Daily Archives: March 26, 2010

Rio Tinto Deal Reveals Some Interesting Faces In Finance

Everything PR | Mar 23, 2010

by Phil Butler

Rio Tinto is interesting on more than one level. Outside today’s announcement that an Australian executive and three Chinese officials working with the mining conglomerate plead guilty to accepting bribes, there are the Chinalco deal, and other oddities afoot. Some of the investors in Rio Tinto, besides the new China connection that is, have their fingers in just about every natural resource pit there is.

Rio Tinto is currently the 4th largest mining conglomerate in the world. So, this deal between China and the UK/Australian company may not seem like big news, but looking just a degree or two left and right of the capital influx promised Rio Tinto by Chinalco (now number one by the way), it is interesting to watch the movers and shakers in resource commodities in the region and worldwide.
The Old World Charm of Natural Resources

Forget the deal, or lack of a deal as Goldman Sachs predicts in devaluing Rio Tinto, and consider who is behind the company founded on the river of the same name in Spain over a Century ago. If I brought up the Rothschild name again, would it surprise you? The Rothschild family took over control of the company way back in 1880, but the interesting part of this story fast forwards us to today. Jacob Rothschild, 4th Baron Rothschild, and other members of the world’s most famous banking family, still hold significant stakes in one of the old family businesses. A brief bit of research reveals Jacob Rothschild has at least two subsidiaries of his own wealth portfolio vested in Rio Tinto (among the many, many others).

Rothschild’s RIT Capital Partners held £12.5 million (PDF) of Rio Tinto in September. But more interestingly, Rothschild’s St. James Place Capital owned 3 percent of Rio Tinto at the beginning of this year. This may not seem all that interesting on face value, but consider the myriad of Rothschild holdings and subsidiaries. While not all that dramatic by themselves, other Rothschild investments, which by the way are as difficult to find out as hen’s teeth, reveal some interesting associations.

Full Story

WWF hopes to find $60 billion growing on trees

Tumucumaque in northern Brazil has been designated a ‘carbon sink’

The carbon credits scheme would make WWF and its partners much richer, but with no lowering of overall CO2 emissions, writes Christopher Booker .

Telegraph | Mar 23, 2010

By Christopher Booker

If the world’s largest, richest environmental campaigning group, the WWF – formerly the World Wildlife Fund – announced that it was playing a leading role in a scheme to preserve an area of the Amazon rainforest twice the size of Switzerland, many people might applaud, thinking this was just the kind of cause the WWF was set up to promote. Amazonia has long been near the top of the list of the world’s environmental cconcerns, not just because it includes easily the largest and most bio-diverse area of rainforest on the planet, but because its billions of trees contain the world’s largest land-based store of CO2 – so any serious threat to the forest can be portrayed as a major contributor to global warming.

If it then emerged, however, that a hidden agenda of the scheme to preserve this chunk of the forest was to allow the WWF and its partners to share the selling of carbon credits worth $60 billion, to enable firms in the industrial world to carry on emitting CO2 just as before, more than a few eyebrows might be raised. The idea is that credits representing the CO2 locked into this particular area of jungle – so remote that it is not under any threat – should be sold on the international market, allowing thousands of companies in the developed world to buy their way out of having to restrict their carbon emissions. The net effect would simply be to make the WWF and its partners much richer while making no contribution to lowering overall CO2 emissions.

Related

The 1001 Club: Bankers, intelligence agents, and raw materials executives striving for a sustainable future

WWF, which already earns £400 million yearly, much of it contributed by governments and taxpayers, has long been at the centre of efforts to talk up the threat to the Amazon rainforest – as shown recently by the furore over a much-publicised passage in the 2007 report of the UN’s Intergovernmental Panel on Climate Change. The IPCC’s claim that 40 per cent of the forest is threatened by global warming, it turned out, was not based on any scientific evidence, but simply on WWF propaganda, which had wholly distorted the findings of an earlier study on the threat posed to the forest, not by climate change but by logging.

