The Mirror November/December 2011

t h e E M i r r o r E 1

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R e f l e c t i o n s & o b s e R v a t i o n s


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NOVEMBER –DECEMBER 2011

Is the World becoming a better place?

Protests can paint the picture

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Reflections and observations

the Mirror’s FacesMANAGING EDITORDoug GreenRESEARCHWORDSPRODUCTION & DESIGNKarl GrantADMINISTRATION & SUBSCRIPTIONSMedia Hawkes Bay Ltd

ADVERTISING ENQUIRIES06 870 [email protected] O Box 1109,Hastings, New [email protected]

editorial 3Protests can paint the

picture. 6

Caution urged to resolve food crisis.

14

The dragon’s shadow.

16The Global Oil Price Story.

20

Sustainable palm oil.

contents

The Mirror is published bi-monthly and offers the Reader reflections and observations on the issues of our times. The Mirror welcomes editorial contributions and encourages readers to share their reflections and views with us. The Mirror uses information provided in good faith. We give no guarantee of accuracy of the information. No liability is accepted for the result of any actions taken or not taken on the basis of this information.Those acting on the information and recommendations do so entirely at their own risk.

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Occupying planet EarthAs you can gather from our cover feature which appears

on Page 3, we are focussing this issue on the differences which are making living intolerable for people around the world. The Occupy Wall Street movement which is now in other countries highlights a whole raft of issues which really do show the imbalances on this planet of 7 billion people.

Overnight the Greek government is calling for a vote to have their financial rescue package put into action so the situation has changed already.

Food availability is becoming a real problem, especially with the economic growth of emerging nations like China and India. This has brought resource price hikes including crude oil as well as a rapid increase of livestock product consumption due to an income increase among the people in emerging nations.

Funny about that. There has recently been comment on whether oil will fall in price now in Libya now that Gadaffi is no longer around. Again as long as consumption is high (in demand) prices for oil will stay that way too.

Overall, in the scheme of things, we’re in a mess. Social unrest around the globe threatens stability because people are not getting a fair go. How on earth is the planet going to look after 7 billion people today when she is struggling? When we get to 50 billion who will be growing the crops, what will the quality of the soil be like? Will there be enough transport to move the goods around the world?

You concerned about these comments? I hope so be-cause it’s about time we all did something about the pressures of life we currently have and the future we are facing.

The world is not caring enough for its people. Send in your ideas on how to make a difference.

Overall, in the scheme of things, we’re in a mess. Social unrest around the globe threatens stability because people are not getting a fair go.

mailto:[email protected]





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Every single thing we do on this planet can bring about protest. For every decision we make, there can be another person who disagrees with it. Fair enough, it’s called freedom of speech, freedom of thought or democracy.

There are times when protest occurs because of discrimination and the evil that men do. And there is a lot of that going on. Think Enron, starvation in Africa, the indiscriminate choice of who in the military will be sent to a foreign war, destruction of the rain forests and of late, Wall Street.

The cover of this issue shows a scene from the Occupy Wall Street protest which has found root in other countries including the United Kingdom, Australia and New Zealand. A strong message is coming forth: those who have, who continue to have, have done so at the expense of those who have not –those who have lost money via financial institutions and those who continue to face an uncertain life because of a lack of financial resources.

And then there is Europe... a real blight on life because of the continuing uncertainty of debt in countries like Greece and Spain... and the United Kingdom. The people who are having their social security trimmed, who have lost their jobs and are struggling to hang on have a point. They want to know why they have to suffer while the wealthy continue to exploit and reap the rewards.

Let’s look at some other examples... tyrants like Muammar Qadaffi and Saddam Hussein, Idi Amin, don’t exist anymore. For years they pillaged their country’s resources to look after their own, to build enormous financial reserves and assets to benefit their families and hangers –on.

Remember Nicolae Ceausescu in Romania? He and his fellow officials had suits made for them out of third-rate materials to illustrate to their people how broke the country was – only to go to resorts of a weekend, living the life of Riley while the people went without.

Man’s inhumanity to man is not new...it is a giant toothache which continues to cause pain around the world. Right now, while you are reading this, someone is being dishonoured, made powerless, impotent and made to feel inadequate because of an

Protests can paint the pictureoverbearing, bullying approach to power and greed by another person or a country.

In the beginning of this year there was discussion about the vulnerability of the Arab world because of the single-minded dictators (like Gadaffi, like Assad) who lived there. It was even suggested that one by one these kinds of rulers will fall. This projection is looking more and more likely with those who made the change in Libya suggesting to those in Syria that they do the same thing.

And it’s not only leaders in such countries who need to be on their toes. Some of the world’s largest institutions controlled by philanthropists may need to keep their eyes open especially as they are seen as beneficiaries to other’s misfortune.

It needs to be said here, though, that we can also make our own luck; that envy for another man’s success can only be that.

Lawlessness is not acceptable. Destroying a person’s livelihood through envy is a criminal offence.

But flip over the coin and feel compassion for those manipulated by economic systems – by greed merchants who want to take all.

Consider through globalisation the sweat shops of Asia where workers have to buy their own fresh water from the meagre amount of money they are paid.

Now think of the unbranded pair of jeans they manufacturer for a pittance which is sent to a country, where once to be labelled and sold for an exorbitant amount of money. Much more than what

There are times when

protest occurs because of

discrimination and the evil

that men do.



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Also consider, however, the fact that some of these workers have been given a job and their children an education. A positive side, a glimmer of hope.

The Occupy Wall Street protesters, from Seattle to Sydney, are dissatisfied about the state of their economy and their country and the unfair way the poor are being treated while the rich keep on keeping on.

The point of this article is that once upon a time protestors were seen to be from the left, or misguided, or even

It has been ten years since the September 11 terrorist attacks shocked the world. Over these past ten years, the world has been swayed by the “war on terrorism” through events such as the attacks on Afghanistan and the war with Iraq, triggered by 9.11. Obama’s having assumed the presidency has not changed the fact that the Middle East is a battlefield, and the Middle East peace problem has remained at an impasse.

There came the sudden Jasmine Revolution in Tunisia, Egypt’s “January 25 Revolution” that was inspired by the Jasmine Revolution, and the regime collapses in Arab nations, all while those in the Arab nations were still filled with a sense of stagnation toward the state of affairs. As authoritarian Arabian regimes, which had been believed to never budge, were overthrown by mass demonstrations, media and intellectuals in Europe and the US have become optimistic that democratization would start to spread in Middle Eastern nations in a domino effect.

One wonders, however, if spring has really come to the Arab world. At the moment, it is a little too early to be joyful about spring having come to the countries where the regimes were overthrown. Spring in Arab nations, centered on the ones in North Africa where the regimes have collapsed, is an unstable season where sandstorms continue for tens of days before the flowers start to bloom.

The Eastern European Revolution and the “Arab Spring”

The optimistic view that the media in Europe and the US have in calling the political changes in Arab nations the “Arab Spring” is due to their seeing these changes the same way they saw the Eastern European revolution of 1989. To be sure, there is one thing that the “Arab Spring” and the Eastern European revolution definitely have in common—namely, the fact that rigid regimes were toppling one after another from demonstrations by the public. However, the backgrounds of the revolutions in both regions are fundamentally different.

What the people of the Eastern European nations hoped for were the political freedom and prosperous societies that came with it. Clear visions of the new structures to be established were spread over the Western European nations just next to them. All that needed to be done next was to go ahead with the ideal models. However, the situation is completely different with Arab nations. Of course the Arabian people wanted political freedom and prosperous societies as did the people of the Eastern European nations, but what they wanted the most was, in a word, fair societies. The forming of the unjust societies that the Arab people renounced was actually not so long ago.

Except in Libya, in which no constitution or assembly existed and the dictator

people with time on their hands for a ‘rent a protest’. But not anymore. They are but a reflection of a heck of a lot of ill-feeling in a world of so much disenchantment.

They want a lot of different things to happen in different ways in different countries. It may be higher taxes for the rich, jobs for young people, cheaper housing, and keeping pensions for the elderly.

Across the world we need change, a decent review of how we are doing things. The old systems are not working anymore.

-Doug Green

Is the World Becoming a Better Place?One wonders, however, if spring has really come to the Arab world. At the moment, it is a little too early to be joyful about spring having come to the countries where the regimes were overthrown.

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known as Gaddafi was synonymous with the state, the IMF’s structural adjustments have been embraced and huge pushes toward market economies have been made in countries with fallen regimes such as Tunisia, Egypt, and Yemen since the 1990s, when Eastern European nations were struggling to work toward building market economies. State enterprises were dissolved and the middle class was impoverished. A new class of businessmen emerged, on the other hand, and they took important positions in the ruling party with the help of enormous amounts of funds, and crony capitalism—where they became cronies to presidents and their successors while gaining political power as well as economic benefits—was progressing. In other words, the regime collapses in the Arab nations described above also represented denial of the paths that the Eastern European nations had followed under the name of democratization, the neo-liberal economic systems.

Instability after the Revolution

As the paths that the new nations should take are still unclear, the interim governments designed to run the nations after the regime collapses are groping in working on their national frameworks while negotiating with people including groups that constituted demonstrators (referred to as “demonstration groups” tentatively), opposition parties, religious groups, and others who had been isolated from political spheres in the past. However, the policymakers in these times of instability are facing difficulties that have never been experienced before.

New tools of information transmission that apply social networks typified by Facebook have played a major role in the toppling of the governments. Facebook is effective in mobilizing unorganized people and bringing down something huge, but it is extremely ineffective when it comes to coordinating and outlining diverse opinions.

The demonstration groups that are negotiating with the interim governments are lacking clear structures of leadership

and are repeatedly undergoing factional splits and reorganization. The citizens have discovered, however, that demonstrations and sit-down protests are fast and effective ways to exert enormous pressure on government. As a result, there are frequent demonstrations by young people who may block off the roads when their demands are not met, and often even turn into mobs. This is particularly noticeable in Egypt.

Sea Voyages without Compasses

These confusions could be seen as acceptable losses if they were labour pains in the establishing of Arabian-style democracy. The interim governments of countries such as Egypt are compromising with the sometimes emotional public opinion at the moment, however, while still unable to find the right path to the building of new systems between real society and public opinion. History has shown what continued compromise with public demand leads to. Egypt’s second president Nasser gave in to the public’s demand for the overthrowing of Israel and went to war with Israel, though he had been reluctant about entering into the war. This led to the devastating defeat of Egypt and other Arab nations with the occupation of the West Bank of the River Jordan and East Jerusalem, the Golan Heights, and the Sinai Peninsula (gradually returned to Egypt after 1982) and worsened the Palestinian problem, which still continues to this day. The future of the Arab nations and regional stability depends on how well future political leaders can persuade the sometimes emotional masses.

The world may have once again entered a new age of turmoil, ten years after 9.11.

Is the World Becoming a Better Place?

