Taming the Dirty Oil Giants November 17, 2012Posted by rogerhollander in Africa, Energy, Environment, Nigeria.
Tags: avaaz, environment, nigeria, nigeria parliament, oil spill, roger hollander, shell nigeria, shell oil
1 comment so far
In days, Nigeria’s Parliament could approve a $5 billion fine against giant
oil polluter Shell for a spill that devastated the lives of millions of
people, and pass a law to hold all oil companies to account for polluting and plundering.
This is a watershed moment,
but unless we all speak out, oil giants will crush it.
Oil is having to pay for the wasteland and violence that they’ve created.
President Jonathan supports the Shell fine, and progressive Senators are
pushing for strong regulations, but oil companies are slick, and without huge
international support MPs could buckle under the pressure.
are deciding their positions right now — sign the urgent petition for the
Nigerian Parliament to fine Shell and support the bill, and then forward this to
everyone — when we hit a million signers we’ll bring our unprecedented
global call to the steps of Nigeria’s Parliament:
Experts say that every year Big Oil spills as much crude into the
Niger Delta as an Exxon Valdez, but as it is Africa, it gets little media
play. After a leak occurred at Shell’s Bonga oil facility last December,
millions of gallons poured into the ocean and washed up on the densely populated
coast — resulting in one of the largest African oil spills ever. The fine
and bill on the table are a once in a lifetime chance to stand up to Big
Oil companies have made $600 billion in the last 50 years in
Nigeria, but locals don’t see the benefits. Their land, drinking water and
fishing grounds are ruined. And Shell has spent hundreds of millions of
dollars a year on security forces, repressing protest against its harmful
The oil industry is crucial to the economy, but companies have
never been held to account for the devastation of drilling. Now, the Nigerian
President and a few brave MPs are speaking out and they could finally slam the
oil giants with tough fines and give fair pay outs to the victims. If we show
MPs that the world supports these crucial steps, we can literally change the
lives of millions. Click below to sign the urgent petition:
Avaazers have stood up to Big Oil all over the world, from Chevron in
Ecuador, to the oil spill in the Gulf of Mexico, to ending fossil fuel subsidies
at the Rio Summit. Now let’s do it for Nigeria too. Make sure the politicians
send a message to Big Oil: your days of impunity are over.
With hope and
Pascal, Patricia, Alex, Ricken, David, Rewan, and the
Shell Faces $5 Billion Nigeria Fine (Wall Street
Shell urged to pay Nigeria $5bn over Bonga oil spill (BBC)
Shell’s grip on Nigerian state revealed (The Guardian)
U.N. slams Shell as Nigeria needs biggest ever oil clean-up
Nigeria: Oil spill investigations ‘a fiasco’ in the Niger Delta (Amnesty
Nigeria is days from passing the “Jail the Gays” bill November 16, 2012Posted by rogerhollander in LGBT, Nigeria.
Tags: anti-gay, Goodluck Jonathan, homophobia, lgbt, nigeria, roger hollander, same sex
1 comment so far
Nigeria is days from passing the “Jail the Gays” bill - one of the harshest anti-gay laws the world has ever seen. The proposed law will mean 10 years in prison for two people daring to hold hands in public.
After a year languishing in the House of Assembly, the “Jail the Gays” bill has been rushed through with zero notice. The only roadblock before it becomes law is one signature – President Goodluck Jonathan’s. Last year, 65,000 of us stood against this bill and it was abandoned! Can you take one minute to help us do it again? It takes only one minute but it could change history:
When the bill was first introduced, politicians said there were no gay people in their country. Our friends in Nigeria have said they are not taking this lying down – they’ve got a plan and they’re asking for our help. Right now, they are organising an unprecedented response of African advocates – both straight and gay – to speak out against this bill. Today, we are showing that not only do Nigerian LGBT people exist, but the whole world has their back. Will you stand with Nigerians against this hateful law and help us to get to 100,000 signatures?
The only way to stop this bill is to trumpet Nigerian voices for equality – supported by millions around the world. President Jonathan can veto the bill – and if he hears these Nigerian voices, he’ll have to.
