中国資本が日本の水源地を買収 危機感強める林野庁、調査開始 (1/3ページ)
2009.5.12 23:36
このニュースのトピックス：農林水産
中国資本が触手を伸ばした水源林＝５月１日午後３時２７分、三重県大台町中国資本が触手を伸ばした水源林＝５月１日午後３時２７分、三重県大台町
中国の企業が西日本を中心に全国各地の水源地を大規模に買収しようとする動きが、昨年から活発化していることが１２日、林業関係者への取材で分かった。逼迫（ひっぱく）する本国の水需要を満たすために、日本の水源地を物色しているとみられる。
買収話が持ち掛けられた地元自治体などが慎重姿勢を示しているため、これまでに売買交渉が成立したり、実際に契約締結に至ったりしたケースはないというが、外国資本の森林買収による影響が未知数なことから、林野庁は都道府県に対して一斉調査を始めるなど危機感を強めている。
奈良県境に近い山あいにある三重県大台町。昨年１月ごろ中国の企業関係者が町を訪れた。水源地となっている宮川ダム湖北を視察した上で、「いい木があるので立木と土地を買いたい」と湖北一帯の私有地約１０００ヘクタールの買収を町に仲介してほしいと持ち掛けた。また約３年前には、別の中国人の男性から町に電話があり、同じ地域の水源地の買収話があったという。
町は「本来の水源林として残してもらいたい。開発はしないでほしい」と相手側に伝えると、それ以降交渉はなくなり連絡は取れなくなったという。
水源地の立木は、原生林を伐採した後に植林した二次林で、「よい木材」とは考えられず、土地も急斜面で伐採後の木材の運び出しに多額の費用がかかるため、同町産業室の担当者は「木ではなく地下に貯まっている水が目的ではないか」と分析する。
また、長野県天龍村には昨年６月、東京の男性が訪れ「知り合いの中国人が日本の緑資源を買いたがっている。今の山の値段はいくらか」と持ちかけてきた。同村森林組合の担当者が実際に山のふもとまで案内し、森林の現状を説明した。
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Sheikh Who Backed Barclays Gets Another Shot With Qatar’s Money
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By Vernon Silver and Henry Meyer
May 12 (Bloomberg) -- On a March morning in Qatar’s Ras Laffan Industrial City on the Persian Gulf, a red flame shrouded in black smoke shoots into the haze from a 650-foot stack. The burst of fire is burning off excess fuel as workers rush to finish equipment that will help the nation, already the world’s biggest exporter of liquefied natural gas, more than double output in the next two years.
An hour away in Doha, amid the glass and steel skyscrapers turning this desert capital into a modern metropolis, Sheikh Hamad bin Jassim bin Jaber Al-Thani will invest as much as $20 billion a year from the gas bonanza.
Sheikh Hamad, Qatar’s prime minister and foreign minister, wears a third hat: chief executive officer of the Qatar Investment Authority, which was founded in 2005. A latecomer among nations with sovereign wealth funds, Qatar formed the QIA to preserve its oil and gas wealth.
Last year, the Connecticut-sized emirate -- best known as a staging ground for the 2003 U.S.-led invasion of Iraq -- earned more from LNG than oil for the first time. That milestone followed a 15-year, $120 billion spending binge by the country on its gas, petrochemical and other industries. Gross domestic product has surged to $101 billion, or $101,000 for each of the 1 million men, women and children on the thumb-shaped peninsula -- among the highest per-capita GDPs in the world.
“Qatar is on the verge of being transformed,” says Thierry Bros, a gas companies analyst at Paris-based Societe Generale SA. “It’s a small amount of people with a tremendous amount of wealth.”
Barclays Rebound
Now, as Ras Laffan’s 140,000 workers race to multiply Qatar’s riches, Hamad is navigating investments overseas and at home. He bet QIA money on international banks just as the credit crisis forced many to take government handouts.
On Oct. 31, he raised the QIA’s 6.4 percent stake in Barclays Plc to as much as 12.7 percent, propping up the U.K.’s third-biggest bank after it had rejected money from Prime Minister Gordon Brown. Since then, Barclays stock has jumped 40 percent through May 11. The QIA’s original stake, purchased in July 2008, had tumbled as much as 82 percent by January. It’s now up 1.8 percent.
The QIA said on April 22 it had sold 35 million Barclays shares, lowering its original stake to 5.8 percent as part of a trading strategy. The Qatari fund said it still planned to increase its overall Barclays stake under the terms of the October deal.
Assets Drop
The value of Qatar’s 9.7 percent stake in Credit Suisse Group AG, Switzerland’s No. 2 bank, dropped to 4.93 billion Swiss francs ($4.45 billion) on May 11. Credit Suisse stock has lost 20 percent of its value since February 2008, when Hamad said he was first buying shares; it’s dropped about half a percent since October 2008, when he added more.
QIA assets, which peaked at about $75 billion in June 2008, dropped to about $50 billion at the end of March, according to estimates by RGE Monitor in New York, which researches sovereign funds. Qatar’s estimated $35.6 billion in 2008 LNG exports spared the fund from a worse decline.
“They got burned,” says Rachel Ziemba at RGE Monitor. “There was a lot of money to manage quickly and get it invested.”
At home, Hamad is deploying as much as $5.3 billion of QIA cash on shares of Qatari banks hammered in the global rout. In March, his government agreed to buy the investment portfolios of seven local banks traded on the Doha Securities Market.
Pile of Cash
“Qatar is facing a lot of difficulties,” says Laurent Lavigne du Cadet, who was CEO of Qatar’s biggest investment bank, Amwal, from September 2007 through the end of 2008. “The reasonable approach for the prime minister of Qatar would be to look after its own needs and be less on the international market.”
Hamad’s most lucrative domestic project is Ras Laffan. Once the new LNG facilities are in full swing, Qatar will produce 77 million tons a year, generating $292 billion from exports over five years, the International Monetary Fund forecasts.
That will make Hamad, who turns 50 this year, steward of a growing pile of cash at a time when funds tied to fossil fuel wealth have blown up. Norway’s Government Pension Fund-Global bled a record 633 billion kroner ($90.5 billion) last year, wiping out all of the gains since that nation began investing its oil revenue 12 years ago.
‘Wall of Money’
“The key challenge will come as the wall of money hits Qatar in the next three to five years,” says Kapil Chadda, head of global banking at HSBC Qatar, the Doha-based unit of HSBC Holdings Plc.
Lavigne du Cadet expects Hamad to invest inside Qatar this year, though he doesn’t rule out another headline-grabbing deal such as Barclays.
“Qatar wants to play a role and is positioning itself to be a go-between for the Western world,” he says.
Hamad may get his power-broker mantle once the new gas money starts flooding in, says Simon Maughan, a banking analyst at MF Global Securities Ltd. in London. For now, Maughan doesn’t expect big companies to come hat in hand for Qatar’s cash. Governments are bailing out banks, and larger businesses can sell bonds, he says. Companies shut out from lending may court the sheikh, he says. The QIA will be eager to try something new, he says.
‘Burn a Hole’
“The money seems to burn a hole in their pocket,” he says. “It’s not going to be banking; it’s going to be commodities: iron ore, copper.”
Hamad says he’ll invest cautiously for now and wait for markets to stabilize. On a Thursday in January at the World Economic Forum in Davos, Switzerland, he’s receiving visitors at a ground-floor conference room in the Arabella Sheraton Hotel Seehof.
Wearing a tweed jacket and open-necked dress shirt, he’s just finished talking with hedge fund billionaire George Soros. The next day, he’ll switch hats and become Qatar’s top diplomat.
“I’m meeting Prime Minister Gordon Brown tomorrow here,” he says.
Hamad, a barrel-chested baritone, points to Qatar’s 20 billion pounds ($30 billion) of deals in London during the past few years. “We have a good partnership between us,” he says. “Qatar has a lot of investment in the U.K.”
Britain is a key customer for Qatar, which has the world’s third-largest natural gas reserves, after Russia and Iran. It may claim 20 percent of the U.K. market by 2011, up from 4 percent this year, Societe Generale’s Bros says. Ras Laffan’s new facilities will hand Hamad more cash to invest.
The sheikh leans back in his chair and grins as he acknowledges his fund’s slump.
Food and Gold
“With all that happened in the world, everyone is affected, even if you are clever or not clever,” he says. “We need more clarity in the market. Right now, we feel there is still a choppy road in front of us.”
In March, QIA Executive Director Hussain Ali Al-Abdullah gave a peek into the fund’s future.
“We will look at food, we will look at gold, we will look at minerals,” Hamad’s lieutenant said at an alumni event in Dubai for the Wharton School of the University of Pennsylvania. The QIA will begin hunting for distressed assets in 2010, he said.
Abu Dhabi and Kuwait
Like the QIA, neighboring sovereign funds are recalculating as the recession depletes the world’s last great pools of money.
Since the start of 2008, Abu Dhabi has lost about $153 billion from what is now an estimated $300 billion fund, RGE Monitor says. In March, state-controlled Aabar Investments PJSC agreed to buy 9.1 percent of German carmaker Daimler AG for 1.95 billion euros ($2.6 billion). Kuwait has about $208 billion, down from $262 billion. The Kuwait Investment Authority is buying Kuwaiti shares to bolster the local stock market.
“Most of the investments of all the sovereign wealth funds have pretty much gone wrong,” says Reji Joseph, director of corporate finance at accounting firm KPMG in Doha.
In daily life, Qatar is one of the more relaxed among its Gulf neighbors. Unlike in Saudi Arabia, where there are no public movie theaters and women are forbidden to drive, Qatari women take the wheel and vote in local elections. Doha’s over- air-conditioned shopping mall cinemas show films rated R for sexual content. At night, cocktail bars with views of the crescent-shaped waterfront serve alcohol to mostly expatriate workers.
The Pearl
Off the coast of Doha, 30,000 workers are constructing a $14 billion luxury residential and commercial project called the Pearl on a man-made island. The Hermes International SCA shop serves a clientele whose wardrobes often mix traditional black Islamic robes with jeans and high heels.
Natural gas gives Qatar an advantage over its oil-rich brethren. Because gas contracts can span 25 years, the QIA gets steadier revenue than if the country depended on petroleum alone. That’s why Qatar is staking its future on its offshore gas field and, back on land, the 41-square-mile (106-square- kilometer) city where the vapor is converted into its liquid form.
The flare lighting the sky over Ras Laffan on the hazy March morning is from Qatargas 2 Train 4, so named because stations that cool the gas into liquid are lined up like freight cars. This train is 70 percent owned by the government’s Qatar Petroleum and 30 percent by Exxon Mobil Corp., the biggest U.S. oil producer.
Tight Security
The facility will turn out 7.8 million tons of LNG a year -- a quarter of Qatar’s current production and a 10th of its projected new output, making it Ras Laffan’s first so-called megatrain.
With so much riding on Ras Laffan, security is tight. Anyone approaching the city must pull up at a tollbooth-style building and show an identity card or passport. Inside the city, each megatrain, even those under construction, has its own roadblock and security search. Deep-water docks await Q-Max tankers, membrane-lined ships almost as long as four American football fields.
On the receiving end, Queen Elizabeth II was scheduled to open a terminal in Milford Haven, Wales, today. The Duke of York, Prince Andrew, joined Emir Hamad bin Khalifa Al-Thani at Ras Laffan in April to inaugurate Qatargas 2.
Ruling Clan
Ties between Qatar and the U.K. have roots in the rise of the emirate’s ruling clan. Sheikh Hamad’s family, the Al-Thanis, moved from the Qatari village of Fuwairat in 1847 to Doha, known for its pearling and fishing, according to a government history.
The Al-Thanis amassed power via an alliance with the neighboring House of Saud in what’s now Saudi Arabia. The title “sheikh,” designating a tribal elder, has come to signify male members of some Gulf royal families, the equivalent of Saudi Arabia’s “prince.”
The family kept its grip while the nation was under foreign occupation, first by the Ottoman Empire and then by the U.K. Britain made Qatar a protectorate during World War I, after which nations turned to the Mideast for oil.
Sheikh Hamad was born in 1959. Educated in local schools, the young royal attended university in Egypt and studied English in the U.K., says former U.S. ambassador to Qatar Andrew Killgore. Hamad’s resume on the Qatari Ministry of Foreign Affairs Web site doesn’t include educational background. The prime minister’s office declined to release additional biographical material. A QIA spokesman says education is a personal matter.
Palace Coup
Hamad wasn’t groomed for leadership in the same way as his cousin, Hamad bin Khalifa, the future emir. Hamad bin Khalifa went to the Royal Military Academy Sandhurst in England, the training ground for British princes William and Harry.
In 1971, Qatar gained its independence and became a constitutional monarchy. Hamad took over as minister of Municipal Affairs and Agriculture, building Qatar’s fishing industry and creating parks to beautify Doha and other towns, Killgore says.
Yet natural gas would shape Qatar’s future -- and demand Hamad’s attention as a leader and investor. As the smallest Arab oil producer in the Organization of Petroleum Exporting Countries, Qatar earned less than bigger countries. In 1991, it first successfully extracted gas from the Gulf.
The next year, Hamad bin Khalifa assumed Qatar’s day-to-day business from his father, the emir. With the younger generation in charge, Sheikh Hamad became foreign minister.
All in the Family
While the emir had ceded most power to his son, he controlled what mattered: Qatar’s money. In 1995, dissatisfied with the arrangement, Hamad bin Khalifa ousted his father, who was away in Geneva, according to “All in the Family: Absolutism, Revolution and Democracy in the Middle Eastern Monarchies” (SUNY Press, 1999) by Michael Herb.
The former emir had kept much of the country’s income in Switzerland and elsewhere, says J.E. Peterson, historian of the Sultan’s Armed Forces in Oman and now a Tucson, Arizona-based Arabian Peninsula scholar. Tradition dictated that those in power share their wealth, he says.
“The ruler and even the tribal sheikh received revenues from various sources and then had a responsibility to take care of their constituents,” Peterson says.
The new emir would later make wealth sharing official policy in the form of the QIA. He and Hamad plowed billions of dollars into gas. The results were swift and bountiful. In 1997, when Qatar exported its first LNG -- just $499 million worth -- the nation’s current account was negative $2.9 billion. By the end of 1999, Qatar had quintupled LNG exports. The current account swung to a positive $868 million.
I.M. Pei
Qatar’s young rulers engineered a transformation, granting women the vote in municipal elections and turning Doha into a wonderland of modern architecture.
I.M. Pei designed the Museum of Islamic Art, a white-stone building on an artificial island. The government backed Education City, a campus with branches of six U.S. universities, including Cornell University’s medical school and Georgetown University’s foreign service program. A booster of Education City, the emir’s wife, Consort of the Emir Sheikha Mozah bint Nasser Al Missned, is one of the few women in public life in the Gulf region.
In 2005, as gas exports soared to $8.74 billion, the emir founded the QIA. Its roughly 110 investment professionals went to work spending on real estate, private equity, hedge funds, equities and fixed income. Along with the staff, which occupies nine floors of a sandy-hued office tower in Doha, the QIA created a patchwork of outside partners to gain ties with Western financial centers.
Seeking Sainsbury
Hamad tapped London-based private equity firm Three Delta LLP, run by entrepreneur Paul Taylor. Taylor had been CEO of Rotch Property Group, which invested in London real estate. With Hamad’s backing, Three Delta went after J Sainsbury Plc, the U.K.’s third-largest grocer, in April 2007.
Some of the best-known buyout firms, led by London-based CVC Capital Partners Ltd., had tried to take over the publicly traded chain that year for 10 billion pounds. After the founding family held out for more money, the CVC-led group scrapped its offer on April 11, 2007. That left an opening for Hamad and Three Delta.
The QIA affiliate began buying Sainsbury shares through a company Taylor ran called Delta (Two) Ltd. On April 26, Delta (Two) announced it had acquired a 17.4 percent stake. Hamad added some of his personal fortune, buying 300,000 Sainsbury shares.
World Stage
The deal put Hamad on the world stage for a second time that month. The first was when his cousin, the emir, promoted him to prime minister of Qatar.
Delta (Two) boosted its stake to 25 percent and on July 18 said it was in talks to take over the company. The Sainsbury family, with about 18 percent, opposed any acquisition that would load up debt. Trustees of Sainsbury’s pension fund fought to safeguard retirement plans. The sides talked through the summer of 2007, signing a confidentiality agreement to view financial records.
As the pension trustees dug in, the takeover fell apart. On Nov. 5, 2007, Delta (Two) dropped the proposal, citing deterioration in credit markets and pension demands. Qatar remains the biggest shareholder in Sainsbury, with a 27 percent stake.
“Some of the groundwork wasn’t possibly worked out -- just how important the whole pension situation was,” says Peter Brockwell, a London-based retail analyst at ING Groep NV. Sainsbury’s press office and its public relations firm declined to comment.
‘A Disaster’
London tabloids pounced on the failure. “It is a disaster for Qatar, which made a bold bid to play in the big league of sovereign wealth funds,” Daily Mail City Editor Alex Brummer wrote in a Nov. 6, 2007, column.
Sheikh Hamad regrouped. Seven months later, he tried again to make his mark in Britain -- this time with a willing target. As the credit crisis deepened in mid-2008, Barclays was socked by 1.7 billion pounds of losses on bad loans. The bank tapped Roger Jenkins, its chairman of Middle East investment banking and investment management, to line up new capital, according to a person familiar with the arrangement.
The two men were introduced in 2006 by Diana Jenkins, Roger’s wife, on the Italian island of Sardinia, where Hamad summers, the person says. In July 2008, the QIA took a 6.4 percent stake. Challenger Universal Ltd., the Qatari ruling family’s private investment arm, agreed to a separate 1.86 percent share.
Banking Stocks
Qatar got in as banking stocks were crumbling. Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15. Two days later, Barclays agreed to buy Lehman’s North American unit for $1.75 billion.
By October, the British bank itself needed to raise money. The bank declined to take U.K. government funds, as Royal Bank of Scotland Group Plc had done in mid-October. Yet Barclays still required cash to meet new capital requirements. Writedowns for the first half of 2008 had ballooned to 2.8 billion pounds. By the end of October, Barclays had written down another 1.2 billion pounds.
For a second time, Barclays turned to the Mideast. On Oct. 31, investors from Qatar and Abu Dhabi agreed to buy 5.8 billion pounds of Barclays’s convertible notes and preferred shares that paid as much as 14 percent annual interest.
This purchase gave the QIA as much as 12.7 percent of the company. Sheikh Mansour bin Zayed Al-Nahyan, a member of Abu Dhabi’s ruling family, gained a stake convertible to as much as 16.3 percent. British adviser Amanda Staveley, 36, and her firm, PCP Capital Partners LLP, helped with the deal, according to Square1 Consulting, a public relations firm in London that handles her publicity.
‘Absolutely Appalled’
The Qataris came to the table through Jenkins, the person familiar with the deal says. In the U.K., Barclays fended off criticism that the bank was falling under foreign control and that existing investors hadn’t been able to participate.
“I am still absolutely appalled and surprised at the animosity that created in the investor community and media,” Barclays President Robert Diamond says.
“The last thing we would do is say we want the government to bail us out and we want to be a burden on the taxpayer.”
Hamad had financial as well as foreign-policy motives for the deal, RGE’s Ziemba says.
“They did hope there would be positive diplomatic results,” she says.
Cultivating the U.K. as a gas market was part of the equation. “Not only do they want to increase exports to the U.K.; they have portfolio investments in the U.K.,” Ziemba says.
