CL news by nation  = https://globalcompetitionreview.com/regions/spain

Best cl strategy:  foc cas decisions

ec: Private actions seeking to nullify contracts for infringing antitrust rules cannot rely on the EU Damages Directive, but can still use decisions from competition authorities as strong rebuttable presumptions of wrongdoing

CLP shapes alternative economic systems

CLP polar opposites:

Competition, like fire, is a great servant [if controlled], and a terrible master [ if perfcomp or monopoly]

a. monopoly 

many buyers but only one seller, who therefore, may increase prices [productive inefficiency PI] and reduce supply [allocative inefficiency (AI)=  deadweight loss] …moreover, monopoly brings excessive staff, excess capacity or excessive product differentiation. This situation is also referred to as X-inefficiency

b. perfcomp

 [allocative efficiency (AE) + productive efficiency (PE) ] =max [ society’s welfare (EW) + consumer welfare (CW)] = max. EE [ economic efficiency]= Pareto efficiency = the welfare of one, cannot be improved without lowering the welfare of another……HOWEVER, THIS EFFICIENCY ACHIEVED BY PERFCOMP, IS ONLY (static = short term) 

Under perfect competition, there are many buyers and sellers, and prices reflect supply and demand. Companies earn just enough to stay in business and no more. If they were to earn excess profits, other companies would enter the market and drive profits down….perfcomp requires all producers and consumers to have full and symmetric information and no transaction costs….sellers are small firms [incapable of controlling prices by adjusting supply]. They sell homogeneous gs [minimal differences in capabilities, quality, and pricing.] so gs are substitutable….and there is no point in:

• marketing
• BAD: innovating …thus, perfectcomp prevents DE (dynamic=long term efficiency) ……Firms cannot set themselves apart by charging a premium for higher-quality products and services. For instance, it would be impossible for a company like Apple to exist in a perfectly competitive market because its phones are more expensive
• BAD: investing to expand production (to cut consumer prices, and raise corp profits] …thus, perfcomp does not allow for economies of scale, since firms have near zero profit
• gov regs:  regs are to protect the EW, make sure that competition is neither too perfect, nor too imperfect. 2 types: 

• • • a. pricecontrols : gov regs on wages, prices, or their rates of change.
    • b. entry/exit controls [eg to reg. access to information and transaction costs, so that they are neither too asymmetric, nor too symmetric

gov/cma/clp  goal, is only to defend COMPETITION, and NOT PERFECT COMPETITION, NOR COMPETITORS…WHY?  because EW would be harmed, if  gov/cma/clp defended all competitors (garanteeing perfect comp) = garanteeing    entry access + competition on equal grounds + subsidies/ais [to artificially promote entry or prevent firms from exiting]

A/ NORWAY SYSTEM: BEST POLITICAL SYSTEM

 OIL FOR DEVELOPMENT PROGRAM [eg norway is a member]

The aim of the OfD Programme is to reduce poverty by promoting economically, environmentally and socially responsible management of petroleum resources. The programme is currently being phased out, and will be concluded in 2024.

B/central planning (COMMUNIST SYSTEM) = STATE MONOPOLY

can sustain growth for a period, but most new goods and services would not become available – as was evidenced by the catastrophic failure of communist planned economies by 1989.

C/ COMPETITION = CAPITALIST SYSTEM:

competition benefits everyone by encouraging continuous economic growth. The goal of capitalism is to reach a perfectly efficient market (=where neither buyers nor sellers have market power). this system forces everyone to tell the truth, and gets the right product, at the right price, to the right people….But … competition can lead to inefficient allocation of resources. to avoid this, in some cases, cos need to cooperate..eg.is very difficult, for instance, to travel north/south across London, Manchester and Glasgow because competing railway companies saw no point in joining their networks beyond their terminal stations at Victoria, Waterloo, Euston and Kings Cross, for instance…..while the multitude of competing lines around central London offered considerable resilience during the ww2 london bombings…..but competition favours the rich: Some are born rich. and money pays lobbying etc. is immoral …. private health care can start to shunt the poor into long waiting lists. Ticket resale sites – and selling TV rights to major sports – have destroyed the community and social events.  There have been calls for tradeable procreation permits, and for tradeable pollution permits and carbon trading, which allow wealthier folk to bribe poorer people to make sacrifices.

competition (like democracy) is far from perfect, but it is often the least bad of all the alternatives that have been tried. competing humans do not usually lose their humanity. Look at the camaraderie of athletes at the Olympic Games…nobody should want humans to be purely profit driven.

One problem is that free (competitive) markets fail to take account of the social costs that they impose on others – such as on the environment….eg.  huge costs imposed on the rest of us by the failures in the financial markets that led to the 2008 financial crisis, and more recently to the problems associated with hyper-competition such as high frequency trading.

This is why competition needs to be constrained by regulation and supplemented by Consumer Protection.

some countries are thrived by encouraging cartels. Germany’s economy grew rapidly in the late 1800s whilst its government encouraged companies to coordinate their prices, production levels and marketing. The Germans believed that this helped achieve economies of scale, remove damaging competition and facilitate R&D and investment. whole areas of German industry had been cartelised.

There is a related debate about whether the state should support national champions at the expense of local or international competitors

E/ globalisation (=world liberalization)

Globalization:  process whereby: national cultures, national economies and national borders are dissolving.  Thus, it involves political, economic and cultural dimensions.  In this new globalised world, the doctrine of state sovereignty is being superseded by market forces and global governance.

PROS:

Proponents of trade liberalization claim that it ultimately lowers consumer costs, increases efficiency, and fosters economic growth.

CONS:

-nations end up giving up political/legislative/judicial soverignity to intl.bodies that are incompetent and impose  their own interests , or general interests, over the nations particular interests, which need tailor-made policies…eg. El Salvador is now a prosperous country since they stopped listening to UN, wto, etc.

-globalization perpetuates inequalities in the world:

The inequality that globalization causes inside countries is because those without capital cannot gain from the economic integration inherent in globalization; thus those with capital grow richer and those without grow poorer….rapidly imposed globalization, as in Russia in the early 1990s, does increase inequality.  However, naturally occurring globalization creates stability

-leads to homogenisation of culture

-is overly Western-dominated

– financialisation: the combined effects of:  [shareholder primacy, shp + common ownership , cow + the concentration of asset management, cam], influence competitive strategies [of nations/corps], by corrupting concepts like ‘own-firm profit’ or ‘value maximisation

-creates new global problems:  international organised crime (eg women trafficking), global terrorism, and climate change

-strengthened the concentration of firms downstream

-led to the exertion of a buying power upstream, particularly over farmers, since their dispersal is now total.

<> cocoo:   press for a change in clp, since this map, harms the collective well-being (wpi) …..curiously, there is still no international body capable of correcting this market failure ….. eg farmers in developing nations, like the Ivorian cocoa farmers, lack resources to setup/enforce their own competition clp…..the WTO is limited to promoting just one very rudimentary form of competition (free circulation of goods).

<> cocoo:  inapropriate liberalising laws are an entry barrier for smaller companies for basic goods, thus they are forced to remain informal, and consequently cl and consumers are not respected.

eg. small Colombian exporters of cut flowers were also harmed by the Flower Label Program (FLP) which is a private, voluntary eco-labelling programme led by German industry, aimed at restricting the use of toxic chemicals and pesticides for the cultivation of such flowers….The Colombian government’s submission to the WTO contended that the FLP is arbitrary and discriminatory, as it imposes significant compliance costs , and is de facto mandatory, since non-compliance results in ‘negative pressure

<> cocoo: challenge countries’ failure to file submissions to the WTO…. and for wto to have true cl powers.

-the ‘rule of reason’ (ROR) is the analysis of a Product Standard(PS) (eg FLP) , to balance its comp benefits v anticomp effects…however, the ROR mechanism is absent at the international level

<> cocoo will apply the ROR in favour of developing nations

-The GATT/WTO legal framework on PS:

PS types:

-mandatory (government driven) : are regulated by GATT (General Agreement of Tariffs and Trade)/WTO agreements.

– voluntary (market driven)

-‘product-related’ PS  (PR-PS) , changes the characteristics and quality of the final product, to protect the end-user or the environment

-Non-product-related PS (nPR-PPMs) only changes how the product is created/harvested…egs: protection v slave labour; protection of the environment or the welfare of animals

LOOPHOLE: the lack of coherent recognition of nPR-PPMs at the international level, harms developing countries

<> cocoo will advocate the formal and transparent regulation of nPR-PPMs.

-Korea Beef Case:   WTO Appellate Body, held Korea responsible for violation under Article III:4 (NT) because domestic law gave a sufficient incentive for its retailers to act in a manner inconsistent with the WTO.  <> cocoo: identify ps that violate wto Article III:4. on the basis that affects internal sales, discriminates between like products, and fails to afford like treatment to imported products

eg: SUPERMARKETS

Is heavily constrained because, eg:

• Expensive services (such as cancer treatments and university courses) have to be made available to the least well off in our society, not just those who can afford them.
• But the middle class often ensure that it is only the well-informed and/or the well-networked and/or the better off that can make full use of competition.
• a multiplicity of suppliers, which is hard to arrange in smaller towns and in rural areas
• spare capacity (under-used teachers, wards, doctors) has to be paid for by someone.
• Unsuccessful institutions have to reduce capacity – but that always runs into serious opposition
• And the customer might not always be right. The university that most effectively sells itself to 17 year olds might not employ the best teachers. Even more worryingly, its teachers might mark generously so as to avoid upsetting students

Competition between Professionals

when surgeons started to publish their success rates etc. , it encouraged them to learn from one another, and so good practicespread much more quickly. The result was that most surgeons’ performance came up to near the standard of the best, and patients no longer needed to ‘exercise choice’

BALANCING OF GOALS 

sadly, most jurisdictions today balance in favour of ee goals, over wpi goals eg:..UK, Belgium, usa….however, in South Africa, wpi is even with ee

A/ CLP GOAL = EE (‘economic efficiency’) = AE + PE . slc test.  ee goals:  deliver benefits to consumers: low prices •  high output and quality • Promote innovation (disruptive & sustained) • Promote consumer choice & variety competition

CLP GOAL = EE (‘economic efficiency’) = [AE + PE ] = EW = [PS(producer surplus) +CS (consumer surplus)], current and future

B/ CLP/WPI GOALS : GREY AREA : • Fairness (no exploitative conduct) • Freedom to compete/freedom to trade •Limit abuse of economic dependence & superior bargaining power • Ensuring market access for small and medium undertakings •Privacy and informational selfdetermination

C/ wpi goals: can be translated into ee goals, thus, is wrong to name them ‘non-economic’.  ee goals and wpi goals, are compatible. wpi goals egs:  all examples  .  egs. •Protection of the environment, biodiversity and sustainability  •Security of supply • Right to food • Competitiveness of the local industry • Geopolitical concerns & national security • Promotion of employment & social welfare •Promoting human happiness or capabilities; financial stability, industrial growth, industrial policy, innovation, national security, media plurality and empowering historically disadvantaged persons 

a ‘market’ is not a set of products which ”resemble“ …. but is a set of products, or geographical areas, in mutual competition…eg. bananas would be in the same market [as oranges], if the price of bananas cannot be raised (much), becos consumers would then substitute bananas for oranges.

products (or geographical areas) in the same market, have their prices correlate positively

The test to identify a market, is the the SSNIP test (= hypothetical monopolist = Small but Significant Non-transitory Increase in Prices)

Rent-seeking activities :  firms competing (bribing, lobbying) for moprents (to get mop/map), waste welfare resources, as they produce no (or negative) social value

Market power: MAP = [prices – marginal costs of production]

MOP = SMAP = entry barriers = DP (DOMINANT POSITION)  = an undertaking has DP, if it has substantial and durable map, so that they could, if they wished, charge nearmop prices.  DP firms/nations is not a clp breach, unless they do anticomp.

