The Island of Nauru – Development as Environmental Decline

The case study of Nauru illustrates the potential catastrophic consequences of pursuing economic growth without considering the ecological consequences. It may only be one island but Klein argues that the logic which hollowed out Nauru is the same logic which has driven the global economy for the last 400 years. 

Nauru.jpg
Nauru – Hollowed out due to phosphorous mining

The extract below is taken from Naomi Klein’s ‘This Changes Everything‘ (2014: Chapter Five  Beyond Extractivism)

Few places on earth embody the suicidal results of building our economies on polluting extraction more graphically than Nauru. Thanks to its mining of phosphate, Nauru has spent the last century disappearing from the inside out; now, thanks to our collective mining of fossil fuels, it is disappearing from the outside in.

For decades, the tiny South Pacific Island of Nauru, home to only 10 000 people, seemed to be an example of a developing country which was doing everything right.

During the 1970s and 80s, the island was periodically featured in press reports, as a place of almost obscene riches, much as Dubai is invoked today, and in the mid-80s Nauru was reported as having the highest GDP capita in the world.

All of this was due to the fact that Nauru was made up almost pure phosphate, a valuable fertiliser, which the Nauruans had been shipping to mainly Australia since they gained their independence in 1968.

Extraction had been going on long before, since 1900, carried out by a series of colonial rulers, who had a simple plan for Nauru once all the phosphate had been extracted – simply ship the islanders to another island. In other words, Nauru was developed in order to disappear – an acceptable (and largely invisible) sacrifice to make for the advancement of industrial agriculture.

When the Nauruans themselves took control of their country in 1968, they had hopes of reversing the hollowing out of their island. They put large chunks of their mining revenue into a trust fund, with the intention of winding down the mining operation and rehabilitating their island’s ecology. However, this long term plan failed as Nauru’s government received catastrophically bad investment advice and the countries mining wealth was squandered.

As a result, rather than being wound-down throughout the 70s and 80s the mining continued unabated and Nauruans benefited from the royalties which rolled in – one consequence was a radical change in diet as islanders came to eat large amounts of processed food (as one resident recalls – ‘during the golden era we didn’t cook, we at in restaurants) which resulted in Nauru becoming the fattest place on earth (today it has the highest levels of obesity and the highest levels of diabetes in the world). Another consequence of high levels of cash was high levels of corruption amongst public officials.

Another consequence was, of course, the hollowing out of the island – in the 1960s Nauru could still have passed as a pleasant tropical island, but the 1990s it was a hollow shell with a small strip around the edge where people lived.

Isolated in the Pacific, the island of Nauru, world's smallest republic, was once world's richest country because of phosphate resources. Nauru holds currently diabetes and obesity highest levels though weightlifting is the national sport. Following state
Machinery used to extract phosphorous from Nauru

Now the island faces a double bankruptcy – with 90% of the island depleted from mining it faces ecological bankruptcy and with a debt of at least $800 million it faces financial bankruptcy as well.

But this is not the end of Nauru’s problems – it now also faces rising sea levels and inland water shortages because of climate change.

This isn’t the end of the misery of Nauru – because in the past decade the island has become a dumping ground of another sort – In an effort to raise much needed revenue it has agreed to house an offshore detention centre for the government of Australia, in what has become known as ‘the Pacific Solution’. Australian navy and customs ships intercept boats of migrants, most from Afghanistan, Sri Lanka, Iraq, Iran and Pakistan, and immediately fly them to Nauru where they languish in a detention centre, unsure of their status, sometimes up to five years.

Nauru detention centre.jpg
The detention centre for refugees on Nauru

Amnesty International has called the camp ‘cruel’ and ‘degrading’ and one journalist has likened it to a death factory because conditions are so bad that people have been driven to attempt suicide.

Nauru is only an extreme case – there are plenty of other examples which are similar, if not as bad…

Unfortunately for us, the logic which has led to such devastation and cruelty on Nauru is the same logic which has underpinned the last 400 years of ‘development’. This logic is the logic of ‘extractivism’ – a non-reciprocal, dominance based relationship with the earth, one of purely taking. The opposite is stewardship, which involves taking but also taking care that regeneration and future life continues.