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The interim governments

of countries such as

Egypt are compromising

with the sometimes emotional

public opinion at

the moment, however, while still unable to

find the right path to the building of

new systems between

real society and public

opinion.



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The world has faced food crises twice since the latter half of the 20th century.

The first one took place in 1973. The world end of term grain stock ratio, which had been on the decline for some years because of the worldwide grain failure, sank to a record-low of 15.4% in 1972. In the same year, the Soviet Union became a net-importer of grain due to the increase of livestock products consumed by the Soviet people.

The 1973 crisis was caused by factors such as the bulk purchase of grain by the Soviet Union under the circumstances of poor harvest, and the U.S. placed an embargo on soybeans, albeit for a short period of time. The impact was so enormous that they named it the Reappearance of the Ghost of Malthus, and grain was referred to as the third strategic material behind nuclear weapons and oil.

After that, however, countries including the European Community (EC) steered toward the enhancement of agricultural production, which considerably alleviated the condition of grain supply and demand.

While protecting national borders by levying import surtaxes under the Common Agricultural Policy, the EC protected intraregional agriculture through generous support for farm product prices.

As a result, they were plagued by excess produce in the 1980s. The EC implemented the raw milk quota system in 1984, and the

U.S. also undertook the set-aside.

The world grain market substantially shifted to the tone of excesses. The EC, which had failed to eliminate such excess, exported excess agricultural products to developing countries with export subsidies, and the U.S. used the said subsidies in defiance, causing a dumping battle with financial burdens.

The agricultural negotiations in the Uruguay Round of GATT started in 1986 under the theme of removing the market distortion through agricultural protection by such developed countries, and the parties reached an agreement in 1993 based on the basic rule of reducing production-stimulating agricultural policies including price support. It was the 2008 crisis, however, that made us realize a change to the long-lasting tone of alleviating the conditions of supply and demand.

The 2008 Food CrisisAlthough the world end of term grain

stock ratio, which rose to 35.7% in 1986, subsequently maintained a high level, it dropped rapidly at the beginning of this century, and in 2006 got quite close to the cautionary zone of the stock level (17.1%) stipulated by the FAO.

In 2008, nine countries, including Brazil and India, enforced bans on food exports, and five countries including China, Vietnam, and Argentina imposed export taxes and set the export ceiling.

Also, food protests and riots occurred in 20 countries including Tunisia and Egypt. After the latter half of 2008, grain prices fell sharply and seemed to calm down, however they skyrocketed again after July 2010, and as of September 2011, they have been elevated to levels 2.6 to 3.3 times, as compared with the fall of 2006.

Corn set a historic high of $309.8/ton on June 10, 2011.

The backdrop of the recent food crisis is the economic growth of emerging countries such as China and India. It brought resource price hikes including crude oil, as well as a rapid increase of livestock product consumption due to an income increase among the people in emerging economies.

Sophistication of diet entails a surge in

Caution urged to resolve food crisis

The 1973 crisis was caused by factors such as the bulk purchase of grain by the Soviet Union under the circumstances of poor harvest, and the U.S. placed an embargo on soybeans, albeit for a short period of time.



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the demand for feed grains. Although Beijing makes it a basic policy to maintain self-sufficiency of three kinds of staples (i.e., rice, wheat, and corn), it became a net-importer of corn due to a soaring feed demand in 2010.

Being a super-populated country, China’s future import expansion will wield an impact on the world market.

Meanwhile, export expansion of soybeans, which are not the three kinds of staples, is astounding. The import volume of 290 thousand tons in 1995, when China became a net-importer, was boosted in 2010 to 54.8 million tons (60% of the global soybean trade volume).

However, as Lester Brown pointed out in his book, Who will Feed China? there is a question as to whether the sophistication of the Chinese diet will lead to U.S.-level livestock consumption.

Experts argue that the income elasticity of demand for livestock in Chinese urban areas has been dropping sharply in recent years. Also, the fact that per-capita annual meat consumption in Japan as a high-income nation stays at 34% of that in the U.S. in feed grain equivalent suggests the changing pattern of diet in China.

Chinese agricultural production has been stagnant. It should be noted that cultivation areas have been significantly decreasing at present because of farmland diversion, water shortage, soil erosion, and the conversion of cropland to forest policy.

Since the beginning of this century, demand for bioethanol derived from corn (U.S.) and sugar cane (Brazil) has drastically increased against a backdrop of the crude oil price hike.

The Energy Independence and Security Act enacted in December 2007, following the State of the Union address delivered by the former President Bush in the same year, states that the renewable fuel standard (RFS) shall be 36 billion gallons by 2022.

In the U.S., a soaring demand for corn as a raw material of bioethanol resulted in boosted prices of wheat converted to animal consumption due to the price hike of feed corn, and the drastic increase of corn acreage in turn decreased soybean acreage, causing an increase in soybean prices. This is a chain of grain price hikes starting with the skyrocketing crude oil price.

As mentioned above, it seems that the world has entered upon a new phase of demand for agricultural products. It can be said that against this backdrop, the inflow of speculative money triggered the recent crisis. It has been pointed out that the year 2008 goes far above the negative correlation line between the ending stock ratio and prices.

Solving shortage in low-income countries

If the demand structure of agricultural products shifts to an increase, prices will rise, causing an adjustment to be made through increase in supply and drop in demand, and no shortage of agricultural products. Furthermore, promotion of technological advancement due to the price increase will change the supply structure, causing the prices which have remained high to decline. Therefore, simple pessimism is not appropriate.

However, there are two points of contention here. The first is an effect of eliminating the shortage accompanied by decrease in demand on low-income countries. Unlike high-income countries, the price elasticity of demand in poor nations is not low. The rate of decline in demand of low-income countries is higher than that of high-income countries with low elasticity.

Despite great need for food, demand considerably declines. It is alarming that this makes more people in poor countries unable to secure the minimum nutrient level to preserve their health. We must keep in mind that the number of undernourished people in the world at this point amounts to 850 million, and 96% of such population lives in developing countries.

Is a rapid change in the supply structure possible?

The second point to argue is whether the shift of the supply structure through rapid technological advancement is feasible. Unlike industry, cultivated land with soil suitable for farming is essential to agriculture, and the land expansion is limited. The limits of land expansion are supplemented with increased crop yields per unit area (yields per unit). Man

Caution urged to resolve food crisis

In the U.S., a soaring

demand for corn as a raw

material of bioethanol

resulted in boosted

prices of wheat

converted to animal

consumption.



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obtained chemical fertilizers through a fixation of atmospheric nitrogen at the beginning of the 20th century. This released man from the limits, i.e., agricultural production under the conventional constraint of material circulation within regions.

For 40 years from 1960 to 2000, whereas the world harvested area has hardly increased, yields per unit have risen 2.2 times, and grain production has increased 2.3 times. However, the average annual rates of increase in yields per unit and production volume have consistently dropped rapidly since the 1960s. In addition, the world arable land area has been decreasing recently due to soil erosion, overgrazing, salt damage, and water shortage.

Meanwhile, it can be pointed out that slowing in the increase of yields per unit and devastation of arable land were caused by weak prices of agricultural products, i.e., real depreciation during this period. For example, the gap of yields per unit, existing between the cultivated land in developed countries and that in developing countries, indicates the possibility that there is high potential for increase in yields per unit by capital intensification in areas with low yields per unit due to rises in prices. Also, with regard to the production slump in the former Soviet Union such as Ukraine which used to be known as a breadbasket, realization of irrigation facilities in places with prices increasing raises the possibility of moderating fluctuation due to increases in yields per unit and drought.

Furthermore, as the vast cerrado region in central Brazil has acid soil, it was used for grazing but not for cultivation. However, the soil improvement projects in collaboration with the Japan International Cooperation Agency since 1979 have enabled soybeans and other crops to be cultivated. The vast unimproved area may be improved and turned into cultivated land with price increases. Sub-Saharan Africa may witness land improvement and cultivation in the future.

Price increases help push out the marginal farmland where differential rent is zero beyond the boundary to broaden economically-viable arable land. Farmland whose cultivation was abandoned because of its low productivity could return to within the marginal farmland. Also, the price increase made the European Union (EU) lift set-aside.

Sustainability of modern agriculture

The problem of an increasing number of undernourished people in low-income countries could be headed to resolution, if the demand curve moved to the upper right with income increase due to economic growth, or the supply curve moved to the lower right due to technological advancement. As for bio fuel issues, if bio fuel is made unprofitable due to a rise in corn prices, technological advancement of the cellulosic second-generation biomass not in competition with food may be promoted. Can the market, then, dispel the pessimism by adjusting functions?

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For 40 years from 1960 to 2000, whereas the world harvested area has hardly increased, yields per unit have risen 2.2 times, and grain production has increased 2.3 times.



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Seen from the aspect of sustainability, different figures of modern agriculture come into sight. Three points are pointed out here. First, agricultural resource problems of soil erosion, soil deterioration such as salt accumulation, and lower groundwater levels, have been aggravated even in super agricultural powers including the U.S with high productivity and solid assistance from the government, and Australia with its top-level productivity.

It is said that the production of one ton of wheat results in one ton of soil erosion in the U.S., despite the fact that it supposedly takes more than 100 years to allow the 30-centimeter topsoil on the surface of the ground to be formed by soil microorganisms. Loss of cultivated land by soil deterioration has swept away effects of new agricultural land development.

Secondly, unlike conventional agriculture bound by the constraint of material circulation within regions, modern agriculture with high land and labour productivity depends on exhaustible energies and materials. Not only agriculture in advanced countries, but also the green revolution in South East Asia triggered by prolific breed development was realized by a large input of chemical fertilisers and chemical agents in addition to the control of bountiful water resources by irrigation. At present, exhaustion of phosphate and potash ores has been growing into a serious problem.

As for energies, according to the research by Dr. Taketoshi Udagawa of the National Institute of Agro-Environmental Sciences, whereas paddy rice yields per unit rose 1.53 times, the input of energy sharply increased 5.15 times for 25 years from 1950 to 1975 in Japan.

Also, 1 kilocalorie of input energy produced 1.27 kilocalories of rice in 1950, but only 0.38 kilocalories in 1974. The energy balance shows a heavy deficit, and there is nothing left of agriculture as the only energy-producing industry.

While Japanese rice cultivation in 1950 is a conventional form of agriculture dependent on manual labour and animal force, 1975 is the time when the mid-size mechanised systems including rice planters were boosted, and both mechanisation and chemicalisation progressed far ahead. Ecologist, E. A. Odum, pointed out that “in order to double crop yields, it is necessary to increase the fertiliser, pesticides, and work energy by about 10 times.”

Thirdly, it is the environmental destruction brought on by modern agriculture. Without mentioning Silent

Spring (authored by Rachel Carson), pesticide problems are serious. Europe faced a serious excess of agricultural products in the 1980s. This surfeit was brought on by excessive intensification such as too much input of chemical fertilisers and increased livestock breeding density, causing serious environmental problems including contamination of soil and groundwater.