Diff:

• DP firms/nations have a propr higher duty to prevent anticomps…but only if they commit anticomps [eg abuse by charging nearmonop prices], they commit ADP …moreover, ADP violates clp, only if:

(1) substantially harms comp, and

(2) anticomps outweigh any EE

• a non DP firm, even if commit anticomps [eg abuse], is not ADP, thus it does not violate clp….eg: Article 2(3) of UK/EU mcr :  duty to ban only those mergers that could potentially create or reinforce a DP [dominant position : is allowed] …….cocoo: This arts breach economic principles, since they also should ban mergers which do not create/reinforce a DP, but decrease EW/wpi (usual in markets with few firms)

AEQ [allocative efficiency quantity and quality]

AEQ is a type of EW GAIN: 

diff:

• PMQ (profit maximising=market equil quantity) = **what society gets, if there is comp = [Qd=Qs]….in a competitive market, (MSB>MSC)…the msb (social benefit from a bit more gs output) exceeds the MSC (the extra cost to produce that little more gs output) creates EW…..This causes the industry to grow, until the AEQ (what we want) is reached.
• AEQ (ae quantity) =  what society wants = [MSB=MSC] =[marginal social benefit = marginal social cost]…the mix of gs produced matches consumer preferences; how?:  not producing (gs) too much or too little…there is no deadweight loss or waste of resources. the amount and quality of gs production (output) is finetuned to the exact needs/wants of society, at the least cost of resources…

** EXCEPTION: the “invisible hand” of capitalism gets society, more than just PMQ….it gets us AEQ!!( WHAT SOCIETY WANTS/NEEDS)

• • (D=MSB)…this is true if there are no positive externalities (spillover benefits))
  • (S=MSC)….this is true if there are no negative externalities (spillover costs) ex:   NO ENVIRONMENTAL HARM
  • THEREFORE if there are no negative externalities (spillover costs) and no positive externalities (spillover benefits), competitive markets (capitalism) achieve AEQ (WHAT WE WANT)=  [MSB=MSC] = [D=S]. …self-interested, profit maximizing, COMPETING firms end up doing what is best for society (AEQ), as if there is some “invisible hand ” guiding their decisions..This is the “invisible hand” of capitalism

AIQ :[allocative inefficiency quantity and quality]

type of welfare loss caused by smap=mop, bringing prices above marginal costs. this causes higher PS [producer surplus], but not enough to compensate for the lower CS [consumer surplus]. Because [welfare = CS + PS], the CS loss, brings welfare loss…… some people may gain without imposing losses on others.

PEC [productive efficiency cost]

economies of scale = type of welfare gain, thanks to comp, getting us ever closer to the chinese model: maximum output at the lowest cost……Competition ensures that production occurs at the lowest possible cost and without waste, ow, rivals will do it cheaper.

PIC [productive inefficiency cost]

type of welfare loss caused by smap/mop, bringing high cost of production caused by operating below production potential, because the capital and/or labor are underutilized….waste (welfare loss) because the full gs that consumers need/want, are not produced.

<> cocoo will find the invisible boundary [where toomuch/toolittle competit harms consumers ], in a market, and identify which pbs/soes/firms are crossing it    +   cocoo v gov for failing their duty to properly regulate/subsidise, so that there are sufficient gs [quantities and qualities [minimum quality standards not met]] , so that more EW is gained 

MA is a more profitable strategy than predation (DP firms cutting prices to kick out rivals or deter entry)….however, even more profitable is to first engage in  predation , and then to ma rivals (at a lower price than if there had been no former predation). <> cocoo to block this mergers

the ec has a duty to consider the interest of consumers in all aspects of its competition policy.

incomplete contract:   [ eg ip development contracts]

a contract that is too gappy or indefinite in important respects, to be enforced.  in some cases, a court should fill gaps.  in other cases, there is a duty to negotiate in good faith to make an incomplete contract sufficiently complete, or to reach a contemplated final contract [when the reason the contract is incomplete is because there was a contemplated final contract].

Contracts are incomplete when they are complex, or do not specify what happens under all contingencies…

<> cocoo to identify incomplete [ eg concession] contracts, and seek that is completed, by negotiation, or by court.

<> cocoo.uk  v ec/ca for failing their duty to promote a more competitive allocation process, thus they failed a duty to promote ew

<> cocoo.uk may research auction houses’ [award concessions] designs, to identify anticomps and/or incomplete contracts

how gov/soes impact clp:

• Legislation and regulation;
• Subsidies
• Procurement
• market activities :

many public sector firms (soes) compete with private firms. this causes anticomps [thus reducing profitability of priv.firms…..this is unfair because the taxes they pay are subsidising their public firm competitor ]…thus, more stringent competition requirements should be placed on public firms, to prevent anticomps resulting from:

• • • public/private differences in regulations;  
    • lower cost of capital of public firms, as they are not required to earn a commercial rate of return or can borrow funds at lower rates
    • public firms have no requirement to pay taxes.
    • public firms may be exempted from anticomps. 
    • public firms may receive gov subsidies. if they are used to cross-subsidise commercial activities, the public business will have a comp advantage
    • public firms get lax public procurement rules
    • some public sector agencies have the power to collect data for public purposes….they have an advantage if they can use this data on terms more favourable than the private sector.
    • if the public firm is less  efficient [actually or potentially] than private providers, but is able to “crowd out” private firms, will result in a higher tax burden and allocative efficiency (AE)is reduced.
    • if the public firm is less likely to innovate and entry is deterred, Dynamic efficiency (DE) is reduced.
    • public firms have greater incentives to exploit their map, and more opportunity to conceal anticomps…..In particular, an SOE [State Owned Enterprise] may :
  • • • set prices below marginal production costs, especially on products for which demand is price-elastic
      • understate its marginal cost of production and overinvest in capacity, in order to relax a binding prohibition on pricing below cost
      • have stronger incentives [than a private firm] to raise its rivals’ costs and to exclude rivals….. For example, SOEs often enjoy privileges and immunities
      • have objectives other than profit maximization
      • benefit from statutory monopolies….Consequently, SOEs may not need to recoup the costs of anticompetitive activities by raising prices

CP is the responsibility of the SOSBIS…THUS, COCOO WILL CHALLENGE SOSBIS FOR CP CHANGES

RTEFA = refusal to ef access

[essential (facility=service=product) doctrine]=efd

RTEFA is a type of RTD….but could still be challenged on both clp(efd) grounds, and on wpi grounds [eg: chatham bus station]

CAS  (eg cma/ec)

have 2 clp mandates:  enforcement + advocacy 

in developing countries, the state plays a double role: as ca, and as publicfirms….resulting in corruption and anticomps…. Thus, the first step to become a developed country requires cas to be indep <> cocoo challenge nations’ [regs/laws that are in breach of their own constitutions/int.treates], by failing to declare the indep of cas 

<> cocoo: press/supercomplaint v CA, to amend some regulations, as it is failing its 2 mandates + failing its independence

<> cocoo v nations that fail to give their cas indep and sufficient powers to restrict anticomp

ADP

Facebook CASE:  court held: the merging of the data constituted a violation of the users’ constitutionally protected right to informational self-determination, the Court decided facebook was liable for adp

In Astra Zenecca the CJEU found that misleading representations to the patent office, a possible regulatory offence, could constitute adp, if it was part of a strategy by a DP seeking to unlawfully exclude rivals.

USA PATENT LITIGATION DATABASE     EU PATENT LITIGATION DATABASE     MISLEADING EU PATENTS DATABASE  
UK PATENT REVOCATION

A patent can be revoked if the patentee’s prescribed declaration:  “…contains a false statement or representation which is material and which the patentee knew or ought reasonably to have known was false at the time made”.

CLP AND PATENT(ip) POLICY, are in conflict:

• clp restricts the abuse of smap 
• ip policy confer map

cocoo opinion:  developing countries should balance in favour of clp , over ip policy, because most ips belong to developed countries, and bring anticomps that harm developing countries.

<> cocoo to claim that a specific european/usa ip , is not subject to clp in a developing country, on basis that clp + wpi, outweigh ip

if an IP causes ADP, the clp exemption must be withdrawn or limited

<> cocoo will claim that an ip causes ADP, so it must be withdrawn/limited

CLP EXEMPTIONS

1/IP [eg patents] are clp exempted, unless causes ADP

2/IF THERE IS NO UA/PRACTICE, CLP IS NOT APPLICABLE +  IF THERE IS UA/PRACTICE THAT IS EXEMPTED, CLP IS NOT APPLICABLE :

UAS  [undertaking economic agreements or persons(legal/physical)]

In cases involving uncertainty [on whether a proposed activity is ua [subject to clcp], and if so, whether, the ua would be anticomp, the CMA should be approached to provide a non-binding ‘Short-form Opinion’  0845 7 22 44 99.

PB’s gs purchases are ua, only if there is a subsequent economic offer/supply of gs 

Only uas/practices are subject to clp….moreover, the ua/practice are only subject to clp, if are not exempted:

      – if does not Contribute to improving the production or distribution of goods, or to promoting technical or economic progress

– if does not Allow consumers a fair share of the resulting benefits

– if does Not impose restrictions on firms that are not indispensable to the attainment of the above-listed objectives

– if does Not give rise to the possible elimination of competition in a substantial part of the market of the products in question

-if is not in a block exemption:  EC: Block exemption clauses [uas/practices that are not subject to clp]: [exclusive distribution and purchasing arrangements, R&D cooperatives, patent and know-how licensing, and specialization agreements]

< > cocoo.uk will identify nonexempted or wrongly exempted anticomp uas/practices...eg strikes; get high earners; etc 

3/ PROF.BODIES:

clp exemptions for professional bodies (eg sra), are not justifiable on economic grounds,  except for qualifications and standards of services 

<> cocoo will destroy prof.body exemptions unlawfully (selfregulated) (self) granted [eg advertising ban on solicitors] , other than qualifications and standards of services

4/ Insurance, investment brokerage and banking services:   clp exemptions are granted only if needed to reduce risk and uncertainty.

<> cocoo will destroy clp banking….exemptions unlawfully (self) granted [= clp exemptions other than to reduce risk and uncertainty]: eg exemptions for  pricing of insurance or security brokerage services, or to setting of interest rates and service charges by banks]

5/ R&D and Environment protetion,  are clp exempt, if based on coop between rivals…because cooperation and competition between firms are not in conflict.,,eg in  pharmaceuticals and electronics, firms cooperate in R&D but compete in the pricing and sale

<> cocoo identifies where coop. becomes anticomps

6/ in some  jurisdictions, clp exemptions are granted for “special” sectors such as energy, liner shipping, air, trucking, professional sports, small business and government enterprises….and for ‘natural monopolies’.

In most of these cases there are no credible reasons for clp exempting…eg: privatization, deregulation, structural changes and application of clp to ‘natural monopolies’ like airlines, power and telecommunication sectors,  have increased productivity, lowered prices and improved services.

<> cocoo v countries that grant clp exemptions where they should not

EU CLP/WPI GOAL BALANCING [kneepkens]

diff:

• -ec. benefits (EB=EW) = wpi.ua
• -nonec benefits (NEB=NEW) = wpi.nua =wpi non-ua

the EAF (exempt.analytical framework) uses the EP*, to balance conflicts between the cartel prohibition, and [wpiuas = wpis of ec.benefits…because uas are, by definition, economic]

only gov (demolegit), and not the courts,  may balance the cartel prohibition against noneconomic benefits [wpis that are not uas]

diff:

• CLP GOAL = WPI.UA =  EE (‘economic efficiency’) = [AE + PE ] = EW = EB = WPI.UA = [PS(producer surplus) + CS (consumer surplus)], current and future …..(total: of producers and consumers) EW= consumers’ satisfaction in a given market only. Can only be computed if it’s first translated into monetary terms. this is done by measuring: [consumer surplus(profit) = CS = [price paid by consumers – consumers preference ] = max price consumers would have paid]]
• SW(societal welfare) =  [wpi.uas + wpi.nuas]

 if ew ignores the costs to 3ps/society, then:   societal welfare < total welfare

an ua that increases cs [max price consumers would have paid], it also, indirectly, increases ew, because the consumer is now able to consumer more of other products/services. This violates clp

7 wpi types

paternalistic benefits wpiuas = WPI.P.UA

ec: are only eligible in the 1stcond, if they can increase/protect consumer surplus

ecj/cma:  asnef/equifax case: pbwpiuas are EP eligible . ecj held that the creation of a creditors register could prevent overindebtness.

wpi.ua = economic benefits wpi

all the benefits of a ua , which:

a. may increase ew, and

b. can be translated into monetary terms {based on ec.theory and evidence}

wpi.d.ua = direct economic effects wpiua

improvements in price, quality, range, or service, for direct and indirect buyers, in a given market, affected by the anticompetitive ua.