We know we can drive the right message to every government and media organisation around the world to make sure President Goodluck Jonathan knows his people and their allies will not tolerate him signing this bill into law. Will you take one minute and add your name now?
Thanks for going All Out.
Best, Andre, Hayley, Jeremy, Sara and the rest of the All Out team.
Nigerian law-makers move ahead on anti-gay bill www.nation.co.ke/News/africa/Nigerian-lawmakers-move-ahead-on-anti-gay-bill
Obama Admininstration Backs Shell in Supreme Court Case August 25, 2012Posted by rogerhollander in Energy, Environment, Human Rights, Labor, Nigeria.
Tags: alien torts, atca, Criminal Justice, eric holder, human rights, justice department, nigeria, obama administration, ogoni, puck lo, roger hollander, royal dutch, shell oil, supreme court, torture
add a comment
Roger’s note: Vote Obama! “Plus ca change …” you can believe in.
The Obama administration is backing Shell Oil after abruptly changing sides in a landmark U.S. Supreme Court case that could make it even more difficult for survivors of human rights abuses overseas to sue multinational corporations in federal courts. The case will be heard on October 1.
Lawyers at EarthRights International, a Washington-based human rights law nonprofit, say they suspect that a new legal submission – which was signed only by the U.S. Justice Department – reflects tensions inside the government on how to deal with multinational corporations do business in the U.S. Significantly, neither the State nor the Commerce Department signed on to the brief, despite their key roles in the case.
“It was shocking,” Jonathan Kaufman EarthRights legal policy coordinator commented to Reuters. “The brief was largely unexpected, based on what they had filed previously, and pretty breathtaking.”
At issue is the Alien Torts Claim Act (ATCA) – an 18th century U.S. law originally designed to combat piracy on the high seas – that has been used during the last 30 years as a vehicle to bring international law violations cases to U.S. federal courts.
Lawyers began using ATCA as a tool in human rights litigation in 1979, when the family of 17-year-old Joel Filartiga, who was tortured and killed in Paraguay, sued the Paraguayan police chief responsible. Filartiga v. Peña-Irala set a precedent for U.S. federal courts to punish non-U.S. citizens for acts committed outside the U.S. that violate international law or treaties to which the U.S. is a party. ATCA has brought almost 100 cases of international (often state-sanctioned) torture, rape and murder to U.S. federal courts to date.
In recent years, a number of ATCA lawsuits have also been filed against multinationals which has angered the business lobby. “Expansion of this problem into the international arena via ATCA promises nothing but trouble for U.S. economic and foreign policy interests worldwide,” wrote John Howard, vice president of international policy and programs at the U.S. Chamber of Commerce. “U.S. national interests require that we not allow the continuing misapplication of this 18th century statute to 21st century problems by the latter day pirates of the plaintiffs’ bar.”
No plaintiff against a corporation has won on ATCA grounds, although some have settled or plea bargained. In 1996 Doe v. Unocal, a lawsuit filed by ethnic Karen farmers against Unocal (now owned by Chevron) set a new precedent when a U.S. federal court ruled that corporations and their executive officers could be held legally responsible for crimes against humanity. Unocal contracted with the Burmese military dictatorship to provide security for a natural gas pipeline project on the border of Thailand and Burma. The suit accused Unocal of complicity in murder, rape and forcing locals to work for Unocal for free. Shortly before the jury trial was set to begin in 2005, Unocal settled with the plaintiffs by paying an undisclosed sum, marking the first time a corporation settled in any way a case based on the ATCA.
Another such case was filed against Chiquita, the global banana producer, by surviving victims of brutal massacres waged by right-wing paramilitary squads in Colombia. The paramilitary, who killed thousands of civilians during Colombia’s dirty war of the 1980s and 1990s, were on Chiquita’s payroll in the 1990s. Now-U.S. Attorney General Eric Holder defended Chiquita in the case and won a plea bargain for them of $25 million and five years of probation.
Holder isn’t the only Justice Department staffer who defended a corporation in an ATCA case. Sri Srinivasan, recently nominated for the second highest position in the Justice Department, represented Exxon Mobil in a case brought against them by Indonesian villagers who survived alleged attacks, torture and murder by Indonesian military units hired by Exxon to provide security. Lower courts disagreed on Exxon’s liability under ATCA, and in 2011 an appeals court sent the case back to trial.
