“We’ll stop hurting our brothers and sisters” – What success at the G8 would look like

 

Protesters in London call on G8 leaders to beat hunger

It has become to fashionable to say that G8 meetings never achieve anything. It is also incorrect. Civil society campaigners have made use of G8 meetings in the past to achieve major steps forward on debt, on access to HIV/AIDS treatment, and on maternal and child health. But whereas, in the past, campaigners have tended to focus on urging leaders getting out their cheque books, and though money can and does save lives, this year campaigners are much more focused on calling on the G8 to rewrite their rule book, to address the causes of hunger and not only the symptoms. 

The G8’s role is not to decide for the world, only to agree what they will do themselves. And so it is right that the UK hosts have described the meeting as about “Putting our own house in order”. And the UK, to their credit, have taken on serious core issues in putting the problems of land grabs and tax dodging at the heart of the discussions, and highlighting transparency as key to the solution. But to actually help poor people the leaders will need to take bold action. And what is on the table at present is not ambitious enough to offer real hope to the millions of people whom land grabs and tax dodging leave impoverished and hungry.

Of course, it’s easy for NGOs to call for more ambition. As a British Government official once joked to me, “even when we deliver a massive result, Oxfam say we need to achieve 10% more.” (To which my initial reaction was to think: “Oh no! Only 10%?”) So rather than just call out “Higher, Higher!” it’s only fair that we campaigners say what success would look like.  Here then is a sketch of what I think success would mean on two of the big issues, land grabbing and tax dodging. By this I don’t mean what is needed to fix these challenges – I mean only what the G8 meeting would need to do to start to fix them.

On land, success at the G8 would include a land transparency initiative, and regulatory guidance to G8 companies and investors, so that the G8 is not complicit in land grabbing. As French Development Minister Pascal Canfin said this week, “Without transparency and without protections, land investment can end up as looting. Where the Voluntary Guidelines are not being followed, land investment shouldn’t follow.”

On tax, success at the G8 would include a public registry of the ultimate owners of offshore assets, a deal on sharing of tax information not only between rich countries but with the poorest countries too, and – as they hold one third of the offshore wealth – these agreements must include, in full, all the British Overseas Territories and Crown Dependencies. If the British Prime Minister and other G8 leaders deliver on this they will have sided with tax justice.

At the kids’ group I teach in church, I asked everyone what they could do to help other people. “I’ll share my stuff,” said one; “I’ll help with the cooking,” said another. Then one boy said, “I’ll stop hurting my brothers and sisters.” It wasn’t the answer we’d expected, but reflecting on it, it was an excellent one. And, on land grabbing and tax dodging, an appropriate ambition for the world’s richest countries, one that will need a step up in the negotiations to achieve. “Primum non nocere.” First, do no harm.

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Nuclear war called off in Korea – time to relax?

Something quite significant happened this week– though you may have missed it.

It seems the US military doesn’t think there will be nuclear war with North Korea.

A few weeks ago, you could have been forgiven for thinking we were on the brink of something similar to the Cuban Missile crisis of 1962. Pyongyang was threatening a nuclear strike on America and the US – in an unusual move – publicly announced nuclear-capable stealth bombers were taking part in joint military exercises with South Korea.

But then this Monday, unreported by most media, the US Army commander in the Pacific, Lt. Gen. Francis Wiercinski, said he thought ‘the current cycle of provocation (by the North) has come to its end point’.

Things have probably quietened down because the joint exercises are over and the leadership in the North feel they’ve achieved whatever it is they set out to do.

For instance, also this week, the North Korean Defence Minister was replaced . Although we don’t know for sure why he was given the push, there‘s speculation it’s part of efforts by the isolated communist state’s young leader, Kim Jong-Un, to consolidate his hold on power.  Kim is the grandson of the North Korea’s founder, Kim Il-sung; but at only 30 he’d had very little time to build a power base of his own when he inherited the leadership on the sudden death of his father, Kim Jong Il, 18 months ago. Indeed, many North Korea watchers attribute the recent nuclear sabre-rattling to Kim’s attempt to build support inside the corridors of power in Pyongyang by appearing strong and martial.