At Davos, Hamad said he wasn’t worried about Barclays and would consider raising the QIA stake further should the bank need more capital. Since he spoke on Jan. 30, the shares have more than doubled through May 11.
As the new gas money floods in, Hamad faces the challenge of putting more money to work. Qatar will have billions of dollars to gain -- or lose -- depending on how well the sheikh who wears multiple hats stacks up as an investor.
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The United Nations Helps Syria Squeeze Out Environmentally-Friendly Olive Oil
May 13th, 2009 by Green Prophet
olives-syria-environment
With its Mediterranean climate Syria is a natural home to the olive tree. It is ranked 5th in the world in production of olive oil, behind Spain, Italy, Greece and Tunisia, with a share of 4.6% of world production.
This makes the olive sector one of the most important areas of agricultural production in Syria. Average annual production of olive fruits is around 880 tons of which 15 – 18 per cent is used for table olives and pickling; the rest is used to extract oil. This gives approximately 175 thousand tons of olive oil each year.
The environmental damage caused by olive oil production has been known since antiquity when the Roman author Varro observed that where water flowed from the olive oil presses to the ground the earth became barren. This is one historical legacy that Syria is working to eliminate.
In the southern olive groves of Dara’a the Massalme brothers’ olive mill is whirring away. Sacks of olives are lugged into the warehouse and tracked up a belt to be washed. They then go through a decanter processing system which uses water and centrifugal forces to extract the oil leaving pomace - the solid residue- and dirty water.
At the other end of the machinery a tap spills out fluorescent yellow olive oil to be decanted into tins and taken to market.
This mill is just one of 920 olive mills scattered in different regions of the north, midlands, south and coastal regions in Syria. The number of olive mills is expected to rise in the future due to the rapid increase of olive production in Syria.
But the Massalme mill is unusual – it is one of the few mills set up to minimise the huge damage to the environment that the olive mill waste water (OMWW) can cause (each year in Syria 280 thousand tons of pomace and 700 thousand cubic meters of OMWW are produced).
It and other mills have benefited from a European Union (EU)-funded 1.7 million Euro project in Syria, Lebanon and Jordan that is drawing to a close after three years. The United Nations Development Programme (UNDP) has been helping to implement the project.
olive oil syria photo“When the olive mill waste water is allowed to spread on the land in an uncontrolled manner and in large quantities it changes the environmental conditions, and causes a reduction in the fertility of the soil,” explains Marwan Dimashki, an expert in the environmental effects of olive oil processing and UNDP National Project Director.
“The effects of OMWW are especially damaging when it enters water streams. Aquatic life is killed and drinking water sources can become contaminated.”
The Massalame mill is fortunate to have modern machinery from Italy. The decantor system uses less water than traditional presses and the dirty water produced is disposed of safely underground. The second waste, the pomace, is dried, so it cannot seep into the ground; it is then transported to factories in Aleppo where further oil is extracted to make soap.
When a database of Syria’s olive mills was constructed at the start of the project it was found that the majority of mills did not have modern machinery but used traditional presses.
“Mill owners cannot afford the capital to install a decantor system as they are not large cooperatives like in Spain,” explains Mr Dimashki. “Even if they have decantor systems, they do not always have environmentally friendly ways of disposing the waste products in place.”
The project team therefore decided to focus on giving education and technical expertise to mill owners, focussing how to get rid of their waste water and to save money by reducing the amount of water and fuel used in the processing of olive oil. Initial visits report that some mills have already put in place water meters.
One outcome of the project is a mobile treatment plant (with German technology) which will travel around the mills to treat the OMWW where no systems are in place. And new environmental standards have also been agreed on with the Syrian Government.
In addition to cutting out pollution, production methods have also been changed to improve the yields and the quality of the olive oil. Whereas olives used to be transported in closed sacks which caused them to ferment during transportation, olive packers are learning to use open crates.
As the Middle East’s largest olive oil producer and with the biggest tonnage after the EU countries, improving the olive oil processing in Syria is of enormous importance both domestically and internationally. Sixty percent of Syria’s olive oil is consumed internally and the olive sector is estimated to employ over a fifth of the population. The rest of the oil brings in profits from exports.
FACTS
* Olive trees constitute about 10% of the total planted area in Syria
* In 1980 there were 25 million olive trees in Syria. In 2006 that had risen to 82.1 million
* Aleppo is the governorate with the largest olive oil industry
* The Ministry of Agriculture and Agrarian Reform forecasts that by 2010 Syria will produce 250,000 tons of olive oil
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Japan’s current account surplus shrinks
TOKYO, May 13 – Japan’s current account surplus fell a smaller than expected 48.8 per cent in March from a year earlier, a sign that export demand may be stabilising after a slump in the wake of the financial crisis.
The country is mired in its worst recession since World War Two but exports and output have shown some signs of recovery, adding to hopes the worldwide downturn may be nearing a bottom.
”As overseas demand has bottomed out, the trade balance will recover moderately albeit at a low level. Japan will face fewer risks of a current account deficit,” said Junko Nishioka, chief Japan economist at RBS Securities.
”Still, risks remain in global financial markets, which could send the yen higher and trim Japan’s trade surplus in the coming months.”
Japan logged a current account surplus for the second straight month in March, at 1.49 trillion yen ($15.3 billion), after a record deficit in January, Ministry of Finance data showed.
The surplus shrank in March at a smaller annual pace than a median market forecast of 58.4 per cent.
But the data also showed earnings on Japan’s overseas investments fell 13 per cent in March from a year earlier, in further pain from the global financial crisis.
Leading central banks said on Monday the global economy is about to turn the corner, although there were signs recovery could be long and painful.
Reflecting improvements in Japanese credit market conditions, outstanding commercial paper held by banks fell 15.4 per cent in April from a year earlier, much bigger than a 4.3 per cent drop in the year to March, Bank of Japan data showed on Wednesday.
A BOJ official told a briefing that he expects growth in bank lending, which rose 3.4 per cent in April from a year earlier, to slow in coming months as corporate fund demand appeared to have run its course.
Japanese exports in March were almost half the levels of a year earlier but rose on a seasonally adjusted basis from February, the first monthly pick up since May last year, trade balance data showed last month.
The world’s No. 2 economy probably shrank 4.2 per cent in the first quarter, economists polled by Reuters estimate, putting it on track for its deepest quarterly contraction in modern history.
The expected decline, coming after a 3.2 per cent fall in October-December GDP, would mark the fourth straight quarter of economic contraction and would wipe out all of Japan’s growth since mid-2003.
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Taiwan exchange aiming to rival Hong Kong
By Robin Kwong in Taipei
Published: May 12 2009 19:03 | Last updated: May 12 2009 19:03
Taiwan’s stock exchange, a recent star performer benefiting from the prospect of Chinese investment, is looking to play a more active role in the region and compete with Hong Kong’s bourse for listings .
“Hong Kong played a big role [in Asia’s capital markets] in the past because cross-strait relations were poor, but now it is all coming back,” Chi Schive, chairman of the Taiwan stock exchange, told the Financial Times. In spite of having a recessionary economy and slumping exports, Taiwan’s stock market has been one of Asia’s best performers this year with a 40 per cent rise since the beginning of the year.
Breakthroughs in Taiwan’s relationship with China earlier this month – including a proposal by China Mobile to buy a 12 per cent stake in Taiwan's Far EasTone – helped drive the benchmark Taiex index up 15 per cent in the past two weeks.
“The breakthrough in cross-strait relationships has created something of an uproar domestically,” Mr Chi said. “If Taiwan can properly handle the cross-strait relationship, we could have a unique niche in the world economy.”
Mr Chi said Taiwan’s former government, under Chen Shui-bian, the independence-minded president, was hostile to Taiwanese businessmen who were engaged in mainland China.
As a result, there are now 65 Taiwanese companies listed on the Hong Kong stock exchange while Taiwan’s bourse has no foreign listings.
Mr Chi, who became chairman last August, has aggressively pursued cross-border listings and other ways to attract overseas Taiwan businesses to list on Taiwan’s stock exchange.
Thirteen foreign companies are in talks to list in Taiwan and Mr Chi said he expects about 50 new listings by overseas companies by the end of next year.
Want Want China, a Taiwanese maker of rice crackers and foodstuffs that is listed in Hong Kong, last month became the first Taiwanese company to “return home” with a $100m Taiwan Depositary Receipt listing.
Besides the competitive aspects, Mr Chi said there will also be opportunities for collaboration between the Hong Kong, Shanghai and Taipei stock markets.
Commenting on the recent rally, Mr Chi said that while there are “hidden worries about inflation and whether Taiwan’s financial deficit would worsen, these are not immediate dangers, so the overall environment is quite favourable”.
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Iran ends UAE’s Etisalat mobile award
By Najmeh Bozorgmehr in Tehran and Robin Wigglesworth and Andrew England in Abu Dhabi
Published: May 11 2009 16:20 | Last updated: May 11 2009 16:20
Iran has reversed a decision to award the country’s third mobile phone license to Etisalat, a state-owned operator of the United Arab Emirates, saying the company had failed “to give necessary guarantees and license fees on time”.
Tehran announced in January that a consortium led by Etisalat, the UAE’s largest operator, won the tender with a €300m bid for the license and a pledge to invest up to $5bn over five years. Etisalat’s bid was preferred ahead of rivals including Zain of Kuwait, Egypt’s Orascom, Qatar Telecom and Telekom Malaysia.
Mohammad Reza Farnaghi-Zadeh, a spokesman at the Iranian Regulations and Radio Communications Organisation, which is in charge of tenders, told the Iranian state news agency yesterday that Etisalat would be replaced by a consortium led by Zain.
However, Zain said it had only been invited to renew its negotiations as the leader of the consortium that came second in the original bid process.
“It’s an interesting opportunity and something we will evaluate but we will evaluate it in the context of the changes as the bids were submitted well over a year ago, and the world has changed,” said Ibrahim Adel, a spokesman for Zain. “I’m certain we will visit them to get more clarity.”
Iran is potentially lucrative for Gulf operators, many of which are based in saturated domestic markets. The Islamic republic has the second-highest population in the Middle East and North Africa region, after Egypt, and only about 47m out of the 70m-strong population have mobile phones, according to official figures.
Iran has not given further details on the reasons for withdrawing the license from Etisalat and it is unclear whether any political concerns lie behind the decision. The UAE, which is which is a close ally of the US, is concerned by Iran’s nuclear ambitions and rising regional influence, and the two countries have a long-standing territorial dispute over islands in the Gulf.
“Etisalat will carefully review its options and will revert back to the [Iranian authorities] in due course with a formal response,” the company said in a statement. “Etisalat is, and has always been, committed to the development of the Iranian telecom market and perceives Iran as a great investment opportunity.”
Iran’s Supreme National Security Council, a top security body, closely monitors any foreign contracts in the telecoms sector and has so far refused to allow privatisation of the Iran Telecommunication Company, the leading provider of mobile lines and the only provider of fixed land lines, beyond 5 per cent.
The Iranian authorities blocked Turkcell, a Turkish operator, from taking over Iran’s second mobile license in 2005 for security reasons. Instead, Irancell, which is 49 percent owned by MTN Group, sub-Saharan Africa’s biggest mobile phone company, took over.
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Kuwait pays for investment company ills
By Robin Wigglesworth
Published: May 12 2009 03:00 | Last updated: May 12 2009 03:00
In 1999, Global Investment House in Kuwait established a proprietary investment operation with just over $30m in seed capital. A decade later, the division has brought the investment house, one of the best known in the Gulf, to its knees.
Pumping billions of dollars of borrowed money into investments, ranging from stakes in Tunisair to the Asian Finance Bank, ensured that Global was known far outside the borders of Kuwait, and generated enviable returns for investors and shareholders for much of the past decade.
But the credit crunch has hammered the investment company. In December, Global suffered the ignominy of becoming the first Gulf-based financial institution to default on its debts since 2002, after it was unable to make repayments on about $2.7bn of short-term debt to local and international banks.
Global last month reported $1bn of asset impairments for the previous year, which led to a loss of $885m for 2008 - the first in the investment bank's history. It has yet to reach an agreement with its creditors.
"This is a force majeure that has affected us," claims Maha Al Ghunaim, the head of Global, referring to an extraordinary event beyond her control. She says Kuwait's investment companies "need to reassess and reconsider their strategy".
Global may be the largest investment company in Kuwait but it is not the only one buckling under the weight of short-term debt and illiquid assets.
The size and number of investment companies in the country mushroomed over the past decade to reach 100 entities with assets last year of nearly $64bn, says the central bank.
The investment strategy has varied from company to company. Global focused on taking minority stakes in regional financial services businesses while The Investment Dar, another struggling company, bought positions in Aston Martin, the luxury carmaker, and Grosvenor House, a London hotel. Most have made leveraged proprietary investments in real estate and private equity, bankers say.
"The big question now is whether this is just a liquidity problem that needs to be smoothed out over a three- to five-year period - or is there a hidden whammy with regard to a solvency issue?" says a senior commercial banker in Kuwait. "It is a pretty dicey judgment call because we really don't know where the asset levels should be."
By February, nearly $6bn had been lopped of the value of assets held by the investment companies, according to central bank statistics, with several houses yet to report their full-year results.
"The markets have collapsed for a lot of these investments. Hence, the investment companies have difficulties to service their obligations, and that's the crux of the issue," says a senior international banker.
Some companies now owe more money to local and international banks than their capital base and assets are worth, rendering them technically insolvent.
This is a significant concern for the commercial banks, many of which are heavily exposed to the embattled sector. The leading investment houses have mostly borrowed abroad - Ms Ghunaim says 60 per cent of Global's liabilities are to foreign banks - but many of the smaller ones have raised capital locally.
The government has passed a bill that asks banks to extend KD4bn ($13.8bn) of loans to Kuwaiti companies, half of which the authorities will guarantee, and which allows the government to buy unsubscribed shares in banks' capital-raisings.
"They have very publicly said that their intention is to fully support the Kuwaiti banks but they are not going to provide blanket support to investment companies," says the international banker. "There will be smaller ones that will not survive."
Recriminations are flying in Kuwait, where parliamentary elections are due at the weekend. The emirate has seen its reputation for financial solidity and probity tarnished by the investment companies and the near collapse of Gulf Bank, which was rescued after a currency derivatives trade went awry.
Some bankers are privately blaming the central bank, the regulator of both the banking and investment company sectors.
"The regulator didn't look at certain requirements for investment companies, particularly in terms of how they financed some of their operations," says the commercial banker.
The fallout from the crisis could be long-lasting. Even if the investment companies can restructure their debts and limp through the rest of the crisis, Kuwaiti companies will face trouble raising capital on the international markets for the foreseeable future, bankers warn.
Preferential treatment of local institutions ahead of international lenders is exacerbating this, the investment banker says. "International investors are going to watch these restructurings very closely. It is a good opportunity for them to see precisely how they will be treated in a downturn and it will influence if they invest in the future."
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Brother of Abu Dhabi ruler held over torture claim
By Andrew England in Abu Dhabi
Published: May 12 2009 03:00 | Last updated: May 12 2009 03:00
Authorities in Abu Dhabi said yesterday a senior member of the ruling family had been detained in a criminal investigation over claims that he was involved in the torture of an Afghan citizen.
The move followed the broadcast of a video alleging to show Sheikh Issa bin Zayed Al Nahyan, a half brother of Abu Dhabi's ruler and the United Arab Emirates' president, severely beating the Afghan and driving over his body.
A senior member of the ruling family has never been publicly detained before in Abu Dhabi. The footage has damaged the reputation of Abu Dhabi, the oil-rich capital of the UAE, and raised questions about the rule of law in the Gulf nation, while also threatening to complicate a nuclear deal between it and the US.
Sheikh Issa's detention followed a review of the incident by the Abu Dhabi government's human rights office, which also recommended that if any other officials were found to be involved they should be suspended from their duties and detained pending the outcome of the investigation.
Sheikh Issa has never held a government post but does have business interests in the UAE, which has modelled itself as a business hub for the region. Officials hope that the investigation and recommendations that a new unit be set up to investigate and prosecute human rights complaints, will go some way to deflect the criticism that the allegations have attracted.
The incident leading to Sheikh Issa's detention allegedly took place in late 2004 but resurfaced last month when the video was broadcast on ABC News. The allegations were made by Bassam Nabulsi, a US citizen and former business associate of the sheikh who is suing him in the US over a separate business deal.
The claims came as the Obama administration was reviewing a Bush-era deal that would permit civilian nuclear trade with the Gulf nation and have prompted some Congressmen to question whether that should go ahead. The UAE announced plans last year to set up a civilian nuclear programme to meet rising energy demand. The deal with the US was negotiated by the Bush administration shortly before it left office.
Sarah Leah Whitson, at Human Rights Watch, welcomed Abu Dhabi's decision to detain Sheikh Issa but said the group would be "watching very carefully" to see what materialized from the criminal investigation.
"The detention is definitely a positive first step and I'm glad they are investigating . . not just the sheikh but also those who were aiding and abetting in the torture of the Afghan," she said. "It's important that . . the government recognises this is not an isolated incident."
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Transcript: FT interview with deputy chief of Hizbollah
Published: May 12 2009 13:50 | Last updated: May 12 2009 13:50
Anna Fifield of the Financial Times interviewed Sheikh Naim Qassem, deputy secretary-general of Hizbollah, after being taken to Hizbollah offices at an undisclosed location in Beirut on May 11 2009. The armed anti-Israeli movement leads the ‘March 8’ opposition coalition in Lebanon and could win the balance of power at the parliamentary elections next month. This is the transcript of the interview.
Financial Times: Hizbollah now leads the ‘March 8’ opposition in Lebanon. How do you rate the opposition’s chances of winning the elections next month, and if you win, what will be your first priorities for the government?
Sheikh Naim Qassem: I believe that we will take the majority in the parliamentary elections because we have wide support and during our four years in opposition we always said that we have greater popular support and we believe that these elections will prove that we have this wide popular support.
As far as our priorities in government, we will have a programme in two parts: one will be political and the other will be development. For the political programme, of course it will be very important for us to keep Lebanon as an independent sovereign state and to be able to have no foreign hegemony from any side. For us, the role of the resistance and the relationship of the resistance with the army and the people [is important] and so is making Lebanon strong enough to stand up and challenge any threat from Israel. These are very important priorities for us. The next part of our programme we call development and here we will be tackling the economic problems and the societal problems and the crisis in the country. We will approach this from the point of view that the person is the axis. We will make it our priority to have a balance between the regions in the country. We will make it a priority to fight and limit corruption and we will also have financial and administrative reforms to make sure that the country goes down the right path.
FT: What do you mean that the person is the axis?
SNQ: You can look at the finances of the state but that does not take into consideration the points of view of the people. The other approach is to take into consideration the people, even if it means putting more pressure on the finances of the state. We of course favour the latter approach.
FT: How will Lebanon's foreign policy change if the opposition wins the election?
SNQ: Of course we know that the foreign policy of any government is a continuation of its [domestic] political policies. In our case, our foreign policy will work along the same lines and along the same point of view as our political policies. Our policies will be for the rights of Lebanon over all of its own land: to make sure that the Israelis leave Lebanon totally; the implementation of United Nations resolution 1701 on the Israeli side; to stop all violations, be they air or land, by Israel; and of course to limit and stop their intelligence operations in this country.
