News: Norway's wealth fund blacklists Rio Tinto

Ethics of investing, can activist shareholders make a difference? Here a major investor talks with its feet by walking away from Rio Tinto for stomping all over local environment in Indonesia with its heavy mining boots.

Reuters reported today that Norway's sovereign wealth fund sold out its stake in Rio Tinto - the worlds largest mining company - in protest against its environmental credentials.

Specific reference was made to the Grasberg mine in Indonesia, and the Finance Ministry is reported as having said yesterday Rio Tinto was a joint venture partner in this mine with US-based Freeport McMoRan Copper & Gold, which was blacklisted by the Norwegian fund in 2006, and as having referred to the "severe environmental damage'' being inflicted at this site.

Rio Tinto spokesman Nick Cobban is reported as saying that the environmental measures at the mine were deemed satisfactory by independent audits. He also said that even though Rio Tinto owns a 40% stake in the mine, it is Freeport which runs the operations. "We are surprised and disappointed by the ministry's decision,'' Mr Cobban said.

The ministry also said however that it decided to continue its investments in US-based Monsanto, which develops genetically modified plants, despite recommendations by their ethics council to exclude the firm over concerns it was using child labor in India.

According to the ministry, Norway's ownership activities in Monsanto "have contributed to a significant reduction in the use of child labour in the company's hybrid cotton seed production in India.''

Rio shares had another bad day, losing 5.1%, or $5.47, to close at $102.03, their lowest since September. Major investors and minor stake holders should get active!

Event: Media Talk - Is Somalia the new Front in the War on Terror?

Thu 11th September, 7.30pm Price: £10.00

Chaired by Patrick Smith (Africa Confidential)

Ahmed Abdisalam (TFG)
Mohamed Gure (Somali Concern Group)
Sally Healy (Chatham House)
Mary Harper (BBC)


Location: 13 Norfolk Place, London W2 1QJ

This event will be webcast live on Fontline Club's website - you can view it for free via the link - www.frontlineclub.com


Since 1991, Somalia has been a dangerous, violent and lawless place, home to numerous conflicts and civil war. From localised inter-tribal and clan warfare, to regional tensions and international disputes, Somalia remains a highly complex battleground. Is Somalia really the new home to Al-Qaeda and the next front in the War on Terror?

Somalia's intricate and fiercely loyal clan-based system means that the country is primarily under the control of clan militia. On a regional level, the longstanding tensions with Ethiopia continue, while the proxy war between the US-backed Ethiopian government and the Eritrean government - which backs the Islamic Courts Union (ICU) - adds an international dimension to the wars.

As power struggles and violent clashes continue between the Transitional Federal Government (TFG) and the ICU in the centre and south of the country, the emergence of Al-Shabab - whom the US have branded a terrorist group linked to Al Qaeda - has exacerbated the situation and fuelled speculation that Somalia is the new front on terror and harbouring international terrorist networks.

While the risk of new fighting between Ethiopia and Eritrea is apparently higher than ever as the UN ends its border peacekeeping mission, we examine and demystify the many wars in which Somalia is involved, and which make it such a violent and politically charged country. Is Somalia really the new front on terror?

Ahmed Abdisalam is Deputy Prime Minister and Minister of Information, Youth & Sports for the Somali Transitional Federal Government.

Mohamed Gure is a Somali political activist and one of the founders of the Somali Concern Group (SCG) - a political organization that represents the interests of Somalis at home and abroad. The SCG was established in June 2003 and is a voluntary non-governmental, non-profit organization established to promote peace and reconciliation between warring Somali groups through dialogue.

Mary Harper is an African specialist for the BBC.

Sally Healy OBE is an Associate Fellow of the Africa Programe at Chatham House. She was formerly an East Africa specialist at the Foreign Office. She led a collaborative study of conflict in the Horn of Africa, the findings of which were published by Chatham House in June 2008: Lost Opportunities in the Horn of Africa: how Conflicts Connect and Peace agreements unravel.

Patrick Smith is editor of Africa Confidential

Links

Africa Confidential
http://www.africa-confidential.com/home

Frontline Club
http://www.frontlineclub.com/index.php

Blogger: Somalia
http://crigler-somalia.blogspot.com/

Analysis: Has oil gone M.A.D?

Economic mutually assured destruction? What do trends in high oil prices
mean for global geopolitical stability? Who can afford to disrupt oil
production or supplies? Importers cannot sustain higher prices and fear the
pain, exporters cannot afford the damage higher prices would do to their
export markets and inevitable demand side adjustment.

Given the mutual
interdependence of Russian and European markets, rumoured threats published today (Kommersant and the Telegraph in the UK) that Russia could cut some oil supplies to Europe as soon as Monday in response to European threats of sanctions seem unlikely to materialise, as do the sanctions themselves. Since August 8th and the outbreak of the current Georgia conflict, un-surprisingly there has been a Westward flight of money from Russia. Renaissance Capital suggest US$8-20bn has left the country August 8th to 15th and the flight continues in response to geopolitical destabilisation.
What do trends in high oil prices mean for geopolitical stability?