Under the Common Agricultural Policy in Europe, it was in the late 1980’s that the agricultural environmental policy to reduce such problems was introduced, which subsequently grew into the mainstream of the EU agricultural policy.

It was the policy to internalise external diseconomies of agricultural environmental load, and what lies behind are mainly excess farm produce and promotion of understanding of the people toward agricultural protection. Again, it is not certain whether it can be effective enough to hamper environmental destruction by modern agriculture.

Cornucopia or Pandora’s boxAgricultural modernisation developed

considerably in developed countries’ agriculture in the 20th century, particularly in the latter half, led to a dramatic increase of productivity and serious limits at the same time. In the future, even in countries other than developed countries, the shift is required from relatively-stabilized (or stagnating) conventional agriculture to modern agriculture utilising a large amount of exhaustible resources and water resources.

Prolific breed developed by biotechnologies can be momentum for this shift. Fumio Egaitsu (in 2008) views such a shift, a typical example of which is a green revolution, as the “destruction” of some stability and order, the characteristics of conventional agriculture. He cites the expression, “Cornucopia or Pandora’s Box,” saying that there is no consensus about this destruction being creative or merely resulting in confusion and conflict (Agricultural Economics, The 3rd edition [Nogyo Keizaigaku Dai San Pan] (Iwanami Shoten).

With one globe, equivalent resources and environmental capacity, we need to observe with great interest whether adjusting the power of the market can promptly solve the problems, or whether there is a guarantee that the so-called overshoot in terms of the ecological footprint does not grow into catastrophe before these problems are solved.

It is said that the

production of one ton of wheat results in one ton of

soil erosion in the U.S., despite the fact that it supposedly takes more

than 100 years to allow the

30-centimeter topsoil on

the surface of the ground

to be formed by soil micro-

organisms.

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Mainstream environmentalism is preoccupied with giant technofixes – from windfarms to ‘sustainable consumption’ – and pays almost no attention to the underlying cultural reasons why our civilisation is destroying the planet.

Somewhere along the way of observing and experiencing the degradation of the planet, environmentalism morphed from being a project designed to protect the wider natural world from destruction by human industry, into a project that exists to protect the lifestyles of middle-class consumers in as ‘sustainable’ way as possible.

We are kidding ourselves that we will not have to radically change our ways; if oil, food and commodity prices keep on rising, then localisation will happen, if not for economic rather than simply sentimental reasons. The effects of the 2008 collapse are still playing themselves out, but globalisation is already in retreat.

In ten years time, the world will look very different. By acting now, rather than waiting for systems to fail catastrophically and force our hands, the long-term future for renewal can be extremely bright. Ridiculously high land property prices and entrenched land ownership patters are major obstacles preventing an intelligent use of our countryside today, but as a greater majority of the world’s population migrates towards urban living, cities must regenerate and reinvent themselves.

But the exciting thing about cities is their dynamism and agility in adapting and renewing themselves, absorbing new ideas and becoming more enjoyable places to live and work. The new element in the mix is climate change, and so all development must now embrace social, economic and environmental sustainability.

Consumers have traditionally expected governments to take the lead in protecting the environment, but now they are looking more to the corporate world to take action, rather than individuals with political influence. Increasingly, Asians want economic growth but believe it should be achieved through greener industry. The two essential ingredients here are people and an understanding regarding sense of place. Placemaking is a concept – a place is really only successful if people enjoy it and make good use of it, and that means being appropriate for local people and the local environment.

At the time of writing this article, the

words ‘windfarm’ and placemaking provoke red squiggly lines to appear on the screen, announcing them as unrecognisable in the dictionary. As our way of living changes, so too must the vocabulary we use.

A far more wide-reaching term than the semantics of “eco” or “green” could ever encompass is LOHAS -- Lifestyles Of Health And Sustainability. It represents a social movement that has conscious consumption at the centre of its values. Stemming from a business movement in the USA, LOHAS has morphed in Asia to become a brand used to describe all manner of environmental products and services. First taking off in Japan, then China and Taiwan and now spreading rapidly through the Asia-Pacific region.

LOHAS finds expression from the shores of San Francisco to the bay of Singapore in the increasing global resistance to market globalisation. There is a palpable resurgence of a desire to connect with the land again – hence the recent shift in attention towards placemaking. Tree planting activities are become more and more popular, farmers’ markets are becoming the preferred choice location for grocery shopping and even in supermarkets the organic food selections are increasing.

More consumers than ever are using their purchasing power to make a genuine statement about their concern for the environment. Combined, they make a dedicated group, fond of everything from organic potatoes to hybrid cars, and marketers have given them their very own name to wear as a badge of honour; ‘Lohasian’. The latest research from January 2010 shows that 80% of these environmentally mindful consumers say their purchase decisions are directly influenced by a company’s Corporate Social Responsibility (CSR) policies.

LOHAS Asia is an organisation based in Singapore and serves as an information hub and starting point for any company looking to improve their sustainability and reduce their environmental footprint, as well as for the general public to find new products that align with their sustainable and green philosophy on life.

In May this year a public awareness campaign “R U LOHAS” was launched to inform the public on how being LOHAS can increase personal health and reduce their environmental impact on the world. By ‘liking’ the video and identifying themselves as being LOHAS, this leads to the LOHASia facebook group where members of the

Environmentalism Lost and Found

Continues page 12

A far more wide-reaching term than the semantics of “eco” or “green” could ever encompass is LOHAS – Lifestyles Of Health And Sustainability. It represents a social movement that has conscious consumption at the centre of its values.

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www.flowform.net



glean inspiration from other members, name and shame companies not operating to sustainability principles and share advice on lifestyle options on their doorstep.

A snapshot of the LOHAS consumer reveals a passionate, environmentally and socially responsible consumer segment and shows them to be early adopters who can be used as predictors of upcoming trends. They tend to be influential over friends and family, are more brand loyal than other consumers especially to companies whose values match their own, and most importantly, are willing to put their money behind their beliefs and values.

Just what are LOHAS consumers buying and where are they buying them? Among other goods and services LOHAS consumers are buying organic label products and products related to health, wellness and sustainable lifestyles. The price and availability of green options has grown tremendously with green products now widely available online, but in Asia the results show that demand continues to outstrip supply on the high street market.

As the LOHAS movement moves from niche to mainstream, the opportunities for LOHAS products are everywhere. The HUB by LOHAS was formed in 2010 to help companies network with each other and to date 386 members enjoy the benefits of being connected to valuable leads, contacts and opportunities through a trusted network of likeminded companies worldwide. Members of The HUB by LOHAS are permitted to use the Asia Pacific LOHAS logo on product and promotional materials. Visit http://thehub.lohas.com to become a member today.

-Article courtesy of LOHAS Asia.

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Founded in November 2009, LOHAS Asia is a regional social enterprise based out of Singapore. Over the last two years it has attracted influential country managers throughout the region and together they have built up a community of consumers on Facebook under the group name “LOHASia” and a network of like-minded businesses in The Hub by LOHAS. This month, we meet Amena Schlaiker, the country manager for China.

Market research into consumer behaviour conducted in 2010 revealed an untapped multi-billion dollar demand from households with significant purchasing power that relates to green and sustainable

living choices. These results prove that the consumer group identifying themselves with LOHAS are a megatrend not to be overlooked or taken for granted.

Spending over $300+ billion dollars annually, the demographic called LOHAS, continues to change the way marketers conceptualize the 4 P’s of marketing. The LOHAS Asia and NMI research on China questioned 1,000 consumers across the five cities of Beijing, Chengdu, Dalian, Guangzhou and Shanghai. Results showed that 88% agreed that it is important for companies to be mindful of their impact on society. With China having overtaken Japan as the world’s second-biggest economy, the LOHAS

public are encouraged to share their advice, ideas and opinions on living lifestyles of health and sustainability.

The video can be seen on the homepage www.lohas-asia.org and on YouTube. http://www.youtube.com/watch?v=AN3-Kp7T0LU

Adam Horler, President of LOHAS Asia, says: “We were looking for a way to get across the concept of LOHAS to everyday folk that highlighted how powerful individuals are in the fight for a more sustainable world; the Internet and video delivery is the fastest way to do this.”

R U LOHAS emphasizes the need for all citizens to cooperate with the efforts exerted to live a healthy lifestyle and control pollution, taking into consideration that this is the primary criterion that will contribute to the success of the sustainability endeavours and lessen the adverse consequences on the environment and nature.

Adam Horler adds, “It is time for every individual consumer to understand that WE are the most powerful people in the fight against environmental exploitation, not governments, banks or big corporations. It is through our everyday purchasing habits that we can change the world for the better.”

Members of the public are encouraged to join The LOHASia facebook group and become a part of the rapidly growing LOHAS movement, particularly in Asia Pacific.

Playing on the concept of a Utopia, LOHASia is a platform for the public to join the sustainability conversation, promote healthy and sustainable lifestyle options,

From page 10

LOHAS in China

It is time for every individual consumer to understand that WE are the most powerful people in the fight against environmental exploitation.



”

“consumer demand is on the rise month by month and there is an urgency for the market to respond.

In the spring of 2010, Amena Schlaikjer was appointed as the LOHAS Asia Shanghai Manager. Though American by citizenship, Amena spent most of her life globetrotting, moving every two to three years since her birth in Bangkok, and spending a total of 25 years in cities across Greater China.

“Observing China grow since the early 80s from a hardship developing country to the second strongest economy in the world over the past two decades as been a remarkable experience,” says Amena, but it was witnessing this and a lifetime of growing up in coal-burning environments that Amena understood growth came with a price.

Working in the consumer market, first in the cosmetics/fashion industries and later on studying consumer behaviour at a marketing innovation firm, Amena realized that it would almost be unfair to expect a newly developing economy to forego the consumption pleasures that more developed nations have had over fifty years to enjoy. “That ‘price’ of growth that I observed over two decades is inherently rooted in people’s perspectives and buying habits. Consumers are just beginning to understand the empowerment that comes with choice, and the fun in surrounding themselves with things that define them here. The idea of “Green” is a responsibility of the government and corporations in their eyes.”

Though this is slowly changing through various awareness efforts. Working with two other awareness groups in Shanghai – Eco Design Fair and GoodtoChina – Amena’s company The Wellness Works and Asia Pacific LOHAS’s President, Adam Horler, were present at China’s largest LOHAS fair September this year, EcoLifestyles 2011.

The event was held at the Expo Theme Pavilion in Shanghai, 8,000 sq meters was filled with different companies and initiatives supporting or trying to understand the green movement. Amena explains, “It was a brave first attempt with a mishmash of exhibitors represented: one booth of pirated mainstream cosmetics products exhibited next to a collective of branded eco-fabric baby clothes, which were exhibited next to a flea market half full with second-hand clothes and half full of fallen-off-the-truck items.