EC AND CMA OPINION: DEEWPIUAS ARE ELIGIBLE UNDER 1STCOND AND UNDER EAF

ALL DEES ARE ALSO EBS.

egs of wpi.d.ua :

a.less production costs.

b.Innovation increase.

c.Entry of new markets

wpi.i.ua = indirect economic effects wpiua =negative externalities

WPI.i.ua = ua WITH EFFECTS THAT ARE, PRIMAFACIE, OF ECONOMIC NATURE.

EG:  THE INTERNALISATION OF NEGATIVE EXTERNALITIES-  [eg carbon emissions]; BENEFITS FOR BUYERS IN OTHER MARKETS; OR BENEFITS FOR SOCIETY AT LARGE

reducing wpi.i.uas, may produce wpi.uas, in some cases eg (if the proposed ua reduces carbon emissions]..thus, it can be balanced (v  the costs to competition) eg. ceced case.

EC AND CMA OPINION: WPI.i.UAS CAN BE, BUT EC IS RELUCTANT TO, DEEM IT ELIGIBLE UNDER 1epc.  THEY do ARE ELIGIBLE UNDER EAF…the ec is more reluctant to accept wpi.uas, than wpi.d.uas

wpi.i.ua egs:

a.reduction of fin stability risks because of selfregulation

b.limiting the risks of overindebtness of borrowers

c.cost reductions that sellers may enjoy, if consumers increase use of payment cards, instead of cash.

wpi.n.ua = noneconomic effects wpiua

sometimes they are also ebwpiuas

EC AND CMA OPINION: wpi.n.ua  ARE NOT ELIGIBLE UNDER 1epc.. BUT THEY ARE ELIGIBLE UNDER EAF, IF THEY CAN BE TRANSLATED INTO monetary terms, THUS BECOMING WPI.UAS.

The reason wpi.n.uas cannot be eligible for balancing, is because private uas [lack demolegitimacy] should not decide that buyer’s welfare should be sacrificed due to anticompetition….. unless they can be converted into wpi.uas.

<> padi identifies wpi.n.uas that can be converted into wpi.uas

<> padi identifies wpi.n.uas by pbs/soes/tenderwiners

wpi.ej.ua = economic justifications wpiua

justifications for Regulations to solve market failures

-in banking prudential regulation, we find these ejwpiuas:

a. remedying banks inherent instability, higher chance of failing / bank runs

time asymmetry between a bank’s assets and liabilities, means that if many consumers withdraw lots of cash, the bank can become iliquid. eg. northern rock. … an iliquid bank may be solvent…. a public panic bank run on a solvent bank exposes a market failure (a negative externality) due to the time asymmetry, and also an information asymmetry (customers do not understand that the illiquid bank is actually solvent)….2 regulatory tools (to solve the above):

1. dgs (deposit guarantee scheme= consumer insurance). but dgs are voluntary (for banks to adopt),

2. lolr (lender of last resort)..the eu membe state banks are lolrs, and the ecb (eu central bank) monitors this.

b.remedying systemic risk(bank domino effect):

to protect banks’ consumers v the consequences of bank failure: is a wpi.n.ua goal….this goal is not to correct a market failure… is hard to rm cl goals, with wpi.n.ua goals.

systemic risk is a market failure (a negative externality), mitigated via regulation for: banks’ minimum capital requirements; asset diversification; rescue loans; expropriation; rescue mergers.

the esrb [european systemic risk board] : systemic risk is the risk of disruption of the fin.system, with the potential of serious consequences for the internal market and/or the world economy.

-in banking business conduct regulation, we find this wpi.ej.ua: consumer protection from info asymmetry :

to remedy info asymmetry: even if banks disclosed all info, consumers would still hardly understand it……-crl can be (as cl) paternalistic:  consumers must be offered what they need. not what they ask.  because they suffer from bounded rationality. consumer satisfaction is not decisive. thus, banning some products, or product features, is the best way to protect consumers.

wpi.nej.ua = noneconomic justifications wpiua

-in banking prudential regulation, we find this wpi.nej.ua:  protecting bank consumers from the grave consequences of bank failure

-in banking business conduct regulation, we find these nejwpiuas :

a. consumer protection from overindebtness:

may cause consumer loss of self esteem, and social exclusion.etc….. how?: by regulating an interest maximum,the risk for the bank for lending, is limited….but my opinion is that the real reason for regulation restricting loans/mortages, and for using credit agencies to discriminate the poor, is to keep the limited london housing stock just for the richest, since the demand by the (money laundering) rich for expensive property in london is infinite…the regulatory restriction on mortages does not increase the demand (relative to the supply -which is, by the way, kept artificially low) . the combined effect is that property prices keep climbing…. other factors: absence of building land;  little competition between developers

b. consumer protection from limitations to their choice. eg ban on deceptive products/services.

c. financial inclusion. eg: to guarantee society at large, access to payment services .

d. consumer privacy protection.[eg: reg. to ban the sharing of personal info for commercial purposes, even when the consumer consented]

UK

how will cma apply the S.9 [rival collaboration] exemption [so that ua is cleared]?

By using four “efficiency” criteria: [<>   a carboncopy of the eu 4 EPCS]

• the agreement must give rise to benefits to production, distribution or technical or economic progress (Condition 1);
• the restriction to competition arising from the agreement must be indispensable to achieve those benefits (Condition 2);
• consumers must receive a fair share of the benefit (Condition 3); and
• there must be no elimination of competition (Condition 4)

an agreement to reduce or eliminate certain types of plastic packaging , reduces carbon emissions during the production process, thereby “reduces the negative externalities from greenhouse gases” such that it could be classified as a cca…. in practice, the cma will only clasify it as a cca if the ua achieves large reductions in greenhouse gas emissions

<> cocoo will fight plastics, arguing that the reduction in neg.ext. is large enough to be a cca, thus clearing the anticomp merger……or that the merger should be blocked becos the reduction in neg.ext is not large enough to be a cca.

<> the line between cca/noncca, is very fine, invisible, subject to challenge by cocoo <> ask cma directly about particular firms/mergers….CMA has  an open-door policy: businesses to approach the CMA for informal guidance on proposed environmental sustainability agreements]…This is subject to the condition that the parties did not withhold relevant information from the CMA that would have made a material difference to its assessment

CMA publishes anonymised summaries of sustainability agreements that have been shared for cma approval

<> cocoo will seek disclosure

cl and cma are failing their duty to effectively facilitate businesses’ desire to address climate change. how?: cl , and cma interpretation of cl, should be more admissible of accepting agreements as ccas…well beyond the restrictive interpretation by the EC

The 4 EPCs [exemption possibility conditions]:

1. 1EPC:  all [benefits that can be translated into monetary terms = ec. benefits = EBs = wpiuas].    paternalistic benefits are not ec.benefits.
2. 2EPC:  THE UA MUST GIVE CONSUMERS A FAIR SHARE OF THE BENEFITS
3. 3EPC:  ‘THE COMP RESTRICTION MUST BE INDISPENSABLE TO ATTAIN THE BENEFITS’
4. 4EPC: THE UA MAY NOT ELIMINATE A SUBSTANTIAL PART OF COMPETITION

The 3 UA Types <> the 3 CLP prohibitions:

A/ 102 TFEU UAs = ADPUA (ABUSE OF [DOMINANT POSITION =map] UA)

unlike the other uas, adpuas dont have the CLP EXEMPTION POSSIBILIY (EP) (101.3), thus, adpuas may be banned, even if the EP could have applied…ADPUAS are very rare in banking.

101 (tfeu) UAs that violate the cartel prohibition, are void….… parts of the ua contract only survive if the violation (eg a rc), is not crucial for those parts…An 101 UA may be assumed to exist, even if a firm’s unilateral action/proposal, is tacitly accepted by another.

<> cocoo: claim to hold the entire contract (or parts of it) void/valid

EC/CMA OPINION

• [DIRECT EC.BENEFIT UAS = WPI.D.UAS] ARE ELIGIBLE UNDER 1EPC AND UNDER EAF.. EGS OF WPI.DUAS: a.less production costs. b.Innovation increase. c.Entry of new markets
• [INDIRECT EC.BENEFIT UAS = WPI.I.UAS] CAN BE, BUT EC IS RELUCTANT TO, DEEM IT ELIGIBLE UNDER 1EPC.  THEY DO ARE ELIGIBLE UNDER EAF
• [NON EC. JUSTIFICATION UAS = WPI.NEJ.UAS]. ARE NOT ELIGIBLE UNDER 1EPC. BUT THEY ARE ELIGIBLE UNDER EAF, IF THEY CAN BE TRANSLATED INTO MONETARY TERMS , THUS BECOMING WPI.UAS.

1EPC admits for balancing, either WPI.NEJ.UAS OR WPI.EJ.UAS, only as long as they can be translated into monetary terms; and where that translation evidences that ua may generate the benefit of increased ew [buyers gaining more ew thanks to this ua]….iow, the 1stcond only admits for balancing nefwpiuas or efwpiuas, that have the potential to become ebwpiuas.

-will such  WPI.NEJ.UAS OR WPI.EJ.UAS [eg innovation], really , in the future, become wpi.ua? , and if so….to what extent?…is hard to predict, but even if is a ‘may be’, and is to be realised after many years…it may still be admited for balancing.

<> padi can challenge EPs granted by courts, if a proposed benefit failed to materialise, or did so to little extent.

wpi.nua effectss are not eligible, because they cannot be compared to anticompetitive effects, becasue wpi.nuas cannot be translated into monetary units.  This lack of a common unit between anticomps and wpi.nua effects, means that this conflict can only be resolved by political, subjective decisions (law-by parliament). this should not be decided by the courts, and even less, by the undertakings themselves (their sole duty is not to reduce consumers prosperity by collective action)…..but the law is silent about how to balance….which is a shame….eg: the min.amount of biofuel that should go into gasoline, is not to be decided by a horizontal agreement among suppliers, nor by the cma, or ec. this should be decided by democratically elected legislators….or by large consumer associations that represent consumers with their consent….

padi could argue that a particular wpi.n.ua, of a [proposed, or existing] merger, offsets its anticompetitive effects, so it should be allowed…. or that it does not offset it, and should be blocked….   to support either possibility, padi can argue that , since the law is silent about how to balance, and neither courts , nor ec/cma, nor the undertakings themselves, are legitimised to balance…. padi, as a charity democratically elected by consumers, representing them with their consent,or, alternatively, padi is subject to control by a demo elected body…. then, padi is more legitimised (than courts/cma/ec…), to balance….padi will offer , to the undertakings, a position paper, under an NDA, advising on how the uas should be amended…. or PAP

<> padi’s EEAC [locus standi] v State/gov/sosbib unlawful decisions [eg parliament decision to write unlawful reg/law; sosbib balancing etc]……

EXCEPTION: if there is ultravires, padi also has standi (eeac) to claim :

• v State that is acting ultravires [by overdelegating] 
•  v the delegated body (eg ec, cma, private parties that won a public tender, courts [padi can void a court decision], countries, ngos, etc), as is also acting ultravires,[by carrying state functions that lack demo.legitimacy (eg prioritisation=balancing, of public policies)]

[buyers harmed by anticomps, who are unrelated to the affected markets] = all of society 

<> padi’s standi in EEACs

can the benefits that society at large get [from the anticomp ua] , be added to the ‘appreciable advantages’ that affected consumers receive [from the anticomp ua] , to outweigh the anticomp harms?:

in the past, ec said yes…eg: ceced case: ec held that ‘the environ.benefits for society allow consumers a fair share of the benefits, even if no benefits accrued to individual buyers’…..but now ec/cma has changed opinion to a ‘more economic view’

innovation is the main force of ew growth, but the high uncertainty of innovation benefits, makes it imprudent to allow them to outweigh anticomps…iow,  innovation benefit’s uncertainty means they are not wpi.uas for the 1EPC. …thus, a comp restriction must never block innovation [on a key product feature], beyond the short term.  this is the 4EPC

<> padi can challenge nationalisations [expropiations] , on the basis that, instead of expropriation, a merger should have been cleared…expropriations result in taxpayers losing ew, as they need to pay more than if a merger was cleared.

