Monthly Archives: July 2014

Dams and Fishing at the Columbia River

Grand Coulee Dam on Columbia River. Image from wikipedia

When Dwight Eisenhower, then president of the United States, and John Diefenbaker, his Canadian counterpart, signed a treaty in 1961 to jointly control the unruly Columbia river, they hailed their collaboration as a model for the rest of the world. Fifty years after the treaty was implemented, in 1964, cracks are appearing.

The treaty involved a series of new dams and an agreement to share the power generated as a result. It has worked well. There has been no repeat of the catastrophic flood that wiped out the second-largest city in Oregon in 1948. The United States dutifully hands over Canada’s share of the hydropower generated, worth an average of C$215m ($170m) a year between 1998 and 2013. But the Americans in particular are keen to make changes. Nigel Bankes of the University of Calgary says there is “zero chance” that the disagreements between the two countries can be resolved before September 16th, 2014—after which date either country can give ten years’ notice that it wishes to terminate the agreement.

Money is one of two main differences. In return for building three dams—Duncan, Hugh Keenleyside and Mica —on its side of the border, Canada received an upfront payment from the United States and a guaranteed share of the extra power that could be generated downstream as a result of more dependable water flows. The Americans think Canada has been more than reimbursed for the costs of dam construction, and want to whittle away the annual energy payment known as the Canadian Entitlement. In an open letter to Barack Obama in April, 26 senators and congressmen from the Pacific north-west said a reduction should be part of a renegotiated deal.

Not so fast, say the Canadians. They point out that people were displaced and fertile land flooded to create the dams. That represents a continuing loss. There are also benefits not captured in the treaty, says Bill Bennett, the minister of energy and mines for British Columbia (BC), which implements the treaty for Canada. More dependable water flows lead to improved navigation and irrigation south of the border; BC also co-operates when the United States asks it to spill water over its dams to help meet obligations under endangered-fish-species legislation.

In fact, fish are the other slippery issue. The restoration of salmon migration on the upper reaches of the Columbia river is being pushed by First Nations (native Indian) tribes on both sides of the border. The United States wants salmon on the negotiating table, but the Canadians do not. None of the treaty dams was built with fish ladders and they would be costly to construct today. “Salmon migration in the Columbia river ended 26 years before the treaty was ever ratified,” says Mr Bennett. “It was eliminated by the Grand Coulee dam in 1938, and our position is that’s an important issue but it’s not part of the Columbia River Treaty discussion.”

Excerpt, The Columbia River Treaty: Salmon en route, Economist, June 7. 2014, at 42

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How Palau Fights the Big Fishing Countries

Palau

The traditional prescription for an ailing reef is a fishing ban called a bul. Local chiefs may declare a bul to rest a busy fishing spot or protect endangered sea turtles. Now Palau’s president has a more drastic plan. He proposes a complete ban on commercial fishing—a bul to turn the 600,000 square kilometres (232,000 square miles) of Palau’s Exclusive Economic Zone (EEZ) into a marine reserve the size of Ukraine. Locals could still fish close to shore, but not for export. The ban would last until world leaders implement programmes “to reverse the devastation to our oceans and seas”, Palau’s president, Tommy Remengesau, recently told the United Nations. Environmentalists have rallied to his cause. Such reserves are usually declared by countries with fishing grounds and cash to spare. Palau has a population of 20,000 and a GDP of $246m. I

A total ban might hurt Palau, which is part of Micronesia, 800km (500 miles) east of the Philippines. Though small, its waters are full of bigeye and yellowfin tuna. Japanese and Taiwanese boats pay to fish there, helping Palau earn $5m in revenue from fishing taxes and licensing fees in 2013. That is a lot for a microstate with an annual government budget of only $70m. And fishing revenues have been growing thanks to a regional negotiating block. Together, eight remote Pacific states control 14m square km of tuna-rich waters. They have forced Asian and American ships into a cap-and-trade scheme that boosts access fees by limiting total fishing days. In an age of collapsing fish stocks, the relative health of fisheries in the western Pacific has given island states a rare measure of economic influence. Palau’s bet, however, is that its fish are worth more in the water than out. Mr Remengesau doubts that small islands will ever capture more than “a drop” of a tuna fishery worth billions but dominated by foreign fleets. Ecotourism, meanwhile, accounts for about half of Palau’s GDP. Palau’s leaders hope that a national marine reserve will lure enough tourists to offset lost fishing revenue….