“However, there were definite shining light eco-examples present, albeit mixed up with what was evidently the perception of “green living” for many Chinese. These are examples we can learn from—pure insights into how to better educate consumers on green buying habits—essentially Refuse,

Reuse, Reduce, Recycle. At the end of the day, it won’t be what you buy, but whether you truly need it or not.”

Conscious Consumption and Conscious Connectivity are both key values in Amena’s company, The Wellness Works: a creative factory of practitioners passionate about producing innovative events and concepts to inspire individuals and companies to “be well.”

Seeing health and wellness as the gateway to understanding this shift in behaviour that is required to make a difference, Amena and her partners Kimberly and Georgia, spend half their time doing educational workshops and events on healthy behaviour and the other half crafting ‘conscious’ business concepts that inspire and not patronize people towards LOHAS. Inevitably, those healthy habits will also support a system of health for the planet.

In a country where diabetes ails one out of every ten people, and meat consumption has increased almost ten-fold due to increased wealth and the introduction of a westernized diet. People are not only getting more ill and obese, but they’re supporting an entirely new system of agriculture that is unsustainable.

“China will import a record one million tons of pork this year, which still only accounts for 2% of actual pork consumption, but this is five-fold increase in just one year,” says Amena. By supporting an increase in demand and supply of pork internationally and domestically, this drives up the unnatural rearing of pigs on corn feed and an overall snowball effect on the system of industrialized food production that feeds and grows food further from its source, producing nutritionally deficient food and ultimately, nutritionally deficient people.

“Given that China does not have an equally efficient food supply chain in comparison to the West, an inevitable result is unregulated testing, dodgy food preparation, questionable preservation techniques and daily food scares that have consumers worrying about their neighborhood supermarket and hungry for safe, quality options,” adds Amena. “It’s empowering to realize these large-scale, global systematic shifts lie in the hands of consumers.”

Being the most populous country in the world, much of that impact resides in China. Though these issues seem monstrous, they could be reversed if households and communities realized their collective impact of their daily choices and opted for ethical, healthy and sustainable options.

-Article courtesy of LOHAS Asia❙

In the spring of

2010, Amena Schlaikjer was

appointed as the LOHAS

Asia Shanghai Manager.

Though American by

citizenship, Amena

spent most of her life

globetrotting, moving every two to three

years since her birth in

Bangkok, and spending a total of 25

years in cities across Greater

China.



T

”

“The Chinese government announced

that it will increase its stakes in the four largest commercial banks, which are already largely public-owned. The move is designed to ‘’support the healthy operations and development of key state-owned financial institutions and stabilise the share prices of state-owned commercial banks’’.

But why was this move considered necessary at all? Recently, investors have been dumping Chinese bank shares, anticipating a slowing down not just of the economy as a whole, but in particular the property market, which had experienced a bubble of massive proportions. But the underlying concern about the health of Chinese banks reflects a deeper concern, about the extent of entanglement of these commercial banks with the growing ‘’shadow banking sector’’.

What exactly is shadow banking? Basically, this refers to non-depository banks and other financial entities like investment banks, mutual funds, hedge funds, money market funds and insurers, who typically do not fall under banking regulation. The growth of this sector has been explosive in the last decade: in the United States, in the run-up to the

financial crisis, its size was estimated to be significantly bigger than that of the formal banking sector. In the aftermath of the crisis, many of these institutions, and banks that were exposed to them, had to be rescued.

UNCTAD’s Trade and Development Report 2011 noted that ‘’The shadow banking system depends on wholesale funding, which is extremely unstable and renders the system very fragile, as evidenced by the crisis.’’ (page 94) It argued strongly in favour of bringing shadow banking under regulation not just money market mutual funds, but also the asset-backed securities market financed with repos.

Even at the IMF, a recent meeting of regulators called for greater regulatory focus on shadow banking. Participants noted that shadow banking operations, that firms doing these bank-like activities outside the banking system can pose systemic threats, and to have some effect regulators need more and different data to understand this fast-changing sector.

But China was known to have a much more regulated banking sector. Indeed, the ability of the Chinese authorities to control the four important commercial banks (Bank

of China, Agricultural Bank of China, China Construction Bank and Industrial and Commercial Bank of China, which together were earlier estimated to control more than three quarters of total domestic credit) was seen as important macroeconomic tool in the hands of the state as well as an instrument of ensuring directed credit, both of which have been crucial to China’s economic success.

But this situation has been changing. The changes have been accelerated after 2008, when urge to provide more stimulus mean that the government allowed or encouraged more ‘’informal’’ credit flows that went through new shadow banking intermediaries. As a result, the government’s control over actual flows of domestic liquidity is weaker than it has

The Dragon’s ShadowWhat exactly is shadow banking? Basically, this refers to non-depository banks and other financial entities who typically do not fall under banking regulation.



”

“been for more than half a century. In addition to trust companies and private banks, which are not regulated but at least are registered businesses with established offices, there has been a proliferation of underground operators, usually no better than loan sharks operating in a world of largely unsecured loans. Such has been the profitability of these operations that even large local state-owned firms whose main business was not finance are now expanding into operating guarantee companies, pawnshops and trusts, arbitraging their own access to cheap loans to lend out at many multiples of the official interest rates.

The growing but opaque interlinkages between the formal credit system and the world of shadow banking are the real cause for concern. This is because the formal banks are also more attracted to indirect lending that generates at least double or triple the official 6.5 per cent one-year lending rate, and can even go up to 30-70 per cent in underground banks. In the first half of 2011, the most profitable activity of state-owned banks in the first half of this year was not lending to businesses but funding trusts and underground banks.

Much of that went into the overheated housing market, associated not just with

a construction boom but with urban real estate prices that are now the highest in the world for cities like Shanghai and Beijing. Since official curbs on lending to this sector were tightened, this market has expanded further. But recently the market has wobbled and real estate prices have finally started falling.

The bursting of this bubble could be painful. In an attempt to provide some protection, the government has encouraged the growth of credit guarantee companies – but many of these are also highly leveraged and themselves far from creditworthy.

Societe Generale has pointed out that China’s shadow banking sector could amount to as much as RMB 14 to 15 trillion. This has also increased the correlation between lending curbs on formal banks, corporate bankruptcies and the occurrence of macroeconomic difficulties in China.

For a very long time, China’s ability to control finance was an important (some would say essential) ingredient of its macroeconomic success. Now that this control looks more tenuous, the future of the overall growth strategy also looks that much less rosy.

The growing but opaque

interlinkages between the formal credit

system and the world

of shadow banking

are the real cause for concern.



I

”

“It may seem hard to believe now, but for

more than half a century, world oil prices have not moved much around the average figure of US $27 per barrel in 2007 price terms. The occasional shifts away from this average have been few and the periods of oil price spikes were relatively short, with the most notable being the OPEC-induced “shocks” of 1970s. Between the mid-1980s and 2003, the real price (that is adjusted to inflation) of crude oil on the major international trading exchanges was typically less than $25 per barrel.

The recent rise in the price of oil began in 2004, when it became evident that the US invasion of Iraq was going to be ineffective in securing Iraq’s oil reserves for the US. However, even then the price rise was substantial without being a surge. It is really only in the past year that the global oil price has behaved like a runaway horse, breaking all speed limits and previous barriers. In the three years between January 2004 and April 2007, the oil price in nominal dollar terms increased by around 2.3 times, to $65 a barrel. But in the period between then and early June this year, that is just 14 months, the price more than doubled again, to reach a peak of $139 per barrel on 6 June before coming down very slightly to $132 on 10 June.

A price of around $100 per barrel in 2007 prices would be equal to the maximum

achieved in the post-World War II period, in 1980. So the global price of oil is now higher in real terms than it has been since the 1920s. And the rate of increase of oil prices in the past year has been the fastest ever recorded. Also, there seems to be no ceiling in sight: some market analysts have gone on record to predict oil prices of $150-200 per barrel by the end of the year.

This has already spawned a mini-industry of explanations as to why this has happened. And, just as in the case of global food prices, the various explanations reflect not so much the clear empirical evidence so much as the interests of those presenting them. Thus, it is common for policy makers and commentators in the developed world to argue that the current high oil prices are essentially the fault of the developing world: a combination of supply cutbacks by OPEC and increased demand from the rapidly growing economies of China and India.

However, both of these factors, while they may at some point in future play a role in changing the long-term conditions of the world oil market, have next to nothing to do with the most recent increase in oil prices over the past year. But to understand this, it is necessary to consider each of the most commonly advanced arguments in turn.

Most of the explanations deal with supply conditions. One argument that has been

The Global Oil Price Story

The recent rise in the price of oil began in 2004, when it became evident that the US invasion of Iraq was going to be ineffective in securing Iraq’s oil reserves for the US.



”

“

around for a while is that of “peak oil” – the position that global oil reserves are running out, and may have already peaked or will shortly peak. The most extreme proponents of this position also believe that more investment in exploration will do little to change this imbalance, and therefore the world must learn to shift to alternative forms of energy, whether fossil based or renewable. In this perception, the current spike in price is simply the inevitable effect of more than a decade of denial, which is making the inevitable adjustment that much sharper and more painful.

However, for this to be true, it should be reflected in growing imbalances between actual consumption of oil and global supplies. But this is not the case, as will be evident below.

Then there are those who note the more proximate effects on supply of particular political and economic trends. The continuing instability in Iraq continues to affect its production and exports of oil. Recent terrorist attacks in Nigeria have reduced drilling and production in that country. Production is falling in Venezuela because of aging oil fields. Tensions in the Middle East, whether because of fears of an Israeli attack on Iran or continuing conflicts in Palestine, are also said to have an impact on oil supplies and therefore prices.

A slightly different argument posits that the falling value of the US dollar affects oil supplies, because the oil trade is generally denominated in dollars. This makes producers prefer to keep the oil in the ground rather than extract it to be paid in depreciating dollars. However, this argument is flimsy, not only because it is not essential to denominate the trade in dollars, but because there is no real evidence that the fall in the US dollar is linked to suppliers’ behaviour. Indeed, it may be more likely that the causation may be the other way around – that rising oil prices cause dollar depreciation by pushing up the US import bill.

The more ridiculous of the supply-side arguments is the one that blames OPEC for the current situation. This view is more common than might be expected: Prime Minister Gordon Brown of U.K. has railed against the “scandal” of the continuing

market power of OPEC and the US Congress is actually trying to bring a lawsuit against OPEC for cartel-like behaviour and price manipulation! This remarkably stupid move ignores that fact that since the 1980s, OPEC has not fulfilled the basic requirement of a cartel: a mechanism to enforce quotas upon its members.

In fact, today OPEC is more like a club of some oil producers, rather than a cartel that is in command of world oil supply. It controls only about 40 per cent of world oil production, compared to 70 per cent in the early 1970s. And it has been remarkably inefficient in imposing any kind of production quota on its members, who have happily increased or decreased their production as they wished. Most of its members are producing exactly as they would if OPEC did not exist. And in any case, OPEC has been around for more nearly five decades, and for most of that period the world oil price has been around $27 a barrel.