FT: What about when it comes to the west? The Obama administration is now seeking to engage your supporters, Iran and Syria. Would you like to have direct talks with Washington too?
SNQ: As far as Obama is concerned we’ve heard that he is open to engaging in Iran and Syria. But at the moment this is all hearsay. We have not seen what they will be engaging, nor have we any results that we can look into to see how this would go. This could simply be a tactical method. I think we will have to wait and see. It’s too early to speak about this. However, unless there is a change – and we don’t see this change at the moment – in the Obama administration’s relationship with Israel, then we don’t see a point of engaging because from what we’ve heard Obama is reiterating what Bush has said before. He has not been able to put a stop or even said that there should be a stop to the killing of innocent civilians, or to the settlements that are going on. In fact, most of what he said is similar to the previous administration, so we don’t really see that change in the administration, and until there is a tangible change then maybe we will talk about this again.
FT: Like you say, it’s early days, but are you concerned that the price of any deal between Syria or Iran and the US may be support for Hizbollah? Do you worry that Iran might sell you out in this process?
SNQ: As far as Hizbollah is concerned, it has its place in Lebanon and in the reality of the country. It is not part of a deal or agreement and it cannot be. Whether it be between US and Syria or the US and Iran, we have no worries about any deals going through, and we being the price of the deal. We are in the Lebanese reality and we have a role and our role is very defined. We are here to liberate, we are here to uphold Lebanon’s sovereignty, we are here to stop settlements. Even if there are deals, I don’t think this will affect us.
FT: Who do you hope will win the Iranian presidential election?
SNQ: It is the Iranian people who will choose their leader, this is after all Iranian election. They have the right to vote, therefore they will make the choice. It is not our election. We have no say. However, we will welcome whoever is elected and I can say so far, thanks to God, all the people who have elected in Iran have always been supportive of our cause.
FT: Turning back to the US, would you want the US to continue its military assistance to the Lebanese army?
SNQ: As Hizbollah we are of course for the strengthening of the army and we have no problem what type of weapons the army has, how strong they are, whatever country they come from. We encourage the strengthening of the Lebanese army. What we are concerned with is the political decision. As long as these [weapons] are used to liberate the land and to fight against the greater invasion of our land or takeover by the enemy [we will accept them]. Of course we absolutely reject any weapons that are given with political conditions, but we welcome all weapons given to strengthen the Lebanese army in its role to liberate this land.
FT: ‘March 8’ complains that [the pro-western ruling coalition called] ‘March 14’ is dragging Lebanon under the US’s hegemony, but they contend that you will drag Lebanon too much into Iran’s orbit. What do you say to that?
SNQ: In order to say what you say, first what you need to do is look at what the two sides have realised. If you look at ‘March 14’, whom the American support, what the Americans have done is that they directly intervened in Lebanese politics and security and they paved the way, for example, in 2006 for the Israeli attacks on Lebanon. Another example is their open support of ‘March 14’ candidates for the upcoming elections and this was clearly seen especially with the visit of [assistant secretary of state for near eastern affairs David] Hale to the region. So you have to see that the American interests are against Lebanon politically and in security. As far as the opposition is concerned they have always worked for Lebanese interests with no outside strings. For example, the liberation of the land is in the interests of Lebanon. Standing up to Israel is in the interests of Lebanon. Yes, Iran and Syria have supported us, but they have supported us in interests that are good for the country.
I have something to add when talking about ‘March 14’. Another example is when [former secretary of state Condoleezza] Rice came to Lebanon during the 2006 aggression, she met in the embassy with the members of ‘March 14’ and she asked them to put pressure on the resistance because she wanted Lebanon to be the door of the new Middle East. So this is just to show you that when Americans work in Lebanon, they don’t work for Lebanon’s interest, they work for their own interest while the others, when they work in Lebanon they work for Lebanon’s interest.
FT: The UK has recently started talking to Hizbollah’s political wing. Where do you see this going?
SNQ: As far as engagement or dialogue is concerned, there are no steps for the dialogue with the UK. It is an open road, there have been meetings and there will be meetings but there is no set programme. The discussions are on many levels but again there is no set programme. I think what you have to look here is that at one stage, Britain decided to stop talking to Hizbollah then they realised that Hizbollah could not be ignored, that it is was in fact a Lebanese party and therefore they have re-engaged Hizbollah.
FT: Let’s move on to the recent arrests of 49 men in Egypt who were alleged to be part of a Hizbollah cell there. Hizbollah has always said it gave only moral support to the Palestinians in Gaza but has that now changed? Are you helping on the ground? Are you expanding your operations?
SNQ: We have always said that we supported the resistance in Palestine but we have not mentioned how or given details of such support, we have avoided giving details of our support. But Egypt has now revealed that we have given military support to Palestine. We have done so for a while but we have not talked about it. For us it is a great honour and not just an honour but a duty for us to support the Palestinians, and it should also be an honour and a duty not just for us but for all Arabs and all Muslims to support the Palestinians in their resistance. We are asked about our specific and limited support for Gaza while nobody questions the US about their total and unflinching support for Israel. We are always questioned but nobody questions the US.
FT: For how long have you been supporting the Palestinians in Gaza?
SNQ: It is one of the secrets of the resistance that we don’t talk about the details of our support, but suffice to say that we are giving them every type of support that could help the Palestinian resistance. Every type that is possible.
FT: Have you been giving them military arms? Rockets? Training? Logistical support?
SNQ: We don’t talk about the details of our support or how or what we support them with. We leave this to be seen in time to come.
FT: The Israelis say that Hizbollah's arsenal is much greater now than it was before the 2006 war. Is this true?
SNQ: As I said, we do not talk about details of our arsenal. This is our strength. Not talking, this is our strength against our enemy. But what I will say here is that we will not deny but we will not confirm that we have three or four times the arsenal that we had in 2006, as they [Israelis] say.
FT: Israel has a new rightwing coalition government that is taking a tougher stance than the previous one on core issues such as the Golan Heights and settlements. What does that mean for Hizbollah? Will you ratchet up your resistance in response?
SNQ: Hizbollah always has looked at Israel as the enemy, as a country that wants to expand and has never trusted Israel. So this time is no different. Israel could start another war in the region. Hizbollah is not looking to start a war but we are always in a state of readiness.
FT: My final question is about special tribunal for Lebanon [investigating the 2005 assassination of former prime minister Rafiq Hariri]? If you win the election, what will happen with the tribunal?
SNQ: As you know, the tribunal is not our responsibility – it is not the responsibility of the government or of Lebanon. It is a UN responsibility. However, we have nothing against the tribunal as long as it continues as a judicial and criminal court. We do not want it to become a political court. Only when its results come out can we judge what has happened. We want the truth as much as anyone else?
FT: Sheikh, is there anything you would like to add?
SNQ: What I would say is this: America’s biggest mistake is its relationship with Israel and its relationship with the Palestinians. Its relationship with Israel is like they are the be all and end all, they are everything, and everything they say is true and right. While with the Palestinians, they forget that these are a people who have a country and people who have rights.
Second, Hizbollah came about as a reaction to what Israel did. The creation of Hizbollah is the reaction to 1982 invasion. Hizbollah has grown since and the Americans have tried to call us a terrorist entity, but the more America calls us terrorists, the more they speak out against us, the more popular Hizbollah becomes on the ground, the more people support us, and the stronger we get. All the countries of Europe, including the UK, have come to see that Hizbollah is Lebanese, it’s part of the country, and therefore they can not ignore us. The Americans are taking the wrong path in the way they are relating to Hizbollah.
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Fresh blow to north as property bubble bursts
By Delphine Strauss in Nicosia
Published: May 11 2009 22:54 | Last updated: May 11 2009 22:54
A concrete skeleton on the road into the resort town of Kyrenia is all that has become of a plan to build Northern Cyprus’s first shopping mall. The empty frame is a testament to a property bubble that has popped – with severe consequences for this tiny economy.
Before 2007, the self-proclaimed Turkish Republic of Northern Cyprus – recognised only by Ankara – was a developers’ paradise, as Britons especially poured in to buy holiday homes at comparatively low prices.
As prospects of a settlement receded, people worried less about the fact that up to 78 per cent of property in the north is owned by Greek Cypriots who fled in the 1970s.
After the European Court of Justice ruled in April that courts round the European Union could enforce Greek Cypriot judgments on disputed property, some people wonder whether a market already suffering from oversupply and the British recession can recover. One developer received a call from a Greek Cypriot planning legal action to recover his property the morning after the ECJ decision.
“There is serious disappointment . . . at the perspective of the EU on northern Cyprus,” said Fikri Toros, a businessman distributing household goods. His turn-over has shrunk by a third in 18 months along with the developers’ fortunes.
Northern Cyprus, blocked from direct trade in EU markets, has few options – and remains desperately dependent on Turkey’s sponsorship.
Aside from the direct transfers that sustain generous civil service salaries, Turkish Cypriot casinos rake in cash from mainland tourists banned from gambling at home, and universities thrive on fees from students who have failed to win a place in Turkey.
Hasan Chirakli, a store owner in the old town of Nicosia, tried to export Turkish delight and other foodstuffs through the Republic of Cyprus when restrictions on trade across the Green Line eased in 2004.
His attempts failed, and he is bitter at the slow progress of the latest talks on reunification. “I don’t believe they have the intention,” Mr Chirakli said. “If it was a couple of businessmen, they’d have solved it in a couple of days.”
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Nigeria's middle classes emulate their US idols
By Matthew Green in Lagos
Published: May 12 2009 03:00 | Last updated: May 12 2009 03:00
It's Saturday night at the Jade Palace in Lagos and Killz, one of Nigeria's hottest hip-hop artists, steps out of a swirl of dry ice and disco lights to launch into his new song, "Shoobeedoo".
Shaven-headed, wearing a bespoke French-cut suit with cashmere lapels and exuding attitude, the aspiring impresario could be forgiven for thinking that he is already living the lifestyle of a US rap star.
At the bar, men favour the classic American gangsta-rapper look: oversized designer sunglasses worn indoors, at night. Ice buckets rattling with the bottles of Veuve Clicquot champagne beloved of the Lagos elite ensure the gig retains at least a dash of Nigerian flavour.
Held to launch his new album, Life & Times of Killz: Volume I , the party was a snapshot of a trend sweeping sub-Saharan Africa: a growing hunger for a local version of the hip-hop and R&B music that defines youth culture in the west.
Nowhere is this phenomenon more apparent than in the continent's most populous nation, where the star power of artists such as D'Banj, 2Face and P-Square has grown in parallel with the gradual re-emergence of Nigeria's once vibrant middle-class.
This nucleus of young professionals is already seen as a lucrative market for products from financial services to consumer goods and telecoms. The craze for home-grown hip-hop suggests that investors may do well to brand their products in a way that recognises the strength of the new pop culture in "Naija" - youth slang for Nigeria.
"There's been a reawakening of Nigerian identity," says Obi Asika, chairman of Storm 360, a media content provider that promotes Killz.
"Any investor who wants to come into Nigeria must understand that, if they want to sell products and communicate with Nigerians."
A collapse in prices for Nigeria's oil following the global downturn and a prolonged bear market on the country's stock exchange, coupled with the slow pace of economic reform under Umaru Yar'Adua, the president, suggests that the new cadre of better-off Lagosians may face some tough times. In a country where most people live in poverty, gains made by a few can pale in contrast to the deprivation suffered by the many.
In the long run, however, anecdotal evidence suggests that more Nigerians will start to embrace the kind of globalised consumer culture dominant in the US and Europe.
As Killz puts it in "Shoobeedoo": "I know they say the best things in life are free. But money will take you places I know you wanna see."
Fast-food outlets have proliferated here. UAC Nigeria, a food, property and logistics conglomerate, says the number of its counters, including the Chicken Inn franchise, has risen to about 230 from 150 in 2004. Promasidor, the food group, says the proportion of its sales made up of the larger tins of powdered milk favoured by better-off families has noticeably increased.The small middle-class is also driving growing demand for Nigerian media content. HiTV, a Nigerian satellite television company, has made rapid inroads in a market dominated by South Africa's DSTV, partly with the help of its "Nigezie" Nigerian music channel. Screen Digest says a period of rapid growth has seen the number of Nigerian households taking paid-for television content rise to 430,000 by late 2008. Some of Nigeria's biggest companies are discovering that the new hip-hop culture is a particularly effective channel for targeting the fast-growing telecoms and beverages sectors. In a country where some 45 per cent of the population is under 15 years old, today's teenagers will be tomorrow's shoppers. Mr Asika puts the potential annual spend by corporate Nigeria on music-related endorsements, events and television shows at up to $100m (€73m, £66m).
Perhaps the most notable example is a deal signed by D'Banj, one of Nigeria's best-known music stars, to promote Globacom, a mobile phone operator keen to stress its Nigerian roots in contrast to its main rival, South Africa's MTN.
The appeal of D'Banj and other artists lies partly in their skill at combining the sound of a rap scene that originated in New York and Los Angeles with language that resonates in Lagos. "Let me be your semovita," Killz implores a woman in "Shoobeedoo", comparing himself to the Nigerian staple of coarse wheat flour and corn.
The irony is that for all the Nigerian feel, many of the artists regard their homeland as a springboard to fame in the US. Killz - whose real name is Ikechukwu Onunaku - cruises the city in a black Range Rover with KILLZ inscribed on the number plate. "If you're not big in the United States, you're not big," he says, between bumping over potholes. "What I am doing is championing Nigeria."
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IMF urges stress tests on European banks
By Scheherazade Daneshkhu in Paris, Tony Barber in Brussels and Peter Thal Larsen in London
Published: May 12 2009 15:15 | Last updated: May 12 2009 19:00
Europe should follow the US in conducting stress tests on individual banks, the International Monetary Fund said on Tuesday as it warned that economic recovery in the region next year depended on bolder and more forceful policy action.
Fresh moves by European banks to clean up the banking system and face their recapitalisation needs were essential to restoring trust in the financial system, according to the report on Europe published by the Washington-based agency.
“Further actions by policymakers, particularly in the financial sector, are needed to restore market trust and confidence,” said Marek Belka, director of the IMF’s European department and a former Polish prime minister.
He called on banks and regulators to identify, quantify and ringfence toxic assets and to recapitalise through the private sector “but with public support if needed”.
The German government will on Wednesday endorse plans to rid the country’s banks of their toxic assets – its latest attempt at tackling the crisis of confidence that is weakening Europe’s largest economy.
Lamenting the lack of pro-active Europe-wide measures by the region’s institutions, the IMF said it was essential for the stress tests to be co-ordinated.
It called on the London-based Committee of European Banking Supervisors to set common parameters for national regulators in Europe to avoid the risk of competitive distortion.
“We need more Europe and not less Europe,” said Mr Belka. “Europe is the most economically integrated market economy in the world and yet the policies to address the crisis have been undertaken at a national level.”
The IMF said that crisis measures, such as bank deposit insurance schemes, regulatory and supervisory actions, “have been unhelpfully diverse”.
Europe’s financial regulators and central banks are carrying out stress tests on their national banks. Unlike the US’s recent stress tests of 19 banks, however, the criteria used and their outcome will not be disclosed publicly, nor will the balance sheets of individual institutions be examined. “The exercise does not attempt to assess specific institutions’ needs for recapitalisation,” the CEBS said on Tuesday.
Many bankers and investors believe full public disclosure is necessary to restore market confidence in financial institutions.
EU regulators see the task of cleaning up the “toxic asset” problem as the most effective way of restoring confidence in the banking sector and restoring credit flows to pre-crisis levels. But EU officials say many European banks have been reluctant to acknowledge that they are likely to need extra recapitalisation measures in the future.
Repeating last month’s World Economic Outlook forecasts, the fund expects Europe’s advanced countries to contract by 4 per cent this year with the beginnings of recovery only in spring 2010.
On monetary policy, the IMF saw little scope for further interest rate cuts following the European Central Bank’s cut last week to 1 per cent from 1.25 per cent.
“We are coming quite close to the point where the efficiency of interest rate actions is exploited,” said Mr Belka. In this context, so-called unconventional measures, such as credit easing was becoming “more essential.”
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Italy urged to accept deported asylum seekers
By Guy Dinmore in Rome
Published: May 13 2009 03:00 | Last updated: May 13 2009 03:00
The United Nations called on Italy yesterday to take back African asylum seekers among hundreds who have been forcibly returned to Libya under a new policy that has been condemned by Italian bishops and the Council of Europe.
Italy says that since last week it has returned more than 500 people to Libya on several boats under an agreement reached with Tripoli. But the UN High Commissioner for Refugees said Italy risked violating its obligations under the 1951 refugee convention by sending back to Libya refugees from Eritrea and Somalia who were seeking asylum.
Italy's centre-right government has rejected the UN protests, arguing it was not in breach of its commitments when intercepting the illegal immigrants in international waters.
UN officials and inter-national lawyers say Italy has an obligation to consider asylum requests from immigrants wherever they may be picked up and is in breach of its inter-national obligations by returning them to a country where they might be in -danger.
Silvio Berlusconi, Italy's prime minister, who ignited controversy last weekend by stating that he was against a "multi-ethnic Italy", anticipated the UN demands by declaring that there were no asylum seekers on the boats.
In spite of damage to Italy's image abroad, Mr Berlusconi knows that the policy is a vote-winner at home in next month's European and local elections. His coalition, which includes the hardline Northern League, made immigration and security its main platform in last year's general election and is repeating that strategy.
Italy's lower house of parliament was expected to pass a law late yesterday that would make illegal immigration a crime, and introduce "citizens' patrols" in cities to help police fight crime.
The UN agency, which has limited operations in Libya, says it has already screened some of the refugees in Tripoli and found that some needed international protection, having fled conflicts in Eritrea and Somalia.
"We are asking the Italian government to readmit those persons who were sent back by Italy and are identified by UNHCR as seeking international protection,"the agency said in Geneva.
Libya, which is not a party to the 1951 convention, has no national asylum policy and has been known to deport African asylum seekers to countries of origin, where they risk persecution.
UN officials fear -asylum seekers are a new pawn in Italian politics as well as leverage for Muammer Gaddafi, Libya's leader, in seeking international concessions, which have included Italian payments of compensation for its period of colonial rule.
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First Rand wins banking licence in India
By Tom Burgis in Johannesburg
Published: May 12 2009 22:25 | Last updated: May 12 2009 22:25
South African banks’ push into other emerging markets has accelerated after First Rand Group became the first African lender to win a banking licence in India.
The Johannesburg bank has opened an office in Mumbai, India’s commercial capital, executives said. A team of 40 staff has begun seeking advisory and project finance work as part of a strategy to “dominate” expanding trade flows between India and sub-Saharan Africa.
“Africa has become sexy to the Chinese and the Indians,” Sizwe Nxasana, chief executive of the retail and investment banking operations of the financial services group, told the Financial Times in an interview.
“As they emerge as power blocs, that will extend more opportunities for us as South African banks. The extent that we are strong means we are well-positioned.”
South Africa’s four full-service banks have booked heavy losses on credit defaults as high interest rates give way to recession, but they did not dabble in the toxic derivatives that have felled western institutions. Each turned a profit last year, although First Rand’s declined partly because of overseas securities trading that backfired.
Standard Bank, the continent’s biggest, last year sold a 20 per cent shareholding to Industrial and Commercial Bank of China, the world’s largest by market capitalisation, for $5.5bn. Standard has bought a third of Troika Diolag, the second-biggest bank in Russia’s stricken financial sector.