Whatever the reason, the North has also removed missiles it had deployed on its east coast near the border with the South.

So we can breathe a sigh of relief then? Continue reading

Obama – inevitable lame duck

Tweet on election night:

It took a few months but the Guardian is finally on it today:

Obama lame duck

It is not a comparison that many people thought would ever get much traction.

But, assailed this week by multiple scandals and at the mercy of a furious press, President Obama has endured a legion of pundits wondering if he is the 21st-century Richard Nixon – and whether his second term is already a lame-duck disaster.

The worst corporate scandal you never heard of

Like many people, I have grown blasé about the successive waves of corporate scandal that have broken since the financial meltdown of 2008, but Fortune’s account of the crimes of Indian generic drug maker, Ranbaxy, is quite astonishing.

Ranbaxy boasts that it “is a research based international pharmaceutical company serving customers in over 150 countries… providing high quality, affordable medicines trusted by healthcare professionals and patients across geographies.” Its business is conducted with the “highest standards of professional integrity and ethical behavior,” it says.

What a joke.

According to Fortune, Ranbaxy deliberately and systematically faked quality tests in order to gets its products licensed across the world. Here’s what a new Ranbaxy employee, Dinesh Thakur, found when he investigated his employer’s fraudulent behaviour:

The company manipulated almost every aspect of its manufacturing process to quickly produce impressive-looking data that would bolster its bottom line. “This was not something that was concealed,” Thakur says. It was “common knowledge among senior managers of the company, heads of research and development, people responsible for formulation to the clinical people.”

Lying to regulators and backdating and forgery were commonplace, he says. The company even forged its own standard operating procedures, which FDA inspectors rely on to assess whether a company is following its own policies. Thakur’s team was told of one instance in which company officials forged and backdated a standard operating procedure related to how patient data are stored, then aged the document in a “steam room” overnight to fool regulators.

Company scientists told Thakur’s staff that they were directed to substitute cheaper, lower-quality ingredients in place of better ingredients, to manipulate test parameters to accommodate higher impurities, and even to substitute brand-name drugs in lieu of their own generics in bioequivalence tests to produce better results.

Thakur reported his findings to the company’s bosses, who took no action. Another executive – Kathy Spreen – found that Ranbaxy was submitting patented drugs – the ones it was copying – for testing, not its own. She too reported her concerns:

In a conference call with a dozen company executives, one brushed aside her fears about the quality of the AIDS medicine Ranbaxy was supplying for Africa. “Who cares?” he said, according to Spreen. “It’s just blacks dying.”

Both ended up resigning.

In recent years, USA regulators have made some attempts to pursue Ranbaxy and while no individual has yet been prosecuted (how can that be?), the company recently agreed to pay a huge fine ($500m or so), with Thakur receiving in excess of $48m as a whistle-blower. Ranbaxy is still in business, however, and is strengthening its position in drugs markets around the world.

Why hasn’t this been a bigger story? The BBC gave it a couple of hundred words. I think the Guardian may have briefly carried the wire story but, if so, it’s now gone from its website. The FT managed a blog post which focused mainly on whether the settlement would be good for the company’s share price. In the grand scheme of things, that’s diddly-squat.

Two reasons for the radio silence, I think. The current media narrative focuses heavily on the myriad of sins of Western companies – if this had been GlaxoSmithKline, you can be sure it would have dominated the front pages. There’s much less interest in how lax regulation elsewhere in the world is corrupting globalisation.

Second, many – me included – are heavily invested in generic drugs as a vital weapon in the battle to improve health standards in the poorest countries. In 2004, the Guardian carried an interview with Dr Brian Tempest, a Brit who was then Ranbaxy’s CEO (and who Fortune puts at the heart of the company’s reckless cover-up). For the generics industry, AIDS drugs were a route to respectability, with Ranbaxy swiftly becoming an aid industry favourite.

“We don’t make a lot of money out of selling our Aids treatments cheaply. I tell all the analysts that this is really out of social responsibility because we are based in the developing world and have all its issues on our doorstep.”