Palau has only one boat capable of patrolling its EEZ. Many tuna bandits escape detection. Technology could help: last year the country tested surveillance drones. The problem is money. Japan and America have helped fund enforcement. Both have an interest because of their fishing deals with Palau. But they may not want to fund a system that locks them out of its waters altogether,

Marine protection in the Pacific: No bul, Economist, June 7,  2014, at 46

The Bitcoin Haven: Hong Kong

bitcoin

Entrepreneurs in Hong Kong are scrambling to offer new services for bitcoin investors and enthusiasts in the region, despite a dip in confidence after the collapse of Mt Gox, a Japanese online exchange. The former British territory’s status has been enhanced by mainland China making it hard for the Bitcoin business—banning financial institutions from dealing in bitcoins and closing the bank accounts of online trading platforms.

Hong Kong, on the other hand, continues to be run under the “one country, two systems” set-up, agreed before it was handed back from British to Chinese sovereignty. So it has its own monetary authority and its own British-style legal system. A slew of startups are racing to lay out a network of Bitcoin ATM machines (where you pay money in to obtain bitcoins) and to open exchanges for online buying and selling, while a handful of bricks-and-mortar businesses are starting to accept payments in bitcoins.

As in so many areas, straightforward regulations and high-quality local talent have been the key to Hong Kong’s early success. Promising ventures have found no shortage of capital in the city. Li Ka-shing, a Hong Kong tycoon and Asia’s richest man, was an early investor in BitPay, a Bitcoin payment technology.

Still, the industry is experiencing growing pains, too. Two of the city’s first Bitcoin ATMs stopped working soon after being set up in March. Aurélian Menant, a former investment banker who left his job last year to start Gatecoin, a digital-currencies exchange website, waited nine months for his company to be granted a licence as a money-service operator.

Yet in spite of the teething problems, many observers believe Hong Kong’s transparent legal framework and its position on China’s doorstep can make it a leading global centre for Bitcoin, just as it has been for many other commodities. Authorities in the city have made their position clear. John Tsang, Hong Kong’s financial secretary, told a room of teenagers recently: “Bitcoin is not a currency. Just like your armour in World of Warcraft, since we don’t regulate those, we won’t be regulating Bitcoin.” In addition, any assets gained from the buying and selling of bitcoins are subject to the city’s attractive low flat-tax rate.

Some think the key for Bitcoin startups is to attract capital from flush mainland Chinese investors. The problem for David Shin, a Hong Kong banker who launched Cryptomex, a Bitcoin crowdfunding investment platform, is that investors in China “like to hoard their bitcoins”. Mr Shin hopes his venture could coax them to invest in startups, and that those businesses would in turn improve the security of transactions and earn digital currencies wider legitimacy.

Bitcoin in Hong Kong: Still different, Economist,  June 7, 2014, at 50

The CIA Black Sites at the European Court of Human Rights

CIA black sites. image amnesty USA

The CIA ran a secret jail on Polish soil, the European Court of Human Rights ruled on July 24, 2014, piling pressure on Poland, one of Washington’s closest allies, to break its long silence about the global programme for detaining al Qaeda suspects.  The court said it had been established that the CIA used a facility in a northern Polish forest, code named “Quartz”, as a hub in its network for interrogating suspected al Qaeda operatives rounded up after the Sept. 11, 2001 attacks.

Poland has always denied that the CIA had a jail on its territory, even as leaks from former U.S. intelligence officials, and a Senate investigation, brought more and more details of the programme into the open.  The July 24, 2014 ruling was the first time that a court in Europe had said that the CIA operated one of the secret jails – often referred to as “black sites” -on the continent.