This curious saga goes back to 1997, when the UN’s Kyoto treaty set up what is known as the Clean Development Mechanism (CDM). This allowed businesses in the developing world that could claim to have reduced their greenhouse gas emissions to make billions of pounds by selling their resulting carbon credits to those firms in the developed world which, under the treaty, would be obliged to cut their emissions. In 2001 the parties to Kyoto agreed in principle that trees in the southern hemisphere could be counted as “carbon sinks” for the benefit of CO2 emitting firms in the northern hemisphere. In 2002, after lengthy negotiations with WWF and other NGOs, the Brazilian government set up its Amazon Region Protected Areas (Arpa) project, supported by nearly $80 million of funding. Of this, $18 million was given to the WWF by the US’s Gordon & Betty Moore Foundation, $18 million to its Brazilian NGO partner by the Brazilian government, plus $30 million from the World Bank.

The aim was that the NGOs, led by the WWF, should administer chunks of the Brazilian rainforest to ensure either that they were left alone or managed “sustainably”. Added to them, as the largest area of all, was 31,000 square miles on Brazil’s all but inaccessible northern frontier; half designated as the Tumucumaque National Park, the world’s largest nature reserve, the other half to be left largely untouched but allowing for sustainable development. This is remote from any part of the Amazonian forest likely to be damaged by loggers, mining or agriculture.

So far all this might have seemed admirably idealistic. Despite the international agreement that forests could be counted as carbon sinks, there was as yet no system in place whereby the CO2 thus “saved” could be turned into a saleable commodity. In 2007, however, the WWF and its allies in the World Bank launched the Global Forest Alliance, with start-up funding of $250 million from the Bank, to work for what they called “avoided deforestation”. A conference in Bali, under the auspices of the UN Framework Convention on Climate Change (UNFCCC), which administers the CDM, agreed to a scheme called REDD (reducing emissions for deforestation in developing countries). Hailed as “the big new idea to save the planet from runaway climate change”, this set up a global fund to save vast areas of rainforest from the deforestation which accounts for nearly a fifth of all man-made CO2 emissions.

But still there was no mechanism for turning all this “saved” CO2 into a money-making commodity. The WWF now, however, found a key ally in the Woods Hole Research Center, based in Massachusetts. Not to be confused with the nearby Woods Hole Oceanographic Institute, a bona fide scientific body, this is in fact a global warming advocacy group, headed by a board which includes fund managers responsible for billions of dollars of private investments.

In 2008, funded by $7 million from the Moore Foundation and working in partnership with the WWF on the Tumucumaque project, Woods Hole came up with the formula required: a way of valuing all that carbon stored in Brazil’s protected rainforests, so that it could be traded under the CDM. The CO2 to be “saved” by the Arpa programme, it calculated, amounted to 5.1 billion tons. Based on the UNFCCC’s valuation of CO2 at $12.50 per ton, this valued the trees in Brazil’s protected areas at over $60 billion. Endorsed by the World Bank, this projection was presented to the UNFCCC.

But two more obstacles had still to be overcome. The first was that the scheme needed to be adopted as part of REDD by the UNFCCC’s 2009 Copenhagen conference, which was supposed to agree a new global treaty to follow Kyoto. This would allow all that “saved” Brazilian CO2 to be turned into hard cash under the CDM scheme.

The other was that the US should adopt a “cap and trade” scheme, imposing severe curbs on the CO2 emitted by US industry. This would boost the international carbon market, sending the price soaring as US firms flocked to buy the credits that would allow them to continue emitting the CO2 they needed to survive.

As we know, the story hasn’t turned out as planned. Amid the shambles at Copenhagen in December, all that could be saved of the REDD proposals was an agreement in principle, with the hope of reaching detailed agreement in Mexico later this year. Also lost in the scramble to save something from the wreckage was the small print that guaranteed the rights of indigenous peoples in rainforests, whose way of life – to the concern of groups such as Survival International and the Forest Peoples Programme – has already been severely damaged by REDD-inspired schemes elsewhere, such as in Kenya and Papua New Guinea.

Just as alarming to the WWF and its allies, who were hoping to make billions from Brazilian forests, has been the failure of the US Senate to approve the cap and trade bill championed by President Obama. Since the EU has excluded the rainforests from its own cap and trade scheme, bringing the US into the net is vital for the WWF’s hopes of finding “money growing on trees”. The price of carbon on the Chicago Climate Exchange has just plummeted to its lowest-ever level, 10 cents a ton.