Nedbank, majority owned by Old Mutual, has forged an alliance with pan-West African Ecobank.
Absa Bank last year announced a joint push into the continent alongside Barclays, but may be held back by the travails of its UK parent.
One analyst with a foreign investment bank, who could not be named due to company rules, said India’s complex business environment and competition from Indian banks, including ICICI, might dent First Rand’s ambitions.
First Rand has subsidiaries in southern Africa. But Mr Nxasana said the strategy meant east Africa, with its strong historical links to India, as well as the oil-rich west, had “become important”. The bank retained its preference for starting businesses from scratch, he said, but would consider an acquisition if it were a “really compelling opportunity”.
Mr Nxasana said: “Our competitive advantage is that we are a strong African regional player with a bigger balance sheet here than Indian banks that operate here or other global players like [emerging markets bank] Standard Chartered,” he said.
The bank calculates exports from India to Africa are $25bn to $30bn a year, while India’s imports from the continent – primarily crude oil – come to between $20bn and $25bn.
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Burma's prospects 'bleak'
By Amy Kazmin in Rangoon
Published: May 11 2009 03:00 | Last updated: May 11 2009 03:00
Strong natural gas exports have swollen Burma's foreign exchange reserves to a record high of $3.6bn but have not been used by the military regime to boost health or education spending for the impoverished population, the International Monetary Fund says in a new report.
In its annual evaluation of Burma's economy, the IMF says the global economic slowdown and the devastating May 2008 cyclone, which killed 140,000 people, have taken their toll on the country. Gross domestic product growth slowed to about 4.5 per cent last year, from 5.5 per cent a year earlier.
The military regime's spending on extravagant showcase projects, such as the new political capital, Naypitaw, is being financed by printing money, fuelling inflation of about 30 per cent. Social spending, meanwhile, remains the lowest in Asia, according to the IMF.
The report, which has not been released publicly but was obtained by the Financial Times, also says Burma's prospects "look bleak" if it fails to sweep away socialist legacies - including the multiple exchange rate system and stifling economic controls - or improve the deteriorating business climate.
How Burma's rulers use the revenues from natural gas exports to Thailand - through pipelines operated by Total and Petronas - is also under scrutiny. Gas revenues are added to the budget at the 30-year-old official exchange rate of six kyat to the dollar, while the black market rate is about 1,000 kyat.
As a result, the gas money has had "a small fiscal impact", accounting for under 1 per cent of budget revenue in 2007-08, instead of 57 per cent if valued at market rates. The IMF has urged the regime to report gas sector revenues at the market exchange rate to stabilise state finances.
The IMF's downbeat assessment comes as independent agricultural experts are warning of rising distress among Burmese farmers, after a steep fall in harvest-time prices left many cultivators unable to recover their full production costs.
Analysts fear there will be a significant drop in rice planting in the monsoon season, which begins soon, as heavily indebted farmers try to reduce costs.
"The rural economy here is on the verge of some type of collapse," said one Rangoon-based expert. "Rice farming is currently not profitable."
Analysing Burma's economic performance is challenging, due to the paucity of accurate and timely data. Many western policy-makers still see Burma as largely cut off from the global economy, especially after the US and European Union tightened sanctions after a military crackdown on Buddhist-monk led mass protests in September 2007.
But the IMF says the impact of western sanctions has been "moderated by strong regional trade links", though the region's woes are hitting Burma's natural gas and other commodity exports and remittances flows from Burmese working overseas.
"A lot of people thought that since they have no banking system they would escape the impact of the crisis but it's such a simple economy, so dependent on commodity prices," said one diplomat.
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Fresh front threatens Saakashvili
By James Blitz, Charles Clover and Isabel Gorst
Published: May 6 2009 03:00 | Last updated: May 6 2009 03:00
Yesterday's drama in Georgia is a reminder that the struggle for power and influence in Georgia could derail relations between Russia and Nato, and raises questions over European hopes that the region will become a secure energy supply route.
Georgia hosts strategic transit pipelines carrying Caspian oil and natural gas exports to the west. It is crucial to energy security in Europe, which is trying to reduce its dependence on Russian supplies.
The apparent mutiny, described at one stage by Georgia as an attempted coup, underlines the precarious position of Mikheil Saakashvili, the western-backed president, who many analysts say is unlikely to see out his four-year term.
His credibility was dented beyond repair by last August's disastrous war with Russia, which he was accused of starting and which resulted in the loss of the breakaway regions of South Ossetia and Abkhazia. Street protests against the president's rule have become a regular fixture since early April, and while yesterday's mutiny was shortlived it demonstrated how opposition to Mr Saakashvili may be spreading throughout the establishment.
Georgian officials said the Russian secret services were behind the plot, which was timed to coincide with the start of Nato military exercises in the country.
Moscow's interest in seeing Mr Saakashvili leave power is clear, though Russian officials rushed yesterday to deny Georgian claims that the Kremlin financed the "coup" attempt.
Dmitry Rogozin, Russia's Nato envoy, said the alliance's refusal to cancel the military exercises would "further provoke Georgia's downfall and could possibly destabilise the situation in neighbouring regions".
Andrei Klimov, deputy chairman of the committee for international relations in the state Duma, Russia's lower house of parliament, called yesterday's events a "show" made for western consumption, which would help Mr Saakashvili distract Georgians from opposition demonstrations that have become a regular fixture in the capital. "This is one of Saakashvili's tricks. He is a master of such shows," he said.
Alexander Rondeli, the head of the Georgian Foundation for Strategic and International Studies in Tbilisi, said the government needed to show evidence supporting its accusations against Russia and the alleged coup's ringleaders. But it was possible that the drama was at least partly inspired from Moscow, he added. "Russia is not just sitting on its hands and watching our country."
The situation in Georgia has put the administration of Barack Obama, US president, in a difficult position. Washington's support for Mr Saakashvili is a sticking point in an otherwise improving relationship with Moscow, underlined by a cordial meeting between Mr Obama and Dmitry Medvedev, the Russian president, in London in April.
The Obama administration insists it wants to "press the reset button" with Moscow. But relations were strained again last week when Moscow signed an agreement that, in effect, took control of the borders of Georgia's breakaway regions of South Ossetia and Abkhazia, a move that the US said was "another step in the wrong direction".
The military exercises due to take place in Georgia this week by countries involved in Nato's partnership for peace have also irked Russia, which sees them as a provocative action in a country it regards as under its sphere of influence.
Sergei Lavrov, Russia's foreign minister, yesterday pulled out of a meeting of the Nato-Russia council. He had been due to attend a meeting of foreign ministers on May 18, intended to cement improved relations between Russia and Nato.
The meeting would have looked at a range of security issues, including co-operation between Russia and Nato on Afghanistan and joint attempts to combat piracy off the coast of Somalia. Moscow told Nato diplomats Mr Lavrov's decision was a response to the defence alliance's move to expel two Russian diplomats in the aftermath of a spying scandal, as well as Nato's intention to hold military exercises in Georgia.
Mr Obama has little room for diplomatic manoeuvre. His overtures to Russia, along with other traditional enemies of the US, have attracted the ire of the US rightwing. Delaying the Georgia war games would be viewed as a concession to Russia, and might cost Mr Obama politically at home, a Washington-based analyst said. The US department of defence said the mutiny appeared to be an isolated incident but added it was monitoring the situation. "It doesn't change our long-term relationship with Georgia," the Pentagon said.
Reporting by Charles Clover and Isabel Gorst in Moscow and James Blitz in London
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Embraer: Brazilian closes gaps in line-up
By Kevin Done, Aerospace Correspondent
Published: May 11 2009 15:35 | Last updated: May 11 2009 15:35
Embraer, the Brazilian aerospace group, is making big strides towards joining the front rank of the world’s leading private jet makers.
The grant last month of type certification for the Embraer Phenom 100 by Easa, the European aviation safety agency, has paved the way for the introduction of the Brazilian very light jet into European operations for the first time. It will enter use in air taxi operations being offered by start-up Jetbird.
Jetbird is aiming to become a pan-European private jet airline and will be the European launch customer for the Phenom 100. It is aiming to start commercial operations in September initially focused on the German market with its first base at Cologne/Bonn airport. It expects to have 10 aircraft operating by the end of the year.
Embraer is using the experience and expertise it has built up during the past 15 years in developing regional commercial jets to build an imposing presence in business aircraft. It has already overtaken its Canadian rival Bombardier to become the leading maker of regional jets and has developed an ambitious strategy for capturing a significant share of the corporate jet market.
Embraer’s first foray into business aircraft was focused on derivatives of its regional jets with the Legacy 600, a super mid-size jet, and Lineage 1000 in the ultra-large category.
It has raised the stakes with the development of a new family of aircraft at the bottom end of the market, the Phenom 100 VLJ and Phenom 300 light jet.
It is also moving fast to close other gaps in the product offering, however, with the development of a new family of midlight and midsize business jets, the Legacy 450 and 500, which were presented to the market last year and are expected to start entering into service from late 2012.
Despite its determined forays into new market segments – it also announced last month it was launching the development of the KC-390 military transport aircraft backed by a contract with the Brazilian airforce – Embraer, like its rivals, is feeling the impact of the global economic downturn.
It is cutting more than 4,200 jobs or around 20 per cent of its workforce. At the end of January it had a workforce of 21,350.
It has cut its forecast aircraft deliveries for 2009 by 10 per cent to 242 from the previous guidance of 270 given in November. (A year earlier in November 2007 it had forecast production of 315-350 aircraft for 2009). It is also reducing planned capital investment to $350m from the $450m forecast in November.
The number of aircraft deliveries is still set to rise this year to 242 from 204 in 2008, but the mix will be very different with Phenom jets, which require much less work than larger business and commercial jets, accounting for around 110 of the deliveries, up from just two late last year.
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Banks gear up for iron ore trading
By Javier Blas, Commodities Correspondent
Published: May 11 2009 22:34 | Last updated: May 11 2009 22:34
Three of the biggest banks in commodities plan to launch trading in iron ore, a further signal of the rapid growth of the mineral’s derivatives market amid disarray in the annual price negotiations. The move by Morgan Stanley, Goldman Sachs and Barclays Capital into cash-settled iron ore swaps comes as mining executives acknowledge openly that the traditional system of annual talks – known as the benchmark – to settle prices for the input to steel is breaking down.
The secretive negotiations are between Vale of Brazil, Rio Tinto and BHP Billiton and the steelmakers, led by Baosteel and the China Iron and Steel Association.
Traders said spot prices – physical and paper – could gain further importance if miners and steelmakers fail to reach an agreement for the 2009-10 prices, after missing an April 1 deadline. They said the possibility of a failure was growing.
The likelihood of a structural change to price iron ore sales based on spot prices rather than annual settlements comes a year after the launch of the first cash-settled ore swap by Credit Suisse and Deutsche Bank.
Among the banks, Morgan Stanley said it had started trading iron ore. Barclays said it was “considering entering into the iron ore market in response to” its customers’ needs while bankers said Goldman Sachs was looking into ore, but added that its plans appeared less defined. Goldman declined to comment.
Espen Aaboe, managing director of freight at Morgan Stanley in London, said that as the spot market for iron ore has evolved, Morgan has concluded that there are “opportunities” for both the bank and its clients. “It is clear that the benchmark system is undergoing change and that the long-term trend may be evolving towards a spot pricing market,” he told the Financial Times.
Bankers and traders said Morgan was better positioned than others to profit from iron ore trading because of the linkages with its strong freight business.
The spot physical ore market last year saw transactions worth about 180m tonnes, up 50 per cent from 2007, and accounting for about a fifth of the total seaborne ore market, according to BHP Billiton. Traders estimate about 18m tonnes of iron ore was traded on the derivatives, or paper, market in the past 12 months and say volumes could hit 30m-40m tonnes by the end of the year.
The paper market has been boosted after LCH.Clearnet, Europe’s largest independent clearing house, and Singapore Exchange announced that they would clear the swaps. The move is important because until now, buyers and sellers of the private, bilateral over the counter swaps bore the risk of their counterparties defaulting, deterring some potential participants. Now that concern has been salved.
Ian Ashby, head of iron ore at BHP Billiton, said the market was following a natural evolution. He told an industry conference last week in Sydney: “Not only is iron ore now traded daily on the physical market, but also every day iron ore paper contracts are traded.”
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Investors urged to subscribe to a new world order
By Sharlene Goff
Published: May 8 2009 18:56 | Last updated: May 8 2009 18:56
Investors who fled emerging markets at the end of last year may be regretting it now. Equity indices across Asia and other developing areas have rallied strongly in recent months, making up much of the falls they suffered in last year’s, and outpacing the recovery in western economies.
The MSCI Emerging Markets index has risen more than 50 per cent since its low last October, with a large proportion of the gains coming in the past few weeks.
Some individual markets have staged even more remarkable recoveries. Brazil’s Bovespa index, for example, is 75 per cent higher than its trough at the end of October, while Russia’s RTS index is up 80 per cent from its low last year.
“If we look at the numbers from the start of this year, emerging markets have significantly outperformed developed markets,” says Rupert Robinson, chief executive of Schroders Private Bank. “Particularly interesting are the Bric markets [Brazil, Russia, India and China], which were very much the darlings in the previous bull market but experienced a savage meltdown last year. So far this year, they have rallied hard.”
Advisers say the strong performance has been fuelled in part by a realisation that these markets were oversold at the end of last year. Investors, spooked by the banking crisis in the UK and US, suddenly became risk-averse and withdrew large amounts of capital from Bric markets.
“A huge amount of foreign funding left these countries,” says Christopher Godding, managing director at Morgan Stanley Private Wealth Management. “It was a case of ‘when developed markets catch a cold, emerging markets catch pneumonia’.”
Many now believe the long-term fundamentals are solid.
“Structurally, we are extremely positive on emerging markets,” adds Godding. “Governments have funding surpluses rather than the significant borrowing of the developed world. They can invest in infrastructure and the fabric of the economy.”
Emerging countries have not been hit by the banking crisis to the extend that western markets have. Consumers do not have high levels of borrowing and tend to save a large proportion of their earnings, so are well placed to increase consumption.
Bryan Collings, manager of Ignis International’s Hexam Global Emerging Markets Fund, which has grown nearly 17 per cent in the past three months, believes this increased domestic spending will help offset weaker demand for exports from western markets.
“In the next 10 years, we will see exports make a much smaller contribution to emerging market GDP as developing market consumers spend their savings and domestic consumption begins to increase,” he states.
Nigel Rendell, emerging markets strategist at RBC, believes the growth potential of emerging markets is much higher than western Europe and the US. “Countries such as China, India and Brazil are going to have superior growth rates as they catch up with the rest of the world,” he says.
However, there are fears that the recent rally could peter out in coming months.
Some advisers therefore suggest that investors should consider depositing money over a period of time.
“I would say they should probably take an incremental approach,” says Godding. “Maybe start with a small position, watch markets and increase it over time.”
Over the long term, he believes investors should be “open-minded” as to how much of their portfolio is in emerging markets.
“A typical portfolio might have 8-10 per cent now but over 10 years that could grow to as much as 30-40 per cent,” he states.
Most advisers see the best opportunities in the biggest economies: China, Russia and Brazil, and, to a lesser extent, India.
Rendell believes the best region is Asia. “Asia has the most dynamic productivity growth, its population is expanding, particularly the wealthy middle classes,” he says. He adds that prospects are good across the region, although the smaller markets, such as Singapore and Taiwan, may be more exposed to a fall in exports as they are so dependent on electronics. “You have to pick and choose entry points more carefully in those areas than China and India.”
Robinson also favours Asia as well as the big commodity producers in Latin America.
“China remains the key area over the next few years,” he says. “But as the world gets better, countries that are more export-orientated, such as Korea and Taiwan, may come to the fore.”
Advisers are less keen on central and eastern Europe, which they say have large current account deficits and are more likely to default on debt.
Investors who want to enter emerging markets could take a holding in a diversified fund, which spreads investments across regions. The Aberdeen Emerging Markets fund has holdings across India, South Korea, Hong Kong, Taiwan, Brazil, China and South Africa, while the Ignis Hexam Global Emerging Markets fund covers Israel and South Africa as well as Bric countries.
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Caesar Chávez drives campaign of oil seizures
By Benedict Mander in Caracas
Published: May 11 2009 03:00 | Last updated: May 11 2009 03:00
A fresh round of expropriations in Venezuela has raised fears that the Opec member's already declining oil output could sink to its lowest level in 20 years.
Troops were mobilised over the weekend to assist PDVSA, Venezuela's state-owned oil company, in seizing the assets of 60 oil service companies, after a law was approved last week that paved the way for the state to take increasing control of its all-important oil industry.
"To God what is God's, and to Caesar what is Caesar's," said Hugo Chávez, Venezuela's president, as he presided over the expropriation of at least a dozen rigs, more than 30 oil terminals and some 300 boats. "Today we also say: to the people what is the people's," the socialist leader said to roars of approval from red-clad supporters on the shores of Lake Maracaibo, the heart of the nation's oil production.
This move forms part of a broader assault against the private sector, which Mr Chávez has increasingly blamed as Venezuela slides into recession. Simultaneously he is engaging in what opposition leaders say is a campaign of persecution of his political foes.
Manuel Rosales, a former presidential candidate, has been granted asylum in Peru to escape arrest over corruption charges, while congress has removed almost all the spending powers of Antonio Ledezma, the anti-Chávez mayor of Caracas. Other opponents have been jailed or gone into hiding.
PDVSA, which is suffering from a sharp fall in export income, made the surprise move against the oil service companies in response to their threat that they would suspend operations until it paid a backlog of invoices. Some, including Helmerich & Payne and Ensco International,abandoned rigs this year. PDVSA, which is under pressure to cut expenses by 60 per cent because of tumbling revenues, is estimated to owe as much as $12bn (€8.9bn, £7.9bn) to contractors since suspending payments to them last August, shortly after oil prices began their precipitous decline.
It has demanded that companies accept a 40 per cent cut in their bills, arguing that the decline in oil prices means they are charging too much. The new law will also enable PDVSA to pay debts with bonds rather than cash, and compensate assets at book value.
The move is the latest symptom of the cashflow crisis that has bedevilled the state oil company for two years as it has become burdened with responsibilities removed from its core business - in particular funding and running social programmes that are the bedrock of Mr Chávez's support.
But analysts say that by shifting its problems on to its suppliers, PDVSA is storing up bigger problems for the future. Not only does it lack the ability to operate as efficiently as the service -providers, but it sends a grim signal to companies considering investing in Venezuela.
Perhaps of most concern is the impact this measure could have on foreign companies' interest in an auction to develop the Carabobo block in the oil-rich Orinoco Belt, which is the first oil investment opportunity in Venezuela in the past decade and represents the country's biggest hope for reviving production. The International Energy Agency estimates that production fell to 2.36m bpd in 2008, compared to 3.18m bpd in 1997. PDVSA claims it increased to 3.27m bpd in 2008.
Some 19 companies - including BP, Chevron, Shell, StatoilHydro, and Total - have expressed interest in bidding for the Carabobo projects that could collectively produce more than 800,000 bpd, and require investments of up to $30bn.
But adding to worries about the lack of legal security in Venezuela, intensified by recent developments, oil companies are also concerned by high start-up and financing costs as well as tight profit margins owing to fiscal terms that were drawn up before oil prices began their decline.
"Venezuela's aggressive fiscal terms and the country's trend toward nationalisation of oil industry activities will make it more difficult to attract foreign investment and competitive bids from qualified operators," says David Voght, a director at IPD Latin America, which advises international oil companies in Venezuela.