The world has witnessed a string of "oil wars" as concerns over energy
security rise and major economic powers vie to secure resources for present
and future. With oil prices now as high as they are however, and
threatening to shoot back up to their recent record levels and beyond at
the slightest provocation, the geopolitical situation seems to have grown
increasingly precarious, precarious to the point perhaps, where it is not
unreasonable to speculate that where oil has precipitated conflict, at
current prices oil may have a certain geopolitical stabilising affect -
after all with oil prices already at nose-bleed levels, the pain that would
inevitably be induced by any conflict in an oil region and the consequent
disruption to supply/production, seems likely to have an inhibiting effect
(not least of course for a major oil importing economy such as the US).
This is not a happy or a comfortable equilibrium however, since it is an
order bound together only by a principle of mutually assured destruction
(M.A.D) and increasing competition for resources will increasingly stress
this balance.

With ever more fractious power manoeuvres in eastern Europe, and the Arctic
increasingly crowded with a buzz of survey ships and submarines from all
sides of the circle fighting over where continental shelves begin and end
etc. it seems clear that, current bickering over who is starting the new
cold war aside, we are clearly returning to a cold war type geopolitics.
While things have clearly been brewing for some time, it is sobering to
speculate on the significance of the latest developments in the Georgia
conflict which apparently marks a clear aggressive shift in Russian foreign
policy: an ever more confident and assertive Russia has declared itself
"not afraid of another cold war" and Russia's representative to NATO Dmitri
Rogozin declaring that "There are two dates that have changed the world in
recent years: September 11, 2001, and August 8, 2008," Mr Rogozin explained
that the West has not fully grasped how the Georgia conflict has heightened
Russians' fears about being surrounded by NATO. "They are basically
identical in terms of significance. September 11 motivated the United
States to behave really differently in the world," he said. "That is to
say, Americans realised that even in their homes, they could not feel safe.
They had to protect their interests, outside the boundaries of the US. For
Russia, it is the same thing."

The undeniable economic interdependence of Russia and the west as suppliers
and markets is bound we must expect, to keep this a cold war and to keep
the situation from escalating beyond certain bounds, but given the shift in
Russian sentiment and confidence, there seems to be something of a question
mark over what to expect next from Russia which cannot be good for business
relations and this incident may well demonstrate how tied, in many ways,
Europe's hands are as they are forced to accept the situation.

Event: The Credit Crunch

Graham Turner in conversation with economics editor for The Guardian Larry Elliot

Thursday, September 11, 2008, 6:30pm - 8:00pm
Waterstone's, 82 Gower St

Something else for your diary. I will review this book and raise some questions concerning the credit crunch and global economy post event. For now here is a brief outline of book and event for any body interested to check it out or come along:

This book argues that the current financial turmoil signals a crisis in globalisation that will directly challenge the free market economic model. Graham Turner claims to show that the housing bubbles in the West were deliberately created to mask the damage inflicted by companies shifting production abroad in an attempt to boost profits. As these bubbles burst, economic growth in many developed countries will inevitably tumble he says. The Japanese crisis of the 1990s shows that banks and governments may struggle to contain the fallout he argues, stating that the problem has not been limited to the US, UK and Europe but that housing bubbles have become endemic across wide swathes of emerging market economies. As the West slides, Elliot says, these countries will see an implosion of their credit bubbles too, shaking their faith in the free market.

Turner is an economic forecaster, who founded and runs an independent financial and economic consultancy - GFC Economics (See link below).

Graham will be discussing and signing his new book with Larry Elliot of The Guardian

Tickets £2 redeemable against the price of the book

Links:

Book
http://www.plutobooks.com/cgi-local/nplutobrows.pl?chkisbn=9780745328102&main=

GFC Economics
http://www.gfceconomics.com/index.html

Event: FOOD versus/and FUEL

Malcolm Shepherd probes increasing concerns surrounding and policy shift away from biofuels.

Monday 29th September, 18:45 to 20.45

The Gallery, 70/77 Cowcross Street, Farringdon, London, EC1M 6EJ

The production of biofuels from agriculture to replace fossil fuels was originally widely applauded, but concerns over the displacement of food production, doubts about carbon savings, and dismay over deforestation for land use are increasingly shifting public opinion and putting pressure on policy. In July the UK government announced a reduction in its biofuel targets.

Malcolm Shepherd asks however, if the bio-fuel picture has been over simplified, and misinformed by powerful interests, including those who don't want to lose their lucrative market share in liquid fuels?

Malcolm Shepherd is Managing Director of Biofuel Matters Ltd, a company that provides specialist consultancy services on biofuel issues, and he has spoken widely on his investigations into the issues and facts surrounding the "food versus fuel" debate.

He on the current complex situation, he will suggest that if properly produced, the use of food crops for biofuels can actually improve food security, stabilise food prices and reduce poverty. (BBC radio programme “Our food, our future” 28th July)

Link:
http://www.mondediplofriends.org.uk/calendar.htm

Event: Beyond Microfinance:

"The Next Frontier For Sustainable Poverty Alleviation"

Rosalind Copisarow
Chair of the Board, Global Village Energy Partnership; former Chief Executive, International Development Enterprises.