Which brings us to the case currently before the Supreme Court – Kiobel v. Royal Dutch Petroleum Co. (Shell) – brought by relatives of nine Nigerian Ogoni activists who were executed in 1995 by a military dictatorship allegedly working in collaboration with Shell. For the last ten years, the widow of executed Dr. Barinem Kiobel and other Nigerian refugees have been trying to prove in court that the British-Dutch multinational oil company Royal Dutch Petroleum Co., or Shell Oil, conspired with the Nigerian military to illegally detain, torture and kill critics of Shell’s environmentally destructive practices in the Niger Delta.
In February the Supreme Court agreed to hear the case to determine whether or not corporations – as opposed to private parties – could be sued under the ATCA. At that time the Justice Department, submitted a “friend of the court” brief that said they could.
Lawyers say that if the Supreme Court accepts that the case can be heard in U.S. courts, it will mark a significant step forward for human rights activists. It will also send a powerful signal to business that any violations overseas can be prosecuted if they do business in the U.S.
Then in June, the Obama administration, suddenly changed its opinion. The new brief from the Justice Department “read like a roadmap for getting rid of cases Srinivasan and Holder had worked on previously” EarthRights attorney Kaufman told Reuters.
In its submission filed in response to a Supreme Court order to re-argue whether or not ATCA applied to territories outside the U.S., the Justice Department urged the Supreme Court to dismiss the suit against Shell. The brief’s authors stated that the ATCA was not appropriate for Kiobel or other lawsuits involving foreign corporations accused of collaborating in human rights abuses with a foreign government outside U.S. territory.
U.S. courts “should not create a cause of action that challenges the actions of a foreign sovereign in its own territory, where the [sued party] is a foreign corporation of a third country that allegedly aided and abetted the foreign sovereign’s conduct,” the Justice Department wrote.
However, the Justice Department stopped short of categorically barring all similar cases that occur outside the U.S. from ATCA eligibility, and it left ambiguous whether the current recommendation would prevent future ATCA lawsuits against U.S. citizens or corporations, or in cases where abuses take place on the high seas.
EarthRights International filed three Freedom of Information Act requests in July to look for evidence showing whether or not corporate interests and lobbying influenced the government’s decision to back Shell.
“If disclosed, this information will help reveal whether or not the business interests of Attorney General Eric Holder or Deputy Solicitor General Sri Srinivasan influenced the government’s position in Kiobel,” said Kaufman.
Puck Lo is a freelance writer, researcher and multimedia producer based in the San Francisco Bay Area. www.pucklo.com
“U.S. courts “should not create a cause of action that challenges the actions of a foreign sovereign in its own territory, where the [sued party] is a foreign corporation of a third country that allegedly aided and abetted the foreign sovereign’s conduct,” the Justice Department wrote.”
Yet we can get involved in regime change in foreign sovereign countries like Libya and Syria?
power of money and provide a safe haven to social predators while promoting the
rape of the planet for profit. The world
has no or few laws and little to no enforcement of justice to limit or abolish
multi National corporate abuse but in fact what laws exist or are enforced
promote abuse and injustice in the name of profit to shareholders. However the shareholders are for the most
part other corporations not people but a few greedy power hungry social predators. It’s time the world limits the criminal abuse
of multinational corporations and the few who control them for gain and or
Obama has been shiting on the Mother Earth and marginal populations for years on behalf of his corporate Masters. Just another day of the typical sell out.
Thank you for this info…. I have been trying to stay in touch with this type of issue…when I first heard about the Nigerian situation, read about the Ken WiWa(sp)…. case…and how the Nigerian Delta is the most polluted place in the world…. I have handed out articles about this to other people…
Three and a half years of unambiguous actions and decisions seem to prove beyond any reasonable doubt that it is unnecessary for corporations to
waste their time and money to “influence” the Obama admin. The Obama team was not only bought, but created by corporate interests such as Shell in order to dominate US govt.
If only the problem were as simple as Eric Holder, et al having a personal conflict of interest.