The argument appears even more foolish once it is known that the slight decline in global oil supply in April 2008 (compared to a year ago) is entirely because of non-OPEC oil exporters, since the supply from OPEC countries was actually higher by 1.7 million barrels per day. In any case, the Oil Minister of the largest OPEC producer, and indeed the world largest oil producer, Saudi Arabia, has already announced that “any demand for extra production capacity from consumers will be immediately met”, so it is somewhat bizarre to blame the current high prices on OPEC.

The other argument popular in the North relates to demand, and suggests that the voracious demand for oil in China and India – which in turn is fed by heavy state subsidies that keep the domestic prices of fuels down – is responsible for the recent price surge. This argument appears to be superficially plausible, but once again it is fallacious. It is true that China’s demand for oil, in particular, has been increasing rapidly, but it still accounts for less than 8 per cent of global consumption, and India for less than 3 per cent.

The Global Oil Price Storyby F. William Engdahl

In this perception, the current

spike in price is simply the

inevitable effect of

more than a decade of

denial, which is making the

inevitable adjustment that much

sharper and more painful.

➼



”

“The current obsession with subsidies

ignores the taxes imposed on petroleum prices that affect retail domestic prices. In fact, despite recent increases, the US still has among the lowest domestic prices of fuel in the world, substantially lower than India even in nominal terms. Relative to per capita GDP or actual purchasing power, the domestic retail prices of oil and oil products in India and China are many multiples of the prices prevailing in the US. So the subsidies leading to excessive fuel consumption are much more prevalent in the US than they are in India or China.

In 2007, import demand from China and India together increased by 8.7 per cent, but import demand from the other five large importers (US, Japan, Germany, France, Italy) actually fell by 2.6 per cent. As a result, demand for oil from the top ten importing countries actually declined by 0.5 per cent. Even so, the global oil price increased by 170 per cent!

The scenario appears to be similar in the current year. According to projections of the Energy Information Administration of the US Government, OECD oil demand will contract for the third successive year in 2008. While non-OECD demand growth

in 2008, led by China and the Middle East, will remain reasonably strong at 3.7 per cent, aggregate global demand will increase by only 1.2 per cent. Supply is expected to be approximately the same as the previous year, at around 86 million barrels per day. Yet in the first five months of this year, global oil prices have increased by more than 140 per cent.

From all this it is quite evident that the straightforward explanations based on real demand and supply are simply not useful in understanding the current price hike. Rather, the price for this very physical commodity, this universal intermediate, is now determined in the virtual world. In other words, speculative forces, operating especially through the commodity futures markets, are driving the current oil price surge.

Just as in the case of other primary commodities, financial deregulation has played a role in allowing this to happen. Two major international exchanges are crucial to this process. The New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) in London control futures contracts on two of the most widely traded grades of oil: West

While non-OECD demand growth in 2008, led by China and the Middle East, will remain reasonably strong at 3.7 per cent, aggregate global demand will increase by only 1.2 per cent.

➼



”

“

❙

Texas Intermediate and North Sea Brent. This becomes a benchmark for spot prices of actually traded cargo. For the past few years, the oil market has been operating in what is known as “contango”, meaning that futures contracts for oil are priced higher than oil directed to spot delivery. As futures prices keep rising, they push up spot prices as well, regardless of the ground situation with respect to actual consumption and actual supply.

The problem is that the futures market is largely unregulated, because of the growth of OTC (Over the Counter) electronic markets that were allowed in the early years of the decade in the US, and because the ICE in London is also not subject to regulation.

As a result, this has led to “a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”

The problems with such unregulated markets have been evident for some time now. In June 2006, a US Senate Permanent Subcommittee on Investigations published a report on “The Role of Market Speculation in Rising Oil and Gas Prices” (the Levin-Coleman Report). This was largely ignored by the media and indeed by US policy makers, but its findings have great relevance today.

Some of its conclusions are worth quoting in detail: “There is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices (because of) a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets”.

As a result, the Report noted that there has been a significant reduction in the possibilities of market oversight. “With respect to crude oil, the influx of speculative dollars appears to have altered the historical relationship between price and inventory, leading the current oil market to be characterized by both large inventories and high prices.”

Because it is so unregulated, it is not even possible to figure out who the major players (and therefore major beneficiaries of the oil price rise) are, but it is clear that oil producers are not benefiting much even as oil consumers suffer.

It may well be that, in addition to financial institutions that have specialised in commodity futures trading, large transnational banks that have burnt their fingers in the US housing market and desperately need to recoup their losses are entering this market and driving up prices to make quick speculative gains.

There is some evidence of the involvement of large players in this market. Goldman Sachs and Morgan Stanley are the two leading energy trading firms in the United States. Citigroup and JP Morgan Chase are major players and fund numerous hedge funds as well who speculate. In the past five years investment in index funds tied to commodities has grown from $13 billion to $260 billion. Hedge funds, investment banks, pension funds, and other professional investors increasingly direct their financial resources into oil and other commodities. This is supposed to create a hedge against inflation, but of course it ends up contributing to it.

Such speculation has become the most profitable form of financial activity as well. According to HSBC, commodity and energy weighted funds topped the list of “best performers” in the financial markets in the past three months, generating on average more than 30 per cent annual returns even as other hedge funds suffer losses.

There has been some belated and minimalist policy action against this tendency. On May 30, responding to much criticism, both NYMEX and ICE London tripled “margin calls” for their contracts, forcing traders to deposit more money when investing. It is after that that the price per barrel of Brent Crude oil fell from $139 to $132, suggesting that it may have had a minor impact in curbing extremely speculative activity.

So, just as for major food grains, deregulation of financial markets has had a significant role in affecting global oil prices. Therefore, it is likely that the current oil price spike reflects a speculative bubble. If so, like all bubbles, it will eventually come to an end. Of course, this bursting of the bubble may take longer than could be expected – remember that the US housing bubble carried on for several years – but even so it is essentially transient. This means that policies in developing countries must also factor in this possibility, especially before trying to pass on the adverse effects of the oil price hike on to the working people.

There is substantial

evidence supporting

the conclusion that the large

amount of speculation

in the current market has

significantly increased

prices (because of)

a tremendous growth in

the trading of contracts

that look and are structured

just like futures

contracts, but which

are traded on unregulated

OTC electronic markets”.



A“

”

A recent decision by food giant Nestlé to re-instate a previously banned palm oil supplier on sustainability grounds may help make the business case for more sustainable palm oil. Mid-September 2011 was a significant moment in the world of sustainable palm oil.

After months of long conversations between Greenpeace and the Forest Trust, and a lot more hard work on sustainability policies and improved practices, food giant Nestlé resumed purchasing from the Indonesian Palm Oil producer Smart.

In March 2010 Nestlé had dropped Smart and its parent company Golden Agri-Resources (GAR) as a supplier of palm oil, as a result of Greenpeace campaigns against the company. The campaign group had accused SMART of rainforest destruction for the planting of oil palm trees in Indonesia.

Smart is ultimately part of the controversial Sinar Mas group, which owns Smart’s parent firm, Golden Agri Resources. The exact connections between all the companies in the group are not easily available, but Sinar Mar links to Smart on its corporate website.

In turn, Sinar Mas is ultimately controlled by the Widjaja family, which also owns Asia Pulp & Paper, a company held to be one of the world’s most irresponsible by environmental campaign groups, and a long standing Greenpeace target.

High profile campaigns, focusing on the emotive issues of the destruction of rainforests and the decline habitats of Orang-utans, by organisations such as Greenpeace have made many large buyers wary of controversial palm oil companies in recent years.

Unilever, a company that now drives much of the work around sourcing sustainable palm oil via industry body the Roundtable on Responsible Palm Oil (RSPO), has also been a target of Greenpeace in recent years.

The sustainability steps taken by SMART and its parent company Golden Agri-Resources, include a partnership with specialist NGO The Forest Trust. GAR is

also in regular contact with Greenpeace with regard to their sustainability work.

Notably GAR announced that Smart received RSPO certification of its first plantation on the 16th September.

Andy Tait, a senior campaigner from Greenpeace says that: “On paper GAR’s sustainability commitments are now the strongest in the palm oil industry.”However, claims Tait, more broadly, huge problems remain in the palm oil industry. RSPO standards aren’t strong enough to stop deforestation, Tait asserts, claiming that “a number of their producer members have not adhered to RSPO standards.”

Greenpeace is supportive of Nestlé’s recent decision to begin working again with GAR. Tait says that it’s important that Smart/GAR and Nestlé receive recognition for their recent speedy work on improving the sustainability of their palm oil and that others now follow their lead.

Unilever, the world’s biggest individual corporate buyer of Palm Oil, has been less quick than Nestle to resume dealings with GAR and its associate companies. The company released a statement shortly after Nestlé revealed its decision saying that they would not yet be following Nestlé’s example.

However, Unilever’s cautious position could soon be changing; Peter Heng, GAR’s Director of Communication and Sustainability told Ethical Corporation that: “We are in an initial stage of discussion with Unilever to resume business.”

Scott Poynton from The Forest Trust (TFT) highlights the advances that Golden Agri-Resources have made.

These include establishing GAR’s own Forest Conservation Policy closely following Nestlé’s own guidelines. These in themselves exceed the requirements for RSPO certification.

Poynton says GAR has embarked on establishing exactly which of their forested land falls into the category of valuable ‘High Carbon Stock’ (forest which has locked in a lot of carbon, removing it from the atmosphere, crucial in the fight against climate change) and then ruling it out for development.

Sustainable palm oilNestlé supply deal may be a game changer.

After months of long conversations between Greenpeace and the Forest Trust, and a lot more hard work on sustainability policies and improved practices, food giant Nestlé resumed purchasing from the Indonesian Palm Oil producer Smart.



”

“

GAR, says Poynton, who has worked personally with the company, have also been doing the same for ‘High Conservation Value Forest Areas’ and for peat lands.

In addition, they have adapted their supply chain to allow Nestlé to get guaranteed Palm oil from a particular plantation. TFT has visited these plantations on behalf of Nestlé and verified that they meet the company’s Responsible Sourcing Guidelines.

This move towards direct traceability for the Palm Oil industry is a first. The industry has traditionally been unable to guarantee the traceability of produce since many oil aggregator business models are based on mixing oils from a variety of sources together for transport. In Scott Poynton’s view, GAR’s efforts are very important, since as the industry leader, where they go, other producers will have to follow to remain competitive. Poynton also points to concrete evidence of the financial benefits of significant announcements around sustainable oil. GAR’s shares rose 3% after the announcement by Nestlé.

Another aspect of the business case for sustainable oil could be tax benefits. The Dutch Product Board for Margarine, Fats and Oils (MVO) has called on the EU to abolish import duty on RSPO certified sustainable Palm Oil. The current duty is 3.8% and removing this could make sustainable oil much more attractive to business customers, a potential boost in profits for producers.