Extractivism is also directly connected to the notion of sacrifice zones – places that, to the extractors, somehow don’t count and therefore can be poisoned, drained, or otherwise destroyed, for the supposed greater good of economic progress.

This extractivist thinking, unfortunately, lies behind not only the whole history of modernity and colonialism, and obviously neoliberalism, but also behind Socialism, including most of the recent leftist movements in Latin America, because despite their advances in bringing greater equality, national income is still heavily dependent on fossil fuels. Even the mainstream in the Green Movement are failing to challenge the extractivist model because they have come under the thrall of large-scale, big tech solutions to climate-change, rather than accepting as necessity that the earth requires us to consume less.

Pretty much the only ray of hope for a sustainable future according to Klein lies in the Scandinavian social-democratic models, which are going to take a globalised grass-roots movement to realise on an  international level.

Sources used to write this post:

Summarised from ‘Naomi Klein’s ‘This Changes Everything’ (2014)

 

The Increase in Smoking in Poorer Countries

Smoking is on the increase in several low income and middle income countries according to this World Health Organisation data, published in the World Bank’s recent review of 2016

smoking

According to the World Health Organisation up to 80% of the world’s tobacco users now live in low and middle income countries, with younger people especially taking up smoking in increasing numbers.

Why is Smoking Increasing in Poorer Countries?

In Short, it seems that since governments in developed countries have made it more difficult for tobacco companies to kill people in rich countries, they’ve now moved on to trying to kill people in poor countries instead.

tobacco-advertising-poor-countries

A recent Guardian article summarising this World Health Organisation report, notes that:

The latest evidence shows that tobacco industry marketing remains a significant global problem, particularly for people in the poorest countries who are the most exposed to it. Our study examined tobacco marketing in 16 countries.

  • In communities in low-income countries, 81 times more tobacco adverts were observed than in high-income countries.
  • People in lower-income countries were 46 times more likely to hear radio adverts, 11 times more likely to see poster adverts and nine times more likely to see television adverts than those living in high-income countries.
  • Access to tobacco was also higher in poorer countries. In low-income countries, we observed two and a half times more stores selling tobacco in the communities in the low-income and lower-middle-income countries than in the high-income countries. Worryingly, 64% of stores visited sold single cigarettes compared with just 2.8% in high-income countries.

This high level of marketing in poorer countries is consistent with the tobacco industry’s targeting of these countries. They are key to the industry’s future. In the west, the tobacco industry’s profits continue to increase despite the decline in smoking rates , but it is unclear how long this pricing power will hold out in the face of growing regulations.

How to Reduce Smoking in the Developing World?

The World Health Organisation notes that there are several things that effectively reduce the use of tobacco consumption:

  • Banning positive advertising for cigarettes, although there are only total bans in 29 countries worldwide.
  • Promoting negative advertising – those horrible picture adds about how smoking causes disease apparently work
  • Taxation – a 10% increase in the price reduces smoking by 5% in low income countries.
  • NB – A further challenge here is tackling Organised Crime – and their role in smuggling tax-free cigarettes, which can subvert national taxation policies.

This is a useful little data-case-study for lots of reasons

  • It’s a good example of the negative role TNCs play in development
  • It’s a good example of a critique of neoliberalism – it seems that regulation by the government – of advertising and through taxes for example – can really help reduce smoking.
  • This kind of reminds me of ‘Runaway World’ – we know what works to reduce smoking, but what with both TNCs and Organised crime having so much to gain financially from cigarettes, it seems unlikely that governments are going to get a handle on this problem any time soon!
  • Finally this is also a slap in the face to ethnocentrism – You (I did until today!) were probably under the impression that smoking’s on the decline – well it may be in the UK – but looked at globally it’s not.

 

Neoliberalism in India – The Consequences

neoliberalism IndiaA brief summary of part of Arundhati Roy’s ‘Capitalism: A Ghost Story’ – In which she explores some of the consequences of privatisation (part of neoliberalisation) in India.

‘Trickle down hasn’t worked in India, but gush up certainly has’

The era of the privatisation of everything has made the Indian economy one of the fasted growing in the world and most of this wealth has gushed up to India’s Corporate Elite.