We can’t be sure that Tempest knew his company’s drugs were dirty when he gave the Guardian that quote, but later that year, Fortune reports that he attended a meeting of its scientific committee and heard that “the company had simply not tested the drugs and had invented all the data” for entire markets, including Brazil, Kenya, Ethiopia, Uganda, Egypt,  and Thailand.

Perhaps it is time for Randeep Ramesh, the Guardian’s social affairs editor, who talked to Tempest in 2004, to follow up on his story. After all:

  1. Ranbaxy’s drugs continue to be consumed by British patients – in just twelve months, the NHS saved £350m by using a generic cholesterol-reducing drug it buys from the Indian firm. Last year, it was forced to admit that it had shipped batches of the drug contaminated by fragments of glass.
  2. The British regulator seems to have taken barely any action against Ranbaxy when compared to its American counterpart. Parliament has also ignored the scandal, although ministers have met regularly with Ranbaxy both in the UK and in India.
  3. The American investigation tells us nothing about the standard of drugs sent to Africa and other developing countries, including those funded by the British taxpayer. In 2011, for example, DFID lauded Ranbaxy for its “leadership and foresight” in driving down the price of anti-AIDS drugs for the poor. Can we be sure the generic drugs it is now buying are safe?
  4. We also don’t know whether this is a one-off or other generic manufacturers have indulged in similar behaviour. The pattern in banking and other industries, however, suggests that if one company can evade regulation, then others will also have been up to the same tricks. That’s extremely worrying, given that the generic drug industry is expected to be worth $169bn in 2014.
  5. It would be good to hear more about Tempest – dubbed the ‘benign buccaneer’ in the Guardian profile. He was with Ranbaxy until 2008 and now holds a string of non-executive directorships. He is still involved with Ranbaxy’s founding family, serving on the board of Fortis Healthcare, which is chaired by Malvinder Mohan Singh, one of India’s richest men, who sold out his Ranbaxy shareholding to a Japanese drug-maker as scandal engulfed the company. He also chairs the advisory board of Lancaster University Management School. Tempest was too busy to speak to Fortune’s reporter.

Maybe the Fortune story is overblown. I hope it is. But eight Food and Drug Administration inspectors went to look at Ranbaxy factories in India. All of them came back saying they would never, ever, take a Ranbaxy drug.

What is a progressive foreign policy anyway?

Labour left office three years ago this month and may return to it just two years from now. That’s not a very long time in which to formulate a distinctive foreign policy for government, nor to game out responses to the massive shifts in the global strategic context in which the next Prime Minister will be operating.

To lend a hand, Labour think tank/ pressure group Progress have commissioned a series on progressive dilemmas in foreign policy, addressing the 12 big questions where the tensions between different left-of-centre first principles are most acute. Whatever your politics, we hope seeing how that debate plays out inside what could be the next governing party of Britain will be of interest.

How to Start Development’s Gutenberg Revolution

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As a schoolboy I was troubled to learn about medieval Europe where a narrow elite maintained unaccountable power by controlling access to information; and I delighted in the heroic story of how Johanes Gutenberg’s humble printing press began a revolution that brought an end to the unchecked control of knowledge and power by a few. I loved stories of the fearless folk who refused to accept, even under torture, that information was best kept hidden, and cheered the fall of the men who thought that ordinary people were best left ignorant.

Then I ended up as a development worker, asking governments how much they were spending on health, education and hunger. And alongside the late, incomplete, and plain wrong answers that followed, I felt I could hear faintly the all-powerful medieval cardinals of my school history classes laughing at me.

We sometimes talk of how people in power “fail” to put out timely and accurate information. But just as failed states are often terribly lucrative for those in charge of the failing, so too a cynic might ask what incentives there are for elites to fix “information failures” which prevent citizens from seeing what they’re doing.

We need another Gutenberg Revolution – not just the technology of online whizzes (Printers 2.0) but the kind of free-thinking insubordination that made the renaissance and reformation possible. To exhalt the humble, we’re going to have to humble the exhalted.