106.2 tfeu: eu may not prevent undertakings from providing an SGEI…so, if a merger is needed for an undertaking to render an SGEI, the merger should be cleared….SGEI = [private services of general economic interest]eg royal mail, nat.rail, energy, comms.etc.  Current eu state aid rules for SGEIs, allow exemptions from state aid control, for up to 500k, as they are asumed not to affect competition in eu…...

<> padi can challenge this asumptiononly the benefits that a t.o. has for consumers, can be considered in the siec test… exception: all benefits for society at large, may be included in the siec test, only if the commonality exemption applies…eg: where all taxpayers are consumers in the market/s affected by the anticomp t.o. [because only then there will be no wealth redistribution between citizens]

the siec test does not consider benefits that would also materialise in a state rescue. …but, as the benefits for the state cannot be in the siec test, this test may block a merger that is beneficial for society…thus, are there other rms that do consider [for balancing] benefits for the state?…yes:

21.4 EUMR is such a rm:  ‘if a eu dimension merger is cleared, but which could harm the legitinterests of a memberstate, such memberstate can take measures to protect itself from such merger.. ….public security, media plurality, and prudential rules, are automatically legitinterests….any other wpis must be communicated to ec for assessment’

ec: 21.4 eumr only gives memberstates the possibility to block , not to clear mergers, that infringe their legitinterests…..however, ec does not have the power to interpret eu law. this is the role of the ecj, and ecj has not yet had a chance to decide on this.

may a memberstate clear a merger that violates its legitinterests.?…yes, memberstates can force through mergers that are blocked by ec.

<> cocoo will ask nation to force through, a ec blocked merger

TAS

undertakings often use a ta, to facilitate or cover up unlawful collusion.

<> cocos will give ‘free’ advice to SFAs [assocs with statutory functions], arguing that their infringement does not flee cl, cp, becos of SFA‘s actions/omissions have (had) a dir or indir effect on the market, thus on competition….[eg: seeking members commercial interests…eg via tacit uas.]…, thus, this assoc is a ta, thus bound by cl/cp….thus, acted uv , and was negligent/reckless by failing to comply with cl/cp.

<> cocos performs no dir or indir effect on the market, thus is not a ta…thus, cl cp does not apply to cocos 

mod <> baes shit

mod can procure from UK suppliers or from abroad….except that mod colludes with baes(uk nc), to procure mostly from baes, using either of these excuses:

A/only one supplier (baes) can meet demand for certain types of expensive and sophisticated equipment

cocoo: is the baes equip really more sofisticated than the offshore firms?

is it true that only one supplier can meet the demand? offshore firms really do not manufactore those types, and even or supperior quality? 

B/security considerations require the mod to contract with a trusted national supplier (baes), to maintain sovereign capability, for example, nuclear-powered submarines or complex warships.

<> cocoo:

-mod gets no vfm from nocompro….iow, is paying too much to baes

-is baes really a trusted firm?? <> cocoo will dig out baes shit. 

-is it true that to maintain sovereign capability, must mandate that mod contract from a uk firm (mostly baes)?

The most effective route to securing VFM for money in defence procurement is normally through competition. However, because such competition is frequently absent on the largest defence contracts, the Department introduced the Single Source Contract Regulations to balance a fair return for industry with the need for better value for money for the taxpayer. The Department has identified significant potential cost reductions on contracts within the new regime, 

<> cocoo disagrees:

• mod is failing its duty to increase its ability to negotiate contracts and scrutinise costs to secure better vfm
• mod should require formal justification for nocompros, and be able to demonstrate it is applying credible pressure for competition. mod  should be able to demonstrate why a nocompro offers better value for money…. mod should be identifying where competition can be increased
• SSRO and the mod should work together to monitor the impact of decisions on the defence industry. The SSRO’s statutory aims make clear it  should balance value for money for the taxpayer with a fair return for industry

The Single Source Regulations Office (SSRO) : 2014. Its duty is to ensure that gvfm is obtained for the UK taxpayer in expenditure on QDC = qualifying defence contracts [=nocompros over £5m] , and that single source suppliers are paid a fair and reasonable price under those contracts. 

<> SSRO is therefore COCOO’s main target

Within the mod, the SSAT oversees the application of the Regulations and acts as liaison point for the SSRO…BUT…The mod is not required to share with the SSRO the extent of contracts excluded and exempted from the Regulations, or the underlying reasoning

<> cocoo: why not? which types of contracts the mod is not required to share?

The SSRO is a pb ,not part of mod, but approved by the Sosde…SSROis a ‘regulations office’, not a regulator…ssro can request the information they need….ssro Can ask the mod to penalise suppliers that do not provide information, but ssro has no access rights…the SSRO must ensure that suppliers are paid a fair and reasonable price….BUT…The SSRO has sought to audit industry rather than regulate it. Does not consider whether industry is receiving a fair rate of return. Staff lack relevant experience, and its methodology has been flawed.

The SSRO found breaches of the Regulations that occurred during negotiations, but were not reported as deviations. five contracts had breached the Regulations because they had not observed the principle of ‘not taking profit on profit’  : the policy is that Profit can only be charged on profit, if a sub-contractor is part of the same group as the prime contractor….BUT mod did not take action to correct the error in these cases <> why not?.nobody asked.

Disagreements between mod and suppliers have centred on the ‘reasonableness’ of costs, the more subjective category…One such disagreement relates to ‘re-work’. Suppliers are expected to bear the cost of re-work caused by their poor workmanship…the supplier is now setting up a system to record the causes of re-work

<> cocoo will validate these claims, or ask mod to validate them

-what more can be done to reduce nocompros?

-why the increase in ‘cannibalisation’ in the Royal Navy, where parts are being taken from one vessel to keep another going?

-Around 50% of mods procurement is nocompro. sometimes may be valid reasons for nocompros…

<> COCOO:  BUT…. there is scope to reduce nocompros, AS PER GOV policy!!!

Contingent liabilities

mod has repeatedly failed to comply with contracts’ contingent liability procedures, in order to deny both Parliament and the Treasury the means to scrutinise the extent to which the taxpayer is exposed to potentially huge liabilities in the future….

it is also concerning that mod keeps failing their duty to design and implement a clear strategy to drive compros, thus mod is likely to failed their duty to achieve the planned savings of £1.7 billion.

mod keep allowing some suppliers to keep refusing the regulations. Thus, mod is in a duty to arm Sssro with the teeth to do its job

following Brexit…mod is failing to properly support UK defence suppliers, and failing to promote competitive procurement

Reducing single source procurement [sspro = nocompro]

government’s (mod) policy is to use competition wherever possible in order secure the best vfm…. Nevertheless, to retain sovereign capability, as well as consolidation within the defence industry, in some cases there are a limited number of suppliers able to provide the sophisticated equipment needed

<> cocoo challenges this

mod said it did not want to fall into the past traps whereby large uk companies acquired (t.o.) some of the smaller ones, with the result that the ability to procure competitively is reduced

<> cocoo:  did cma not investigate?

mod admitted that, after brexit, the UK lacks the onshore ability to deliver its needs….thus mod was trying to prevent uk defence contractors  from being disadvantaged in selling their products or entering into international alliances

<> cocoo will contact usa ftc, and uk cma, wrt baes current undertakings, and see if bae is complying: 

to co-operate (SO NO ENTRY BARRIERS) with actual or potential contractors bidding for DEFENCE contracts, even where they might need to sub-contract BAES production capacity

teaming arrangements undertakings, were retained in 2006, to prevent a BAES only supplier, from choosing only to work with a BAES sub-contractor, thus foreclosing the market….

Where BAES proposes a teaming agreement involving two or more BAES
entities in an MOD contract, the Undertakings require BAES to seek approval from CMA. BAES has sought permission from the cma to pursue teaming arrangements five times and permission was granted on each occasion…..

<> cocoo will challenge those cma decisions

MOD allows only UK firms in their procurement, on basis of national
security (wpi), for complex warships, submarines and some types of munitions. This
does not mean the entire supply chain is manufactured in the UK

< > cocoo: mod should tender to other uk firms….not just to baes

cma: our statutory duty is to focus on the competition issues raised in the Undertakings. We have therefore not applied a wpi test [eg. national security] which is at Sos discretion.

BAES had divested or closed businesses in areas relevant to the Undertakings. BAES, since 2006, it has sold, closed or otherwise reduced the significance of its business in a number of areas:

cocoo <> did bae [against the wpi), sold/closed/reduced these areas becos they were limiting their nm (near monopoly)? 

cma: in all cases, the absence of the Undertakings would not have led to a different outcome in the tendering process

< >  cocoo:    but the reason is becos baes is infringing the undertakings !!….thus, cma should not advise [sos] that the undertakings should be released….but that they should be complied with by baes, and fined for infringing them !!!

BAES told us that no reference has been made to the Undertakings when BAES has discussed procurement strategies with the MOD….MOD said that the mere existence of the Undertakings, mean that the potential for competition is created

<> cocoo: not, if alll know the undertakings are a joke!

we (cma) have seen no evidence that the Undertakings have enabled other actual/potential prime contractors, to bid for or win contracts relating to MOD programmes….thus, the undertakings can be withdrawn.

For the Undertakings to remain appropriate, two conditions must hold:

(a) There must be a likelihood that procurement will, in the future, be on a competitive basis (which, in turn, means that there must be alternative credible prime contractors) such that the Undertakings would be relevant. If there is no reasonable prospect of MOD competitively tendering contracts in a given area of defence spending, the Undertakings have no role in that area <> cocoo:   the undertakings need be amended, to apply even where no likelihood of future compros.

(b) BAES must have the ability and incentive to foreclose other potential prime contractors <> cocoo:   baes cannot foreclose, because to foreclose, first you need compros [to be foreclosed]…thus, the undertakings need be amended, so that foreclosure is not a requirement

to determine whether there is a realistic prospect of the Undertakings being used in the foreseeable future in a compro:

– is competition among prime contractors likely?

cma: no

are the Undertakings needed to prevent baes foreclosure of other prime contractors?

cma: no

-is BAES likely to have the ability and incentive to foreclose in the event (which we consider unlikely) that a major warship programme is put out to competitive tender?

cma: no

<> COCOO: AR (NORTH STEALS FROM SOUTH) <> OD (SOUTH STEALS FROM NORTH)

 COCOO's CSO AND CHARITABLE [OBJECTIVES = CONSTITUTIONAL DUTIES]:
[NGOs + journalists + Academia = CSOs (civil society orgs)]
TRACEPublic: to TRACE BOS

0/ To share lists of politically exposed persons (PEPs), to exchange corruption evidence , to help :
1/freezing, 
2/confiscating;
 3/ AR+ TE (tax evasion)

0.1/  to: pressure (at the right time and method) governments; to act through campaigns; to raise awareness

/ To claim/complain v banks/firms/ns, for:

A. FAILING TO PREVENT FORESEEABLE FRAUD 
B.  FAILING to perform proper due diligence checks 
C. DISRUPTING [OR FAILING TO PREVENT DISRUPTION] OF CLCP...BECOS: BRFS THAT DISCLOSE THEIR BOS, OBTAIN A 
competitive advantage, as multinational companies (to do business with), often require third parties to disclose
BOS, as part of their due diligence process DDP....to eliminate the risk of abuse of anonymous company ownership

EGS:
<> cocoo: claims that the contracting [banks/firm/sn = BFS], should not have done business with a bank/firm/ns that did not disclose bos..
 thus  the firm/sn failed ddp.....  <> cocoo claims that the contracting BFS, failed to draft a proper ddp, thus disrupting clcp 

/ to present a statement of policy reforms to world governments, through the UNCAC Coalition

/ to follow new leaks ...eg. The Panama and Paradise Papers, following the Swiss and Luxleaks investigations

1/ to support gov in identifying theft of public funds using firms...by using BORS and other techniques.