In India today, a nation of 1.2 billion people, one hundred people own assets equivalent to 25% of the GDP, while a 300 million strong middle class live among the ghosts of the 250 00 debt-ridden farmers who have killed themselves and the 800 million who have been impoverished and dispossessed and live on less than twenty Indian rupees a day.

The most egregious expression of this inequality is Antilla, a building on Altamount Road in Mumbai which belongs to India’s richest man Mukesh Ambanni. It is the most expensive dwelling ever built: it has 27 floors, including 6 for parking, 3 helipads, 600 servants and a 27 story vertical wall of grass. Ambanni is worth $20 billion dollars and his company, Reliance Industries Limited (RIL) has a market capitalisation of $47 billion.

Antilla Mumba

Ambanni’s RIL Corporation is one of a handful which run India, some of the others being Tata and Vedanta, the later of which are truly global in scope – Tata, for example, runs more than one hundred companies in 80 countries.

The consequence of this concentration of wealth, is an increase in corruption, or as Roy puts it – ‘As gush up continues, so more money flows through the institutions of government’. As an example, in 2011, a corrupt minister of communications and information undervalued 2G phone licences by $40 billion dollars, to the benefit of the telecommunications companies which now profit from them, effectively costing Indian taxpayers $40 billion of revenue.

How the Elite in India Benefit from Neoliberal Policies

The way this typically works is that a corrupt government official signs a ‘Memorandum of Understanding’ (MoU) with a Corporation which privatises a chunk of publicly owned land, giving that corporation the right to use that land to establish a business – this either takes the form of mining the raw materials from under the land, or establishing a range of other projects such as Agribusinesses, Special Economic Zones, Dams, and even Formula One racing circuits.

Taxes are typically kept very low in these deals – often sow low in that local people see little of the financial benefit of the new business.

Chhattisgarh
Chhattisgarh

This is especially true were mining is concerned. In 2005, for example, the state governments of Chhattisgarh, Orissa, and Jharkhand signed hundreds of memorandums of understanding with private corporations, turning over trillions of dollars of bauxite, iron ore and other minerals for a pittance – royalties (effectively taxes) ranged from 0.5% to 7%, with the companies allowed to keep up to 99% of the revenue gained from these resources. (Allowing people like Ambanni to build their 27 story houses, rather than the money being used for food for the majority of the Indian population.)

In a third strand of Neoliberal policy, companies are subjected to very little regulation. It seems that they are allowed to develop their projects without protecting the environment or paying any compensation to people who are negatively affected by these projects, as indicated in the case study below:

Tata Steel in Chhattisgarh, North East India

Only days after the Chhattisgarh government signed an MoU with Tata Steel, a vigilante militia was established (known as the Salwa Judum). Organised by the state government and funded by Tata Steel the Salwa Judum initiated a ground clearance operation to eradicate the local forest peoples so Tata could set up its steel plant.

The Salwa Judum
The Salwa Judum

The Salwa Judum burned, raped and murdered its way through 600 local villages forcing 50 000 people into police camps and displacing a further 350 000. To keep these displaced persons in check, the government then deployed 200 000 paramilitary troops to the region to make sure that it remained a stable climate for investment and economic growth.

An Adivasi (local tribal group) protest
An Adivasi (local tribal group) protest

According to Roy the government has labelled these people ‘Maoist Rebels’, but in reality they are just displaced peoples.

Find out More

Corporate Watch – Stolen for Steel: Tata takes Tribal Land in India

Union Carbide – The Worst Industrial Accident in History

Possibly the strongest piece of case-study evidence supporting the Marxist view of crime

In December 1984, an explosion at a pesticide plant in Bhopal India, then owned by the American multi-national Union Carbide, lead to deadly gas fumes leaking into the surrounding atmosphere and toxic chemicals into the ground. That was more than 25 years, but, according to the Bhopal Medical Appeal (1), a toxic legacy still remains.  In addition to the 3000 people that died almost immediately, over the last two and a half decades, there have been a further 20,000 deaths and 120 000 cases of people suffering from health problems, including severe deformities and blindness, as a result of the toxic seepage into the surrounding area from the plant (2).

