Monthly Archives: January 2017

For Debt and Coal: the China-Mongolia Deal

Tavan Tolgoi coal mine in Ömnögovi Province., Mongolia. Image from wikipedia

Mongolia recently reached a new deal to sell coal to China, helping it boost its faltering economy and start repaying billions of dollars it owes Wall Street lenders.  Under the landmark agreement completed late 2016, Mongolia’s state-owned mining company will sell coal to China at roughly double the previously agreed-upon rate.  The deal follows a devastating four-year period when Mongolian miners exported coal to China at deeply-discounted prices, sometimes for as little as 11% of the global benchmark price, undercutting Mongolia’s economic growth. Mongolia agreed to those punitive terms to get the loan from China and has been struggling to repay it.

The new export agreement will help Mongolia pay its mounting debt, including bonds held by BlackRock Inc., Fidelity Investments, UBS Global Asset Management and other global investors that bought the debt for its double-digit yields, according to bond investors.

But the export deal has a downside for Mongolia: It effectively transfers much coal production from China, which is bent on cleaning up its environment, to its poorer neighbor…  Trucks carrying coal are backed up for nearly 40 miles at Mongolia’s southern border with China, in what some analysts call the world’s largest traffic jam…Yet Mongolia seems willing to make that trade-off, with coal prices soaring since China has begun cutting production, analysts say. Market prices for the type of coal produced in Mongolia, which is used in steel- and iron-making operations, skyrocketed 200% in 2016 to $225 a ton.

Mongolia is also in talks with some Asian firms to develop its Tavan Tolgoi coal reserves, analysts say. The Gobi desert site is one of the world’s largest untapped coal mines, with more than six billion tons of coal deposits.

Excerpts from the New China-Mongolia Mining Deal: Economic Windfall or Environmental Threat?, Wall Street Journal, Jan. 21, 2017

Supply Chains Live: combating deforestation

366 companies, worth $2.9 trillion, have committed to eliminating deforestation from their supply chains, according to the organization Supply Change. Groups such as the Tropical Forest Alliance 2020, the Consumer Goods Forum and Banking Environment Initiative aim to help them achieve these goals.  Around 70 percent of the world’s deforestation still occurs as a result of production of palm oil, soy, beef, cocoa and other agricultural commodities. These are complex supply chains.  A global company like Cargill, for example, sources tropical palm, soy and cocoa from almost 2,000 mills and silos, relying on hundreds of thousands of farmers. Also, many products are traded on spot markets, so supply chains can change on a daily basis. Such scale and complexity make it difficult for global corporations to trace individual suppliers and root out bad actors from supply chains.

Global Forest Watch (GFW), a WRI-convened partnership that uses satellites and algorithms to track tree cover loss in near-real time, is one example. Any individual with a cell phone and internet connection can now check if an area of forest as small as a soccer penalty box was cleared anywhere in the world since 2001. GFW is already working with companies like Mars, Unilever, Cargill and Mondelēz in order to assess deforestation risks in an area of land the size of Mexico.

Other companies are also employing technological advances to track and reduce deforestation. Walmart, Carrefour and McDonalds have been working together with their main beef suppliers to map forests around farms in the Amazon in order to identify risks and implement and monitor changes. Banco do Brasil and Rabobank are mapping the locations of their clients with a mobile-based application in order to comply with local legal requirements and corporate commitments. And Trase, a web tool, publicizes companies’ soy-sourcing areas by analyzing enormous amounts of available datasets, exposing the deforestation risks in those supply chains…

[C]ompanies need to incorporate the issue into their core business strategies by monitoring deforestation consistently – the same way they would track stock markets.

With those challenges in mind, WRI and a partnership of major traders, retailers, food processors, financial institutions and NGOs are building the go-to global decision-support system for monitoring and managing land-related sustainability performance, with a focus on deforestation commitments. Early partners include Bunge, Cargill, Walmart, Carrefour, Mars, Mondelēz, the Inter-American Investment Corporation, the Nature Conservancy, Rainforest Alliance and more.  Using the platform, a company will be able to plot the location of thousands of mills, farms or municipalities; access alerts and dashboards to track issues such as tree cover loss and fires occurring in those areas; and then take action. Similarly, a bank will be able to map the evolution of deforestation risk across its whole portfolio. This is information that investors are increasingly demanding.

Excerpt from Save the Forests? There’s Now an App for That, World Resources Institute, Jan. 18, 2017

For Sale Elephant Skin 4 dollars per square inch

“Elephant’s skin can cure skin diseases like eczema,” said one shop owner, who requested anonymity, alongside a counter brimming with porcupine quills and snake skins. “You burn pieces of skin by putting them in a clay pot. Then you get the ash and mix it with coconut oil to apply on the eczema.”  He broke off to talk to a potential buyer, who balked at the price tag of 5,000 kyat (US$3.65) per square inch (6.5 square centimetres) of elephant skin.