1/ to contribute to tracing stolen assets through independent investigations

2/ to ensure the transparent and accountable use of assets once they are returned

4/ advocacy to reform of systems that allow/ed the theft of public assets

5/ TO PURSUE parallel litigation grounds, to those currently used by
 ngos v implementation of netzero 2030 GOAL.....
WHY SHOULD COCOO PURSUE THIS? ....BECOS another 2030 TL HAS BEEN SET: ''the main target under Goal, by 2030,
  is to significantly reduce illicit financial and arms flows [iffs/iafs], strengthen the recovery and return of stolen assets and combat
 all forms of organized crime, obliging States to work towards strengthening the system'' 
EG: COCOO JR V SR'S FAILURE TO DECIDE , OR FOR UNLAWFUL DECISION WRT 
TO THE GOAL TO REDUCE ILLEGAL FIN. ON ARMS

6/ to JR or complain, in order to:

a. require sns to start proceedings, 
b. to require sns to finally freeze local assets asap, 
c.request WPI DAMAGES TO THE SN'S PEOPLE

...ow....COCOO CLAIMS THAT A SN FAILED: 

to start proceedings ingoodtime or at all
to, act
 to cooperate with other sns
to ASK ANOTHER SR TO FREEZE CORRUPTION ASSETS]]

7/ .<> cocoo's duty + duty of the court, to allow cocoo (as intervener/complainant)
 to be involved in restitution judicial processes, to ensure that the funds returned are 
allocated to projects that benefit the population, to ensure the resitution does not fall back into 
the channels of corruption.the returned assets could be at risk of misappropriatation and
 relaundering. [by insisting on guarantees of transparency, accountability and integrity]
EG. TI France and Sherpa launched a complaint and intervened as a civil party to a criminal investigation
 (and to get Restitution),
 requiring the French prosecutor to open an investigation into the allegedly illicit wealth of the ruling families of 
different african countries, found guilty of corruption in 2017.....

The NGO’s Transparency International France (TI-F), 
Sherpa and the Human Rights Association in Central Asia (AHRCA) are highly concerned over the opacity
 of French-Uzbek negotiations in the return of Gulnara Karimova’s illict assets to Uzbekistan.
 This also includes concerns over the French modality for overseeing the asset restitution
 to Uzbekistan; as well as the lack of transparency in the disbursement and monitoring of returned
 funds by Uzbekistan.

2020, the Uzbek authorities announced that they had received US$10 million from France in the return of “illegally acquired” assets of Gulnara Karimova, daughter of the former President of Uzbekistan.

The announcement follows a 9 July 2019 decision by the French court to approve the confiscation of property acquired by Gulnara Karimova, through money derived from corruption and ordered its return, as compensation, to the Republic of Uzbekistan, who had filed a civil suit. Karimova – currently serving a prison term in Uzbekistan – is accused of soliciting bribe payments from three telecommunications companies with approximately a billion USD’s under investigation.

The confiscation of Gulnara Karimova’s three properties in France was decided in a “guilty plea”.  This acceleration of the restitution of Gulnara Karimova’s assets was thus achieved at the expense of transparency and accountability. the lack of transparency inherent in this restitution is damaging and paradoxical because there is no guarantee that this money will be used to benefit the looted populations. to be transparent, should involve French and local independent NGOs, to ensure that the funds returned are allocated to projects that benefit the population

The CRPC negotiations in 2019 covered several tens of millions of euros, a minor part of the approximately 1.3 billion dollars that Gulnara Karimova is suspected of having acquired illegally and invested abroad….France has not provided any information regarding the restitution process, while the Uzbek authorities have merely indicated that the 10 million dollars returned would be transferred to the Uzbek state budget.

Switzerland, which has confiscated several hundred million Swiss Francs from Gulnara Karimova’s associates, has at least issued a press release announcing the restitution of confiscated funds

uncac = The United Nations Convention Against Corruption :
Articles 12 and 14 call on States Parties to enact measures to identify the legal
and natural persons behind companies

The Financial Action Task Force (FATF)
guidance on providing public access to beneficial
ownership information in company registries.iv

To date, Bulgaria, Denmark, the UK and Ukraine
are the first countries to institute public,
beneficial ownership registries.

The UK included beneficial ownership in a public
company register from July 2016, allowing
anyone to see the beneficial owner of
companies registered in the UK
uk has a very high 25% ownership threshold...so
One in ten UK companies didnt list a beneficial
owner, as none of their beneficial owners met
the threshold

In the UK beneficial owners are listed on companies' own records and on the publicly accessible register
 of people with significant control (PSC) register at Companies House.

The Ukrainian register requires payment to
access data on past changes to company
founders, directors and beneficial owners,
making it difficult for to track changes without
paying and downloading several documents

AR asset recovery

According to the World Bank, USD 20 to 40 billion is stolen through corruption from
the Global South and is hidden overseas, often in Europe and North America, every
year. Only a very small part of this is identified and returned....

AR = process of identifying, seizing and returning assets stolen by
public officials from one country and transferred to another

Grand corruption is, however, far from a victimless crime.
In all the asset recovery stages it is the people (WPI), often
from developing countries, who lose. 

Typically, a case of international AR starts
when a government in jurisdiction X asks authorities in
jurisdiction Y to freeze assets related to the proceeds of
corruption. 

confiscation generally requires a final conviction for corruption in the country where the assets were stolen....
 Given the difficulties of this....some countries have introduced
non-conviction-based forfeiture, enabling civil procedures to be brought for the proceeds of corruption

The UN Convention against Corruption, (UNCAC), remains the key int. legal instrument for inter-state AR cooperation

in the second half of the 20th century, countries from the Global South started asking other countries for help to AR , stolen by high-level officials of their
previous regimes...and not to pay their own ODs

AR cooperators:  the United Nations Office on Drugs and Crime (UNODC) and the World Banks Stolen Asset Recovery Initiative (StAR) with the participation of
key governments from the Global North and the Global South

The Tax Justice Network, through its Financial Secrecy Index, which analyses financial secrecy in more than 100 jurisdictions.

INVESTIGATION RISKS

 in 2018 alone, three journalists were murdered in the EU for investigating corruption.  

Several international forums have taken place on asset recovery, and the Conference of Parties to the UNCAC
 has an annual meeting on the topic. However, SCO access to these events has so far been limited,
in contrast to human rights forums. This means that organised civil society is often excluded from large areas of
decision-making

 Mozambique: The Hidden Debts

after the work of csos, in 2018 the Moz Public Prosecutor, launched proceedings against the managers of the
public companies. The tribunal can issue financial penalties but criminal charges are unlikely

The case involves a secret US$2 billion loan from the UK
branches of the Swiss Bank Credit Suisse and the Russian
Bank VTB Capital, to partially state-owned companies
in Mozambique, with the government of Mozambique
providing a state guarantee for the loan. the three borrowing companies were only established shortly 
before the banks provided the loans and that they all had the same CEO

later became clear was that they were earmarked for maritime security. 
Despite legislative requirements, Parliament was not informed of
these loans, with details only becoming public following
a public statement by the Mozambique authorities that they
were unable to service their debts

 Nigeria: the return of the Abacha funds:

Nigeria is likely one of the most politically active countries worldwide in its efforts to recover national assets looted through corruption. 

the Nigerian government has vigorously requested the governments of countries
where Nigerian stolen assets are allegedly hidden, to make greater efforts to help Nigeria recover these assets.

malaysia 

After the change in government following the 2018 election in Malaysia, the new Malaysian government
reopened the 1MDB investigation and arrested Najib, with police claiming to have found nearly USD 275 million in assets in 
linked property

Case study 4 : Mexico: Asset thefts by state governors and the Odebrecht case:

Mexico has also been affected by the Odebrecht investigations spanning the Americas. in 2016, when the company admitted to U.S.
, Swiss and Brazilian authorities in a multibillion-dollar settlement that it had paid USD 10.5 million in bribes to Mexican officials

Case study 5: Moldova: The one billion dollar bank fraud

In late 2014 a huge corruption case hit Moldova, The scandal, involving three of the largest banks
of the country – Banca de Economii, Banca Sociala and
Unibank, holding around one third of the country’s assets
at the time, put the fragile economic and banking system
in Moldova severely at risk, robbing the country at least
one billion dollars, around 15% of its annual GDP. 

 2014, shortly before national elections,
in just two days, the three Moldovan banks transferred
up to USD one billion in loans to companies owned by
anonymous individuals. The assets, which the banks paid
out with reserves of the National Bank of Moldova, were
transferred to bank accounts in Latvia belonging to Hong
Kong and UK-registered companies

The scheme involved the use of offshore companies in the UK and tax
havens, banks in Latvia and corrupt judges in Moldova.
According to OCCRP, over 20 judges in Moldova helped
launder over USD 20 billion from Russia to Europe, a
staggering figure for a tiny and poor country such as
Moldova

the fraud investigation, commissioned by the Moldova National Bank, to the US investigation
company Kroll in 2015, the mastermind of this plan was
the political figure and entrepreneur llan Shor.

Plans to conduct this sophisticated theft started 

modus operandi:  as early as 2012 [4 years before the theft], groups started aggressively buying shares
of the involved banks; the banks were then decapitalised by lending assets far beyond their resources, the purpose
being to involve the National Bank in lending them liquidity through its reserves

 in 2014 when the legislation governing the banking system was amended, allowing for emergency loans from the National Bank
to commercial banks under government guarantee.

but little to no progress has been made in tracing the assets, and linking them to
the responsible individuals....On the contrary, the Moldovan government has actively tried to create a certain
perception around how the two cases have been handled
and to assure Moldovans and international partners that
investigations are ongoing....but There is not even indication that
Moldova requested mutual legal assistance to foreign
jurisdictions on starting recovery 

After November 2014, the National Bank of Moldova
put the banks in special administration, after which they
declared bankruptcy and were liquidated

In 2016, the government decided to put the burden of the accumulated debt on the taxpayers: the Moldovan domestic debt was more
than tripled in just a year and the fraud debt was to be repaid in the next 25 years

When details of the one billion fraud case were revealed
in 2015, tens of thousands of Moldovans went on the
streets, protesting against corrupt government officials,
judges and criminals. 
Additionally, Moldova played a key role in a large crossnational money laundering scheme which moved billions
of dollars from Russia to the EU between 2010 and 2014

OD

Odious debt: OD

a political transition, even  from  an  oppressive regime to a popularly legitimized one, does not break the continuity of state-to-state debt obligations: DEBTS, TREATIES ETC, even where the transition involves state succession.

But…Equity belongs to “the general principles of law of civilized nations,” one of the fundamental sources of international law in the ICC statute.

OD is a set of equitable considerations to sever debt obligations in cases like eg. secession, whether from war or decolonization or political revolution.

OD claims may be raised in bilateral or multilateral negotiations on debt relief, or they could be adjudicated in arbitration, or in domestic litigation

where an incumbent elected Government planned to rig elections or suspend democracy, it would borrow as much as possible before the “odiousness” of the regime was declared……THIS EXCESSIVE BORROWING SHOULD BE A RED FLAG TO BANKS,,, AND IT MEANS THAT BANKS SHOULD HAVE KNOWN THAT IT WAS AN OD FROM THE BEGINNING.

<> COCOO: THE GOV SUCCESSION IS A FRAUDULENT DESIGN TO TURN A LEGITIMATE DEBT, INTO AN ILLEGITIMATE DEBT, MAKING LENDINGGOVS/BANKS, BELIEVE THAT A GOV DEBT IS NOW PERSONAL OF THOSE OTHERS INDIVIDUALS THAT WERE IN GOV BEFORE.

COCOO WILL CHALLENGE GOVS TO PAY THEIR DEBTS, AS THEY ARE LEGITIMATE….IN THE WPI:

-GOVS FAILURE TO PAY, DISTORT BANKING COMPETITION: ods are a risk for lenders and bond investors, and increase borrowing costs (premiums) for countries under [threat of regime change = threat of having to repay a huge debt]

+CONSUMER

+TAXPAYER 

+TO AVOID WARS. HOW?: SUCCESSION FRAUD SOMETIMES INVOLVES WAR DESIGN+

Under the law in many countries, corporations are not liable for contracts that staff enter into without the authority to bind the corporations

odious debts (ods) are incurred by gov/firm staff who:

• lacks the consent of the People [= lacks demolegit]
• lacks the authority to bind the People [eg not ratified by the king]
• and not benefiting the People

Thus, ods are not transferable to a successor government, especially if (malicious) creditors should/could have been aware of that their loans were (potential) ods

example:

the apartheid-era government of South Africa borrowed from international banks and investors to build dams, power plants, and other infrastructure. When the African National Congress (ANC) took power in 1994, it inherited these debts. Many members of the successor government, led by President Nelson Mandela, argued that these debts were odious due to the social policies of the prior regime….