Niger Delta Women Act Against Abuses by Big Oil November 10, 2010Posted by rogerhollander in Africa, Environment, Human Rights, Nigeria.
Tags: Africa, chevron, environment, niger delta, nigeria, nigeria oil, protest, roger hollander, shell oil, women
add a comment
“The reason why we filed this protest is that the affected communities want shore-piling for erosion control. We also need step down line for industrial electrification for the entire Ugborodo communities”. -Chief Thomas Ereyitobi, Chairman of Ugborodo community
“In less than three years from now the surging Atlantic Ocean would have wiped away our communities from the face of the earth and in spite of our crying out loudly everyday in the media to call the attention of the Federal Government to our plight, the Niger Delta Ministry did not deem it fit to include the Ugborodo shore protection project in the recently advertised job showing clearly that we are not part of the Nigerian project.”
“The Sector 2 Commander admonished the troops deployed to the facility and other areas of the council area to ensure “the use of proper tactical, overt and covert operations to protect the vast infrastructure and equipment at the rig site as well as protection of the rig staff.”
Shell Must Clean up Its Act in Nigeria December 4, 2009Posted by rogerhollander in Africa, Environment, Nigeria.
Tags: Africa, chima williams, environment, environmental contamination, environmental damage, environmental justice, environmental rights, human rights, niger delta, nigeria, nigeria environment, nigeria oil, oil contamination, oil spills, roger hollander, royal dutch shell, shell nigeria, shell oil, shill pollution, west africa
add a comment
As Nigerian villagers take Shell to court over huge oil spills, it’s time for the group to take responsibility for polluting practices
by Chima Williams
This is one of three oil spills in the case against Shell that will begin its first hearing at The Hague civil court this week. Four Nigerian villagers, in conjunction with Milieudefensie (Friends of the Earth Netherlands), are charging Royal Dutch Shell with causing massive oil spills that have resulted in loss of livelihoods. The case provides a snapshot of the environmental and social devastation caused by Shell in the Niger Delta.
The bigger, more disturbing picture is that oil spills have contaminated the once fertile Delta with approximately 1.5m tonnes of crude oil, equivalent to one Exxon Valdez disaster every year for the last 50 years. As Amnesty International pointed out in a report this July, Shell “has failed to respect the human rights of the people of the Niger Delta … through failure to prevent and mitigate pollution”.
The parent company, Royal Dutch Shell, denies responsibility for the pollution of its subsidiary, Shell Nigeria, and is challenging the jurisdiction of the Dutch court over its actions abroad. It also blames oil spills on sabotage to its equipment. It seems that if Shell had its way, no court would have jurisdiction over any violations of human rights and environmental law. In 2005, the federal high court of Nigeria declared Shell’s gas flaring to be a violation of human rights and ordered the company to stop the illegal practice. Shell has still not complied with this court order. With little or no legal remedy in Nigeria, villagers from the Niger Delta have decided to bring their case to The Hague to hold the company headquarters to account.
Should the case go forward, the court would hear about Shell’s systematic pollution across the region. In Goi, a massive oil spill from Shell’s Trans-Niger pipeline caught fire in 2005, incinerating farmland, property and polluting fisheries. It took 33 months before Shell cleaned up the mess. Chief Barizaa, an Ogoni elder, and one of the four plaintiffs in the case said: “I lost everything … the oil flowed into my fishponds and killed all my fish. The five canoes I had in the creeks were consumed by the inferno. I have nothing left to feed my family.”
Another oil spill flowed from a high-pressure pipeline in Oruma, Bayelsa state, in 2005, polluting the land and drinking water of several neighbouring communities. Shell waited 12 days before containing the spill, and four months later it began its clean-up operation by dumping the polluted soil into pits and setting them on fire, causing further damage to the environment.
The oil-rich Niger Delta is prized by multinational corporations; chief among them is Shell, which derives approximately 10% of its global profits from the region. The oil companies have made enormous profits and enriched a succession of Nigerian regimes, but pollution is driving local people into poverty. Until Shell takes responsibility for its impact on the environment and human rights, it can expect legal actions like this one to expose ugly truths about their polluting practices. Shell must bear the cost of its environmental devastation. The alternative is daily injustice on a massive scale.