The problem of persuading producers of the financial benefits of more sustainable palm oil does not stop at the big Indonesian producers, however. Herakles Farms, an American company is planning to cultivate a huge palm oil plantation in the poverty stricken West African nation of Cameroon.

Many conservation groups and NGOs such as the World Resources Institute, have expressed grave concerns about the

project. The site of the plantation would be adjacent to the Korup National Park, they say. Campaigns claim the new plantations would threaten highly bio diverse rainforests and the migration routes of rare species such as forest elephants.

Scott Poynton says he sees huge reason to be concerned about African palm oil developments, but makes the point that if palm oil producers and traders want to be able to sell to companies such as Nestle, then they will have to adhere to the firm’s ‘No Deforestation’ Responsible Sourcing Guidelines.

With campaign groups and some major corporations remaining sceptical about the ethical standards of palm oil, producers will need to make further efforts to step up to the expected standard if they want to sell to the largest corporate buyers.

But the challenge remains a big one, at the moment; the percentage of palm oil production that is RSPO certified stands at only 10%. There is clearly much work to do. Campaigners such as Greenpeace and NGOs such as TFT clearly believe the actions of companies such as Nestlé in encouraging and rewarding suppliers that do improve their standards is a positive, if limited, sign for the future.

Sustainable palm oil

The problem of persuading

producers of the financial

benefits of more

sustainable palm oil does

not stop at the big

Indonesian producers,

however.



W“

”❙

World demand for water desalination products and services is projected to increase 9.3 percent annually to $13.4 billion in 2015. Although the global economic downturn has slowed growth in new desalination capacity from the torrid pace of the 2005-2010 period, gains will still be strong in nearly every significant desalination market -- but particularly in the Asia/Pacific region.

The Middle East and North Africa account for about two-thirds of global demand for desalination products and services. The largest desalination markets in the region -- Saudi Arabia, the United Arab Emirates and Kuwait -- depend on desalination for a large share of their water supply, and in some cases nearly all of their drinking water needs. Traditionally, these areas have relied on thermal techniques, particularly multi-stage flash (MSF) distillation.

Many of the largest plants use integrated water and power plant (IWPP) models, in which desalination equipment is powered by waste heat from a power plant. In the coming years, reverse osmosis (RO) and other membrane-based technologies are expected to increase their share of the market in the Africa/Mideast region, especially in countries with water shortages that also lack abundant domestic energy supplies, such as Algeria and Israel. Other areas in which desalination is expected to continue to register favorable growth have not always been challenged by severe shortages of fresh water. In the US -- the largest market outside the Middle East -- population growth and economic development in areas with insufficient

water supplies (or brackish water supplies) will boost demand for membrane elements and other products used in membrane systems.

In California, the traditional approach of importing water from elsewhere has become less feasible due to its high costs and growing demand for water in areas that had once had substantial water surpluses. In the Asia/Pacific region, much of the growth going forward will be in China and India, countries with large water supplies in absolute terms, but severe problems with water quality caused by centuries of negligence. In Europe, Spain is the largest desalination market, due to the continued economic development in the country, much of which has been in arid regions. Other countries, such as the UK, have installed desalination capacity that is intended to operate only in times of drought or other shortages.

Demand for water desalination products to reach $13.4B

Many of the largest plants use integrated water and power plant (IWPP) models, in which desalination equipment is powered by waste heat from a power plant.



I“

”

In The Information, pop science author James Gleick traces the history of information from African “talking drums,” used for centuries as a kind of audio telegraph to send messages from between remote villages, to Wikipedia, Twitter, and the deluge of information that we all experience today.

Beginning with mankind’s shift from an oral tradition to a written one, Gleick outlines how writing, this new technology in which “the one speaks to the multitude. The dead speak to the living, the living to the unborn,” utterly changed the way that people conveyed and perceived information, and he follows by recounting how the rise of books containing collections of words - their spellings and their definitions.

In 1604 a village schoolmaster by the name of Robert Cawdrey was the first to create such a book, “A Table Alphabetical, conteyning and teaching the true writing, and understanding of hard usuall English wordes” (Gleick notes that prior to the publication of such books, words were not expected to adhere to a predetermined spelling). The eventual progeny of Cawdrey’s small book was the Oxford English Dictionary, the first edition of which emerged in 1928 with 414,825 words encapsulated in ten weighty volumes. In The Information, Gleick explores the OED’s evolution to the preent day. Now in its third edition, the OED is entirely onliine.

Gleick perhaps finds a kindred spirit in Charles Babbage, the 19th century mathematician/philosopher/inventor who devoted his life to the uncovering of connections, processes, and phenomena that others took for granted. Prior to the advent of computing, books full of mathematical tables were published as they were necessary for calculations. Babbage, who thought “to throw the powers of thought into wheel-work,” conceived of a machine that would employ the technology of the day - pistons, gears, levers - in performing calculations. Gleick calls Babbage “a mathematical raconteur” whose parties were attended by the likes of Charles Darwin and Michael Faraday.

From Charles Babbage to Samuel Morse, Gleick transitions from information processing to information transmission. He

The Information

By James Gleick

paints the latter half of the 19th century as a period rife with inventions that purported to transmit messages via electricity, but which lacked the language to do so. Into this dilemma walked Samuel Morse, an artist rather than scientist, who instinctively realized that a system of signs could be made by the opening and closing of a ciruit - the meaning encoded not so much in the electric current, but in the spaces between. Gleick enthusiastically traces the growth in popularity of the telegraph, for which the press quickly became the most avid users. News that had formerly taken days to arrive could now be received in seconds.

Gleick leapfrogs from the telegraph, one symbolic abstraction beyond the alphabet, into the history of cryptography and its practitioners, and then further still into the logic of George Boole, “mathematics without numbers,” and the information theory of Claude Shannon and Alan Turing. More abstraction follows in whole chapters devoted to discussions of entropy, randomness, memes, and quantum information theory. Gleick’s final chapters are all about the surfeit of information that comprises our daily lives.

The Information, which tracks the origins and progression of this deluge, is a bit of a flood itself, the expanse of which could easily be divided into several books. But while James Gleick might be accused of TMI, he remains a gifted writer with a passion for a subject that would easily drown many of us.

Beginning with mankind’s shift from an oral tradition to a written one, Gleick outlines how writing, this new technology in which “the one speaks to the multitude. The dead speak to the living, the living to the unborn.

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Her Fearful Symmetry is a great book for a dark winter night. It takes place in and around London’s Highgate Cemetery and deals with love, obsession and ghosts (real and metaphoric). The book is quietly suspenseful, slowly drawing readers into the lives of an unusual set of characters before moving into a fast and somewhat frantic climax.

Elspeth has been estranged from her twin sister for years, but before dying of cancer, she decides to leave her apartment near Highgate Cemetery to her twin nieces who she has only met once. The condition: the nieces must move from America and live in the apartment before selling it. The twins’ mother (Elspeth’s sister) is not allowed into the apartment.

Her Fearful Symmetryby Audrey

NiffeneggerRandom House

$38.99

Julia is thrilled to inherit the apartment and have a chance at adventure. Her twin, Valentina, is less enthusiastic, but always lets Julia make the decisions. Once in London, however, Valentina begins to find some independence. She also experiences a strange connection with her aunt, which is further solidified when the twins discover that their aunt’s ghost is living in the apartment.

This all may sound a little far-fetched and silly, but if you read The Time Traveler’s Wife, you know that Niffenegger has a gift for taking the far-fetched and making it seem plausible. As she does so, she reveals depth in her characters and looks at the nature of love and control.

It is unusual, to say the least, to publish a book against the will of its author. That’s especially true when the manuscript is a first draft by a ghost writer.

Some readers may feel that Text’s decision to publish this book requires an explanation.

Julian Assange: The Unauthorised Autobiography is a portrait of a man who polarises opinion but who has also changed the world. Whether you read this book as a ghosted memoir or as a ‘literary interpretation of a conversation’ (which is how Assange himself describes it), it may be the most insightful and intimate account of him that we will ever have.

The voice that winds its way through these pages is unmistakeable. We believe that this book is essential to any informed view of Julian Assange and WikiLeaks. We invite you to read it and make up your own mind.

(Julian Assange is an Australian publisher, journalist, software developer and internet activist, and the founder and editor-in-chief of the whistleblower website WikiLeaks.)

Praise for Julian Assange:‘An intriguing self-portrait … Assange

reveals a lot about himself … Well worth reading … Although Mr Assange makes an easy target, he has interesting things to say, however controversial. And the world

The Unauthorised AutobiographyJulian Assange

Text Publishing

NZ$37.00

does sometimes need such annoying, single-minded people to move forward. Mr Assange and his creation, WikiLeaks, have made it a more open and transparent place, and hence a bit more just.’

The Economist‘Surpisingly revealing. It reminds us

of the huge amount Julian Assange and ➼

We believe that this

book is essential

to any informed

view of Julian

Assange and WikiLeaks.

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Poor’s had hinted darkly that Italy might be next. Ireland was about to be downgraded to junk status, too, and there was a very real possibility that the newly elected local Spanish governments might seize the moment to announce that the former local Spanish governments had miscalculated, and owed foreigners a lot more money than they previously imagined. Then there was Greece. Of the 126 countries with rated debt, Greece now ranked 126th: the Greeks were officially regarded as the least likely people on the planet to repay their debts. As the Germans were not only the biggest creditor of the various deadbeat European nations but their only serious hope for future funding, it was left to the Germans to act as moral arbiter, to decide which financial behaviors would be tolerated and which would not. As a senior official at the Bundesbank put it to me, ‘If we say no, it’s no. Nothing happens without Germany. This is where the losses come to live.’ Just a year ago, when German public figures called Greeks cheaters, or German magazines ran headlines like Why Don’t You Sell Your Islands, You Bankrupt Greeks?, ordinary Greeks took it as an outrageous insult. In June of 2011 the Greek government started selling islands, or at any rate created a fire-sale list of thousands of properties—golf courses, beaches, airports, farmlands, roads—that they hoped to auction in order to help repay their debts. It’s safe to say that the idea of doing this had not come from the Greeks.

To no one but a German is Hamburg an obvious place to spend a vacation, but it happened to be a German holiday, and Hamburg was overrun by German tourists. When I asked the hotel concierge what there was to see in his city, he had to think for a few seconds before he said, ‘Most people just go to the Reeperbahn.’ The Reeperbahn is Hamburg’s red-light district, the largest red-light district in the world, according to one guidebook, though you have to wonder how anyone figured that out. And the Reeperbahn, as it happens, was why I was there.

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WikiLeaks have contributed to this epochal time and how important is the principle of free publication. The most fascinating part is what Assange objects to: the personal stuff… Remarkably candid.’ Read the full review here.