<> cocoo disagrees with mandela…becos the infrastructure build with the loans benefited the SA wpi…thus, is not an od.

but mandela , temporarily, got away with not paying the debt, because the sovietunion was supporting mandelas’ anc….but, with the collapse of the Soviet Union in the early 1990s, to maintain access to international credit markets, the new government ended up paying those debts, not to scare off badly needed foreign investment….and because it really was not an od.

OD IN PUBLIC INTERNATIONAL LAW

July 2007

OD is a set of ecs (equitable considerations), to adjust or sever debt obligations in the context of political transitions. od’s ecs: 

-the purported odiousness of the previous regime

-the debt did not benefit, or was used to repress, the people

equity(ecs) lives inside GPLCN [ “the general principles of law of civilized nations”], one of the fundamental sources of international law stipulated in the Statute of the International Court of Justice

most debt contracts are governed by the domestic private law specified  in  the  contract…where [if OD does not apply], debts can be invalidated of grounds of : “clean hands”, or illegal purposes.

in the cases examined, there were doubts as to whether the debt was “od” or valid as it may have conferred some benefits on the population or the new regime

State-to-state debt contracts may specify a forum for the settlement of disputes.

ODS are growing in legal and political significance in the early 21st century, due to a large  number  of political regime changes, whether due to war, revolution, secession, or the peaceful evolution of societies

“…if a despotic power incurs a debt not for the needs or in the interest of the  State, but to strengthen its despotic regime, to repress its population that fights against it, etc., this debt is odious for the population of the State…..it is a regime’s debt, a personal debt of those that have incurred it….ods are not repayable because are illegal as they fail to comply with the requirement that State debts must be incurred and used for the needs/interests of the State.

ods = debts incurred and used for ends which, to the knowledge of the creditors, are contrary to the interests of the nation, do not compromise the nation ….except to the extent that real advantages were obtained from these debts.”

<> cocoo will seek partial repayments, if partial benefits arised from the debt

types of ods:

-war debts: debts contracted by the State for the purpose of funding a war which the State eventually loses and whereby the victor is not obliged to repay the debt.

-subjugated or imposed debts

-regime debts

-“hostile debts” =  incurred to suppress secessionist movements, to conquer peoples and so forth.

-“profligate debts”

– “developing world debts not spent in the interests of the population” 

-irresponsible lending 

ods are incurred for purposes in breach of the principles of international law embodied in the Charter of the UN:

“(1) The new Government would have to prove and an international  tribunal would have to ascertain:

“(a) That the needs which the former Government claimed in order to contract the debt in question, were odious and clearly in contradiction to the interests of the people of the entirety of the former State or a part thereof, and

“(b) That the creditors, at the moment of paying out the loan, were aware of its odious purpose.

“(2) the creditors must then prove that   the funds for this loan were not utilized for harming the people

The above formulation does not appear to require that the creditors be aware of how in fact the funds were actually spent

when state succession occurs, no international legal obligations are automatically transferred to the new State/s….this may lead to

a. financial instability and uncertainty

b. UE: unjust enrichment of the new State…eg infrastructure

<> cocoo claims that a nation as UE’d and owes Restitution to other nations/banks

Article 16 of the 1978 vienna Convention provides that “a newly independent State is not bound to maintain in force or to  become party to, any treaty by reason only of the fact that at the date  of the succession of States  the treaty was in force in respect of the territory to which the succession of States relates.”

<> cocoo will claim that certain treates no longer apply to a certain country

Article 38 of the 1983 Convention: “(1) When the successor State is a newly independent State, no state debt of the predecessor State shall pass to the newly independent State, unless an agreement between them provides otherwise, but does not harm the People.

apportionment of debt between several new States that are the successor of a single now-defunct State (eg ussr),  has to take into consideration the relative benefit from the lending that flows  to each of    these successor States, not just considerations of relative gross domestic product, population or territory. Consideration of the “odiousness” of a particular debt is another example.

is there an  obligation on States, to ensure that ods are not paid?

<> cocoo: country A is failing its duty to ensure ods are not paid…..

<> cocoo: country B is failing its duty to claim restitution from country A [for its unjust enrichment]

– limits of freedom of contract (illegality[ ..eg OD], fraud, changed circumstances, ostensible authority of the agent to contract, public policy, etc.)

-Treaties are binding as a matter of international law and the doctrine of “maintenance” turns State-to-State debt agreements into treaties.

diff: rd (repudiated debt)… od 

in the case of state-to-state debt, od may be invoked in state-to-state arbitration or even in the International Court of Justice, but in practice  it is much more likely to be voiced in political or diplomatic discussions and negotiations in the context of political transition

In some transitional situations, the  best  option  for  reasons of economic and financial stability (wpi), is to continue to pay all debt, even  if it  is  odious.

<> cocoo: country A failure to pay od, is bringing ec.instability (harming wpi) and clcp…thus, should (partially) pay.

<> cocoo: country B failure to accept od (no payment), is causing ec. instability in country A

in reality, rather  than  repudiating  debt,  a debtor State might invoke concerns of odious debt in

negotiations with its creditors, to  reach a compromise that promotes financial stability and future

access to credit….creditors will accept to avoid bad reputation effects and also to  maintain relationships.

successor regimes may give amnesties and pardons to human rights  violators  in the previous regime, for reconciliation and building a successful democracy

<> cocoo: country B should only ‘forgive’ the od, if , ow, country A would suffer ec.instability, and anticomps….and if it gives amnesties and pardons to hr violators in former regime; and if continues to be part of certain treaties..

the new regime may even examine the actions of the international financial community in the context of a truth commission [such as the South African Truth and Reconciliation  Commission]…. so that, only if creditors admit OD complicity (ie, forgive the debit), and make amends through new lending, or even apologies, the new regime may be satisfied for accountability to them about the past.

OD EXAMPLES

In 1922, Costa Rica refused to honour loans made by the Royal Bank of Canada to the former dictator Federico Tinoco. This is an example of state practice with respect to a change of Government and not state succession.

In 1917, Federico Tinoco overthrew the Government of Costa Rica and later held an election to ratify the “revolution”. During the summer of 1919, the Banco Internacional de Costa Rica issued several “bills” of credit to the Royal Bank of Canada, in respect of which the Royal Bank paid several cheques drawn by the Tinoco Government.  The  money was  used personally by Tinoco and his brother and for no public purpose. By August 1919, Tinoco and his brother had left the country and the Government fell in September. The restored Government of Costa Rica enacted a law which invalidated all transactions between the State and the holders of the “bills”  issued by  the Banco Internacional.

Chief Justice William Howard Taft was the sole arbitrator for the dispute. Taft agreed that the Tinoco Government was a de facto Government capable of binding the State to international obligations. Despite this, Taft emphasized the fact that the debt in question did not create a valid public debt, nor was it in the WPI. The evidence established that the funds were used for the personal enrichment of the Tinoco brothers and that the bank was aware of this, since the transactions “were made at a time when the popularity of the Tinoco  Government  had disappeared, and when the political and military movement aiming at the overthrow of that Government was gaining strength….Taft required    the Royal Bank to prove that  the Costa  Rican Governments had  used the money for legitimate purposes, something which it could not do. Accordingly, Taft allowed the OD…so no repayment.

Taft also dismissed the claim of Great Britain on behalf of the Royal Bank of Canada because the contract was ultra vires the Constitution. The contract contained provisions regarding taxes, and therefore  to be valid required the approval of both Houses of Congress, not the Chamber of Deputies alone.

German repudiation of Austrian debts – 1938

The Government Austria was heavily indebted to foreign creditors at the time of the German annexation of Austria in 1938, when loans from creditors had been expressly designed to prevent union with Germany.  Germany repudiated the debt, citing prior  American and British practice   and arguing that it was  contracted  against  the  interests  of  the  Austrian  people. To no avail, the Americans tried to argue that much of the debt  had been used for  the purchase of food.

1947 Treaty of Peace with Italy

Article 254 of the 1919 Treaty of Versailles: exempted Poland from those debts attributable to the costs incurred  by Germany and Prussia, during the German occupation of Poland.

The ruling drew a parallel with the Italian occupation  of Ethiopia,  considering it  inconceivable that Ethiopia should have to assume the burden of expenses incurred by Italy in order to ensure its domination over Ethiopian territory” (Bedjaoui: 71).

Apartheid debt

Advocates of repudiation of debt incurred by the apartheid South African regime argue that apartheid was a racial dictatorship

South Africa was forced to leave the Commonwealth  in  1961. in 1985 the United Nations Security Council imposed trade sanctions on the apartheid regime. Despite this, the regime continued to borrow from private banks throughout the 1980s. In July 1985, the Government declared a state of emergency and on South Africa defaulted and stopped paying its creditors. Archbishop Desmond Tutu, among others, called on the banks  not  to  reschedule South Africa’s debts and advocated the confiscation of South African assets abroad instead. Nevertheless, a settlement was reached in 1987 with 14 major banks….sa repaid on promises to maintain relationships for foreign investment… but Foreign direct investment has been tiny – And new lending has not kept up with repayments – over six years South Africa paid out $3.7 billion more than it received. Thus, promises have not been kept and policy advice was wrong. If South Africa had

repudiated the odious apartheid debt – or even if it had demanded a ten year moratorium

– it would have been $10 billion better off. Foreign aid during this period was only $1.1 billion, so even if aid had been cut off, South Africa would have profited by $8.9 billion.”

on 12 November 2002, a suit was filed in the New York Eastern District Court for apartheid reparations [for funding/helping the apartheid regime + failing the promises under which SA decided to repay them], against eight banks and 12 oil, transport, communications technology and armaments companies . The suit was filed on behalf of the Khulumani Support Group, representing 32,000 individual “victims of state-sanctioned torture, murder, rape, arbitrary detention and inhumane treatment”, by the Apartheid Debt and Reparations Campaign.  The suit was brought pursuant to the Alien Torts Claims Act (ATCA) which allows any non-United States citizen to bring a claim for damages against any other person who has violated customary international law.

The Government of South Africa continues to distance itself from the  popular  movement  to cancel the apartheid debt.

Others argue that the UN should have declared the od….but if so, private banks would not have been willing to make the loans that effectively kept South Africa afloat for a few more years

Similar action could have been taken after  major  shareholders  forced  the International Monetary Fund to cut all lending to the former President of  Croatia,  Franjo  Tudjman, in 1997, after he was accused of resorting to political violence and appropriating public funds…..However, in the absence of UN action, private commercial banks continued to lend Croatia a further $2 billion until Tudjman’s death in 1999.

Iranian debt

In 1982, usa claimed that iran owed them a substantial amount of money pursuant to a contract dated 1948 relating to the purchase by Iran of certain World War II surplus military property.

Iran denied any liability, claiming that the debts were ODs, imposed by the United States, and were “subjugation debts” of the prior regime. As such, they are “not transferable to the Islamic Republic of Iran”

the Iran–United States Claims Tribunal held :

that the original contract was not imposed on Iran… is not possible to establish any connection between the Contract and the crisis in Iran that led to the  Islamic Republic  of Iran in  1979. The Contract did not and in fact could not, in any respect detract from or undermine the new Constitution, the social order and the form of government of Iran as created in and after 1979. also, the revolutionary changes in Iran are state continuity, not state succession, because despite the change in head of State and the system of government in 1979, Iran remained the same subject of international law as before the Islamic Revolution. When a Government is removed through a revolution, the State, as an international person, remains unchanged and the new Government generally assumes all the previous international rights and obligations of the State”. also the contract  was not for objectives contrary to the legitimate interests of Iran , nor  of international law”….…. for all those reasons, the iran debt is not an OD

Iraqi debt

Prior to the overthrow of the Government of Saddam Hussein, Iraq accumulated over $125 billion of unpaid debts.

following the overthrouw of sadam, a United States congressional initiative in 2003 was set up to eliminate Iraqi OD, on the notion that such debt not only impedes a successful rebuilding of post- authoritarian States, but that the debts were never legitimate inheritances of the new Government…much of the money borrowed by the Iraqi regime had been used “to buy weapons and to build palaces and to build instruments of oppression.

Eventually, Iraqi debt relief was granted not with references to its legitimacy (OD), but for reasons of “debt sustainability”….why?:  invoking considerations of odiousness, make the task of obtaining relief more difficult or slower, than the use of more easily applicable criteria of economic sustainability.