True Cost of Chevron (Alternative Report) June 3, 2009Posted by rogerhollander in Africa, Asia, Environment, Human Rights, Latin America, Nigeria.
Tags: chevron, chevron contamination, chevron violence, contaminated water, human rights, justice nigeria, nigeria contaminated water, nigeria contamination, nigeria environment, nigeria oil, roger hollander
add a comment
|True Cost of Chevron Coalition Releases Alternative Annual Report“Chevron refuses to clean up its mess in Nigeria.” ChevWrong Ad Campaign designed by Underground Ads|
|Justice In Nigeria Now!
2017 Mission St. 2nd Fl
San Francisco, California 94110
Photo LEFT: Fire burning at Chevron Pascagoula, MS refinery, photograph by Christy Pritchett ran August 17, 2007.
Courtesy of the Press-Register 2007 © All rights reserved. Reprinted with permission.
Chevron, Shell and the True Cost of Oil May 27, 2009Posted by rogerhollander in Africa, Environment, Human Rights, Nigeria.
Tags: Amnesty International, amy goodman, burma, chevron, Condoleezza Rice, denis moynihan, ecuador oil, environment, human rights, james jones, jeremy scahill, ken saro wiwa, myanmar, niger delta, nigeria oil, nigerian dictatorship, nigerian military, ogoni, oil contamination, oporoza, roger hollander, san suu kyi, shell, waterboarding, william haynes
1 comment so far
The economy is a shambles, unemployment is soaring, the auto industry is collapsing. But profits are higher than ever at oil companies Chevron and Shell. Yet across the globe, from the Ecuadorian jungle, to the Niger Delta in Nigeria, to the courtrooms and streets of New York and San Ramon, Calif., people are fighting back against the world’s oil giants.
Shell and Chevron are in the spotlight this week, with shareholder meetings and a historic trial being held.
On May 13, the Nigerian military launched an assault on villages in that nation’s oil-rich Niger Delta. Hundreds of civilians are feared killed in the attack. According to Amnesty International, a celebration in the delta village of Oporoza was attacked. An eyewitness told the organization: “I heard the sound of aircraft; I saw two military helicopters, shooting at the houses, at the palace, shooting at us. We had to run for safety into the forest. In the bush, I heard adults crying, so many mothers could not find their children; everybody ran for their life.”
Shell is facing a lawsuit in U.S. federal court, Wiwa v. Shell, based on Shell’s alleged collaboration with the Nigerian dictatorship in the 1990s in the violent suppression of the grass-roots movement of the Ogoni people of the Niger Delta. Shell exploits the oil riches there, causing displacement, pollution and deforestation. The suit also alleges that Shell helped suppress the Movement for the Survival of the Ogoni People and its charismatic leader, Ken Saro-Wiwa. Saro-Wiwa had been the writer of the most famous soap opera in Nigeria, but decided to throw his lot in with the Ogoni, whose land near the Niger Delta was crisscrossed with pipelines. The children of Ogoniland did not know a dark night, living beneath the flame-apartment-building-size gas flares that burned day and night, and that are illegal in the U.S.
I interviewed Saro-Wiwa in 1994. He told me: “The oil companies like military dictatorships, because basically they can cheat with these dictatorships. The dictatorships are brutal to people, and they can deny the human rights of individuals and of communities quite easily, without compunction.” He added, “I am a marked man.” Saro-Wiwa returned to Nigeria and was arrested by the military junta. On Nov. 10, 1995, after a kangaroo show trial, Saro-Wiwa was hanged with eight other Ogoni activists.
In 1998, I traveled to the Niger Delta with journalist Jeremy Scahill. A Chevron executive there told us that Chevron flew troops from Nigeria’s notorious mobile police, the “kill ‘n’ go,” in a Chevron company helicopter to an oil barge that had been occupied by nonviolent protesters. Two protesters were killed, and many more were arrested and tortured.
Oronto Douglas, one of Saro-Wiwa’s lawyers, told us: “It is very clear that Chevron, just like Shell, uses the military to protect its oil activities. They drill and they kill.”