The Observer

‘But the author of this book, and let’s call him Assange for brevity’s sake, has erased that caricature and produced a compelling portrait of a brave, complex, difficult, brilliant and essentially humane individual. Assange is not easy to like but his intellectual gifts, his moral courage and his carelessness of his own physical safety

make him impossible not to admire.’The Spectator

‘Beautifully textured … There is something special about him: a scrappiness, a chippiness, a kind of brilliance. Whatever his doubts, he is well served by this book.’

The Times

‘It is not hard to see why Assange is now fretting that, in this text, beautifully crafted by Andrew O’Hagan, he has given away too much of himself and said too little about his mission. That is exactly what makes the book such an engrossing read.

The Independent

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Having made the U.S. financial crisis comprehensible for us all in The Big Short, Michael Lewis realised that he hadn’t begun to get grips with the full story. How exactly had it come to hit the rest of the world in the face too? Just how broke are we really?

Boomerang is a tragi-comic romp across Europe, in which Lewis gives full vent to his storytelling genius. The cheap credit that rolled across the planet between 2002 and 2008 was more than a simple financial phenomenon: it was temptation, offering entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Icelanders wanted to stop fishing and become investment bankers. The Greeks wanted to turn their country into a piñata stuffed with cash and allow as many citizens as possible to take a whack. The Irish wanted to stop being Irish. The Germans wanted to be even more German.

Michael Lewis’s investigation of bubbles across Europe is brilliantly, sadly hilarious. He also turns a merciless eye on America: on California, the epicentre of world consumption, where we see that a final reckoning awaits the most avaricious of nations too.

This is the ultimate book of our times. It’s time to brace ourselves for impact. And, with Michael Lewis, to laugh out loud while we’re doing it.

ExtractThe Secret Lives of Germans

By the time I arrived in Hamburg, in the summer of 2011, the fate of the financial universe seemed to turn on which way the German people jumped. Moody’s was set to downgrade the Portuguese government’s debt to junk bond status, and Standard &

By Michael LewisPenguin Books

$47.00 RRP

Boomerang

This is the ultimate book of our times. It’s time to brace ourselves for impact.

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REFLECTIONS & OBSERVATIONS

Perhaps because they have such a gift for creating difficulties with non-Germans, the Germans have been on the receiving end of many scholarly attempts to understand their collective behavior. In this vast and growing enterprise a small book with a funny title towers over many larger, more ponderous ones. Written in the early 1980s by a distinguished American anthropologist named Alan Dundes, Life Is Like a Chicken Coop Ladder set out to describe the German character through the stories that ordinary Germans liked to tell one another. Dundes specialized in folklore, and in German folklore, as he put it, ‘one finds an inordinate number of texts concerning Scheisse (shit), Dreck (dirt), Mist (manure), Arsch (ass). . . . Folksongs, folktales, proverbs, riddles, folk speech—all attest to the Germans’ longstanding special interest in this area of human activity.’

He proceeded to pile up a shockingly high stack of evidence to support his theory. There’s a popular German folk character called der Dukatenscheisser (The Money Shitter), who is commonly depicted crapping coins from his rear end. The world’s first museum devoted exclusively to toilets is in Munich. (A second has opened in New Delhi.) The German word for ‘shit’ performs a vast number of bizarre linguistic duties—for instance, a common German term of endearment once was ‘my little shitbag.’ The first thing Gutenberg sought to publish, after the Bible, was a laxative timetable he called a ‘Purgation-Calendar.’ Then there is the astonishing number of anal German folk sayings. ‘As the fish lives in water, so does

the shit stick to the asshole!,’ to select but one of the seemingly endless examples.

Dundes caused a bit of a stir, for an anthropologist, by tracking this single low national character trait into the most important moments in German history. The fiercely scatological Martin Luther (‘I am like ripe shit and the world is a gigantic ass-hole,’ Luther once explained) had the idea that launched the Protestant Reformation while sitting on the john. Mozart’s letters revealed a mind, as Dundes put it, whose ‘indulgence in fecal imagery may be virtually unmatched.’ Hitler’s favorite word was Scheisskerl (shithead): he apparently used it to describe not only other people but himself as well. After the war Hitler’s doctors told U.S. intelligence officers that their patient had devoted surprising energy to examining his own feces; and there was pretty strong evidence that one of his favorite things to do with women was to have them poop on him. Perhaps Hitler was so persuasive to Germans, Dundes suggested, because he shared their quintessential trait, a public abhorrence of filth that masked a private obsession. ‘The combination of clean and dirty: clean exterior–dirty interior, or clean form and dirty content—is very much a part of the German national character,’ he wrote.

Dundes confined himself mainly to the study of low German culture. (For those hoping to examine coprophilia in German high culture he recommended another book, by a pair of German scholars, called The Call of Human Nature.

He proceeded to pile up a shockingly

high stack of evidence to support his

theory.

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Instability in Asia would have an impact on New Zealand and we should be paying more attention to how changes there could affect our future prosperity and security, a new report says.

The New Zealand National Forum of the Council for Security Cooperation in the Asia Pacific (CSCAP:NZ) has released Projecting our Voice, which examines the changes in power balances within Asia, the way the region’s organisations are responding—and what it means for New Zealand.

“Asian countries will shape the world of the 21st century in a way they have not done in New Zealand’s recent history,” states the report.

“In particular, China’s growing power is creating both opportunity and uncertainty. The region shows staggering economic growth, but it also contains unresolved disputes including some potentially serious fracture points,” says Professor Robert Ayson, Director of Victoria University’s Centre for Strategic Studies.

The report shows New Zealand’s prosperity is increasingly derived from Asia, and New Zealanders tend to look at our relationships there from the perspective of what we can earn.

“That is important. But a similar effort is needed to understand the political and security preoccupations in Asia, because these could have a significant impact on New Zealand’s interests in future,” says Professor Ayson.

“As Asia’s influence grows, New Zealand needs more than ever to have broadly based relationships with countries in Asia. New Zealand’s voice in the region needs to reflect clear understandings of our interests in Asia, the intersection between domestic and international policy and an astute appreciation of how insecurity in Asia could affect us,” he says.

The report includes a series of recommendations for New Zealand’s future policy towards the region.

“We hope this report will open a debate about the role of security issues in New Zealand’s relations with Asia”, Professor Ayson says. “We are keen to get people’s feedback and plan to publish significant reactions as part of an ongoing debate.”

CSCAP:NZ is a national forum of academics and other experts on security issues from throughout New Zealand. It is hosted by the Centre for Strategic Studies at Victoria University.

The full report can be read on the website of the Centre for Strategic Studies at http://bit.ly/pALbvC and http://www.asianz.org.nz/our-work/track-ii/opinions-and-essays/projecting-voice.

Growing pains in Asia



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Two of the people deeply nvolved in the Wall Street fiasco were Meredith Whitney and Steve Eisman. What follows is about some of what they went through.

Meredith Whitney is a banking analyst who wrote a particularly pessimistic, but accurate, report on Citigroup in October 2007, to which many Wall Street analysts, and the news media, paid attention

She has since followed this report with similar reports and predictions, which have tended to leave the companies involved with lower stock prices as the market has taken her opinion seriously. One of her claims is that goodwill is built into a lot of companies’ share prices, and that as the market moves into dark times, this goodwill will dissipate.

On December 19, 2010, Whitney was accused of stating that between fifty and a hundred counties, cities, and towns in the United States would have “significant” municipal bond defaults starting in 2011, totalling “hundreds of billions” of dollars in losses. She predicted this during her appearance on the broadcast of the CBS program 60 Minutes. Since the record amount of money lost in one year through municipal bond defaults is $8.2 billion, Ms. Whitney’s comments about hundreds of billions in losses drew a great deal of attention, much of it critical. As of September 2011, “her prediction had yet to materialize.”

According to Vanity Fair writer Michael Lewis, in his November 2011 article, California and Bust, “But that’s not at all what she had said: her words were being misrepresented so that her message might be more easily attacked. “She was referring to the complacency of the ratings agencies and investment advisers who say there is nothing to worry about,” said a person at 60 Minutes who reviewed the transcripts of the interview for me, to make sure I had heard what I thought I had heard. “She says there is something to worry about, and it will be apparent to everyone in the next 12 months.”

And then there is Steve Eisman, a money manager famous for shorting securitised subprime home mortgages. Eisman currently works for FrontPoint Partners, a subsidiary of Morgan Stanley. When asked about his plans for the

future, Eisman answered, “At this point in my career, I want to have more control over my destiny.

Eisman is a strong opponent of for-profit institutions of higher education. During a speech entitled “Subprime Goes to College” during the Conference in May of 2010 Eisman attacked companies that run private colleges such as Think ITT Educational Services, Corinthian Colleges, and Education Management Corporation. Eisman likened such companies to seamy mortgage brokers. He said, “Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry. I was wrong.

After the Department of Education took action against for-profit colleges in 2010 the industry retaliated by accusing Eisman of attempting to illegally influence the government and calling for an investigation by the Secretary of Education. The allegations stem from a meeting that Eisman had with Department of Education officials David Bergeron and Robert Shireman, two weeks before delivering his speech at the Ira Sohn Conference. Shireman was in charge of the department’s efforts to toughen regulations on for-profit colleges.

After offering testimony to Senate Health, Education and Labour Committee on problems with for-profit higher education, Eisman was strongly criticized by progressive groups such as Citizens for Responsibility and Ethics in Washington on the grounds that he stood to profit from proposed regulations due to his short positions against private colleges.

On Wall Street

Meredith Whitney

Steve Eisman



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Eating is anagri-cultural act….

your health, economic and cultural wealth start with seeds

sown in the field, the ‘ager’

3 issues a year. Subscribe on-line atwww.earthmatters.co.nz for

$NZ 35.00 [$45.00 o’seas] or by direct credit Kiwibank account 38 9010 0519122 00

or by cheque to P O Box 24-231,Royal Oak, Auckland 1345.

www.earthmatters.co.nz

A recent OECD report describes New Zealand’s water quality as ‘good’ relative to most OECD countries but says that it is deteriorating.

This deterioration is due, in large part, to diffuse pollution from agriculture, says Dr Kevin Parris of the Trade and Agriculture Directorate, OECD in Paris, France.

New Zealand’s agriculture is vital to its economy. As New Zealand’s agriculture sector expands, more pressure is put on its environmental systems. Agriculture contributes to water pollution through excess nutrients, pesticides and other pollutants.

Public opinion surveys across OECD countries in recent years have consistently ranked water pollution as one of the top public environmental concerns.

Agricultural nutrients are a major pressure on river, lake and marine water quality, and this is assessed by OECD through nutrient balances, says Dr Parris.

“We look at all the nitrogen and phosphorus going into the system, mainly from livestock manure and fertilisers and calculate how much nutrients are used to grow crops and pasture. In most situations there is a surplus of nutrients to crop and pasture requirements which places stress on the environment (soils, water and the air). In 2000, the average for New Zealand was around 35 kilograms of nitrogen per hectare. By 2008 it was about 45 kilograms per hectare. In ten years it has gone up 10 kilograms.”