That’s why charities are so focused on getting the G8 to deliver on transparency in land investments and in taxation – because knowledge is power, because stealing is harder in broad daylight. The G8 would, no doubt, prefer if we only asked them to beneficent. But we’re insisting, most of all, that they are transparent, and end their role in providing shadowy corners for shady characters to hide their dodgy deals.

For development to succeed in ending extreme poverty and extreme inequality, transparency will be needed not only from the governments of rich countries but from the governments of developing countries too. That’s why it’s such important news to see the launch today of Government Spending Watch which monitors spending in 52 low income countries, an NGO initiative that provides the most up-to-date and comprehensive data we’ve ever had. It reveals, for example, that fewer than a quarter of countries are spending what is needed to deliver education for all or to meet targets on water and sanitation; that declining aid is leading to rising borrowing and increasing debt burdens; and that the global rhetoric on investing in social protection and gender equality is backed by very little actual money. But most importantly, it helps puts power in the hands of citizens to know what their governments are spending, and to hold them to account. There’s a lot of money in keeping people ignorant. Which is why we need to know.

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Britain’s dirty secret – the island havens that make life hell for the world’s poor

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The G8 agenda on tax is getting increasingly radical, and much of the credit on that must go to to the UK Government hosts. Issues that were off the table months ago are now up not just for discussion but for decision. The agenda has moved beyond tax evasion to the kind of tax avoidance that has been able up to now to squeak through as legal. The UK is serious, not just in its public statements, but, representatives of other governments have confirmed to me, in the private intergovernmental discussions too. As one official from a European country told me, “We couldn’t believe it when the UK put tax on the agenda. For years, whenever we tried to put even a sentence on tax into communiques, the British got out their red pen. And now it is they who are leading the call for action. So thanks to them, to you NGOs … and to Starbucks.”

But a contradiction lies at the heart of the UK’s action on tax dodging, one that could both hold back progress in itself and undermine the UK’s ability to get others to act. The UK is a haven for havens. Whilst the government talks of “tough negotiations” with the Lichtensteins of the world, it has power, through the Crown, to stop some of the most egregious havens and yet is holding back. The claims that these British treasure islands are independent sovereign states over whom the UK has no power is a fiction that collapses under a few minutes of scrutiny. The Kilbrandon Commission confirmed in 1973 that “The United Kingdom parliament has the power to legislate for the islands.” In 2009, the UK suspended the government of the Turks and Caicos Islands to deal with a corruption crisis. The notionally independent decisions of some of the islands to make some concessions last week were all announced on a single day by a UK Treasury press notice. When you read about “British Virgin Islands”, “British Overseas Territories” and “Crown Dependencies”, the clue is in the name. If UK tax havens fail to adequately tackle the secrecy and other practices that facilitate tax dodging it is ultimately because the UK allows it.

The impact of tax dodging on poverty is massive. Tax dodging deprives poor countries of the revenues they need to tackle poverty and to stand on their own two feet. As Jeff Sachs notes today, “The IF campaign makes a basic point: poverty can be fought, and austerity overcome, IF taxes are properly paid by those who owe them.”  Zambia would have 46% more money to invest in schools, health clinics, child nutrition and agricultural development if it could prevent tax dodging by multinationals. In a world where 2 million kids die before the age of five from malnutrition, tax dodging is literally fatal.

So why is the UK protecting its tax havens? It’s hard to know. I’ve heard, informally, from well-meaning people, arguments like “the money would just be moved elsewhere” and “it’s the only business they know”. Yet these are, sadly, no different in logic to the arguments made by drug dealers’ mums about their errant sons. I’ve heard “we can’t force them to behave”, which is flat out wrong. And “it’s OK, we’ve sorted it,” which is to mistake some minimal progress with a proper solution. Whatever the reason, it must be a very challenging cognitive dissonance, to lead an international negotiation to eradicate something which – unhappily, uneasily – you ultimately let your own people get away with. Especially when the mantra of the G8 is “Getting our own house in order.” And the dirty secret isn’t even secret any more. It’s a huge hulking big elephant in the room.

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