Chevron is the second-largest stakeholder (after French oil company Total) of the Yadana natural gas field and pipeline project, based in Burma (which the military junta renamed Myanmar). The pipeline provides the single largest source of income to the military junta, amounting to close to $1 billion in 2007. Nobel Peace Prize laureate Aung San Suu Kyi, popularly elected the leader of Burma in 1990, has been under house arrest for 14 of the past 20 years, and is standing trial again this week. [On Tuesday the government said it had ended the house arrest of Suu Kyi, but she remains in detention pending the outcome of the trial.] The U.S. government has barred U.S. companies from investing in Burma since 1997, but Chevron has a waiver, inherited when it acquired the oil company Unocal.
Chevron’s litany of similar abuses, from the Philippines to Kazakhstan, Chad-Cameroon, Iraq, Ecuador and Angola and across the U.S. and Canada, is detailed in an “alternative annual report” prepared by a consortium of nongovernmental organizations and is being distributed to Chevron shareholders at this week’s annual meeting, and to the public at TrueCostofChevron.com.
Chevron is being investigated by New York State Attorney General Andrew Cuomo about whether the company was “accurate and complete” in describing potential legal liabilities. It enjoys, though, a long tradition of hiring politically powerful people. Condoleezza Rice was a longtime director of the company (there was even a supertanker named after her), and the recently hired general counsel is none other than disgraced Pentagon lawyer William J. Haynes, who advocated for “harsh interrogation techniques,” including waterboarding. Gen. James L. Jones, President Barack Obama’s national security adviser, sat on the Chevron board of directors for most of 2008, until he received his high-level White House appointment.
Saro-Wiwa said before he died, “We are going to demand our rights peacefully, nonviolently, and we shall win.” A global grass-roots movement is growing to do just that.
Denis Moynihan contributed research to this column.
© 2009 Amy Goodman
Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on 700 stations in North America. She was awarded the 2008 Right Livelihood Award, dubbed the “Alternative Nobel” prize, and received the award in the Swedish Parliament in December.
Niger Delta in the Midst of Worst Violence in Years May 25, 2009Posted by rogerhollander in Africa, Nigeria.
Tags: chevron nigeria, jinn, john kerry, nige delta, nigeria, nigeria massacre, nigeria violence, nigeria war, nigerian military, russ feingold
|Niger Delta in the Midst of Worst Violence in Years Displaced women and children taking refuge at the relief camp at Ogbeh-Ijoh (Vanguard)|
Pirate Bankers, Shadow Economies April 15, 2009Posted by rogerhollander in Africa, Economic Crisis, Nigeria.
Tags: africa government, africa poltics, capital flight, citigroup, corruption perceptions, cpi, economic justice, Free Trade, G20, global shadow economy, Gordon Brown, IMF, jacob zuma, khadija sharife, nigeria dictator, nigeria oil, oecd, roger hollander, sani abacha, swiss bank account, swiss banks, tax havens, tax justice, third world corruption, third world economy, ti, transparency international, washington consensus, World Bank
1 comment so far
Published on Wednesday, April 15, 2009 by Foreign Policy In Focus
Corruption isn’t an issue that Jacob Zuma, the current president of the African National Congress – South Africa’s liberation party – is particularly enthusiastic about. Until prosecutors dropped charges in early April, Zuma stood accused of three dozen counts of corruption, graft, fraud, and racketeering related to a rigged multibillion-dollar arms deal. He was alleged to have accepted 783 payments from French arms multinational Thint via his financial advisor Shabir Sheik, who was later convicted for graft, fraud, and corruption. Sheik has since emerged from prison, serving just 28 months of his 15-year term.
In Africa, political power is often used as a “get out of jail free” card, immunizing the venal political elite through various mechanisms. Transparency International, the global corruption watchdog renowned for its annual Corruption Perceptions Index (CPI), argues that corruption is especially rampant in Africa. TI defines corruption as the “abuse of entrusted power for private gain,” a notion limited to the governing bodies in developing countries.