18th September, 6.30-8pm. DFID, 1 Palace Street, London SW1E 5HE

Presentation
When micro-finance first started, enabling ‘access to finance’ was considered virtually automatically to lead to ‘poverty alleviation’. Over time, however, the many important innovations increasing access to finance have not translated into the same levels of poverty alleviation. More importantly, the vast majority of the world’s unbanked will remain below the reach of MFIs unless an integrated package of support is made available to them. In her presentation, Rosalind will provide examples of organizations that have successfully combined micro-finance with other support tools and show how this approach could well be the next big breakthrough towards eliminating global poverty.

Speaker
After 15 years in investment banking with Citigroup, HSBC and JP Morgan, followed by 13 years in micro-finance largely pioneering cutting edge products and models of delivery, Rosalind is now on her third career, most recently as Chief Executive of International Development Enterprises (IDE). She is applying her business and financial skills and passion for working with micro-entrepreneurs to the service of the 2 billion people either below the reach of MFIs or for whom micro-finance is inadequate as a stand-alone tool to help them out of poverty. A serial social entrepreneur, Rosalind is now starting her fourth social enterprise, to be based in the UK, having founded and led three microfinance-related organizations: Fundusz Mikro in Poland, Street UK and the Microfinance Centre for Central and Eastern Europe. Rosalind has written a number of publications, perhaps the most influential of which, “Self-Employed People in the Informal Economy: Cheats or Contributors?” (2004), offers a secure platform for the transition of UK micro-entrepreneurs into the formal economy. Rosalind holds a BA in Human Sciences from Oxford University, an MBA from the Wharton School and an MA in Latin American studies and Spanish from the University of Pennsylvania. In 2000, she was awarded the Officer’s Cross of the Order of Merit of Poland.

Information about Rosalind’s new social enterprise which packages modular kits to build decent homes with home-based income-generating opportunities and microfinance
The organization will operate in the areas of overlap between the housing, renewable energy, water and sanitation, micro-enterprise development and micro-finance sectors. Its objective is to improve the living conditions of the 2 billion people currently inhabiting shacks without water, sanitation or power, in such a way that it also builds their short term income and long term assets, leaves the lightest possible ecological footprint, and insulates them as much as possible against major political and economic risks likely to directly affect them.

Attendance:
If you are interested to attend, please register online at London Microfinance Club's site by filling in their online attendance form (No later than 10am on Friday, 12th September 2008).

http://www.microfinanceclubuk.co.uk/

Event: Commodity Prices, Capital Flows and the Financing of Investment

Secretary General of UNCTAD Supachai Panitchpakdi, will present The Trade and Development Report 2008, subtitled "Commodity Prices, Capital Flows and the Financing of Investment.”

Tuesday 2nd September 2008, 18.30-20:00
Key Speaker: Supachai Panitchpakdi
LSE, New Theatre, East Building
Discussants: Heiner Flassbeck and Professor Robert Wade
Chair: Professor Stuart Corbridge

The report, which is under embargo until 4 September 2008, highlights the implications of commodity price volatility and one of the major paradoxes of globalization, namely that the “capital poor” developing world is exporting capital to the “capital rich” developed countries. Moreover, those developing countries that are the largest capital exporters tend to invest more domestically and to grow faster than those that still depend on capital imports. These facts create serious puzzles for mainstream economic models and reject most of their predictions. The report calls for a fresh approach to development financing that focuses less on the mobilization of savings and more on the direct stimulation of investment. UNCTAD also makes an important contribution in the report to the Doha Conference to review the implementation of the Monterrey Consensus on financing for development (Qatar, 29 November - 2 December 2008).

Supachai Panitchpakdi began his four-year term as Secretary-General of UNCTAD on 1 September 2005, following his appointment by the UN General Assembly. Dr. Supachai previously served as Director-General of the World Trade Organization (September 2002 to August 2005). He is a former Deputy Prime Minister of Thailand who was entrusted with oversight of the country´s economic and trade policy making. In this role, he was actively involved in international trade policy and represented Thailand at the signing ceremony in Marrakech of the Uruguay Round Agreement in 1994. He was also active in shaping regional agreements, including Asia Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN) and the Asia Europe Meeting (ASEM).

Heiner Flassbeck is UNCTAD Director of Division of Globalization and Development Strategies. Robert Wade is Professor of International Political Economy at LSE.

The United Nations Conference on Trade and Development was established in 1964. UNTAD promotes the development-friendly integration of developing countries into the world economy. It has evolved into an authoritative knowledge-based institution whose work aims to shape policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.

The event is free and open to all with no ticket required. Entry is on a first come, first served basis. For more information, email events@lse.ac.uk or phone 020 7955 6043.

http://www.lse.ac.uk/collections/LSEPublicLecturesAndEvents/events/2008/20080728t1155z001.htm