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商船三井、ベトナム拠点に海運網 6月、北米航路に大型貨物船
【ハノイ＝岩本陽一】商船三井はベトナムを核としたコンテナ輸送網を構築する。同国南部で整備中の貨物ターミナルを中継拠点として活用。今年6月に新設する北米航路に大型船を投入し、従来より早く、低コストで輸送できる体制を整える。世界同時不況で国際貿易は停滞しているが、ベトナムからの荷動きは底堅いと判断。2011年には同国を核とする航路を欧州、アフリカ、南米にも拡大する。
商船三井が活用するのはベトナムの商都ホーチミン近郊のカイメップ港。日本の国際協力機構（ＪＩＣＡ）の支援などによって港湾整備が進んでいる。貨物ターミナルの一部が5月に完成するのに合わせ、6月3日から運航を始める。商船三井は200億円を投じて隣接地でターミナルを拡張する。(16:00)
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外務省、択捉島取材で日テレに抗議 ロシアのビザ利用
外務省は12日夜、日本テレビ系列のテレビ局モスクワ支局長がロシアの査証（ビザ）を持って今月9日から北方領土の択捉島に入ったことを確認したとして、日本テレビ側に「極めて遺憾だ」と抗議し、再発防止を強く要請したと発表した。
外務省はモスクワ支局長の択捉島上陸はロシアの入国手続きに従っており、日本固有の領土とする日本の法的立場を害するとしている。(07:01)
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グアム移転協定：承認案、参院否決
在沖縄米海兵隊のグアム移転に関する協定締結の承認案は１３日午前、参院本会議で反対多数で否決された。衆院では承認されており、同日午後、両院協議会を開いたうえで、憲法の規定により衆院の議決を優先し承認される。
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ＣＯ２削減：経団連の御手洗会長発言を斉藤環境相が批判
斉藤鉄夫環境相は、日本経団連の御手洗冨士夫会長が２０２０年までの日本の温室効果ガス削減目標（中期目標）として６案のうち最も緩い「９０年比４％増」を支持したことに対し、１２日の閣議後会見で「そんな目標を出したら世界の笑いものになる」と批判。政府と産業界の対立が表面化している。
中期目標について、政府の検討委員会は４月、９０年比▽４％増▽１％増～５％減▽７％減▽８～１７％減▽１５％減▽２５％減－－の６案を提示した。
御手洗会長は１１日の定例会見で４％増への支持を表明。経団連は１２日、「中国や米国など主要排出国が国際的枠組みに参加することが不可欠。国際競争にさらされる産業界にとって、国際的な公平性の観点から『４％増』が最も合理的」との意見書を政府に提出した。
一方、斉藤環境相は「（排出量が）京都議定書の目標（９０年比６％減）さえも上回る中期目標を掲げるのは、日本の国際社会における地位をおとしめる。野心的な中期目標が必要だ」と主張した。
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国際収支：経常黒字、半減 貿易・サービス、赤字に－－昨年度
財務省が１３日発表した０８年度の国際収支速報によると、モノやサービス、投資による収益など海外との取引状況を示す経常収支の黒字額は前年度比５０・２％減の１２兆２２９１億円だった。黒字縮小は７年ぶりで、減少率は現行の統計が始まった８５年以来最大。金融・経済危機で貿易・サービス収支が初の赤字に転落し、海外投資からの収益を示す所得収支も６年ぶりに減少した。
貿易収支は１兆１７０４億円の黒字で、０７年度から９０・０％も減少した。０８年１１月以降、輸出の２ケタ減が続き、輸入は原油価格高騰などで高水準が続いたため。日本人の海外旅行の減少などでサービス収支は２兆１７２９億円の赤字で、赤字幅は１６・３％減った。
所得収支の黒字は、１３・１％減の１４兆５５９３億円。金融危機で国債などに資金が集まり金利が低下し、債券の利子収入が１３・２％減、株式の配当も前年度の３分の１の水準に落ち込んだ。
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現状判断ＤＩは4カ月連続上昇、判断を上方修正＝景気ウォッチャー調査
2009年 05月 13日 15:43 JST
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［東京 １３日 ロイター］ 内閣府が発表した４月の景気ウォッチャー調査では、景気の現状判断ＤＩが３４．２となり、前月比で５．８ポイント上昇し、４カ月連続の上昇となった。定額給付金や高速道路料金の引き下げなどがプラス要因となる中、景気ウォッチャー調査の判断は「景気の現状は厳しいものの、このところ悪化に歯止めがかかりつつある」となり、３カ月連続で上方修正された。
回答者からは「高速道路料金引き下げの影響で、土日、特に日曜日の来客数がかなり増えている」（四国、商店街）、「２月が底であり、それに比べると、４、５月の売上は２─３割ほど増えている」（東海、輸送用機械器具製造業）との声が出ていた。
２、３カ月先を見る先行き判断ＤＩは３９．７で３．９ポイント上昇した。家計部門では景気・雇用の先行や新型インフルエンザに対する不安感があるものの、経済対策などの効果に期待感が出ている。企業部門では、厳しい状況ながらも、受注回復や在庫調整の進展が製造業を中心に見込まれているほか、雇用部門では一部で休業減などに期待感も出ていた。
現状・先行きともに、家計、企業、雇用関連のすべてのＤＩが上昇するなど、やや戻す動きが出ているものの、内閣府はＤＩの水準自体は依然として低いと指摘している。現状判断ＤＩは、横ばいを示す５０を２５カ月連続で下回っているほか、先行き判断ＤＩは５０を２３カ月連続で下回っている。
なお、前月の判断は「景気の現状は極めて厳しいものの、悪化のテンポがより緩やかになっている」だった。
地域別にみると現状と先行きともに、全国１１地域のうち１０地域で前月から上昇、１地域（沖縄）で低下した。調査期間は毎月２５日から月末までとなっている。
--------------------------
Genetically Engineered Golden Rice: A Dangerous Experiment
* GM Watch, May 12, 2009
Straight to the Source
NOTE: At the heart of the big GM promotional kicking off at the Vatican later this week is Golden Rice.
The organiser of the event is Ingo Potrykus who, together with Peter Raven, who's also an advisor to the Pontifical Academy of Sciences, has for much of the last decade been at the heart of the GM PR campaign based around Golden Rice.
http://www.spinprofiles.org/index.php/Ingo_Potrykus
But as this article makes clear there are already tried-and-tested programmes involving cheap, traditional, and readily available solutions to Vitamin A deficiency. So why are the likes of the Rockefeller Foundation pouring huge sums into Golden Rice and the like?
Low-tech, sustainable solutions to hunger and malnutrition are going unfunded, or underfunded, thanks to the governmental biotech industry obsession with the hugely expensive and uncertain technology of genetic engineering.
World Food Prize winner, Hans Herren, whose work on natural biological control helped save the endangered cassava crop in large areas of Africa (from Senegal to Mozambique), removing a threat to the food security of some 300 million people, has commented, "We already know today that most of the problems that are to be addressed via Golden Rice and other GMOs can be resolved in matter of days, with the right political will."
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Golden Rice: A dangerous experiment
GMWatch, May 2009
http://www.bangmfood.org/feed-the-world/17-feeding-the-world/37-golden-rice-
a-dangerous-experiment
In February 2009 a group of 22 international scientists and experts addressed an open letter to Prof Robert Russell at Tufts University School of Medicine, who is in charge of clinical trials on GM Golden Rice, protesting at clinical trials of GM Golden Rice being conducted on adults and children.[1]
The authors say that the trials breach the Nuremberg Code, brought in at the end of World War II to prevent any repetition of the experiments conducted on people by Nazi scientists.
The authors say that Golden Rice:
* is inadequately described in terms of biological and biochemical makeup
* has not been shown to be stable over time GM crops have been found to be unstable in that their genetic makeup as revealed in tests has differed from that described by the company and scrambling of the genome at the site of insertion sometimes occurs[2]
* has never been through a regulatory /approvals process anywhere in the world.
The authors' concerns are backed by a large body of evidence showing that GM crop/food production produces unintended effects, which can result in damage to health when GM foods are fed to animals.[3] There is no evidence to suggest that Golden Rice is any safer than these GM foods.
The authors of the letter to Prof Robert Russell protesting at the Golden Rice human feeding trials conclude, "We can assure you that such trials would not have been approved within the European Union in the absence of safety information, which highlights yet again the flaw of the USDA and FDA regulatory system in considering GM crops/foods as hypothetically 'generally recognised as safe GRAS' in the absence of hard experimental data."
This is not the first time that clinical trials of Golden Rice have become mired in controversy. In the summer of 2008 it was reported that a clinical trial on Golden Rice was cut short in China in July 2008, when the government found that 24 children 6-8 years of age at a primary school in Henyan, Hunan, were to be used as guinea pigs.[4]
Golden Rice not proven safe to eat
When pharmaceutical drugs are tested for safety, they are first tested on animals. Only if animal studies reveal no harmful effects is the drug further tested on human volunteers. If animal tests with a drug were to yield results similar to those seen in feeding studies carried out with GM foods, the drug would most likely be disqualified for further development.
Golden Rice has never been subjected to feeding trials on animals. It is therefore criminally irresponsible to test it on humans.
The absence of animal testing data on Golden Rice is especially worrying as Golden Rice is engineered to overproduce beta carotene, and studies show that some retinoids derived from beta carotene are toxic and cause birth defects.[5][6][7][8][9] In particular, high concentrations of the retinoid called retinol are toxic.[10]
One of the breakdown products of beta-carotene, RA, is biologically active at much lower concentrations than retinol, and for this reason excess RA or RA derivatives are extremely dangerous, particularly to infants and during pregnancy.[11]
In his review of GM nutritionally enhanced plants, David R. Schubert of Cellular Neurobiology Laboratory, The Salk Institute for Biological Studies, La Jolla, California, argues that "rigorous, multigenerational animal safety assessments with the hope of identifying risks to health" are needed for all such plants before they are commercialized.[12]
Defenders of Golden Rice have claimed that as humans and not animals are the intended consumers, animal feeding trials are unnecessary.
This argument is a common one from advocates of GM, but it is fatally flawed. It is true that animal feeding trials on Golden Rice may not answer the questions of how much vitamin A humans would derive from eating the rice and how effective it would be in solving vitamin A deficiency in humans. But when it comes to testing for toxic effects, animal feeding trials have been found to be a valuable indicator.
It is especially important to carry out such toxicological testing on GM foods because unexpected toxins or allergens may arise from the GM process itself. These may result from genetic disruptions or disturbed biochemistry arising from new enzyme activities in a place where they do not normally occur. The same enzyme working in different plant hosts and cellular environments, as is the case with Golden Rice, can participate in different biochemical reactions and produce by-products that affect health.
For these reasons, animal testing is the standard investigation performed to assess possible toxicity both in drugs and in new GM foods. Why should Golden Rice be an exception?
With regard to testing for efficacy and assimilation of the beta-carotene in Golden Rice, defenders of the product say that beta-carotene is broken down differently in animals than in humans and so animal testing is irrelevant.
But ferrets have been identified by researchers as animals that break down beta-carotene in a similar way to humans.[13] Why has efficacy and assimilation not been tested on them?
Golden Rice appears to have escaped animal testing because of the pervasive attitude to GM in the USA, which was initiated and perpetuated by industry in partnership with government. Under the US system, GM crops and foods are classed as "GRAS" (Generally Recognised As Safe). This is a completely theoretical evaluation which means that industry can do no safety testing at all and still get products approved.
Tellingly, on the Golden Rice Humanitarian Board website (www.goldenrice.org), the header for the section "Tests performed on Golden Rice" reads, "It's just rice". The unnamed authors claim, "Detailed molecular analyses have failed to find new allergens showing up as a consequence of having introduced a new gene into a plant, and determination of the expression levels of ten-thousands of genes have also shown that the only changes encountered are related to the introduced genes and those involved in related metabolic pathways." But no data have been published to enable independent scientists and the public to evaluate these claims. As one scientist told GMWatch, "If data isn't published, it doesn't exist."
Bizarrely, the "Research on Health Effects" section of the Golden Rice website lists publications NOT on Golden Rice but on general research on the health effects of vitamin A. Even more bizarrely, the main publications listed are by the United Nations (UN) and the World Health Organisation (WHO). The UN and WHO report success from their long-running programmes to combat vitamin A deficiency (VAD) in those places where they have been implemented. These tried-and-tested programmes involve cheap, traditional, and readily available solutions such as vitamin A supplements and encouraging home growing of vitamin A-rich leafy green vegetables. Golden Rice has never been a part of these programmes. Yet in a sleight-of-hand that has become all too typical in the GM industry, the Golden Rice Humanitarian Board is using data from those programmes to promote its risky, heavily patented, and expensive technological 'solution' to VAD!
Golden Rice not proven safe for the environment
No data have been published on the environmental risks of Golden Rice. These may include the possibility that the rice will cross-pollinate with other cultivated rice and wild rice.
Golden Rice not proven effective
No data have been published on how much beta-carotene is in the rice after four weeks of storage and 20 minutes of cooking.
It's important to note that Golden Rice does not contain vitamin A, but a vitamin A precursor, beta-carotene, that needs to be converted by the body into usable vitamin A.
No data have been published on the bioavailability and conversion into vitamin A of the beta-carotene in Golden Rice how much is actually taken up and converted into a useful nutrient by the body.
No data have been published on the bioavailability and conversion into vitamin A of the beta-carotene in Golden Rice in people who are deficient in other nutrients. The target consumers of Golden Rice are the malnourished, but these people are lacking in many nutrients, some of which (e.g. fats and iron) are necessary for the uptake and use of beta-carotene. This fact undermines the entire "single nutrient" assumption behind the Golden Rice project.
Better alternatives are available
"GE rice could, if introduced on a large scale, exacerbate malnutrition and undermine food security because it encourages a diet based on a single industrial staple food rather than upon the reintroduction of the many vitamin-rich food plants with high nutritional value that are cheap and already available." Professor Klaus Becker, University of Hohenheim, Germany
"Real-world studies [on Golden Rice] are still lacking, says WHO malnutrition expert Francesco Branca, noting that it's unclear how many people will plant, buy, and eat golden rice. He says giving out supplements, fortifying existing foods with vitamin A, and teaching people to grow carrots or certain leafy vegetables are, for now, more promising ways to fight the problem." [14]
WHO launched its strategy to combat vitamin A deficiency (VAD) in 1998. It describes the strategy as follows: [15]
*promoting breastfeeding, as breast milk is a natural source of vitamin A and protects babies from VAD
*supplying high-dose vitamin A supplements for deficient children. This has proven a simple and low-cost intervention that has produced remarkable results, reducing mortality by 23% overall and by up to 50% for acute measles sufferers
*food fortification, which takes over where supplementation leaves off.
Sugar fortified with vitamin A in Guatemala maintains vitamin A status, especially for high-risk groups and needy families.
*cultivating the garden is the next phase necessary to achieve long-term results. For vulnerable rural families, for instance in Africa and South-East Asia, growing fruits and vegetables in home gardens enables a diverse diet and contributes to better lifelong health. This is backed by research in South Africa. A home-gardening program that was integrated with nutrition education, and focused on the production of yellow and dark-green leafy vegetables, significantly improved the vitamin A status of 2-5-year-old children in a rural village in South Africa. [16]
Changing agricultural models have contributed to vitamin A deficiency
Interestingly, WHO's recommended practice of growing beta-carotene-rich leafy vegetables in home gardens was common in developing countries before the arrival of World Bank, IMF and other Western-backed programmes that forced farmers into growing cash crops for export. This fact is recognized in a World Bank report, which notes, "Cash crops are useful for generating income but export vegetables may not be meeting local demand for micronutrient-rich foods."
The report also says, "Home gardens can be both a major household food resource and a source of income. It recognizes that the role of home gardens in solving nutrient deficiencies have been ignored by policy makers because they lack the status of marketed crops (and often do not appear on any economic balance sheet). Home gardens are also frequently the domain of women, which further reduces their status.[17]
It is ironic that Golden Rice is a "solution" promoted by Western interests to a problem that was arguably generated by Western interests in the first place.
Notes
1. Tufts University Involvement in Golden Rice Feeding Trials. Letter from scientists and experts to Professor Robert Russell, Professor Emeritus, Friedman School of Nutrition Science and Policy, Tufts University School of Medicine, February 2009, archived at http://www.i-sis.org.uk/SPUCTGM.php
2. Collonnier C, Berthier G, Boyer F, Duplan M-N, Fernandez S, Kebdani N, Kobilinsky A, Romanuk M, Bertheau Y (2003). Characterization of commercial GMO inserts: a source of useful material to study genome fluidity.
www.crii-gen.org
3. Reviews include: Pusztai A. and Bardocz S. (2006). GMO in animal
nutrition: potential benefits and risks. In: Biology of Nutrition in Growing Animals, eds. R. Mosenthin, J. Zentek and T. Zebrowska, Elsevier Limited, pp. 513-540; Schubert D.R. (2008) The problem with nutritionally enhanced plants. J Med Food., 11: 601-605; Dona A. and Arvanitoyannis I.S. (2009) Health Risks of Genetically Modified Foods. Crit Rev Food Sci Nutr., 49: 164175.
4. Noemie Bisserbe, Golden scare: A new genetically modified rice strain is breeding controversy, Businessworld, 22 August 2008, http://www.businessworld.in/index.php/Economy-and-Banking/Golden-Scare.html
5. McCaffery PJ, Adams J, Maden M, Rosa-Molinar E: Too much of a good thing:
retinoic acid as an endogenous regulator of neural differentiation and exogenous teratogen. Eur J Neurosci 2003;18: 457472.
6. Adams J, Holson RR: The neurobehavioral teratology of vitamin A analogs.
In: Handbook of Developmental Neurotoxicology (Slikker W, Chang LW, eds.).
Academic Press, San Diego, CA, 1998, pp. 631642.
7. Marcus R, Coulston AM: Fat-soluble vitamins. In: The Pharmacological Basis of Therapeutics, 10th ed. (Hardman JG, Limbird LE, Gilman AG, eds.).
McGraw Hill, New York, 2001, pp. 17731791.
8. Teelmann K: Retinoids: toxicology and teratogenicity to date. Pharmacol Ther 1989;40:2943.
9. Wyatt EL, Sutter SH, Drake LA: Dermatological pharmacology. The Pharmacological Basis of Therapeutics, 10th edition (Hardman JG, Limbird LE, Gilman AG, eds.). McGraw Hill, New York, 2001, pp. 17951818.
10. Adams J, Holson RR: The neurobehavioral teratology of vitamin A analogs.
In: Handbook of Developmental Neurotoxicology (Slikker W, Chang LW, eds.).
Academic Press, San Diego, CA, 1998, pp. 631642.
11. Marcus R, Coulston AM: Fat-soluble vitamins. In: The Pharmacological Basis of Therapeutics, 10th ed. (Hardman JG, Limbird LE, Gilman AG, eds.).
McGraw Hill, New York, 2001, pp. 17731791.
12. David R. Schubert, Perspective: The Problem with Nutritionally Enhanced Plants, J Med Food 11 (4) 2008, DOI: 10.1089/jmf.2008.0094.