The WWF’s dream has been thwarted – but the revelation that it could even be party to such a scheme may have considerable influence on the way this richest of all environmental campaigning groups is viewed by the world at large.

* Further details at www.eureferendum.blogspot.com

* ‘The Real Global Warming Disaster’ by Christopher Booker and Richard North is published by Continuum (£16.99)

Russian ‘Nuke’ Bombers Invade UK Airspace…Again

An RAF Tornado aircraft escorts one of the Russian bombers out of UK airspace

Sky News | Mar 25, 2010

by Laura Holmes

Two Russian bombers, capable of carrying nuclear weapons, have been caught flying over British airspace.

The unwelcome guests spent four hours flying over the Isle of Lewis despite being intercepted by two RAF jets.

A pair of 111 squadron Tornado F3 fighters took of from RAF Leuchars in Fife to locate the supersonic Tu160 bombers in the Outer Hebrides.

They shadowed the Russian aircraft as they flew south towards the coast of Northern Ireland and then turned north.

Wing Commander Mark Gorringe, commander of 111 Squadron, said: “This is not an unusual incident.

“People may be surprised to know that our crews have successfully scrambled to intercept Russian aircraft on more than 20 occasions since the start of 2009.

“Our pilots, navigators and indeed all the support personnel at RAF Leuchars work very hard to deliver the UK Quick Reaction Alert Force 24 hours a day, which can be scrambled in minutes, to defend the UK from unidentified aircraft entering our airspace, or aircraft in distress.

“It’s a very important job, defending the UK and helping to keep UK citizens safe.”

After being tailed for four hours, the Russians eventually left British airspace.

The Ministry of Defence stressed that there was no indication that the planes intended to enter British airspace.

The Tupolev Tu160 is a heavy bomber which was first deployed during the last years of the Soviet Union.

It has the heaviest take-off weight and the highest top speed of any combat aircraft.

At least 16 of the models are currently in service with the Russian air force.

Airport worker warned over body scanner ‘harassment’

Body scanner abuse?

CNN | Mar 25, 2010

London, England (CNN) — An employee at London’s Heathrow Airport has been given a police warning after allegedly making a lewd remark about a female colleague as she stood in a full body scanner by mistake.

The woman reported the incident to airport bosses and to police, according to the UK’s Press Association.

“Police received an allegation regarding an incident that happened at Heathrow Terminal 5 on March 10,” a Metropolitan Police spokesman told PA. “A first instance harassment warning has been issued to a 25-year-old male.”

Related

Pilots criticize security as Britain makes body scanners mandatory

A spokeswoman for BAA, which runs the airport, said that the allegations were being investigated and that “appropriate action” would be taken if the claims were substantiated.

“We treat any allegations of inappropriate behavior or misuse of security equipment very seriously and these claims are investigated thoroughly,” she told PA.

Heathrow and other British airports introduced full body scanners earlier this year as part of tougher security measures introduced following an attempt to blow up a Detroit-bound airliner from Amsterdam on December 25 last year.

British Prime Minister Gordon Brown said that scanners were necessary to combat “a new type of threat.”

But critics say the scanners breach people’s privacy rights.

“This incident highlights the risks to privacy and respect for human dignity that are posed by the use of full body scanners,” said Susie Uppal of the UK’s Equality and Human Rights Commission.

“The Government needs to take urgent and decisive action to ensure that incidents of this kind are not repeated. There needs to be a lawful system of training and conduct that is applied consistently across all airports, rather than the current haphazard and rushed approach which is already showing its flaws.”

Matthew Knowles of the aerospace trade organization ADS told PA body scanners were vital tools to protect travelers from possible terror attack and said safeguards had been put in place to protect passengers’ privacy.

“The development and deployment of this technology by industry and the authorities have been carried out with safeguards in place to prevent such alleged abuses happening when in use with passengers at airports.

“For example, in actual use the person operating the scanner is in a separate location to the passengers to prevent any such situation occurring.”

In a report issued Wednesday British lawmakers said that privacy concerns regarding body scanners had been “overstated.”

“Air passengers already tolerate a large invasion of their privacy and we do not feel that full body scanners add greatly to this situation. Privacy concerns should not prevent the deployment of scanners,” said the House of Commons’ Home Affairs Committee.

