rob Maguire

Living on less than two dollars a day, the poor are particularly vulnerable to increases in the price of basic commodities. Privatization within the energy sector, however, has preyed upon this very weakness. Imposed by the World Bank through loan conditions, reforms designed to make electric utilities more attractive to foreign takeover left people paying more than twice as much for electricity then they were in the mid-1990s.

Furthermore, inability to pay these inflated rates now results in disconnection. This strict marketplace logic is expressed by Andrei Rappaport, a senior official for Unified Energy System of Russia, and the new owner of several Armenian generating facilities: "If you want energy pay for it, and if there is not any money to pay, then goodbye."

Not unsurprisingly, these new conditions led to a serious decline in household energy consumption. The poor in particular were forced to cut electricity use considerably, by twenty percent on average. According to a World Bank report, the typical household barely has enough electricity to power a refrigerator and a handful of light bulbs.

Despite the decline in consumption, increased energy costs now account for approximately thirty percent of all household expenditures, with electricity making up the bulk of these payments. A related concern is the move towards greater wood consumption. While this reduces the reliance on costly electric power, it has also contributed to higher levels of indoor air pollution and accelerated deforestation.

Energy—widely recognized as a fundamental need for human development—has become increasingly inaccessible in Armenia. At the insistence of the World Bank, control over this precious commodity has been handed over to foreign interests, where social priorities are sacrificed in the name of corporate profit and capitalist ethos.

The picture is similar in much of the former Soviet Union: increases in cultural and, to a lesser degree, political freedoms have been overshadowed by a sharp decline in the freedom to meet basic human needs. This failure is directly related to the "shock therapy" imposition of market capitalism on countries with centralized economies—a prescription borne more of ideological zeal than sound economic principles.

Soviet leftovers, Yerevan. photo: Rob Maguire

Joseph Stiglitz, former Chief Economist of the World Bank, explains: "From this cold-war perspective, those who showed any sympathy to transitional forms that had evolved out of the communist past and still bore traces of that evolution must themselves be guilty of 'communist sympathies.' Only a blitzkrieg approach during the 'window of opportunity' provided by the 'fog of transition' would get the changes made before the population had a chance to organize to protect its previous vested interests."

Poverty and inequality remain Armenia's greatest challenges, and some question whether the political will exists to tackle these vital problems. This is true for the Armenian government, but perhaps more importantly, for the World Bank and related organizations such as the International Monetary Fund and the United States Agency for International Development. The coercive pressure these institutions place upon governments to engage in fire sale privatisation tactics could be redirected to produce publicly owned utilities that are transparent, efficient, and designed to serve the public good.

Unfortunately, these institutions appear more concerned with ideological imperialism and creating profit opportunities for Western corporations than they are with promoting sustainable economics, accountable governance, and poverty reduction—all of which are necessary for human beings to truly prosper.

Rob Maguire is a Canadian activist and graduate student living in Yerevan, Armenia. He can be found online at www.projectcommunis.org.

Rob Maguire reports from Armenia, where civil liberties have not increased quite as fast as the cost of living.