13. Morphology of ferret subcutaneous adipose tissue after 6-month daily supplementation with oral beta-carotene. Incoronata Muranoa, Manrico Morronia, Maria Cristina Zingarettia, Paula Oliverb, Juana Sánchezb, Antonia Fusterb, Catalina Picób, Andreu Paloub and Saverio Cinti. Biochimica et Biophysica Acta (BBA) - Molecular Basis of Disease, Volume 1740, Issue 2, 30 May 2005, pp. 305-312
14. Enserink, M. 2008. Tough Lessons From Golden Rice. Science, 230, 468-471.
15. Vitamin A deficiency, World Health Organisation website, http://www.who.int/nutrition/topics/vad/en/index.html
16. Faber Mieke; Phungula Michael A S; Venter Sonja L; Dhansay Muhammad A; Benade A J Spinnler (2002). Home gardens focusing on the production of yellow and dark-green leafy vegetables increase the serum retinol concentrations of 2-5-y-old children in South Africa. The American journal of clinical nutrition 2002;76(5):1048-54.
17. Best Practices in Addressing Micronutrient Malnutrition by Judith McGuire, The World Bank, 1818 H Street NW, Washington DC, 20433, http://www.unscn.org/archives/scnnews09/ch2.htm
--------------------------
Mexico Corn Contamination: How Monsanto & University of California Tried to Silence Dr. Ignacio Chapela
* By Andy Rowell
GM Watch, May 7, 2009
'I don't want to be a martyr by any means, but I cannot avoid now realizing that this is a very, very well concerted and coordinated ad paid for campaign to discredit the very simple statement that we made.' - Ignaco Chapela
'Current gene-containment strategies cannot wok reliably in the field.' - Nature Biotechnology, Editorial [1]
In the autumn of 2000 a graduate student from the University of California held a workshop for local peasant farmers in the beautiful mountainous region of Sierra Norte de Oaxaca in southern Mexico. The graduate, David Quist, hoped to show the farmers how to test their seeds for GM. To do this he thought he would show them the difference in the purity of the local maize, called criollo, compared to the maize that had been shipped in from the USA, where some 40 per cent is GM. The US maize would test positive for GM and, naturally, the Mexican maize would be negative, he thought. But Quist was wrong. For some reason, instead of the local maize being negative, it kept coming up positive. [2]
Quist was visiting the region because his supervisor, Dr Ignacio Chapela, who was originally from Mexico City, had been working with the campesinos or peasant farmers in Oaxaca for over 15 years, assisting them in community sustainable agriculture.
Quist was told by Chapela to bring the samples back to the USA, where the two would repeat the experiments and test the native maize 'landraces' for contamination by GMOs. Although there had been a moratorium on the commercial growing of GM in Mexico since 1998, there was general concern that GM maize was coming across the border from the USA, either as seed or as 'food aid' and that it was contaminating the indigenous species.
This was seen as a worry for various reasons, the main one being that contamination threatens Mexico's unique maize genetic diversity. Mexico is the traditional home of corn, where the plant was first domesticated some 10,000 years ago. It is an important crop for a quarter of the nation's 10 million small farmers and corn tortillas are a central part of nation's diet. But now due to NAFTA (the North American Free Trade Agreement), the country is a net importer of the crop. With some 5 million tonnes coming in from the USA every year, and because there is no mandatory labelling, there is no way of knowing if this corn is GM or not. [3]
Greenpeace had launched a campaign in Mexico in January 1999 warning the Mexican Government that GM maize imports from the USA 'would end up polluting Mexican corn varieties'. 'The aim was to stop the imports', says Hector Magallon Larson, from Greenpeace Mexico. 'Greenpeace wanted to highlight the inconsistency of the Mexican government stance of supporting a moratorium but allowing millions of tonnes of GE corn to pour over the border.'
The campaign was not well received in official circles. 'The main response came from the Minister for Agriculture,' says Hector Magallon Larson. 'He said these corn imports were only for human food and animal feed, so the corn shouldn't be planted. They also said that the corn was treated with a fungicide that made the seed sterile so it couldn't grow.'
Greenpeace took samples of corn imported from the USA in March 1999, analysing samples from three different boats docked in Veracruz. The results showed that it was Bt corn made by Novartis. The campaigning group even planted some of the seeds and grew them, making sure to harvest them before they released pollen. Then they took the GM corn to the Ministry of Agriculture. 'We told them it could grow, but they said it would not happen. They have done nothing to stop or solve the problem,' says Magallon Larson. Despite Greenpeace's concerns, Dr Chapela says that: 'We were not expecting to find transgenics when we went looking for them in Oaxaca'.
Although they were working in Mexico, Chapela's and Quist's academic base is in Berkeley, where Chapela is an assistant Professor. Although a microbial ecologist by training, he had served on the prestigious National Research Council's Committee on Environmental Impacts Associated with the Commercialization of Transgenic Plants, whose report was published in 2002 by the National Academy Press. [4] Both scientists had sprung to prominence in 1988 as two of the key opponents of a multi-million dollar alliance between Novartis and the University of Berkeley. Unbeknown to Chapela and Quist at the time, their opposition to the Novartis deal would come back to haunt them after their research was published. The ensuing saga led to the most acrimonious fight between opponents and proponents of GM since the Pusztai affair. It also laid bare a central strategy of the biotechnology industry: that of GM contamination, and raised questions about what many believe is one of its Achilles' heels: that it could be inherently unstable. The argument over whether Quist and Chapela were attacked because they did bad science or because they questioned GM continues to run and run.
Back in the laboratory, Quist and Chapela starting using the standard amplification technique for DNA called polymerase chain reaction. Known as PCR for short, it is used to test 'for the presence of a common element in transgenic constructs' and in this case that was the promoter for the CaMV virus. The CaMV, the promoter at the heart of the Pusztai controversy, is seen as an ideal marker to tell if transgenic contamination has occurred. [5] But the PCR technique can also be problematic, as the amplification process can cause 'false positives' where simple contamination in the lab can seem to be part of the transgenic DNA. So researchers can believe they are looking at genetic contamination when in fact they are looking at experimental contamination.
Chapela and Quist also analysed control samples that came from maize grown in Peru and from seeds from the Sierra Norte de Oaxaca region in Mexico taken in 1971, long before the introduction of GM crops. They found positive PCR amplification in four of the six samples of the Oaxaca maize, but no contamination in the Peruvian maize or the older sample. [6]
They then undertook a further similar analysis, called inverse PCR, so that they could establish the precise position of the transgenic sequences. They were able to identify the DNA fragments flanking the CaMV promoter sequence through inverse PCR tests, known as iPCR. The fragments were scattered about in the genome, suggesting a random insertion of the transgenic sequence into the maize genome. [7]
So essentially, Quist and Chapela reached two conclusions. The first was that GM contamination had occurred in Mexican maize and the second was that the GM DNA seemed to be randomly fragmented in the genome of the maize. If the first point was contentious, the second was explosive, as it suggested that transgenic DNA was not stable. Quist and Chapela knew that if the research was published it would cause an international outcry, so they wanted to make sure that their research was correct. The biotech industry had hardly recovered from the StarLink scandal in the USA, and GM contamination of Mexican maize would represent a 'nightmare' scenario for the industry. [8]
'I repeated the tests at least three times to make sure I wasn't getting false-positives', says Quist. [9] Convinced of their findings, Chapela shared the preliminary results with various Mexican government officials who started to do their own testing. He also approached the scientific journal Nature with a view to publishing the work.
'I had been talking to government officials, because I thought it was the responsible thing to do, even though it was preliminary research', recalls Dr Chapela. [10] At one meeting the aide to the Biosafety Commissioner, Fernando Ortiz Monasterio, told Chapela that his boss wanted to see him. 'The guy just sat outside the door and when I came out, he almost took me by the hand and put me in a taxi with him to see his boss,' he says.
A Hollywood script-writer could have conceived what happened next. Chapela was hauled up to Monasterio's 'office' on the 12th floor of an empty building. 'The office space was absolutely empty', recalls Chapela. 'There were no computers, no phones, the door was off its hinges, there were cardboard boxes as a table. The official is there with his cell-phone beside him. We are alone in the building. His aide was sitting next to me, blocking the door.'
With obvious emotion, Dr Chapela recalls what happened next. 'He spent an hour railing against me and saying that I was creating a really serious problem, that I was going to pay for. The development of transgenic crops was something that was going to happen in Mexico and elsewhere. He said something like I'm very happy it's going to happen, and there is only one hurdle and that hurdle is you.'
Sitting stunned, Chapela replied: 'So you are going to take a revolver out now and kill me or something, what is going on?' Then Monasterio offered Chapela a deal: 'After he told me how I had created the problem, he said I could be part of the solution, just like in a typical gangster movie. He proceeded to invite me to be part of a secret scientific team that was going to show the world what the reality of GM was all about. He said it was going to be made up of the best scientists in the world and you are going to be one of them, and we are going to meet in a secret place in Baja, California. And I said, "who are the other scientists"', and he said "Oh I have them already lined up, there are two from Monsanto and two from DuPont". And I kept saying "Well that is not the way I work, and I wasn't the problem, and the problem is out there".'
Then events took a very sinister turn. 'He brings up my family', recalls Chapela. 'He makes reference to him knowing my family and ways in which he can access my family. It was very cheap. I was scared. I felt intimidated and I felt threatened for sure. Whether he meant it I don't know, but it was very nasty to the point that I felt "why should I be here, listening to all this and I should leave".'
Monasterio later admitted to the BBC that he had met Chapela, but vehemently denied threatening him in any way. He said that the meeting had taken place not on the 12th floor, but on the '5th floor of our offices, which is an office of the Ministry of Health, in the southern part of town where we work'. He said that at the meeting they had discussed 'the issues of the presence of maize, the importance of publishing, that what we were doing is research, and that when we have the results from our own researchers, we will share with him'. [11]
Chapela was told by Monasterio that he was in charge of biosecurity and 'I'll tell you what biosecurity is really about, it is about securing the investment of people who have put their precious dollars into securing this technologies, so my job is to secure their investment'.
'I think first he was trying to intimidate me into not publishing,' says Chapela. Once Monasterio realized that Chapela was going to try and publish his results, that 'very night he called a meeting with Greenpeace and the people from Codex and people from the Senate to divulge the results'.
The reason that Monasterio wanted the results made public was simple: 'I had said to him', says Chapela, 'that if the information was released before it was published in Nature then Nature would think twice about publishing it'. 'He fed it directly to Greenpeace, which is a lot easier to discredit than Nature,' says Chapela, adding that Monasterio knew that 'the media coverage would seriously threaten publication in Nature'. Monasterio denies breaking any confidentiality agreement by divulging the results early. [12]
But the threats intensified against Chapela, who received a letter from an agricultural under-secretary, saying that the government had 'serious concerns' about the 'consequences that could be unleashed' from his research. Moreover the government, would 'take the measures it deems necessary to recuperate any damages to agriculture or the economy in general that this publication's content could cause'. [13] 'He signed it before the publication is out and it is obvious that he is trying to intimidate me into not publishing', says Chapela, who believes that the approach is not surprising, as the Agriculture Ministry itself is 'riddled with conflicts of interest. There are just working as spokespeople for DuPont, Syngenta and Monsanto'.
In contrast to the agricultural officials, others were worried, and started to replicate the research. As Quist and Chapela outline: 'During the review period of this manuscript, the Mexican government established an independent research effort. Their results, published through official government press releases, confirm the presence of transgenic DNA in landrace genomes in two Mexican states, including Oaxaca'. [14] On 17 September 2001, Mexico's Secretary for Environmental and Natural Resources released partial results of its own study, confirming that transgenic maize had been found in 15 of 22 areas tested in Oaxaca and nearby Puebla. [15]
Just over two months later, Chapela's team published in Nature. 'We report', wrote Chapela and Quist, 'the presence of introgressed transgenic DNA constructs in native maize landraces grown in remote mountains in Oaxaca, Mexico, part of the Mesoamerican centre of origin and diversification of this crop'. In plain English, they were reporting contamination of native corn by its GM equivalent.
The scientists were both 'surprised and dismayed' over their findings, but admitted they had no way of knowing whether the contamination was from a loose implementation of the moratorium or due 'to introgression before 1998 followed by the survival of transgenes in the population'. [16]
'Whatever the source, it's clear that genes are somehow moving from bioengineered corn to native corn', says Chapela. 'This is very serious because the regions where our samples were taken are known for their diverse varieties of native corn, which is something that absolutely needs to be protected. This native corn is also less vulnerable to disease, pest outbreaks and climatic changes.' [17]
Once again it was time to shoot the messenger. 'We are just facing every single level of intimidation and aggression that you can imagine', says Chapela. 'It is obviously very well funded and very well coordinated'. 'The main attack, the most damaging attack' came 'from my own colleagues within the university', says Chapela, 'who are mad at me because I stood up against Novartis coming in with US$50 million and buying the whole college. It has to be said that the immediate consequences might be very dire for me as my tenure is being reviewed.'
Chapela says that because of his stand against Novartis: 'They are saying that we are activists, that we are anti-biotech'. Ironically before joining the staff at Berkeley Chapela had worked for Sandoz, which later merged with Ciba-Geigy to form Novartis. [18]
Some of the most virulent attacks came via the AgBioView discussion group and AgBioWorld.org website run by C S Prakash, who is a Professor of Plant Molecular Genetics at Tuskegee University, Alabama. Prakash's foundation and website are an influential talking shop for GM scientists world-wide and a key place to influence other scientists. But the underlying reason for its existence is the promotion of biotechnology and the website features a Declaration in Support of Agricultural Biotechnology, signed by more than 3300 scientists from around the world, including 19 Nobel Prize winners.
Prakash calls the Quist and Chapela study 'flawed', saying that the 'results did not justify the conclusions'. He says that they were 'too eager to publish their results because it fitted their agenda'. A co-founder of the AgBioWorld Foundation, is Gregory Conko, from the right-wing free enterprise think-tank the Competitive Enterprise Institute (CEI), based in Washington. The CEI has a long history of working with the antienvironmental 'Wise Use' movement, and is a key player in the backlash against people speaking out on environmental issues. [19]
Prakash says that the AgBioWorld website 'played a fairly important role in putting public pressure on Nature, because we have close to 3700 people on AgBioView, our daily newsletter, and immediately after this paper was published, many scientists started posting some preliminary analysis that they were doing'.
'It was not just the paper from Chapela that was damaging from the point of view of biotechnology', says Prakash. 'But a large number of media interviews, where he claimed that Mexican biodiversity was contaminated, the ability to feed its people was threatened, really outlandish claims that probably irked many of the scientists.'
The first attack came on Prakash's website within hours. But it was not a scientist who fuelled the attacks, but someone called Mary Murphy. 'The activists will certainly run wild with news that Mexican corn has been "contaminated" by genes from GM corn not currently available in Mexico... It should also be noted that the author of the Nature article, Ignacio H Chapela, is on the Board of Directors of the Pesticide Action Network North America (PANNA), an activist group' wrote Murphy.
Chapela was 'not exactly what you'd call an unbiased writer'. [20] The next AgBioView bulletin led with a posting from someone called Andura Smetacek, under the head-line 'Ignatio Chapela - activist FIRST, scientist second'. It read: 'Chapela, while a scientist of one sort, is clearly first and foremost an activist'. 'Searching among the discussion groups of the hard-core anti-globalization and anti-technology activists Chapela's references and missives are but a mouse click away.'
Smetacek argued that the article was 'not a peer-reviewed research article subject to independent scientific analysis'. Her email included detailed information on the author and tried to undermine his credibility. 'A good question to ask of Chapela would be how many weeks or months in advance did he begin to coordinate the release of his "report" with these fear-mongering activists [Greenpeace, Friends of the Earth]? Or more likely, did he start earlier and work with them to design his research for this effect?' [21] In the space of an email, peer-reviewed research becomes non peer-reviewed research designed by 'hard-core' environmental groups.
In the next bulletin, on 30 November, other contributors continued the theme started by Smetacek and Murphy, questioning Quist and Chapela's 'activist' links and their research. 'Mary Murphy's comment echoes my reaction when I read the news reports This alarmist reporting of preliminary, incomplete research is just another example of the nutty illogic of the anti-GE luddites.' [22]
These attacks by Smetacek and Murphy were sent immediately after the publication of the Nature article. Their character assassinations set the tone for others to follow, as we shall see. They had moved the debate from the message to the messengers and it was time for character assassination. Even the journal Science noted the part played by what it called, 'widely circulating anonymous emails' accusing researchers, Ignacio Chapela and David Quist, of 'conflicts of interest and other misdeeds'. [23] Some scientists though, were alarmed at the personal nature of the attacks. 'To attack a piece of work by attacking the integrity of the workers is a tactic not usually used by scientists', wrote one. [24]
A virtual world
So who are Mary Murphy and Andura Smetacek, who between them have posted over 60 articles on the Prakash site? Mary Murphy's email is mmrph@hotmail.com, which seems like just another hotmail address. However, on one occasion, Murphy posted a fake article claiming that Greenpeace had changed its stance on GM due to extra strength GM marijuana. Although Murphy used her hotmail address mmrph@hotmail.com, she left other identifying details, including 'bw6.bivwood.com'. [25]
Bivwood is the email address for Bivings Woodall, known as the Bivings Corporation, a PR company with offices in Washington, Brussels, Chicago and Tokyo. Bivings has developed 'internet advocacy' campaigns for corporate America [26] and has been assisting Monsanto on internet PR ever since the biotech company identified, in 1999, that the net had played a significant part in its PR problems in Europe. While Bivings claims its work for Monsanto is an example of how it approaches contentious issues in a 'calm and rational way', it uses the internet's 'powerful message delivery tools' for 'viral dissemination'.
As it outlines: 'Message boards, chat rooms, and listservs are a great way to anonymously monitor what is being said. Once you are plugged into this world, it is possible to make postings to these outlets that present your position as an uninvolved third party.' [27]
But evidence points to the fact that Bivings, or those who have had access to its email accounts, has covertly smeared biotech industry critics via a website called CFFAR (Center for Food and Agricultural Research), although no such organization appears to exist, as well as articles and attacks posted to listservs under aliases. The attack on the Nature piece is a continuation of this covert campaign. [28]
Andura Smetacek is the original source of a letter that was published in The Herald newspaper in Scotland under the name of Professor Tony Trewavas, a pro-GM scientist from the University of Edinburgh. This letter was the subject of a legal action between Greenpeace, its former director Peter Melchett and the newspaper. The case went to the High Court and resulted in Peter Melchett being paid damages, which he donated to various environmental groups, and an apology from The Herald. [29]
Trewavas has always denied that he wrote the defamatory letter, and Andura Smetacek has acknowledged that 'I am the author of the message, which was sent to AgBioWorld. I'm surprised at the stir it has caused, since the basis for the content of the letter comes from publicly available news articles and research easily found on-line'. [30]
Despite the email address, Andura Smetacek is also a 'front email'. Although in early postings to the AgBioView list, she listed her address as London, in a dispute with The Ecologist magazine Andura left a New York phone number. However, enquiries have discovered that there is no person of that name on the electoral roll or other public records in the USA. Despite numerous requests to give an employer or verify a land address for The Ecologist, Smetacek has refused to do so. [31] Subsequent attempts by both British and American journalists to track down Smetacek have also elicited no answers. [32]
The first exposé of the Bivings connection to the Nature article was published by myself in the Big Issue magazine, and by the anti-GM campaigner, Jonathan Matthews, in The Ecologist magazine. [33] Bivings denied being involved in the dirty tricks campaign, saying that the reports were 'baseless' and 'false', and merited 'no further discussion'. [34] Environmental commentator George Monbiot subsequently published two articles in The Guardian. 'The allegations made against the Bivings Group in two recent columns are completely untrue,' responded Gary Bivings, President of the Group. Bivings also contended that 'the 'fake persuaders' mentioned in the articles - Mary Murphy and Andura Smetacek - are not employees or contractors or aliases of employees or contractors of the Bivings Group. In fact, the Bivings Group has no knowledge of either Mary Murphy or Andura Smetacek'. [35]
BBC Newsnight then took up the story. A spokesperson for Bivings admitted to a researcher from Newsnight that 'one email did come from someone "working for Bivings" or "clients using our services"'. But once again they denied an orchestrated covert campaign. [36] Bivings later argued that they had 'never made any statements to this effect', saying that BBC Newsnight had been 'wrong'. [37]
Gary Bivings also denied any involvement with the CFFAR website. But the website is registered to an employee of Bivings, who was a Monsanto web-guru. Furthermore, Bivings denied any involvement with the AgBioWorld Foundation, yet Jonathan Matthews had received an error message whilst searching the AgBioWorld database that a connection to the Bivings server had failed. Internet experts believed that this message implied that Bivings was hosting the AgBioView database. These experts also noticed technical similarities between the CFFAR, Bivings and AgBioWorld databases. [38]
Prakash, however, denied receiving funding or assistance for the AgBioWorld Foundation and denied working with any PR company, saying that he is 'pro-the technology not necessarily the companies'. There were other tell-tell signs to be found, too. For people who had been so prolific in their attack against Chapela, Mary Murphy and Andura Smetacek suddenly disappeared. Murphy's last posting was on 8 April, just a few days before the Big Issue piece went out. That same month, April 2002, Bivings had posted an article by their contributing editor, Andrew Dimmock, called 'Viral Marketing: How to Infect the World' on the web.