But this is only half the story. A respectable financial army plays an invaluable role in a global shadow economy. A coterie of bankers, accountants, and lawyers – based in “transparent” London, New York, and Singapore – serve as the agents of tax havens and offshore financial centers, and they’re backed by multilateral financial institutions. Corrupt government leaders get away with graft much more easily and more frequently because of these international financial enablers.
According to Global Financial Integrity’s Raymond Baker, a leading capital flight expert, an estimated $900 billion is siphoned from underdeveloped regions each year. Since the 1970s, Africa has experienced a loss of $600 billion in capital flight, a considerable portion derived from odious loans that commercial and development banks provided to despotic regimes. Harvard economist James Henry argues that that more than $1 trillion worth of loans “disappeared into corruption-ridden projects or was simply stolen outright.”
Facilitating this theft are the IMF and World Bank’s structural adjustment programs through tax competition, liberalized trade, and natural resources auctioned piecemeal to corporations. These multilateral institutions made it easier for politicians and corporations to acquire capital and then spirit it out of the country.
“The IMF pushed the Washington Consensus, pushed free trade for corporations, providing them with market access and minimum impediments in Africa such as tax competition,” said Richard Murphy, director of Tax Research LLP. “The IMF helped companies not to pay their taxes. They got it horribly wrong.”
Despite TI’s emphasis on corrupt political environments – which has since become the definition of corruption – less than 5% of capital flight comes from this narrow category, according to Murphy. A much larger portion of capital flight, 30%, derives from garden-variety crimes like drug trafficking and money laundering. Multinational internal mispricing, meanwhile, constitutes an astounding 60% of illicit flight.
“TI has got it all wrong,” stated Murphy. “Transfer mispricing constitutes the largest portion of flight capital.” But even when capital flight happens because of corruption narrowly understood, like bribery, where does the money end up? Probably tax havens and places like Switzerland, which zealously protects the privacy of its depositors. Though Sudan, Chad, Equatorial Guinea and Zimbabwe rank near to last on CPI’s list of 180 countries, Switzerland comes in at a pristine fifth place. “The idea that Switzerland has a clean economy is a joke. It is a dirt-driven economy,” said Murphy.
Tax justice was billed as the “big issue” of the recent G20 meeting in London, a gathering of the largest economies in the world. By targeting Switzerland and numerous island economies, Prime Minister Gordon Brown conveniently shifted attention away from UK crown dependencies and overseas territories, accounting for more than a quarter of all tax havens worldwide.
And London is the head office.
“Tax havens are little more than booking centers. I’ve seen transactions where all the decisions are made in London, but booked in havens,” stated an official of Britain’s Serious Fraud Office, to John Christensen, cofounder of the Tax Justice Network and former economic advisor to Jersey, one of the world’s leading tax havens – and a UK crown dependency.
High-net-worth individuals have already secreted away more than $11.4 trillion, Christensen estimates, resulting in a loss of over $250 billion in taxes each year, minus corporate profits declared in tax havens.
The presence of tax havens, guaranteeing protection and discretion to corrupt political elites and economic criminals, directly undermines democracy and development, manipulating legal vacuums in unanticipated ways.
“The IMF is in favor of the highly flawed incentive of tax holidays. Many countries have lost huge sums of revenue, because tax incentives undermine revenue base of developing countries,” said Christensen. “Corporations prefer weak governments that are anxious to secure investments, and despotic governments,” he stated.
Over 60% of global trade occurs in unobserved vacuums. The Organization for Economic Cooperation and Development (OECD), composed of 27 high-income countries, have decided to focus on these conduits as well as the exotic islands, thus marginalizing and absolving structural exploitation, the lax regulation, and the culture of secrecy, all of which underpins the larger OECD economies such as London.
The strength of offshore hubs – an intricate labyrinth that facilitates flight and protects the corrupt through obscuring transparency, depends on the lack of automatic exchange of information between countries experiencing capital flight and those on the receiving end. After intensive lobbying by the international financial community, the IMF removed just such a provision on information exchange from the final drafts of its Article of Agreement. Presently, governments are only able to interrogate havens when already in possession of data related to illicit financial transactions and assets. The power of offshore hubs expanded when the IMF paved the way for capital account liberalization in the late 1970s. Cross-border flows increased eightfold. Unlike tax havens, offshore hubs relocate at the first sign of financial regulation. This is often done via costly flee clauses. The move to target and regulate tax havens, which range from shell companies to conduit markets to hedge funds, shouldn’t detract from the importance of regulating offshore hubs as distinct entities.