Since the disaster, survivors have been plagued with an epidemic of cancers, menstrual disorders and what one doctor described as “monstrous births” and victims of the gas attack eke out a perilous existence – 50,000 Bhopalis can’t work due to their injuries and some can’t even muster the strength to move. The lucky survivors have relatives to look after them; many survivors have no family left.

The plant had actually ceased producing pesticides by the time of the explosion, because Union Carbide had realised that there was not sufficient demand for this product in India. The apparent root cause of the accident was that the plant had not been properly maintained following the ceasing of production, although tons of toxic chemicals still remained on the site. More details of how the accident happened can be found at (1) below

It wasn’t until 1989 that Union Carbide, in a partial settlement with the Indian government, agreed to pay out some $470 million in compensation. The victims weren’t consulted in the settlement discussions, and many felt cheated by their compensation -$300-$500 – or about five years’ worth of medical expenses. Today, those who were awarded compensation are hardly better off than those who weren’t.

In 1991, the local government in Bhopal charged Warren Anderson, Union Carbide’s CEO at the time of the disaster, with manslaughter. If tried in India and convicted, he faces a maximum of ten years in prison. But neither the American nor the Indian government seem interested in disturbing him with an extradition,

The Union Carbide Corporation itself was charged with culpable homicide, a criminal charge whose penalty has no upper limit. These charges have never been resolved, as Union Carbide, like its former CEO, has refused to appear before an Indian court.

Union Carbide was bought by Dow Chemical in 2001. Dow says the legal case was resolved in 1989 when Union Carbide settled with the Indian government for 470 million dollars, and that all responsibility for the factory now rests with the government of the state of Madhya Pradesh, which now owns the site.

To this day, despite requests to appear in court from the Indian government, and despite the compensation which itself may well be regarded by some as an admittal of guilt, the company and its CEO have not faced criminal charges and the owner continues to be profitable on the stock market.

In a rather strange bizarre turn of events, following a wave of publicity around the 25 year anniversary of the Bhopaln disaster, 7 Indian executives were recently found guilty in an Indian court, however, these are not the CEO, it is 25 years too late, one is dead, and they are presently released on bail.

Analysis – so what does the ‘Bhopal-Dow chemical suggest about corporate ethics? – How harmful is this?

If we look at the raw number of deaths and injuries, this is the worst industrial accident of all time; and in terms of immediate harm and suffering to people it ranks considerably higher than September the 11th – with a death toll of roughly 3000, so in terms of sheer numbers the amount of harm is huge.

What the eight Indian employees were found guilty of, and what the CEO would also have gone on trial for,  is neglect – neglecting to adequately maintain the factory once it was not profitable – and it was this neglect that lead to the explosion that caused the 20 000 deaths and 120 000 illnesses. So the company is directly responsible for immense human suffering because of this neglect.

In addition, Union Carbide also remains liable for the environmental devastation its operations have caused. The contamination that Union Carbide left behind continues to spread. Barrels of toxic chemicals still lie open, and people are still forced to drink poisoned water.

What makes this case worse is the actions of the company after the tragedy, which clearly suggest that the profitability of the company always came before the well being of the individuals harmed – the derisory settlement out of court in 1989 suggesting it was liable, without consulting the victims could be regarded as an effort to put an end to the affair – especially as the company is quoted as having said this is the case.

Then there is the fact that the CEO simply went missing for years afterwards and has failed to stand up for criminal trial.

On final analysis, however, the real problem here is the pursuit of the bottom line – it was increased profit that sent the company to India and it is wishing to avoid compensation for the victims – because they can get away with it in India. This is a classic case of a powerful company shafting the powerless, and it continues to this day.

As a brief aside, However, it is important to note that the company did not set out to kill 20 000 people and one can reasonably assume that Union Carbide did not actually want this to happen. Also, it might be argued that, in terms of motive, Union Carbide are not in the same league as mining companies or damn building companies or even Oil companies who displace people from their land without taking steps to compensate those displaced peoples adequately. One couldn’t have reasonably foretold that this would happen.

(1)  http://bhopal.org/index.php?id=22

(2)  See tropic of cancer…

(3)  http://www.youtube.com/watch?v=5ehFcv4ywvA&feature=related – follow the ‘short documentary’ series rather than the other documentary series

(4)  http://news.bbc.co.uk/1/hi/world/south_asia/8725140.stm

 

So I feel sympathy for the victims of Bhopal and (maybe?) cold, bitter hatred for Dow Chemicals – but what can I do?