However, after the story broke in the UK press, Bivings changed their on-line version. Out went the sentence 'There are some campaigns where it would be undesirable or even disastrous to let the audience know that your organization is directly involved' and out went the 'anonymously'. One sentence was changed from 'present your position as an uninvolved third party' to 'openly present your identity and position'. [40] In the autumn of 2002, Bivings outlined how the term viral marketing had been 'unfairly vilified' in the press, it was nothing more than 'wordof- mouth advertising via the internet'. [41]
Why would a company that had nothing to do with the Nature attack, suddenly change articles on its website? Even more intriguing were the actions of a Biving's web designer who lived in the locality of the server that had posted the 'Mary Murphy' emails. Having worked at Bivings for seven years, as a senior programmer, this person suddenly changed his online CV, deleting all references to Bivings. Suddenly he had spent the last seven years being a 'Freelance Programmer/Consultant'. The only problem is that his old CV is still on-line in an archive site that repeatedly mentions that he had worked for Bivings.
There was one other slight but important change to the Bivings site that occurred after the publicity too. Bivings had listed 15 different Monsanto websites as clients, however this changed to just a direct link to Monsanto.com afterwards. Were Bivings trying to hide just how much work they did for Monsanto? Once again, you can see the old version on internet archive sites. [42] Finally, the CFFAR website was suspended, with the site hosting an inoffensive 'holding page', but once again it is still available on archive sites. [43] Monsanto denied that it employed Bivings to undertake this kind of work. 'They don't do PR', said a Monsanto spokesperson. 'We speak for ourselves on issues'. [44] This begs the question of what kind of work Monsanto do on the web, and finally solves the mystery of the identity of Andura Smetacek. The company has radically changed its on-line activities in the last few years. After Monsanto's European PR took a 'beating' in 1999, Monsanto's communications director said 'maybe we weren't aggressive enough. When you fight a forest fire, sometimes you have to light another fire'. [45]
In January 2000, Prakash had set up the AgBioWorld website. [46] In July 2000, Andura Smetacek suddenly appeared on AgBioView, writing in a very measured tone. 'While I remain concerned about who controls biotechnology', wrote Smetacek. 'I have come to a disturbing conclusion about some of the groups with whom I have been discussing this issue who so strongly oppose genetic engineering. Their tactics and support for violence and vandalism are unacceptable and must stop.' Smetacek then mentioned the recently registered CFFAR site, saying that she had 'signed a petition to stop these acts of terrorism posted to www.CFFAR.org'. At the time Smetacek gave a London address, although the time and date on the email located it as 'Pacific Day Time', coming from the Pacific Coast of the USA. [47] In the first months of the AgBioView list, messages were forwarded in such a way that it was possible to track the technical 'headers' that shows where a message comes from. The first few from Andura showed they had come from '199.89.234.124'. If you look up these numbers they are assigned to Monsanto in St Louis, Missouri. So, from the email address, it seems that Andura Smetacek writing from London never actually existed, 'she' was a virtual person whose role was to direct debates on the web and denigrate the opposition.
When asked what work they did for Monsanto, a spokesperson for Bivings said 'We run their websites for various European countries and their main corporate site and we help them with campaigns as a consultant and we are not allowed to discuss strategy issues and personal opinions'. They declined to give further details of their work for the biotech company, [48] but they suggested talking to another PR company that worked for Monsanto, called V-fluence.
The contact person given was Rich Levine, who previously worked for Bivings as a Monsanto web-guru. [49] The president of V-fluence is Jay Byrne, who has over 15 years experience in public relations, campaign communications and government affairs. [50] He was also the former chief internet strategist and director of corporate communications for Monsanto, where he spent a quarter of his time monitoring the web for rogue web- and activist sites. [51] In 2001, Byrne gave a presentation to a PR conference called 'Protecting Your Assets: An Inside Look at the Perils and Power of the Internet'. It gave an insight into Monsanto's use of the internet. 'A website alone won't protect your brand', Byrne told the audience, therefore it was necessary to 'Take Action, Take Control'. Ways to do this included: 'Viral marketing and other dialogue opportunities, monitoring and participation'.
One PowerPoint slide showed 'Monitoring' for Monsanto which included 'Daily monitoring of over 500 competitor, industry, "issues group" websites; Daily monitoring of 50+ key listservs, usergroups and chat rooms; Technology monitoring and updates including search engine programs and legal monitoring'.
Another chart on the PowerPoint presentation gave the difference before and after taking control of the internet to rig a search engine to go from finding hits they did not want to finding hits they did want if someone was searching for 'GM food'. Favourable hits included: 'Glossary of biotech terms; AgBioWorld; AgCare; FDA; Biotech Knowledge Center; CFFAR; Food Biotech Center; and Biotech Basics'. To the uninitiated these would all appear as independent sites, yet we now know that three of these are acknowledged Bivings projects - BioTech Terms; Biotech Knowledge Center and Biotech Basics. Two seem to have links to Bivings - AgBioWorld and CFFAR. One - AgCare - is a biotech lobby front in Canada, and the other - the US FDA - is seen by the biotech industry as an ally.
Of these, the CFFAR site is the most worrying in that it denigrates environmentalists as terrorists. It is the site that Andura wanted the scientists to look at. Once you denigrate someone it becomes easier to attack them, both physically and mentally and even intellectually. Byrne finished by quoting Michael Dell, the CEO of Dell computers: 'Think of the internet as a weapon on the table. Either you pick it up or your competitor does - but somebody is going to get killed.' [52]
The fall-out continues
In January 2002, the Mexican Ministry of the Environment confirmed their findings from the previous year and said that in some remote regions of Oaxaca and Puebla, between 20-60 per cent of tested farms had traces of transgenic material. [53]
The following month Chapela appeared at a press conference with Mexican researchers. Chapela had given some samples to the Environment Ministry who had divided the samples. One batch had been sent to the National University and the other to the Centre for Investigation and Advanced Studies. Both gave details of preliminary research that backed Chapela's findings. [54]
'They have reworked that study in two separate labs, with new sampling and new methodology. Last week, when I was in Mexico', he says when interviewed in March 2002, 'they were announcing that they were close to publication and that everything they had pointed in the same direction and they supported our work. Their principal investigator says they have three levels of analysis - the DNA, the protein and the expression level of analysis and everything that I have seen so far makes it extremely unlikely that there are any mistakes in our statement to Nature.'
So Chapela says that there are now three separate studies that have been done by two separate groups that 'confirm what we are saying, down to the quantitative level. I am still hopeful that I am not going to end the way Pusztai has seen himself pushed out of his job and discredited for publication in major journals. I think and I hope that we will be vindicated'.
But despite his optimism, in February 2002, the row intensified when an editorial written by Paul Christou, then at the John Innes Centre, appeared in the journal Transgenic Research. It was brutal. Its title said it all: ' No Credible Evidence is Presented to Support Claims that Transgenic DNA was Introgressed into Traditional Maize Landraces in Oaxaca, Mexico'.
Christou, writing on behalf of the Editorial Board, wrote that Quist and Chapela's paper had 'technical and fundamental flaws'. Sample contamination was the likely cause of the results, not GM contamination. This said, Christou pointed out that 'introgression of transgenes from commercial hybrids into landraces is likely'. [55]
'Recombination is not a satisfactory explanation either, since multiple generations of crossing have been done with all these constructs, and they have been shown to be stable - or else they would have not made it through the regulatory system,' wrote Christou. Critics of the industry say that whilst Christou's statement is broadly correct, the applicable regulatory standard for a demonstration of 'stability' is low, especially in the USA. [56]
Moreover, critics of the biotech industry point to regulatory laxness again. Consider the EPA's analysis for the stability of Bt crops. In its reregistration document for Bt crops in 2001, the EPA noted that 'stability and inheritance were not addressed with the registrations' for Monsanto's Bt corn and potato. The EPA said that because these crops had been growing for a number of years with a lack of reports relating to loss of efficacy, 'this specific endpoint can be considered to have been addressed through commercial use'. [57]
So because the EPA has not been notified of any failures, the products are deemed to be 'stable'. This is exactly the same unscientific analysis whereby, because the authorities have not been notified of any ill effects, GM products are deemed to be 'safe'. Chapela called the Transgenic Research article a 'regurgitation' of old arguments, but it angered others working on the issue. Peter Rosset from Food First, a think-tank, called it 'a "hit piece" designed to leave the public with a sense of confusion about whether the contamination was real or not'. He continued, citing Pusztai as an example that: 'I firmly believe there is a concerted attempt to make "examples" of scientists who have the courage to be dissidents from the biotech juggernaut. Clearly industry - and scientists on the industry gravy train - want to stifle scientific dissent, and cast a smoke screen over the public's perception of the risks of GMOs'. [58]
Scientists working in the field agree. Sue Mayer from GeneWatch UK says that 'it is quite extraordinary the lengths the biotech industry and scientific establishment will go to discredit any critical science'. [59] Professor Allan McHughen, from the Crop Development Center at the University of Saskatchewan in Canada, believes that there 'are a group of people who for whatever reason don't want to hear anything at all about reasons to question the technology. I read Chapela's paper over and over again and I just couldn't find anything that was inflammatory about it'. [60]
'I don't think the science in the second half of their paper was very good,' adds Allison Snow of Ohio State University, who specializes in gene flow. 'But the first half of the paper, while you could always have asked them to do a better job, I thought was well supported. The things they said could have been taken as a threat to the field of ag biotechnology because all along the ag biotechnologists have been saying that we know what these genes do, they're just like other genes.' [61]
Statements for and against
However, if the industry thought that threatening and undermining Chapela would make the controversy disappear, they were wrong. One of the leading anti-GM protagonists in the USA is Ronnie Cummins of the Organic Consumers Association. 'What the biotech industry is underestimating', says Cummins is that, 'corn is not just another crop down here. It is central to the culture. It is a total insult to the people in Mexico as to what is going on.'
The Organic Consumers Association and Food First were two of the 144 farmer and other civil society organizations from 40 countries that signed a statement on the Mexican GM Maize scandal in February 2002. It stated that 'A huge controversy has erupted over evidence that the Mesoamerican Center of Genetic Diversity is contaminated with genetically modified maize. Two respected scientists are under global attack and the peer-review process of a major scientific publication is being threatened'. The signatories claimed that 'pro-industry academics are engaging in a highly unethical and mud-slinging campaign against the Berkeley researchers'. [62]
On the AgBioView list, this document provoked outrage and the attacks against Chapela intensified. Alex Avery is a well-known adversary of organic food (see Chapter 10). Alex works with his father, Dennis, at the Centre for Global Food Studies that is affiliated to the right-wing think tank, The Hudson Institute. 'Has anyone else picked up on the "Joint Statement on the Mexican GM Maize Scandal" being whored around by the anti-biotech activists?' asked Alex Avery.
Avery followed Smetacek's and Murphy's lead. 'Chapela is an activist assistant professor of microbiology He isn't a geneticist, but he is on the board of Pesticide Action Network North America (an anti-pesticide activist group) and in 1999 signed an anti-biotech statement calling for a global moratorium on GM crops'. Avery then said that Chapela and Quist were 'far from the "respected scientists" that the Joint Statement claims. 'Then again', wrote Avery 'they do their darndest to paint Arpad Pusztai as a "widely respected scientist" in the statement, despite the drubbing Pusztai's research and methodology took from The Royal Society experts.' Avery then proposed that 'Fellow scientists, perhaps we should get out front on this and post a "joint statement" from academics.' [63] In a statement posted on AgBioWorld.org on 24 February 2002, Prakash wrote that 'the research methodology and its conclusions are however being challenged by a number of groups through formal letters to Nature (under review), and it was also addressed recently in an editorial in the Journal 'Transgenic Research'. He urged subscribers to the list to sign the petition.[64]
When is a retraction not a retraction?
Finally on 4 April 2002, Nature issued a terse statement on its website that there was disagreement between the Quist and Chapela and one reviewer. Because of this and 'several criticisms of the paper Nature has concluded that the evidence available is not sufficient to justify the publication of the original paper.' [65]
'It is clearly a topic of hot interest,' said Jo Webber from Nature, admitting the story was not just 'technical' but also 'political'. 'Nature has been going for a very long time and this is a very unusual occurrence'. Webber also admitted that she felt her editor had fudged the issue. [66]
The statements put out by Nature seemed to be contradictory and there was confusion as to whether the paper had actually been 'retracted'. The Editor, Philip Campbell, wrote 'The retraction was necessitated by technical flaws in the paper that came to our attention after its publication (which we should have picked up), and by the authors' decision not to retract the paper themselves'. [67]
In contrast, Dr Maxine Clarke, the Executive Editor of Nature wrote a month later in June that the Quist and Chapela paper 'has not been formally retracted by Nature, and stands as a citable publication'. [68] Quist certainly felt it was a fudge: 'I think they wrote in very specific language for a reason, so that it was somewhat equivocal', he says. 'If results come out to corroborate our results, they can say, "See, we didn't ask for a retraction because it is a biological reality; it is happening". If it turns sour, they can say, "See, we were right in putting these guys on the chopping block".' [69]
Chapela was more blunt, accusing Campbell of 'siding with a vociferous minority in obfuscating the reality of the contamination of one of the world's main food crops with transgenic DNA of industrial origin'. [70] Campbell had sent the paper to three referees before deciding whether to retract. Of the three, only one scientist thought the paper should be retracted - though all said there were flaws in its second part - the section on iPCR. Others joined in the argument, and the journal was accused of setting a 'dangerous precedent' and it was added that, 'by taking sides in such unambiguous manner, Nature risks losing its impartial and professional status'. [71]
Due to the connections between the prominent attackers and the biotech industry, Chapela requested that Nature print a 'statement of conflict of interest from all authors,' as regarding the Berkeley-Novartis connection. 'It cannot go unnoticed that the antagonists signing the letter against the Nature piece should all be connected directly with this local political scandal', wrote Chapela. Campbell refused.
Chapela also noted that 'Given that two of the three reviewers of the exchange between our critics and ourselves unequivocally state that our main results and statements are not legitimately challenged by the letters included here, we find it unjustified that Nature should decide to remove its endorsement of a paper which itself was subjected to several rounds of a particularly stringent review process'.
Chapela noted how the second referee had said 'none of the critics seriously dispute the main conclusion' and the third said, 'none of the comments has successfully disproven their main result that transgenic corn is growing in Mexico and crossing with local varieties'. Yet Dr Campbell published the retraction - citing only the first referee, leading to the charge that 'he had ignored the advice of most of its own advisers'. [72]
In the end Nature published two critical letters, one from a team led by Nick Kaplinsky in the Department of Plant and Microbial Biology - the department at Berkeley that received the Novartis funding. The lead author of the other letter was Matthew Metz, who also used to be at the Department of Plant and Microbial Biology at Berkeley. [73]
Both lead authors - Matthew Metz and Nick Kaplinsky - were signatories to the Prakash 'Joint Statement' that Prakash had urged scientists to sign. It has received nearly 100 signatories. [74] Metz had coedited a pro-biotech document with the AgBioWorld Foundation, the Liberty Institute and the Competitive Enterprise Institute two years before. [75] Another co-editor was Andrew Apel, editor of the industry newsletter, AgBiotech Reporter, who used the 11 September attacks to vilify anti-GM activists and scientists, specifically Drs Vandana Shiva and Mae- Wan Ho, as having 'blood on their hands'. [76]
In his letter to Nature, Metz argued that Quist and Chapela's analysis was 'flawed' and that the authors had 'misinterpreted' a key reference. Kaplinsky's letter argued that Quist and Chapela may have been 'confused', and although transgenic corn could be growing in Mexico, their claims were 'unfounded'. [77]
Chapela admits that Nature was 'under incredible pressure from the powers that be', and that the journal had asked him to respond to four letters that were critical of his paper, of which only the Kaplinsky and Metz letters were published. Both of these critics work or used to work at the department that received the Novartis funding. Metz's co-author, Johannes Fütterer, is a post doctorate student at ETH-Zurich, under Wilhelm Gruissem. According to Chapela 'Gruissem was head of department in Berkeley and the person who brought Novartis to us'. Chapela believes that it is this issue that lies at the heart of the whole saga. 'I and a few other people stood up against it and we made a big scandal that went around the world. It became a very big scandal', he says. 'And they just cannot forgive that.' Metz had even written to Nature defending the Novartis deal. [78] Chapela points to an article in the German press that says that Fütterer only 'decided' to write the letter with Metz after consultation with his boss, Gruissem, and 'his American research associates'. [79] So everyone who had letters published in Nature was in some way connected to the Novartis-Berkeley relationship. [80]
This point was also taken up by others, pointing out the controversy was taking place 'within webs of political and financial influence that compromise the objectivity of their critics'. Correspondence to Nature also pointed out that the 'Nature Publishing Group actively integrates its interests with those of companies invested in agricultural and other biotechnology, such as Novartis, AstraZeneca and other "sponsorship clients", soliciting them to "promote their corporate image by aligning their brand with the highly respected Nature brand"'. [81] As if to prove their point, just over six weeks later, Nature ran a special 'Insight' into food and the future, sponsored by Syngenta that contained several pro- GM and anti-organic-farming opinion pieces.82 But Metz and Kaplinsky replied that their criticisms of Quist and Chapela, were 'exclusively over the quality of the scientific data and conclusions' and that their funding has 'absolutely nothing to do' with their criticisms. [83]
However, the journal also published a further letter by Quist and Chapela where they acknowledged that in relation to iPCR they had misidentified certain sequences. But they added 'the consistent performance of our controls, as reported, discounts beyond reasonable doubt the possibility of false positives in our results'. The authors, noted that 'to address' the challenges laid down by their critics they had used a 'non-PCR-based method' called DNA-DNA hybridization. 'The results of these experiments' they argued, 'continue to support our primary statement The DNA-hybridization study confirms our original detection of transgenic DNA integrated into the genomes of local landraces in Oaxaca.' [84]
Ironically the fact that GM contamination has occurred is now not disputed by the GM opponents. 'Quist and Chapela have subsequently presented data that further supports the presence of transgenes in maize landraces - a point that has not been disputed', argued Prakash on AgBioWorld. [85]
In April, Jorge Soberon, the executive secretary of Mexico's National Commission on Biodiversity, announced the findings of the Mexican government's research at the International Conference on Biodiveristy at The Hague. Soberon confirmed that the tests had now shown the level of contamination was far worse than initially reported in both Oaxaca and Puebla. A total of 1876 seedlings had been taken by government researchers and evidence of contamination had been found at 95 per cent of the sites. One field had 35 per cent contamination of plants alone. The Mexican government also re-confirmed the presence of the Cauliflower Mosaic Virus. [86]
Jorge Soberon said soberly that: 'This is the world's worst case of contamination by genetically modified material because it happened in the place of origin of a major crop. It is confirmed. There is no doubt about it'. In response, Philip Campbell, the editor of Nature, said: 'The Chapela results remain to be confirmed. If the Mexican government has confirmed them, so be it'. [87]
In August the President of Mexico's National Institute of Ecology, confirmed that his team had found 7 per cent of the native maize plants they sampled contained genetic material that appeared to come from bioengineered corn. 'This is basically the same result that Chapela reported in his study, and both results suggested the presence of transgenic constructs in native maize varieties', he said, confirming that the paper had been submitted for publication. [88]
But two months later, the controversy took a new twist when the Mexican press announced that Nature had rejected their independent studies into the GM contamination for publication. The reviewers had rejected the papers for opposing reasons. One said that the results were so 'obvious' that they did not merit publication in a scientific journal, whereas the other said the results were 'so unexpected as to not be believable'. The Nature editor said the papers had been rejected on 'technical grounds'. [89]
So over a year after the revelation of GM contamination in Mexico, the controversy continues and nothing has been done to stop the source of the contamination, but then perhaps that is what the industry wants.