Elephant poaching in Myanmar has jumped tenfold in recent years, the government said this week, driven by growing demand for ivory, hide and body parts.Increasingly carcasses are being found stripped of their skin, the hide used for traditional medicine or reportedly turned into beads for jewellery. Some of it is sold in local markets but the vast majority goes to feed neighbouring China’s inexhaustible taste for exotic animals.  Myanmar’s wild elephant population is thought to have almost halved over the past decade to around 2,000-3,000. The animals are killed or smuggled alive to be used in the tourist industry in neighbouring Thailand.

“”Elephants are one of dozens of endangered species being trafficked through Myanmar, which has become a key hub in the US$20 billion a year global wildlife trade.  Watchdog TRAFFIC claims the country has “the largest unregulated open markets for tiger parts” in Southeast Asia, which experts say also sell everything from African rhino horn and clouded leopard skins to pangolins.  Much of the trade runs through the country’s lawless eastern periphery, controlled by a sophisticated network of criminals who are thought to be armed and funded by powerful “kingpins” in China.  It is lucrative business: in Mong La, on Myanmar’s eastern border, sales of ivory alone are thought to rake in tens of millions of dollars a year.

Excerpts from Skin care fad threatens Myanmar’s endangered elephants as demand from China drives trade in animal products, South China Morning Post, Jan. 21, 2016

 

On Slaughtering and Shooting to Death: the conservation of wildlife

Poachers killed image from http://www.nelive.in/assam/news/poachers-killed-kaziranga-while-trying-sneak-rhino-habitats

A South African, 31 Zambians and seven Mozambicans were among 443 people arrested in Zimbabwe in 2016 for poaching, the national parks authority has said. [According to] the Zimbabwe Parks and Wildlife Management Authority (ZimParks) spokesperson Caroline Washaya-Moyo said there was an increase on arrests last year compared to 2015 when 317 were arrested.
Washaya-Moyo said locals, who constitute a majority of those arrested for poaching, are working mainly with colleagues from Zambia as well as Mozambique, targeting wildlife sanctuaries in the north-west and south-east of the country.  “Mozambican poaching groups target Gonarezhou National Park and Save Valley Conservancy, where they poach elephants. It has now emerged that most of the poaching taking place inland is being perpetrated by syndicate members of different groups, who are hired to form one larger organised gang,” Washaya-Moyo said.

However, the introduction of modern anti-poaching strategies, such as sniffer and tracker dogs as well as unmanned aerial vehicles (UAVs) she said, is likely to help boost anti-poaching activities. In September 2016 South Africa’s UAV and Drone Solutions (UDS) provided UAVs to Zimbabwe. The technology was deployed to Hwange National Park, Zimbabwe’s largest game park, to fight elephant and other wildlife poaching. Between 2013 and last year, poaching syndicates killed at least 300 elephants through cyanide poisoning in the park. “This silent poaching method has serious effects to the eco-system and is a potential threat to human life,” she said.

ZimParks released the 2016 report in a week it also announced the shooting to death of three suspected poachers in Hwange National Park and Hurungwe near Lake Kariba. Two were killed on 10 January in Hwange while one, believed to be a Zambian, was shot dead in Hurungwe on 11 January….

A Zimbabwean safari operator, Langton Masunda, blamed recurrent droughts, a difficult local economy and global restrictions in lion and elephant hunting for the high poaching cases in the country.  “Without money coming from hunting, communities derive little value from wildlife and when that happens they are tempted to poach. The economic conditions are pushing some to poach as well. So poaching at those low levels then escalate into wider scale and more organised poaching activities,” he said

Excerpts from Ian Nyathi,  Increase in number of poachers arrested in Zimbabwe as slaughter continues, http://www.defenceweb.co.za/, Jan. 16, 2017

An Undersea Network for Emergencies: DARPA Tuna

DARPA’s Tactical Undersea Network Architecture (TUNA) program completed its initial phase, successfully developing concepts and technologies aimed at restoring connectivity for U.S. forces when traditional tactical networks are knocked offline or otherwise unavailable. The program now enters the next phase, which calls for the demonstration of a prototype of the system at sea.

TUNA seeks to develop and demonstrate novel, optical-fiber-based technology options and designs to temporarily restore radio frequency (RF) tactical data networks in a contested environment via an undersea optical fiber backbone. The concept involves deploying RF network node buoys—dropped from aircraft or ships, for example—that would be connected via thin underwater fiber-optic cables. The very-small-diameter fiber-optic cables being developed are designed to last 30 days in the rough ocean environment—long enough to provide essential connectivity until primary methods of communications are restored.