Norway’s ship export debt

the Government of Norway in 2006 determined that money lent and owed to them by some developing countries, should be cancelled, on grounds  that Norway ought to share responsibility with the debtor countries for the failure of the  programme, based on  inadequate  needs  analyses and risk assessments.

This is not an OD example …indeed  the  Government stressed that the debt was not “illegitimate”. But the notion of co-responsibility exemplified by the unilateral and unconditional cancellation of these debts,  means that repayment is subject to Equity considerations between debtor–creditor

<> COCOO WILL CLAIM THAT SOME DEBTS , THOUGH LEGITIMATE (NO OD), ARE, HOWEVER, TO BE CANCELLED, ON THE BASIS THAT THE LENDER MUST SHARE RESPONSIBILITY [WITH DEBTORS] FOR THE FAILURE OF THE LENDING PROJECT OF DEVELOPMENT.

State succession v government succession

In state succession, the debtor has ceased to exist. thus, is OD.

what about in [ regime change = gov.succession]?….the Iran Claims Tribunal, said no OD…. because the identity of the State is unchanged

Creditor knowledge of OD

for OD to be allowed, the creditor, at the time at which the loan was made, knew, or should have known, that the debtor wanted the money for a purpose contrary to the interests of the population.

 thus, there is a burden on creditors to take positive steps to inform themselves of the purposes of the loan, and to assess the credibility of assertions of borrowers…ow, the debt may not be repayable.

Based on the agency concept, a regime’s reputation for exploiting and oppressing its own people may place on the lender a higher burden to satisfy itself that the proceeds of the borrowing are benefiting the principal (the country) and not just the agent.

just as a court may  allow a creditor to recover [the money he lent to the firm], from an abusing shareholder….  a State may be allowed to avoid debts contracted by a collusive lender and corrupt government officials 

Even if a loan is assigned to a third party who had no knowledge [of, for example, corruption or bribery] the borrower can raise the same  defences against  the assignee

The fungibility of debt

The concept of od, is based on the fact that the loan is  used for a purpose contrary to the interests of the people

However, loans used for a non-od purpose may indirectly contribute to odious purposes.. thus, it can be declared OD, a proportion of all loans to  an oppressive regime that was spending money on odious purposes, even if the connection loan/odious purpose, cannot be established

State-to-state debt vs. state debt to private creditors

-in od, there is no unjust enrichment UE, since the funds were spent harming the interests of the people, or the successor regime itself.

-OD only applies between states….BUT,  in some cases, SNs repudiating contractual obligations to private creditors may constitute :

1/a violation of international law….egs:

• a.where the repudiation of a loan is analogous to expropriation of property; or 
• b.where the repudiation is discriminatory or arbitrary; or
• c. where the repudiating State gains a genuine benefit from the funds,

in all cases above, there is UE unjust enrichment that requires the State to restitute the private creditos.

2/a violation of domestic law:  contract law invalidates illegal purpose contracts…so, under domestic law, the private creditors may claim that the loan contract was invalid: A illegal (purpose) contract/agreement is not considered a contract at all….a court will not enforce it; rather, illegal contracts are void or unenforceable [as if the contract never existed]……Where odiousness  is established in a state succession, it would be very difficult for a private creditor ,or a State espousing its claim, to  argue successfully that the alteration of contractual rights is a denial of justice. Nor could the alteration of contractual rights  be considered fundamentally unfair  or  discriminatory, nor could it claim ue occurred, since a key aspect of odiousness is the notion that the population of the debtor State did not benefit from the loan

<> COCOO WILL APPROACH PRIVATE CREDITORS[FIRMS/BANKS] TO GET STATES TO RESTITUTE THEM [UE] (UNDER INTERNATIONAL LAW) , OR TO VOID THE LOAN CONTRACT (UNDER DOMESTIC CONTRACT LAW  )

new approach to odious debt

two DIFF SOLUTIONS:

A/trade sanctions: often harm the people they are intended to help. For example, if firms in a country are prevented from selling their products abroad, the loss of revenue may cause them to fire workers or lower wages

B/  curtailing dictators’ ability to borrow, loot, and saddle the people with large debts, would hurt illegitimate regimes but help their populations. and prevents ODs.

<> cocoo to challenge trade sanctions

Tudjman of Croatia was an odious ruler, having suppressed the media, instigated violence against political opponents, and looted public funds. In 1997, the IMF cut off aid earmarked for Croatia. Still, commercial banks lent an additional $2 billion to the Croatian government between the IMF decision and Tudjman’s death in December 1999…. this is an OD, but the new croatia has chosen to pay it….today, countries repay even ODs, because, if they failed to do so, their assets abroad could be seized and their reputations would be tarnished, making it more difficult for them to borrow again or attract foreign investment

<> cocoo v banks for lending the dictator gov,even when imf had cut off aid.

How PIL (Public Interest Litigation) Led to Invalidation of Illegal Mozambican Debt

Category: African Sovereign Debt Justice Network (AfSDJN).  2020

multinational corporations identify development countries with something of value, such as minerals, and persuade the authorities of these countries to secretly take on huge development loans with banks. In most cases, the money never reaches the countries. Rather, the money is transferred directly from the banks to contractors and the countries are then left with massive debts. Resources and companies from developing countries are given as collaterals for these loans. Therefore, these poor country’s natural resources, are transferred to service these ods….. eg. this is what happened in Mozambique

In 2013, two London-based banks, Credit Suisse and Russian VTB lent $2 billion to three state-owned enterprises (SOE) that did not exist at the time. These companies—Ematum, Proindicus, and Mozambique Asset Management (“MAM”)—were created to facilitate the fraud and never generated any profit. These entities were owned by the Mozambican security and intelligence services.

these banks loaned millions to these soes….. but these loans were not approved by the Parliament of Mozambique, thus violating both the Mozambican Budget Law and the Constitution of Mozambique.

three different loans across multiple jurisdictions

in 2016, the (IMF) suspended its programme with Mozambique in line with its disclosure policy. Other donors followed suit, and all 14 donors who provided direct support to the state budget halted their disbursements. The country found itself facing a severe budget deficit. The loans have thus led to an economic and social crisis in Mozambique, with the local currency falling by 50% against the dollar and cuts to government spending. Consequently, the loans have drastically affected the already fragile provision of basic services, including health, education, water and sanitation.

Pressure from civil society, development partners and the media, led the Attorney General in Mozambique to commission an audit on the three loans in 2017. According to the Kroll Audit Report, among several other detected irregularities, the banks lent the money knowing that the loans had not received parliamentary approval as required under the Mozambican Constitution. Furthermore, the banks did not carry out due diligence on the SOEs or on the guarantees provided by the government. The loans were given to three soes which had no revenue and no contracts in place to generate any future profits. The ships and equipment being supplied were massively overpriced and there had been no competitive bidding for the contract – the whole idea was presented by the contractor and the banks rather than being solicited by the Mozambican Government. Also, the money went directly from the banks in London to the contractor, Privinvest, in the United Arab Emirates, rather than to the SOEs in Mozambique. All of these irregularities were in collusion with Mozambican Government authorities.

In addition, the process followed by the arranging banks was not compliant with various legal and international standards, including the U.S. Foreign Corrupt Practices Act; U.K. Bribery Act; Mozambican Anti-Bribery Law; OECD Convention on Combating Bribery of Foreign Public Officials in International Business; and the FATF Recommendations which set an international standard on anti-corruption for countries to implement through measures adapted to their particular circumstances. This fraud was also in violation of the U.N. Convention Against Corruption; 2015 G20 High Level Principles on Private Sector Transparency and Integrity; and 2017 G20 High Level Principles on the Liability of Legal Persons for Corruption.

International and domestic law make contracts by corruption and bribery voidable. However, the government took too long to declare all the loans void and null.  a pending legal action in London might provide some relief…but, is unlikely that the contracts can be voided within a short-term period in the U.K. jurisdiction.

In 2019, as part of the U.S. investigation, three former employees of Credit Suisse were arrested in London, and a former employee of the United Arab Emirates company Privinvest, which supplied boats as part of the loan deal, was arrested in New York. The former Mozambican Finance Minister, Mr. Manuel Chang, was previously arrested in December 2018 in South Africa on charges of conspiracy to violate anti-bribery laws, money laundering and securities fraud on an Interpol warrant. Immediately after his arrest, Mozambique filed a request to extradite Mr. Chang to Mozambique. The U.S. indictment provides compelling evidence of the bribes and kickbacks that were paid as part of the loan deals. evidence that Credit Suisse failed to prevent this fraud. The bank did not have adequate procedures in place to prevent the dubious transactions.

The pressure prompted the Mozambican government to finally take action. The Attorney General has indicted and arrested 19 people on charges of abuse of power, abuse of trust, and swindling and money laundering.

We, the N’weti Organization, launched two applications in the Mozambican Constitutional Court to have the three loans declared illegal as they complied with neither the Mozambican budget laws nor the Constitution. The petitions were signed by 2000 citizens requesting the court to rule the debts illegal. In response to our filling, the Constitutional Court of Mozambique declared the three loans illegal, thus null and void

Then, the General Prosecutors Office filed a court case in the High Court in London against Credit Suisse, VTB and Privinvest – the corporation behind these frauds. Another court case was filed by the Central Bank of Mozambique against the same defendants last month also in London.

The General Prosecutor of Mozambique built on our legal argument requesting the cancelation of the loans to the Constitutional Court. The Mozambican state claimed that the then- mozambique Minister of Finance,  did not have the authority to sign the sovereign guarantees because the Mozambican Parliament had not approved the loans.  Mozambique sought: (1) A declaration that it is not liable to pay any of the debt on one of the three deals, namely the $623 million loan to Proindicus; (2) Compensation for the losses due to past or future debt payments concerning the loan (and the restructured loans in the case of the Ematum bond); (3) Compensation for all fees and expenses incurred in the restructuring of the Ematum bond; and (4) Compensation for macroeconomic losses resulting from the financial crisis and loss of donor funding which followed the revelations about the loans in 2016.

$200 million was paid for bribes, $200 million was paid as fees for arrangers, and more than $700 million is unaccounted for according to the Kroll Audit report.

In representation of the Mozambican civil society, we have intervened in this case by exposing that Mr. Chang (former moz.minister of fin):  (1) enjoys immunity; (2) there is no indictment launched in Mozambique; therefore, justice will not be served in Mozambique. He enjoys immunity as of the time of his arrest because he was a member of parliament.

the Swiss Money Laundering Reporting Office responded to a 2018 request by the Mozambican General Attorney for mutual legal assistance. The authorities in Switzerland finally started an investigation in January this year.

the g20  approved Transparent Lending Covenant (TLC) 2019 …but does not address the problem (corrupt ministers borrowing behind the back of the People) The TLC is just a set of voluntary Principles for Debt Transparency by the Institute of International Finance (IIF) and are applied only to lending from the private sector, not from states

C I FA R. E U 
i n fo @ c i fa r . e u

THIS STUDY IDENTIFIES 16 CASES WITH POTENTIALLY ILLICIT ASSETS IN GERMANY
THAT ARE LARGELY UNRESOLVED TO DATE, AND ARGUES THAT THIS IS MOST
LIKELY JUST THE TIP OF THE ICEBERG
Despite many years of commitments to increase
efforts, the results of international AR
are dismally low compared to the assets hidden

While estimates put the global total of anonymous
and potentially illicit wealth at around 10% of total
global wealth ($7 trillion to $32 trillion), only
$2.6 billion in illicitly acquired wealth was frozen
and $423 million returned by OECD countries
every 6 years.

Germany receives less than 100 MLA requests from
developing countries per year and very few of them
are related to asset tracing and asset recovery

Sanctions have received increased attention as
a tool to quickly freeze assets

In Germany, bank accounts with
assets totaling 865 million remained frozen at
the end of 2018, from Libya : Gaddafi case:

the success of EU misappropriation
sanctions is small in Germany. The European
Commission rejected a fOIR to obtain comparable data for the EU...why?:

< > cocoo:  becos statistics/data [on the success of eu/sns misappropriation sanctions], 
could be used as evidence for cso claims v eu/sns, on the ground of failing their duty to contribute
to successful ar, by failing to provide technical assistance in developing countries, and
failing to support and advocate for increased recovery efforts at home

CIFAR. MEXICO

Mexico ranks 124th out of 180 on Transparency International’s 2021 Corruption Perceptions Index,

Mexico also continues to rank in the middle of the Basel Institute’s Anti-Money Laundering Index, indicating a substantial risk of money laundering. Moreover, the country’s criminality score of 7.57  remains very high, according to the Global Organized Crime Index of 2021 (the global average being 4.88).⁴

UK caselaw has thus created two exceptions to the traditional doctrine of
 ‘no recognition, no existence’:
 
1/ the ‘delegated authority exception’: 
acts of an unrecognized state can be considered where such acts can be said have
 been done pursuant to powers delegated by the recognized sovereign authority.
 