Going after the Real Corrupters
During his days on the throne, according to the Tax Justice Network’s John Christensen, former Nigerian dictator Sani Abacha had a standing order to transfer $15 million from state coffers to his Swiss bank account each day, resulting in a personal fortune of $3-$5 billion. One hundred banks (including Citigroup) knowingly protected Abacha and facilitated his plunder. Since the early 1990s, the population of Nigerians living on less than one dollar per day has increased by 10%.
Nigeria’s economy is largely dependent on hydrocarbon contracts, which is the root of the problem. “Hydrocarbon contracts in particular are very secretive, especially with regards to taxation, and it is difficult to get evidence of payment, with many political parties and politicians receiving payment on the side,” said Christensen.
Nigeria isn’t the only country subject to opaque transactions and capital flight. Wall Street’s $56 trillion tumble was triggered by toxic assets traded in the shadow economy. Suddenly, the spotlight in the United States fell on discretely marketed tax havens and powerful multinationals, many of them on the receiving end of taxpayer-subsidized bail-out funds. The Government Accountability Office reported that 83 of the top 100 corporations maintained multiple subsidiary units in tax havens.
The key to addressing corruption in the broadest sense is through country-by-country reporting. Such reports reveal the presence of multinationals in each country, trade names, financial performance, physical assets, the number of employees, sales to third parties, and intra-group trading, profits, and tax payments to the governments in each location. “Country-by-country reporting already works in the US where states all have different corporate taxes,” stated Murphy. “It would allow us to ‘look through’ havens, and if nothing of value is added there, we can simply ignore it and tax the companies where performance is happening.”
The automatic exchange of information in conjunction with country-by-country reporting would bolster accountability by precipitating automatic sanctions on havens, disincentivising capital flight and corruption. In doing so, the magnifying glass of transparency would fall on unchecked and unregulated shadow economies in developed and developing countries alike.
Now that would be an economic revolution.
Justice for Nigerians Brings Shell to Court in NY April 9, 2009Posted by rogerhollander in Africa, Environment, Nigeria.
Tags: Africa, africa colonialism, africa shell, africa solidarity, constritutional rights, environment, human rights, niger delta, nigeria, nigeria murders, nigerian military, roger hollander, shell, shell oil, shell trial
1 comment so far
On May 26, 2009, the Center for Constitutional Rights (CCR), co-counsel EarthRights International (ERI) and other human rights attorneys will bring oil giant Shell to federal court in New York for the start of a landmark trial for corporate accountability. CCR is pleased to make two exciting announcements as we draw nearer to the trial: we are launching a short film developed by CCR and ERI titled The Case Against Shell, and a new website, www.WiwavShell.org
In the early 1990′s, following decades of Shell’s environmental devastation in the Niger Delta in Nigeria, the Ogoni people of the region organized a non-violent movement against the oil company.
Shell’s response? They armed, financed, and otherwise colluded with the Nigerian military regime to repress the non-violent movement – leading to the torture and shootings of Ogoni people as well as massive raids and the destruction of Ogoni villages. In one incident, Shell was building an oil pipeline and requested support from the Nigerian military. The pipeline destroyed Karalolo Kogbara’s farm and, as she was crying over her lost crops, the soldiers shot her. In a separate incident, Uebari N-nah was shot and killed by soldiers near a Shell flow station; the soldiers were requested by and later compensated by Shell. Furthermore, Shell helped develop a strategy that resulted in the 1995 executions of nine of the movement’s leaders, including internationally acclaimed writer and activist Ken Saro-Wiwa.
Shell must be held accountable. As Ken Saro-Wiwa’s son, Ken Saro-Wiwa Jr. has said about the upcoming trial against Shell, “We need to have people account for their role in the executions and the displacement of the Ogoni people, many of whom feel traumatized. It will be a relief. It will enable people to face the future. That’s the most important thing. Let’s account for the past, so we can move forward.”
Executive Director, CCR