In 2000, the average for the 34 OECD countries was 80 kilograms per hectare. In 2008 the average for OECD countries had come down to 65 kilograms per hectare. Interestingly, among the worst ranked was the Netherlands with a surplus of over 200 kilos per hectare.

Agriculture is a major user of water, and worldwide we face the enormous challenge of producing almost 50% more food by 2030, and doubling production by 2050. This will place still further stress on water quality in New Zealand and worldwide.

There is a ‘time-bomb’ effect from this agricultural expansion. Nitrogen and phosphorus can sit in soil for a long time before they appear in water.

In exploring new policy opportunities and market approaches to minimise diffuse source pollution from agriculture across OECD countries in a report to be published in early 2012, Dr Parris examines the policy, challenges, reforms, opportunities and policy governance issues that face the sector. His findings reveal that policies have generally fallen short of what is required. This is mainly a result of:• inefficiency and failure in enforcing water

pollution regulations,• increasing budgetary costs of support to

farmers to control pollution,• frustration with the time required and

institutional barriers to introduce new policies,• lack of understanding of the scale and time

delays of diffuse pollution,• and insufficient attention to the establishment

of a more inclusive stakeholder process.

OECD report on NZ water– not as clean as you’d like



R e f l e c t i o n s & o b s e R v a t i o n s

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Women’s rights in AfghanistanThe improvements for Afghan women’s

rights gained over the last decade are at risk of slipping away and could be lost in a quick fix bargain for peace, the international aid agency Oxfam has warned.

The protection of women’s rights in Afghanistan was promoted as a positive outcome of the international intervention which began on October 7, 2001. But in a new report, “A Place at the Table: Safeguarding women’s rights in Afghanistan”, co-authored with well-known Afghan academic Orzala Ashraf Nemat, Oxfam says Afghan women could face a dangerous future after 2014 if sidelined in the search for peace.

The report finds that there already has been a downward slide in the advances women began to make after 2001. Although there have been strong gains in girls’ education, with some 2.7 million girls in school compared to a few thousand in Taliban times, other areas show patchy progress. In parliament, a quota system put into place in 2005 guarantees 68 female MPs – there are now 69. However there is now just one female minister compared to three in 2004. The number of women in the civil service has dropped from 31 per cent in 2006 to 18.5 per cent in 2010.

In addition, the government’s ground-breaking Elimination of Violence Against Women law – which criminalises harmful traditional practices such as honour killings, child marriages and giving away girls to settle disputes – is only being enforced in 10 out Afghanistan’s 34 provinces. In the second quarter of 2011 alone, the Afghan Independent Human Rights Commission registered 1,026 cases of violence against women. In 2010, by contrast, there were 2,765 cases in total.

The report warns that in the context of recent upheavals, women’s rights are at risk falling further down the political agenda. The recent assassination of the head of the country’s High Peace Council, Burhanuddin Rabbani, has underscored the volatile conditions that continue to plague Afghanistan – conditions in which the rights of women, once hailed as one of the cornerstones of stability, could easily be ignored.

Orzala Ashraf Nemat, co-author of the report, said: “Recent history has been harsh to Afghan women – and we don’t want to see it repeated. We have made incredible gains in the last 10 years. Women are working as doctors, lawyers and businesswomen; and girls are at school. But what is life going to be like for us in the next

10 years? Already life is getting tougher for Afghan women. Afghan women want peace – not a stitch up deal that will confine us to our homes again. We are a voice that must be heard.”

Oxfam said that the number of women on the High Peace Council did not bode well for women’s participation in future formal peace talks with the Taliban. There are just nine women on the 70-member council, which was created to lead the peace process.

The agency urged the Afghan government and international community to use the run up to December’s Bonn conference, which will set the course for Afghanistan beyond 2014, to develop a more inclusive peace process which involves Afghan people from all parts of society, including women. The agency called on world leaders to ensure that women play an active role in any negotiations and urged them to pledge that any political settlement with groups such as the Taliban will explicitly guarantee women’s rights.

Louise Hancock, Oxfam policy advisor in Afghanistan and co-author of the report, said:

“Afghan women tell me that they do not feel that they can count on any of the main players in peace efforts to safeguard their rights. They want a place at the table so that they can protect their hard-won gains. The greater stake women have in the peace process the more likely they are to support and promote reconciliation within their families and communities, which is essential for lasting peace.

“The Bonn Conference comes 10 years after the initial conference which laid the foundation for the reconstruction of Afghanistan. A lot of mistakes have been made over the last decade. World leaders must ensure that this time in Bonn we see more than just shop-talk – and instead put forward concrete solutions to deliver a brighter future for Afghanistan. The Afghan people deserve a real, just and lasting peace – not a political bargain that only serves the interests of a few.”

Oxfam has called on world leaders to ensure that any peace deal includes benchmarks to guarantee women’s rights, such as monitoring the numbers of girls in school and the numbers of women in public life.

In addition, it called on the Afghan government and international community to ensure that there is meaningful participation of women in all peace processes at all levels – matching the government’s existing pledge of 30 per cent of women in government bodies.

The report finds that there already has been a downward slide in the advances women began to make after 2001. Although there have been strong gains in girls’ education, with some 2.7 million girls in school compared to a few thousand in Taliban times.



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MEETDISCUSSEVALUATEDECIDE

ACT POSITIVELY!

Leonardo Academy’s vision for World Green is to fundamentally transform the way we think about sustainability by providing a forum for sharing information and working together on green actions.

This is a unique online sustainable community created to help social entrepreneurs on all levels develop and communicate the impact of their green actions. By providing a forum for the discussion of environmentally sustainable materials, reduction of negative environmental impacts and increased energy efficiency, Leonardo Academy extends its knowledge-base freely to the public. Leonardo Academy also emphasizes designs and materials that safeguard the health of residents and locations.

World Green is designed to help companies, investors, builders and home owners make the transition to a greener future and a sustainable living standard.

The Community provides a forum for sharing information and working together on green actions. This site launch will be followed by upgrades that include additional communication channels and interoperability with other social media sites. Leonardo Academy would like to leverage its knowledge with all sustainable

communities to help create a World Green® Vision.

A nonprofit organisation founded in 1997 it is dedicated to advancing sustainability and putting the competitive market to work on improving the environment.

Leonardo Academy is a Think and Do Tank, developing and distributing strategies, guidance, metrics, standards, education, and information on how to increase sustainability. We also help companies, organizations, families, and individuals successfully promote, encourage, and implement sustainability. Our integrated approach makes sustainability very practical for our clients.

The World Green CommunityWorld Green is designed to help companies, investors, builders and home owners make the transition to a greener future and a sustainable living standard.



PPush aside dated notions of our global forestry sector as dominated by lumberjacks focused solely on logging trees and processing the wood. Today’s forests are increasingly high-tech with employees skilled in biochemistry, genetics, computer modeling, satellite imagery, and digital processing. Today’s bio-economy is a dynamic, global market that mirrors a paradigm shift to products that originate from natural renewable sources. Mills that have focused on processing timber and pulp are beginning to diversify into bio-energy, bio-chemicals and bio-materials which include wood fibre and biomass that is converted into renewable fuel, food additives, non-toxic chemicals, solvents, plastics, textiles, and other products. The International Council of Forest and Paper Associations, (ICFPA), www.icfpa.org,

which represents the global forest and paper industry, champions the role of our global forest sector as a central, thriving player in our new bio-age. The international forest and paper industry is committed to the principles of sustainable development and ensuring that the environmental, social and economic benefits of our natural resources are available to current and future generations. Studies have shown that by repurposing the chemicals and bio-materials extracted from trees, we can tap into a potential global market estimated at around $200 billion.

The global forestry industry is a vital benefactor to our world’s sustainable development. The worldwide forestry sector supports thousands of communities as a provider of millions of jobs across the globe. The forestry sector prides itself on its use of renewable raw material and is driving for the increased use of sustainable forest management and application of cleaner technologies. More and more mills across the world are converting their wood residues into heat and power for their own operations with most of the sector’s energy coming from waste biomass with some facilities already acting as net sources of green power. With its strong reliance on biofuels, maximum recycling rates and the storage of carbon in its wood and paper products, our global forestry sector is at the forefront of the renewable era.

Forestry is finding new life in innovative and creative solutions that are not only helping the once struggling industry turn around, but also helping to usher in a green movement. After two years of work by the Forest Products Association of Canada, FPInnovations, and the Canadian Forest

Future of Global Forestry Sector is Renewable

By Chadwick Wasilenkoff

Service of Natural Resources Canada, a new program called the Bio-pathways Project was set into motion this year with the goal of revitalizing the Canadian forestry sector. The project looks outside of traditional uses for wood, lumber, pulp and paper in an effort to create new jobs and sectors with a more sustainable future for the country and its citizens. New, innovative products include bio-active paper – paper towels than can indicate contamination; nanocrystalline cellulose composites that can replace materials in aircraft; wood-based textiles (such as rayon); and cross-laminated timber – a technology that produces strong beams and panels for construction products.

As the CEO of a security and specialty pulp and paper company, we are in the process of transforming Quebec’s Thurso mill from a traditional pulp mill to a specialty dissolving pulp operation. Dissolving pulp is a chemically refined bleached pulp of pure cellulose fibers extracted from trees that are used to produce rayon which is a popular cotton substitute in China and other markets. With our Quebec facility we are transforming an under-utilized asset which struggled for market-share in the low-value add commodity marketplace. The evolution to dissolving pulp from traditional pulp metamorphoses the mill into a globally competitive, low-cost producer with a sustainable and profitable long-term future.

The future of the forestry sector is here today and it offers a bold, innovative, profitable and environmentally conscious path for the industry. Our global concern to reduce greenhouse gas emissions leads us through the forest to invest in renewable energy technologies that use wood fibre. As more forestry firms invest in technologies to increase their reliance on biomass for fuel versus fossil fuels, we drive the future of the forest sector to develop new biotechnologies, new jobs and greener prospects.

As our global forestry sector expands to produce new and innovative bioproducts, we will experience greatly enhanced employment opportunities and financial returns than from traditional stand-alone mills. By incorporating new technologies into existing mills, we can ensure that these integrated operations will utilize all parts of the trees and extract the most value possible to ensure an environmentally friendly, sustainable, and profitable future.

As Fortress Paper’s Chairman, Chief

Executive Officer and Director, Chadwick

Wasilenkoff, oversees the company’s production of

security and other specialty papers.

Based in Vancouver, Canada, Wasilenkoff

is an established entrepreneur with

extensive capital markets experience

specializing in the resource industry

and has been a director and officer

of numerous publicly listed companies.

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www.10thousandtrees.com

The Mirror November/December 2011

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Transcript of The Mirror November/December 2011