Supplying power to floating buoy nodes on the open sea presents a particular challenge. During the first phase of the program, the University of Washington’s Applied Physics Lab (APL) developed a unique concept called the Wave Energy Buoy that Self-deploys (WEBS), which generates electricity from wave movement. The WEBS system is designed to fit into a cylinder that could be deployed from a ship or aircraft.

Excerpt from Networks of the Sea Enter Next Stage, DARPA website, Jan. 5, 2017

The Ghosts of 1904: the first genocide of the 20th century

image from wikipedia

Germany was sued for damages in the United States on January 6, 2017 by descendants of the Herero and Nama people of Namibia, for what they called a genocide campaign by German colonial troops in the early 1900s that led to more than 100,000 deaths .

See Herero v. Germany (pdf)

According to a complaint filed with the US District Court in Manhattan, Germany has excluded the plaintiffs from talks with Namibia regarding what occurred and has publicly said any settlement will not include reparations to victims, even if compensation is awarded to Namibia itself.

“There is no assurance that any of the proposed foreign aid by Germany will actually reach or assist the minority indigenous communities that were directly harmed,” the plaintiffs’ lawyer Ken McCallion said in an email. “There can be no negotiations or settlement about them that is made without them.”  The proposed class-action lawsuit seeks unspecified sums for thousands of descendants of the victims, for the “incalculable damages” caused.

The slaughter took place from roughly 1904 to 1908, when Namibia was a German colony known as South West Africa, after the Herero and Nama groups rebelled against German rule.According to published reports, victims were also subjected to harsh conditions in concentration camps and some had their skulls sent to Germany for scientific experiments.Some historians view what occurred as the 20th century’s first genocide, and a 1985 United Nations report said the “massacre” of Hereros qualified as genocide…

The plaintiffs…sued under the Alien Tort Statute, a 1789 US law often invoked in human rights cases.

The US Supreme Court narrowed the law’s reach in a 2013 decision, Kiobel v. Royal Dutch Petroleum Co, saying it was presumed not to cover foreign conduct unless the claims sufficiently “touch and concern” the United States.  McCallion said Kiobel and later rulings “leave the door open” for US courts to assert jurisdiction in genocide cases. The plaintiffs, including some from New York, also brought federal common law and New York state law claims.

Germany sued over early 1900s Namibia slaughter, Reuters, Jan. 6, 201

Who Owns the Internet Pipes

The ships that lay electronic cables across the ocean floor look like cargo vessels with a giant fishing reel on one end. They move ponderously across the open water, lowering insulated wire into shallow trenches in the seabed as they go. This low-tech process hasn’t changed much since 1866, when the SS Great Eastern laid the first reliable trans-Atlantic telegraph cable, capable of transmitting eight words per minute. These days, the cables are made of optical fiber, can carry 100 terabits of data or more in a second, and aren’t owned only by telephone companies.

Among the newcomers are a few of the world’s leading internet companies, which have concluded that, given the cost of renting bandwidth, they may as well make their own connections. Facebook and Microsoft have joined with Spanish broadband provider Telefónica to lay a private trans-Atlantic fiber cable known as Marea. The three companies will divide up the cable’s eight fiber strands, with Facebook and Microsoft each getting two. The project, slated to be completed by the end of 2017, marks the first time Facebook has taken an active role in building a cable, rather than investing in existing projects or routing data through pipes controlled by traditional carriers. Marea will be Microsoft’s second private cable; a trans-Pacific one is scheduled to come online in 2017.

In June 2016, Google said it had finished a data pipeline running from Oregon to Taiwan, and it has at least two more coming: one from the U.S. to Brazil; the other, a joint project with Facebook, will connect Los Angeles and Hong Kong. Amazon.com made its first cable investment in May, announcing plans for a link between Australia and New Zealand and the U.S. Worldwide, 33 cable projects worth an estimated $8.1 billion are scheduled to be online by 2018, according to TeleGeography. That’s up from $1.6 billion worth of cables in the previous three years. And bandwidth demand is expected to double every two years. ..

Cables are just one way to increase the supply of bandwidth and cut costs, says Chetan Sharma, an analyst and telecom consultant. Facebook is also working on satellites, lasers, and drones to deliver internet access to remote places, and Google has experimented with hot air balloons. So far, undersea cables remain the best option for crossing oceans—they’re cheaper, far more reliable, and largely unregulated. The United Nations treats ocean cables in much the same manner as boat traffic, meaning companies can lay and repair cables in international waters pretty much wherever they please, provided they don’t damage existing ones.So Silicon Valley will continue to pour money into technology pioneered in the telegraph era. “It’s about taking control of our destiny,” says Mark Russinovich, chief technology officer for Microsoft’s cloud services division, Azure. “We’re nowhere near being built out.”

Excerpt from Bet you Own Broadband, Bloomberg, Oct. 20, 2016