EU draws up plans for single ‘economic government’ to ‘prevent crisis’

Germany and France have tabled controversial plans to create an “economic government of the European Union” to police financial policy across the continent.

Telegraph | Mar 25, 2010

By Bruno Waterfield in Brussels

They have put Herman Van Rompuy, the EU President, in charge of a special task force to examine “all options possible” to prevent another crisis like the one caused by the Greek meltdown.

His mission will be to draw up a master-plan for the best way to oversee and enforce economic targets set in Brussels as a key part of a bail-out package for Greece.

The options he will consider include the creation of an “economic government” by the by the end of the year.

“We commit to promote a strong co-ordination of economic policies in Europe,” said a draft text expected to be agreed by EU leaders last night.

“We consider that the European Council should become the economic government of the EU and we propose to increase its role in economic surveillance and the definition of the EU’s growth strategy.”

Gordon Brown was last night examining the wording of the statement to see whether it was restricted to eurozone members or has possible implications for British economic sovereignty.

Officials are concerned that the language calling for an “economic government” could be another attempt at a power-grab in the wake of the Lisbon Treaty.

It comes at a time when a Conservative government has promised Britons a vote on any new EU treaty if it wins the general election.

The contentious language was contained in a Franco-German document prepared for an emergency meeting of the 16 “eurozone” countries, in the wings of a summit in Brussels.

The talks, over a pre-dinner aperitif, decided on an EU-led “mechanism” for bailing out the crisis-hit Greek economy with the help of the IMF if necessary.

Combined with the aid is a German plan for tougher sanctions for countries, such as Greece, that run up massive public debts while failing to reform uncompetitive economies.

Mr Van Rompuy, the former Prime Minister of Belgium, is an enthusiastic supporter of “la gouvernement économique” and last month upset many national capitals by trying impose “top down” economic targets.

Angela Merkel, the German Chancellor, has called for the Lisbon Treaty to be amended in order to prevent any repetition of the current Greek crisis, which has threatened to tear apart the euro.

“I will push for necessary treaty changes so that we can act sooner and more effectively when things go wrong, including with targeted sanctions,” she said.

If Chancellor Merkel’s idea gains momentum, Croatia’s likely EU membership next year would need an “amending Treaty” providing an easy opportunity to lever in proposals for economic government.

When the Lisbon Treaty was agreed, European leaders, including Mr Brown, said that it would be the last attempt to change the EU’s basic rules until least 2020.

Britain is not a euro member, but it is a signatory to the Maastricht and Lisbon treaties that already require London to submit budgetary reports. Britain ia also required, under recent proposals from Mr Van Rompuy, to observe EU targets on employment, research spending, green technology, education and poverty reduction.

Rotarix rotavirus vaccine contaminated with pig virus

CNN | Mar 22, 2010

By Tom Watkins

About 1 million children in the United States and about 30 million worldwide have gotten Rotarix vaccine, the FDA says.

(CNN) — Federal health authorities recommended Monday that doctors suspend using Rotarix, one of two vaccines licensed in the United States against rotavirus, saying the vaccine is contaminated with material from a pig virus.

“There is no evidence at this time that this material poses a safety risk,” Food and Drug Administration Commissioner Dr. Margaret Hamburg told reporters in a conference call.

Rotarix, made by GlaxoSmithKline, was approved by the FDA in 2008. The contaminant material is DNA from porcine circovirus 1, a virus from pigs that is not known to cause disease in humans or animals, Hamburg said.

About 1 million children in the United States and about 30 million worldwide have gotten Rotarix vaccine, she said.

Rotavirus disease kills more than 500,000 infants around the world each year, primarily in low- and middle-income countries, she said. Before rotavirus vaccine became available, the disease was blamed for more than 50,000 hospitalizations and several dozen deaths per year in the United States, she said.

The FDA learned about the contamination after an academic research team using a novel technique to look for viruses in a range of vaccines found the material in GlaxoSmithKline’s product and told the company, Hamburg said. The drug maker confirmed its presence in both the cell bank and the seed from which the vaccine is derived, suggesting its presence from the early stages of vaccine development, she said. The FDA then confirmed the drug maker’s findings.

GlaxoSmithKline emphasized Monday that the pig virus is not known to cause illness in humans, saying “it is found in everyday meat products and is frequently eaten with no resulting disease or illness.”