Amrit Singh, a lawyer with the Open Society Justice Initiative who acted for one of the men who brought the case, told Reuters both Poland and the United States would have to take note of what she called an historic ruling…The court case was brought by lawyers for two men, Saudi-born Abu Zubaydah, and Saudi national Abd al-Rahim al-Nashiri, who are now both inmates at Guantanamo Bay, the U.S. military’s prison on Cuba.

They alleged they were flown in secret to a remote Polish airfield, then transferred to the CIA-facility near the village of Stare Kiejkuty where they were subject to treatment they said amounted to torture.  Lawyers for Nashiri said one on occasion he was forced to stand naked and hooded in his cell while his interrogator operated a power drill, making the detainee believe he would be harmed. In another incident, the lawyers said, an interrogator cocked a pistol next to Nashiri’s head.

The court ruled that, despite the wall of secrecy around the U.S.-led “extraordinary rendition” programme, there was enough circumstantial evidence to say beyond reasonable doubt that both men were held at a CIA-run facility in Poland. It said Poland knew about their detention and should have known they were at risk of ill-treatment.

The court found Poland violated its obligations under the European Convention on Human Rights to prevent torture, ensure the right to liberty, and properly investigate allegations a crime had been committed on its territory.  It ordered Poland to pay al-Nashiri 100,000 euros in damages and 130,000 euros to Zubaydah….

The ruling from Strasbourg may have implications for other European states alleged to have hosted CIA prisons: similar cases have been lodged with the court in Strasbourg against Romania and Lithuania. The court ruling did not directly cover the United States, which is outside its jurisdiction.

Excerpt from CHRISTIAN LOWE European court says CIA ran secret jail in a Polish forest, Reuters, July 24, 2014

The Partition of Central African Republic

Anti-Balaka militia--image from wikipedia

Central African Republic is de facto partitioned with Christian militias in the west of the impoverished, landlocked country pillaging diamonds and mainly Muslim Seleka rebels in the east controlling gold mines, U.N. experts said on Friday.  Violence between the Muslim and Christian communities killed at least 2,400 civilians between December 2013 and April 2014, the panel said, but they acknowledged the toll was likely higher due to underreporting.  Seleka rebels seized power more than a year ago, committing abuses on the majority Christian population that triggered waves of deadly revenge attacks by the anti-balaka Christian fighters, forcing a million people to flee their homes.

In a report to the U.N. Security Council released in July 2014, the experts who monitor sanctions violations said they believe “that armed groups, whether associated with anti-balaka or the former Seleka, have been manipulated and incited by political spoilers to commit acts of violence against civilians and international forces with the aim of strengthening those leaders’ influence and destabilizing the transition process or promoting the partition of the country.”  “The country is de facto partitioned into two … with the predominant presence of so-called anti-balaka militias in the west and of the new Seleka in the east,” the experts said.

The violence in Central African Republic has continued despite the presence of 2,000 French troops and some 6,000 African Union forces. In April, the Security Council authorized a U.N. peacekeeping force of up to 10,000 troops and 1,800 police, which is due to assume authority in September.  “Armed groups have been involved in the illicit trade and exploitation of natural resources, namely gold and diamonds,” the experts’ report said.  “In the west of the Central African Republic, anti-balaka members are digging for and trading in diamonds in remote villages,” it said. “In the east, Seleka forces retain a tight grip on artisanal gold mines.”

In December, the Security Council imposed an arms embargo on Central African Republic and then in May, it imposed sanctions on the country’s former President François Bozizé and two other men linked to the country’s conflict. ..Armed groups were mainly using small arms that were circulating in the country before the crisis or obtained from government stockpiles following the collapse of the national security forces, the experts said.

Excerpt from Michelle Nichols. Central African Republic de facto partitioned, UN experts say, Reuters, July 12, 2014

Corruption in Somalia

Somalia_map_states_regions_districts

A United Nations panel that monitors compliance with U.N. sanctions on Somalia has accused Somalia’s  president, a former minister, and a U.S. law firm of conspiring to divert Somali assets recovered abroad, according to a new report.  The Somalia and Eritrea Monitoring Group, an 8-person committee, disclosed the findings in a confidential report to the U.N. Security Council’s Somalia/Eritrea sanctions committee. Reuters reviewed a copy of the 37-page document.  The U.N. Monitoring Group said the information it has gathered so far “reflects exploitation of public authority for private interests and indicates at the minimum a conspiracy to divert the recovery of overseas assets in an irregular manner.”