Quite a lot for this one! – here are some ideas…..

Firstly, you can make a donation to the Bhopal Medical Appeal –  https://www.committedgiving.uk.net/bhopal/public/donor.aspx

Secondly, if you know where your nearest Dow offices are, or if you happen to find out when the next event will be that ‘Dow chemicals’ will be sponsoring or appearing at you might like to try something like this  http://www.youtube.com/BhopalMedicalAppeal (and check out the 12 year old – whose made me question my belief to never have children – because if they turn out like him, perhaps reproducing would be worthwhile after all)

Thirdly, you could watch this film and get inspired- http://theyesmenfixtheworld.com/ – which is about two anti-corporate media activists who stick it to immoral corporations with a sense of humour.  This part of their web site http://challenge.theyesmen.org/ gives you some ideas of how you can hold Corporations to account and undermine their power.

Criticisms of Neoliberalism

The three country case studies below all suggest that although neoliberal policies might promote economic development in the long run, in the case of Chile at least, there are some significant negative consequences of this pathway to development.

  • Chile in the 1970s
  • Boliva in the the 1990s
  • India – Contemporary

NB – If you’re here for a blog post about Neoliberalism in India – please click here (I moved it!)

Chile 

The following clip from ‘The Shock Doctrine’ outlines the ‘neoliberal experiment in Chile from 1973 onwards, the very first neoliberal experiment in development.

Following the overthrow Salvador Allende, the democratically elected but Socialist President, the American backed Dicator Augusto Pinochet implemented neoliberal economic reforms.

These were written for him by by a group of American economists known as ‘The Chicago school’, headed by Milton Freedman.

Examples of neoliberal policies reforms included the cutting of taxes on imports to 10% (previously Chile had the second most protected economy in the world) and the privatisation of state owned companies.

In the short term – the policies increased unemployment and inflation and inequality and human misery which led to massive social unrest which Pinochet oppressed violently killing tens of thousands of people.

However, 40 years later… Chile is one of Latin America’s leading economies.

Neoliberals might argue tens of thousands of lives is a price worth paying for rapid wealth creation

Neoliberalism in Bolivia 

This video clip from ‘The Corporation’ summarizes the case study of water privatization in Bolivia in the 1990s.

  • In the early 1990s, one local administrative area within Bolivia was forced to privatise the previously state owned water supply as part of a ‘Structural Adjustment Programme’
  • A Multinational took over running the water supply for a profit
  • The poorest people couldn’t afford to pay for water.
  • This led to massive protests which the government violently suppressed.
  • In this case the government eventually renationalised the water supply due to popular demand.
  • Did neoliberalism help development?
  • If you define progress as the right to clean water then no.
  • If you define it as increasing profit for European Transnationals then yes.

Neoliberalism in India 

Arundhati Roy notes that  ‘Trickle down hasn’t worked in India, but gush up certainly has’

 

She notes the following three ways in which the Elite in India Benefit from Neoliberal Policies

  • Corrupt government officials sign a ‘Memorandum of Understanding’ (MoU) with a Corporation which privatises a chunk of publicly owned land, giving that corporation the right to use that land to establish a business – this either takes the form of mining the raw materials from under the land, or establishing a range of other projects such as Agribusinesses, Special Economic Zones, Dams, and even Formula One racing circuits.
  • Taxes are typically kept very low in these deals – often sow low in that local people see little of the financial benefit of the new business. This is especially true were mining is concerned. In 2005, for example, the state governments of Chhattisgarh, Orissa, and Jharkhand signed hundreds of memorandums of understanding with private corporations, turning over trillions of dollars of bauxite, iron ore and other minerals for a pittance – royalties (effectively taxes) ranged from 0.5% to 7%, with the companies allowed to keep up to 99% of the revenue gained from these resources. (Allowing people like Ambanni to build their 27 story houses, rather than the money being used for food for the majority of the Indian population.)
  • In a third strand of Neoliberal policy, companies are subjected to very little regulation. It seems that they are allowed to develop their projects without protecting the environment or paying any compensation to people who are negatively affected by these projects.