Is GM contamination beneficial?
In the Joint Statement signed by Kaplinsky, Metz and Prakash there is one paragraph that stands out as warranting further analysis: 'It is important to recognize that the kind of gene flow alleged in the Nature paper is both inevitable and welcome.' [90]
So GM contamination is not only inevitable but also beneficial, and it fuses together two important pro-biotech messages: that biotechnology is no more than an extension of traditional plant breeding and that because contamination is inevitable, any kind of resistance is futile. Contamination could be inevitable unless regulators act. As Nature Biotechnology candidly pointed out, 'gene containment is next to impossible with the current generation of GM crops gene flow from GM crops to related plants thus remain a primary concern for regulators and one that companies need to address'. [91]
Ironically it is in the biotech companies interests not to address this problem, although that is not in the interests of consumers who want choice. 'The hope of the industry is that over time the market is so flooded [with GMOs] that there's nothing you can do about it, you just sort of surrender', say Don Westfall, vice-president of Promar International, a consultant to the biotech and food industries in Washington. [92]
Critics of the biotech industry cannot believe what they read in the Prakash statement. 'It is not beneficial for the Mexican campesinos or peasants or indigenous peoples', says Hector Magallon Larson, from Greenpeace Mexico. 'It is not beneficial for the Mexican environment and it not beneficial for world food security.'
'You would never say that BSE was inevitable or welcome,' adds Alan Simpson MP, a leading critic of the industry. 'The arrogance of it is outstanding. One of the things that Pusztai has been trying to get us to understand is what we are talking about is a completely new frontier and it's not about plant breeding. This is being run past society and past political institutions on the basis that it is both a radical scientific advance and yet no different at all. It is unbelievably dishonest and anti-scientific.' There are numerous reasons why the process cannot be beneficial, and one of these is the potential inherent instability of GM crops, something that was outlined in the discussion of the Pusztai saga in Chapter 5 and which Quist and Chapela still stand by. 'It suggests that transgenic DNA can move around the genome with a range of unpredictable effects, from disruption of normal functions to modification of expressed products that become toxic agents to the generation of new strains of bacteria and viruses,' Quist says. [93] 'There are a lot of theoretical reasons to believe that most of the transformation events are going to be ultimately unstable, particularly as they have been put in another environment', adds GM specialist Dr Michael Hansen from the US Consumers Union.
The fact that many biotech scientists have signed on to a statement that says that GM contamination is inevitable, underpins the theory that many of the industry's critics and analysts have felt for some time. They believe that the industry has deliberately set out to contaminate both non- GM and organic crops with the implicit or explicit intention of making contamination inevitable. All hope of another alternative agriculture system simply vanishes and once that vanishes, the anti-GM fight becomes hopeless.
'I think the industry now recognise that hopelessness is their best hope', adds Alan Simpson. 'They have manifestly failed to convince the public of either the desirability or safety of GM products. Having failed to convince, having failed to co-opt or to buy the public support, they are left with coercion. Coercion comes in two forms. One is putting an arm lock over the farmers and the other is putting a choice lock on consumers.'
But it is not just the critics who argue that contamination is a deliberate policy. Dan McGuire, Program Director to the 2002 Annual Convention of the American Corn Growers Association: 'I believe that the biotech companies that market GMO seed would like to see the grain marketing system totally taken over and "contaminated" by GMOs. I expect they would see that as ending their problem'. [94]
With widespread GM commercialization, GM contamination is inevitable. There have now been episodes of GM contamination in Argentina, Austria, Bolivia, Brazil, Canada, Colombia, France, Germany, Greece, Holland, India, Japan, Korea, Luxembourg, Mexico, New Zealand, Sweden, Thailand, the UK and the USA, amongst others. [95] The health and environmental impact of these contamination episodes is unknown. But waiting in the wings are the second-generation crops, those with health and nutritional benefits, and third generation crops - with industrial, or pharmaceutical properties, known as pharm crops. These include vaccines, growth hormones, clotting agents, industrial enzymes, human antibodies, contraceptives and abortion-inducing drugs. [96]
Scientists believe that work needs to be done to stop pharm crops - which are already being grown - from contaminating other crops. If these are not contained, the US National Academy of Scientists warn that 'it is possible that crops transformed to produce pharmaceutical or other industrial compounds might mate with plantations grown for human consumption, with the unanticipated result of novel chemicals in the human food supply'. [97]
Dr Norman Ellstrand, a professor of genetics at the University of California, Riverside, and a leading expert on corn genetics, says that 'if just 1 percent of [American] experimental pollen escaped into Mexico, that means those landraces could potentially be making medicines or industrial chemicals or things that are not so good for people to eat. Right now, we just don't know what's in there'. [98]
Others are worried too. 'Most people are assuming that plants being used for these purposes [bio-pharming] will not enter the food supply, but if you assume that you need to have controls in place to make sure that does not happen,' says Michael Taylor, who used to work for the FDA and Monsanto. Some are more blunt: 'Just one mistake by a biotech company and we'll be eating other people's prescription drugs in our corn flakes', argues Larry Bohlen, from Friends of the Earth in the USA. [99]
It is not clear yet who will bear the ultimate responsibility for GM contamination, but it is likely to be the consumer. As we wait to find out, it is worth looking at another part of the fall-out from the Mexican maize fiasco. Ignacio Chapela believes that one of the reasons he was attacked is because he had opposed the corporate of alliance between Berkeley and Novartis; that he had opposed the corporatization of science. But it is not only in the USA that it is happening.
Notes
1 Nature Biotechnology (2002) 'Going With the Flow', Vol 20, No 6, June, p527.
2 Platoni, K (2002) 'Kernels of Truth', East Bay Express, San Francisco, 29 May.
3 BioDemocracy News (2002) 'Frankencorn Fight: Cautionary Tales', No 37, January, p1.
4 National Research Council (2002) Environmental Effects of Transgenic Plants: The Scope and Adequacy of Regulation, Committee on Environmental Impacts Associated with the Commercialization of Transgenic Plants, Board on Agriculture and Natural Resources, Division on Earth and Life Studies, National Academy Press, Washington.
5 Quist, D and Chapela, I (2001) 'Transgenic DNA Introgressed into Traditional Maize Landraces in Oaxaco, Mexico', Nature, London, Vol 414, 29 November, p541.
6 University of California - Berkeley (2001) Transgenic DNA Discovered in Native Mexican Corn, According to a New Study by UC Berkeley Researchers, Press Release, 28 November; Quist and Chapela (2001) op cit, pp541-542.
7 Quist, and Chapela (2001) op cit, p542.
8 ETC Group (2002) GM Fall-out from Mexico to Zambia: The Great Containment - The Year of Playing Dangerously, Winnipeg, 25 October.
9 University of California - Berkeley (2001) op cit.
10 Chapela, I (2002) Interview with Author, 1 March.
11 BBC Radio 4 (2002) 'Seeds of Trouble', 7 January
12 Dalton, R (2001) 'Transgenic Corn Found Growing in Mexico', Nature, London, Vol 413, 27 September, p337.
13 Ferris, S (2002) 'Battle Lines Drawn in Mexico; Native Corn too Sacred to "Infect"?' The Atlanta Journal and Constitution, 28 February.
14 Quist and Chapela (2001) op cit, p541.
15 Dalton (2001) op cit.
16 Quist and Chapela (2001) op cit, p543.
17 Yang,S (2001) Transgenic DNA Discovered in Native Mexican Corn, According to a New Study by UC Berkeley Researchers, University of California Press Release, 29 November.
18 Press, E and Washburn, J (2000), 'The Kept University', The Atlantic Monthly, Vol 285, No 3, pp39-54.
19 See Rowell, A (1996) Green Backlash - Global Subversion of the Environment Movement, Routledge, London, New York.
20 Murphy, M (2001) Subject: Mexican Corn - the new Starlink-Monarch-Mutant Scare Story, Posted on the AgBioView site on the 29 November.
21 Smetacek, A (2001) Subject: Ignatio Chapela - Activist FIRST, Scientist Second, posted on the AgBioView site on 29 November.
22 MacGregor, B (2001) Re: Genetically Modified Material Found in Mexican Corn, posted on AgBioView list on 30 November.
23 Mann, C (2002) 'Has GM Corn "Invaded" Mexico?', Science, Vol 295, p1617, 1 March.
24 Kinderlerer, J (2001) Regarding AGBIOVIEW: Chapela and Mexican corn, China, New Zealand support up, Lomborg, Peanut map, Posted on the AgBioView list on 1 December.
25 http://www.foxbghsuit.com/wwwboard/messages/1168.html
26 See www.bivings.com
27 http://www.bivingsreport.com/search_view_full_article.php?article_id=73
28 Rowell, A (2002) 'Seeds of Dissent', The Big Issue South West, 15-21 April, pp16-17.
29 Ibid.
30 Copies of the emails provided to the author by the The Ecologist.
31 Rowell (2002) op cit.
32 Platoni (2002) op cit; Monbiot, G (2002) 'The Fake Persuaders', The Guardian, London, 14 May, p15.
33 Rowell (2002) op cit; Matthews, J (2002) 'Amaizing Disgrace', The Ecologist, London, Vol 32 No 4, May.
34 Bivings Group (2002) Statement on the Ecologist story entitled 'Amaizing Disgrace', May.
35 Bivings, G (2002a) 'Bivings: We Condemn Online Vandalism', Letter to The Guardian, 12 June.
36 BBC Newsnight (2002) 'Row Over GM Crops - Mexican Scientist Tells Newsnight he was Threatened Because He Wanted to Tell the Truth', London, 7 June.
37 Bivings, G (2002b) 'The Maize Feud', New Scientist, 6 July.
38 Rowell (2002) op cit; Monbiot (2002) op cit; Matthews (2002) op cit; Bivings (2002a) op cit.
39 The original article was posted as the The Bivings Report (2002) Viral Marketing: How to Infect the World, 1 April.
40 Platoni (2002) op cit.
41 Bivings Report (2002) Viral Marketing: The New Word of Mouth, 1 November.
42 The Monsanto sites listed before the changes were Monsanto Corporate, Monsanto Africa; Monsanto France; Monsanto Fund; Monsanto India; Cornfacts; Monsanto Pakistan; Monsanto Spain; Monsanto UK; BioTech Basics; BioTech terms; Biotech Knowledge Centre; Monarch Info; Report on Sustainable Development and Teaching Science.
43 See cffar.org
44 Philipkoski, K (2002) 'A Dust-Up Over GMO Crops', Wired News, 12 June.
45 The New York Times (1999) 'Biotech Companies Take on Critics of Gene- Altered Food', 12 November; The Wall Street Journal (1999) 'Monsanto Fails Trying to Sell Europe on Bioengineered Food', 11 May.
46 Prakash,C (2002) Interview with Author, April.
47 Smetacek,A (2000) A Plea to Stop Eco-Terror, 21 July.
48 Rowell (2002) op cit.
49 Del Porto, D (2002) Interview with Author, Bivings, April.
50 http://www.v-fluence.com/about/team.html.
51 Bivings Group (2001) A Look Into the Future of Online PR, January.
52 Byrne, J (2001) Protecting Your Assets: An Inside Look at the Perils and Power of the Internet, a Presentation to the Ragan Communications Strategic Public Relations Conference, V-Influence, 11 December.
53 ETC Group (2002) GM Pollution in the Bank? Time for "Plan B", News Release, Winnipeg, 4 February; Magallon Larson, H (2002) Interview with Author, 5 March.
54 Mann, C (2002) 'Has GM Corn Invaded Mexico?' Science, Vol 295, 1 March, p1617; Magallon Larson, H (2002) op cit.
55 Transgenic Research (2002) 'No Credible Evidence is Presented to Support Claims that Transgenic DNA was Introgressed into Traditional Maize Landraces in Oaxaca, Mexico', Editorial, 11, ppiii-v.
56 Hansen,M (2002) Communication with Author, June.
57 EPA (2001) Bt Plant-Pesticides Biopesticides Registration Action Document, Washington, 15 October, pIIA3.
58 Posted on the NGIN website on 27 February, 2002; http://www. ngin.org.uk
59 Rowell (2002) op cit.
60 Lepkowski W (2002) 'Biotech's OK Corral', Science and Policy Perspectives, No 13, 9 July.
61 Ibid.
62 ETC Group (2002) UnNatural Rejection? The Academic Squabble Over Nature Magazine's Peer-Reviewed Article is Anything but Academic, News Release, Winnipeg, 19 February.
63 Avery,A (2002) Joint Statement from Scientists? 21 February.
64 Prakash, C (2002) Joint Statement of Scientific Discourse in Mexican GM Maize Scandal, 24 February.
65 Nature (2002) 'Editorial Note', 4 April.
66 Webber, J (2002) Interview with Author, 4 April.
67 Campbell, P (2002) Letter to The Guardian, 15 May.
68 Clarke, M (2002) 'Suggestion on Mexican Maize Article,' Email to Kate O'Connell, 10 June.
69 Platoni (2002) op cit.
70 Chapela, I (2002) And Yet it Moves, Letter to The Guardian, 24 May.
71 Suarez, A et al (2002) 'Correspondence', Nature, Vol 417, 27 June, p897.
72 BBC NewsNight (2002) 'Row Over GM Crops - Mexican Scientist Tells Newsnight he Was Threatened Because He Wanted to Tell the Truth', London, 7 June; Meek, J (2002) 'Science Journal Accused Over GM Article', The Guardian, London, 8 June.
73 Metz, M and Fütterer, J (2002) 'Suspect Evidence of Transgenic Contamination', Nature, 4 April; Kaplinsky, N et al (2002) 'Maize Transgene Results in Mexico Are Artefacts', Nature, 4 April.
74 Prakash, C (2002) Joint Statement of Scientific Discourse in Mexican GM Maize Scandal, 24 February.
75 http://www.public.iastate.edu/~iazelaya/Newsletter_Vol_1_No_3- Addendum.pdf
76 Apel, A (2001) The Face of Terrorism, Posting to AgBioView, 18 September.
77 Metz and Fütterer (2002) op cit.; Kaplinsky et al (2002) op cit.
78 Metz, M (2001) Correspondence, Nature, Vol 410, No 513, 29 March.
79 Chapela, I (2002) Communication with the Author, 15 April; quoting the ETH magazine "ETH-Life", 25 March
80 Chapela, I (2002) Interview with Author, 1 March.
81 Worthy, K, Strohman, R and Billings, P (2002) Correspondence, Nature, Vol 417, 27 June, p897.
82 Gee, H (2002) 'Food & the Future', Nature, Vol 418, 8 August, p667.
83 Metz, M and Fütterer, J (2002) Correspondence, Nature, Vol 417, 27 June, pp897-898; Kaplinsky, N (2002) Correspondence, Nature, Vol 417, 27 June, p898.
84 Quist, D and Chapela, I (2002) Brief Communications, Nature, 4 April.
85 AgBioWorld.org (2002) Mexican Maize Resource Library.
86 Brown, P (2002) 'Mexico's Vital Gene Reservoir Polluted by Modified Maize', The Guardian, London, 19 April.
87 Clover, C (2002) '"Worst Ever" GM Crop Invasion', The Daily Telegraph, 19 April.
88 Abate, T (2002) 'Hot Seat May Cool for Berkeley Prof: Mexican Scientists Reportedly Confirm his Findings of Engineered Corn in Maize', The San Francisco Chronicle, 26 August.
89 Rosset, P (2002) Open Letter to Nature, October; Food First (2002) Nature Refuses to Publish Mexican Government Report Confirming Contamination of the Mexican Maize Genome by GMOs, Press Release, Oakland, 24 October; ETC Group (2002) GM Fall-out from Mexico to Zambia: The Great Containment The Year of Playing Dangerously, Winnipeg, 25 October.
90 Prakash, C (2002) Joint Statement of Scientific Discourse in Mexican GM Maize Scandal, 24 February.
91 Nature Biotechnology (2002) op cit, p527.
92 Laidlaw, S (2001) 'Starlink Fallout Could Cost Billions', The Toronto Star, Toronto, 9 January.
93 Pearce, F (2002) 'The Great Mexican Maize Scandal', New Scientist, London, 15 June.
94 McGuire, D (2002) Farmer Choice - Customer First When it Comes to GM Crops, Presentation to 2002 Annual Convention of the American Corn Growers Association on 9 March; Washington, 13 March.
95 Villar, J (2001) GMO Contamination - Around The World, Friends of the Earth International, Amsterdam; Hager, N (2002) Seeds of Distrust, Craig Potton, Nelson, pp12-20.
96 Friends of the Earth (2002) Manufacturing Drugs and Chemicals in Crops Biopharming Poses New Risks to Consumers, Farmers, Food Companies and the Environment, Washington DC, July, Executive Summary; IPS (2002) 'Host for "Pharm Crop" Experiments,' Carmelo Ruiz-Marrero, Puerto Rico, 29 October.
97 Committee on Environmental Impacts Associated with Commercialization of Transgenic Plants of the National Academy of Sciences (2002) Environmental Effects of Transgenic Plants: The Scope and Adequacy of Regulation, National Academy Press, p68.
98 Schapiro, M (2002) 'Sowing Disaster?', The Nation, 10 October.
99 Friends of the Earth (2002) Drugs And Chemicals Will Contaminate Food Supply Concludes New Report, Press Release, Washington, 11 July.
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