Most of the overseas assets were frozen at the outset of the civil war in 1991 and include cash and gold held in banks during two decades of chaos and conflict in Somalia, as well as government properties on foreign soil.  What the monitors describe as a conspiracy involved the U.S.-based law firm Shulman Rogers, President Hassan Sheikh Mohamud and his office, former foreign minister Fawzia Yusuf H. Adam, as well as two other individuals whom the monitors said acted as liaisons between Shulman Rogers and Somalia…

All those accused of involvement in the plan to divert assets have denied any wrongdoing. Several accused the chairman of the Monitoring Group, Jarat Chopra, of dubious investigative methods and making baseless assertions….

A 2013 U.N. Monitoring Group report said individuals in Mohamud’s government used the Somali central bank as a personal “slush fund”, with an average 80 percent of withdrawals made for private purposes. The presidency and the then-central bank governor Abdusalam Omer have strongly denied that accusation..  In its latest report, the Monitoring Group said that “a complex architecture of multiple secret contracts, which defied a separation of powers between the Presidency and the Central Bank, created the opportunity and rationalization for the misappropriation of public resources.”  “‘Pie-cutting’ of overseas assets by those involved in the project entailed retention of excessive percentages and direct payments from recovered assets as well as attempts to circumvent deposits in the Central Bank of Somalia,” it added.

Abrar, the former central bank governor who was also a former Citigroup vice president, quit last October after seven weeks on the job, alleging she had been pressured to sign a contract with Shulman Rogers that she feared could invite corruption at the central bank.According to the new report, she sent her resignation from Dubai after fleeing from Mogadishu out of fear for her safety.The Monitoring Group said it had followed up on a number of Abrar’s allegations and her concerns about the contract and the planned scheme for the recovery of Somalia’s overseas assets. One of her main worries, the monitors said, was a clause in a July 2013 contract with Shulman Rogers that gave the law firm a bonus of 5 percent of recovered assets in addition to its fees and for Shulman Rogers to retain a further 6 percent of recovered assets for undefined costs and expenses.

“Ms. Abrar considered this clause for undefined costs and expenses to be for hidden fees and ultimately understood that it was meant as a side payment to be divided two percent each between Foreign Minister Adam, Musa Haji Mohamed Ganjab and Abdiaziz Hassan Giyaajo Amalo,” the report said…

After consulting with the World Bank, the Somali president’s office said in a statement to Reuters that it revoked a power of attorney it had granted to Shulman Rogers in May and was renegotiating its contract with the law firm.

Excerpts from LOUIS CHARBONNEAU AND DRAZEN JORGIC. Exclusive: U.N. monitors allege ‘conspiracy’ to divert Somali assets, Reuters, July 15, 2014

The $5 Billion Counterterrorism Fund

money

President Obama is seeking $5 billion for a counterterrorism fund that will boost deployment of special operations forces to combat terrorists in hotspots such as Libya, Somalia and Syria. But Congress is balking at providing the funds without more details on how it will be spent….The initiatives are part of the president’s $58.6 billion overseas contingency operations request for 2015. The fund was created in 2006 to pay for operations related to the Iraq and Afghanistan Wars, but has expanded to include counterterrorism operations in various places such as the Horn of Africa and Yemen. The new counterterrorism initiative would expand train and equip programs, currently undertaken by mostly special operations forces..,,Officials say details of this $500 million plan are still being put together and are classified, though they said the training would likely occur outside Syria.  The Wall Street Journal reported that the program could train a force of 2,300, and that defense officials have promised to increase those numbers…

Lawmakers, however, said the details were lacking and accused officials of trying to create a “slush fund” they could tap into to spend without congressional scrutiny….“It seems this has become yet another slush fund where you can just transfer it between accounts without accountability and you can transfer it even between departments and you’re asking for $5 billion, which seems like a large amount of money to have that little oversight on,” she said.

Excerpt, Kristina Wong,Lawmakers leery of counterterrorism fund, July 20, 2014