“No safety issue has been identified by external agencies or GSK,” Thomas Breuer, the drug maker’s chief medical officer, said in a written statement. “GSK is committed to patient safety and to the highest manufacturing standards for all our vaccines and medicines. We are already working closely and discussing this finding with regulatory agencies around the world.”

Another vaccine, RotaTeq, is made by Merck and was approved in 2006. There is no evidence that the Merck product is affected, Hamburg said. Both vaccines are given by mouth to infants to prevent rotavirus disease, which is marked by severe diarrhea and dehydration.

Asked whether Merck would be able to meet the nation’s demand, Merck spokeswoman Pam Eisele said, “Obviously, we will work with the … FDA to evaluate supply needs.”

In the next four to six weeks, the drug agency will convene an advisory committee to make recommendations and seek input on the use of new techniques for identifying viruses in vaccine, Hamburg said.

“We’re not pulling it from the market, we’re just suspending its use during this period while we’re collecting more information,” she said. “It should not be in this vaccine product and we want to understand how it got there. It’s not an easy call and we spent many long hours debating the pros and cons but, because we have an alternative product and because the background rates of this disease are not so severe in this country, we felt that the judicious thing to do was to take a pause, to really ask the critical questions about what this material was doing in the vaccine, how it got there.”

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health, said “a substantial amount” of the DNA was found in the vaccine. But, he stressed, “there is no evidence that it causes any disease. … There is no evidence that it ever does anything.”

The research group that discovered the contamination has asked not to be identified pending its paper’s publication in a scientific journal, Hamburg said.

Anyone who has already received a dose of Rotarix should switch to the Merck product for the next two doses, Hamburg said. Preliminary testing of the Merck product has found no evidence of the porcine circovirus 1 DNA, she said. Doctors should be able to tell parents which of the two products their children received, she said.

Hamburg stressed that the suspension applies only to the United States. Public health officials in countries where the incidence of rotavirus is more severe may decide that the benefits of continuing to use the vaccine outweigh any concerns raised by the contamination, she said. “Such a decision would be very understandable,” she added.

A similar virus, porcine circovirus 2, also does not cause disease in humans, but it does cause disease in its pig host, Hamburg said.

Venezuelan TV channel owner arrested in widening government crackdown aimed at silencing critics

The owner of Venezuela’s only television channel that remains critical of President Hugo Chavez was arrested on Thursday, spurring concerns among rights activists of a widening government crackdown aimed at silencing critics.

Telegraph | Mar 25, 2010

Attorney General Luisa Ortega said a warrant was issued for the arrest of Guillermo Zuloaga, owner of the TV channel Globovision, for remarks that were deemed “offensive” to the president.

Zuloaga said that military intelligence agents detained him at an airport in the northwestern state of Falcon.

Ortega said prosecutors are investigating Zuloaga for statements he allegedly made during a recent Inter American Press Association meeting in the Dutch Caribbean island of Aruba, where media executives from across the Americas criticised Chavez’s government for limiting freedom of expression.

Pro-Chavez lawmaker Manuel Villalba urged prosecutors on Wednesday to investigate Zuloaga for allegedly saying that Venezuela’s government is cracking down on its critics and purportedly commenting that it was a shame that a short-lived 2002 coup against Chavez failed.

“He must assume his responsibility,” Villalba told state-run Radio Nacional.

The arrest came three days after opposition politician Oswaldo Alvarez Paz was detained for remarks made on a Globovision talk show on March 8.

Alvarez Paz has been charged with conspiracy, spreading false information and publicly inciting crime after remarking that Venezuela has turned into a haven for drug traffickers. He also said he backed allegations by a Spanish judge that Venezuela’s government has co-operated with the Basque separatist group ETA and Colombian rebels.

Chavez has dismissed those accusations as lies. Alvarez Paz stands by his words and denies breaking the law.

Carlos Correa, director of the local Espacio Publico rights group, condemned Zuloaga’s arrest. “These types of actions against freedom of expression, and against the right that all Venezuelans have to listen to plurality, distinct visions, must be rejected,” he said.

Correa noted that the Inter-American Commission on Human Rights, an arm of the Organization of American States, has expressed concern regarding what it calls increasing persecution of government critics in Venezuela.