2/ the ‘private acts exception’[or acts of everyday occurrence, or perfunctory
 acts of administration’, or ‘acts which can properly be regarded as regulating 
the day to day affairs of the people within the territory in question and can 
properly be regarded as essentially private in character]’......
However the Courts to date have not acknowledged acts of an unrecognized state/entity 
that can be characterized as public and international in character i.e. the acts of states,
 on the basis that is no longer formal recognition. 

UN Membership is only open to all peace-loving States that accept the UN obligations 
and, in the judgment of the Organization, are able to carry out these obligations”....
The recognition of a new State or Government is an act that only other States and Governments
 may grant or withhold. It generally implies readiness to assume diplomatic relations. 
The United Nations is neither a State nor a Government, and therefore does not possess any 
authority to recognize either a State or a Government.
A two-thirds majority vote is necessary in the un Assembly for admission of a new State
How to recognise a government is not defined, as the decision whether or not to recognise
 a government is a unilateral act and at the discretion of each individual State.

The most important criteria for recognising a government are the effective control and 
the legitimacy doctrine ECLD. EG: the conflict in Libya in 2011, 
the recognition of LYBIA by some States, while the Gadaffi regime was still in control over parts 
of the territory, is not supported by the ECLD....This could invoke State responsibility. 

International law constrains nation recognition choices, by defining what is
and is not a state.

<>cocoo: was the recognition/rejection lawful?

-distinction between a ‘state’ and a ‘government’: the government is not a legal person, 
but the state's agent ....thus, for recognition to be lawful, other nations need to enquire
 the basis on which this control is exercised....what if a nation/s no longer recognise a new gov?

-distinction between the creation of a new State(needs proof), and the continuity (presumed) 
or extinction (needs proof) of an
established State.....eg: the continued general international recognition of Somaliland as part 
of Somalia
was based on the presumption of continuity

CRITERIA [international law] determining whether a new entity does
is a state, and whether an state no longer exists:

1/ viability criteria:  a permanent population, existing in a defined territory,
over which there is an effective government operating independently
from external control, and that purports to govern the
people and the territory on the basis that they constitute an
independent state.

2/ SDU : if the claimant state constitutes a self-determination
unit (SDU), it may be regarded to lawfully constitute a state, even if in some respects
its viability criteria is deficient. eg. newly independent former colonial states in
the post-Second World War era of decolonization, for example, The Congo.
By contrast, if the new state could violate selfdetermination, whether internal or external, 
then this may operate as a bar to statehood, even if has sufficient viability criteria....
eg. the claim of Rhodesia to independent statehood was invalid because was constituted on
the basis of an apartheid system of white minority rule, it violated internal selfdetermination.
eg. the creation/extinction/territoryloss of a statev will not be recognised, if brought about
 through the unlawful use of force and/or military occupation....but is hard to diff between 
lawful and unlawful uses of force... 
eg force used to exercise of a claim to
external self-determination, for example India in relation to Bangladesh

-The old uk courts approach: an entity(eg a gov, or a state)unrecognized by the UK government, 
is treated by the courts simply as if it did not exist:  both the unrecognized government/state, and its acts are a nullity

<>  cocoo challenges uk gov decision to recognise/refusetorecognise, a gov or state.
-today uk courts approach:
1966 case of Carl Zeiss v Rayner & Keeler ....The defendants alleged that Carl Zeiss
had no standing to sue, since the administrative act under which Carl Zeiss
had been constituted was an act of East Germany (GDR) and the GDR was not recognized by the UK:
 the Foreign Office had certified that the USSR was recognized as sovereign over the
GDR. While the Court of Appeal ruled lack of standing, the House of
Lords,decided that it could give effect to the acts of the GDR on the basis that they had been
lawfully delegated to the GDR by the recognized sovereign, the USSR. This allowed the courts to
circumvent nonrecognition, to avoid an injustice. 

- in the past, a company incorporated in an unrecognized state, had no legal personality for the UK,
 so could not
 sue or be sued in the UK courts. But there was concern that such a position
would cause unwarranted hardship to individuals and damage commercial confidence, 
so the legislature passed the Foreign Corporations Act 1991
(FCA), which gave companies incorporated under the laws of unrecognized 
territories legal personality within the UK legal system...provided the unrecog.territory has a
 settled legal system.


2009 Kibris and CTA Holidays v Sos for Transport: 
a judicial review, brought by an airline incorporated in Turkey (and a travel company) 
that wished to operate direct flights between the UK and northern Cyprus(not recognised by uk).
 The Secretary of State had
refused the grant of an operating permit for such flights on the basis that to do
so would be unlawful, and the applicants sought review of this decision, which
was upheld, the judge agreeing that the authorization of direct flights would
have been unlawful.

the theory of a state's SR (sovereign right)  as an absolute and unlimited legal
power against other states and their nationals, subject to no control except self-imposed: [right to
SELFDETERMINATION]...is FALSE.... because a society of states in which each member is bound only by
its own will would be an "anarchy of sovereignties, like gladiators with their weapons pointing on
 one another....There would be no rights/justice/injustice as between them

SR ends at the frontier and even within the national
territory, is limited by the rights which international law
recognizes as belonging to the subjects of other states domiciled
or engaged in business therein. 

SR is limitated via the principle of international responsibility, and pple. of intern.justice
[international law]....the exercise by a state of a SR inconsistent with justice,
 is an illegal act.

a nation's SR is absolute, only if does not affect the proper and just rights of other
 nations/individuals.

eg. a nation has no right to choose (and alter) its form of government, if it is "notoriously
 opposed to the existing orde
of affairs " (Eg dictatorship)....this is why nations are asked to recognise new govs

eg. a state right to extend or contract at will its territorial domain by purchase or cession,
does not exist, because other nations can prevent it if could affect their safety/peace.

eg. the refusal of the United States government to recognize the Soviet government of Russia

a SN has the right to regulate its own domestic affairs...But what are "domestic affairs?"
if one SN claims that its laws/conduct are its own domestic affairs, and another SR claims 
that they are international affairs.... who is the judge?

SNs do NOT have the right to decide which are its own domestic affairs

eg.
Italy, by an act of parliament in 1912, created a state monopoly of
the life insurance business, and expropriated the business of
foreign private companies without indemnifying them. Some foreign governments protested on the 
basis  that a state does not have a right to deprive aliens of their property rights and invoke 
as a defense its SN on domestic affairs.

eg.
And when Uruguay in the same year passed a similar
law the protests of Great Britain and France were such as to
cause the Uruguayan legislature to rescind its action and abolish
the monopoly

case: usa issued a protest to the government of Romania, for enacting a mining law which was 
deemed to be confiscatory of the rights of an American oil company. The
reply of the Romanian government that the legislation complained of was enacted in the exercise 
of its right of sovereignty and dealt with matters of purely domestic concern was not admitted

No party can avoid the obligation to arbitrate, by showing that the
matter giving rise to the dispute is by its constitution or laws or because it is so regarded
 by its own authorities.

eg. the French government contended that the determination of matters
of nationality belonged to the exclusive jurisdiction of the state.
The British government denied this as france imposed nationality upon the subjects of other 
states against their will and its view was sustained by the
court. 

The court also said that whether a matter is solely within the jurisdiction
of a state is relative [depends upon the
state of development of international relations]. Thus, what is accepted
 as a domestic matter
today, may be an international matter tomorrow.

-cocoo will challenge SNs's laws/policies 
that breach clcp/wpis of the People and/or of large firms, in that SN, or
on other SNs

-cocoo will require these laws/policies to be amended, as involve 
international affairs, the SN should amended, as has
no soverignty over international affairs....

-cocoo will ask the SN to pay damages to those firms

-The most of irritating are affairs which States insist are domestic, thus excluding them from
 arbitration

-SNs questioning whether certain affairs are the domestic affairs of other SNs, often seriously 
affects international relations. 

-The principle, each nation for itself to the full extent of its powers,
is the principle of war, not of peace."

-reciprocal right of states to protect their nationals/firms abroad, to demand redress for
wrongs imputable to the authorities of a foreign state in which
they are domiciled and to intervene in their behalf

-in case of conflict between domestic and international law, courts and executive authorities are bound
by the domestic law....but this does not mean that domestic law is superior to international law.
 no domestic laws may alter international law.

-domestic law cannot be invoked as a defense to a claim
by another state for reparation for wrongs done in violation of international law
It amounts to little in effect, therefore, to concede to national
sovereignty the right to enact and enforce legislation contrary
to international law, when in the same breath it is declared that
if the right is exercised the state exercising it will be held responsible and compelled to
 make reparation for injuries sustained
by other states in consequence thereof.

international law is supreme over domestic law 

States sometimes assert a claim to be the judges of the applicability and the
meaning of the law, or assert a claim to 
judge of the measure and nature of protection which they are
obliged to afford to foreigners and of the degree of responsibility owed to other states
...occasionally they are able to impose their interpretation upon weaker states... but SRs
 have no right to do so.... and in controversies between
states of equal strength, the attempt usually fails

During the past fifty years a large number of multi-lateral conventions have been concluded 
between groups of states ....a network of common obligations the performance of which necessarily 
reduces  national freedom of action

-the only way for a state may preserve its total sovereignty is by
refusing to enter into conventions [which restrict SN)
The right to so refuse, of course, belongs to every
state...but refusing to admit any conventional SN limitations
 would ultimately find itself outside
the pale of international intercourse and deprived of rights essential to its existence and progress.

-during the controversy in 1901 between Venezuela and
certain foreign governments relative to claims for unpaid bonds issued by the
Venezuelan government and held by nationals of the other governments the
Venezuelan government, invoking the rights of sovereignty in domestic matters,
insisted that the national laws of Venezuela were conclusive as to the merits of
the claims in controversy. This contention, of course, was not admitted

-no surrender of sovereignty results from the voluntary
assumption of contractual obligations; sovereignty is lost only
when a state has been deprived, against its will, of its freedom
of action, by an external power

LIMITATIONS TO FREEDOM OF CONTRACT = SITUATIONAL MONOPOLY

<> cocoo will challenge SNs' convention agreements, using exceptions 
to the freedom of contract. 

-freedom of contract is limited where there was no such freedom [no full consent]
 = situational monopolies

-the principle of freedom cannot require that a person can choose not to be free

coercion :

eg. a foundering ship owner, who is coerced to pay an excessive
salvage fee to the only tug operator in the vicinity, would not rationally
seek rescission and restoration of the status quo ante,
but would seek the substitution of a more reasonable salvage fee

courts in both Great Britain and theusa substitute reasonable salvage terms for extravagant ones
extracted under coercion.

similarly, in European civil law systems, the
doctrine of duress is applied here to enable courts to substitute more reasonable terms for
those apparently agreed to, but only under coercive threat

information asymmetry:

eg. a contract which the consumer did not understand.....if is not feasible to cancel the 
entire transaction,or disadvantageous to the consumer, or
wishes to retain, the goods or services, the courts should ask: did such consumer receive a deal 
significantly inferior (than sophisticated consumers would have received?)?

if so, courts should substitute more reasonable terms

frustration:

a party successfully invoking frustration, can now throw all losses on the other party.

two types of international liability:

 a. civil liability: redress for damage suffered by victims, by holding states responsible [like echr]
b. criminal liability: v perpetrators of international crimes. victims cannot be parties, only can be witnesses
...thus, human rights courts/tribunals cannot replace the ICC jurisdiction against individual ecocide offenders

icc prosecutor’s office policy on its discretion in the selection/prioritisation of cases for investigation and prosecution….but the ICC prosecutor’s discretion is limited by the Rome Statute and the ICC Rules of Procedure and Evidence

<> cocoo to challenge icc prosecutor’s use of such discretion, on ground that failed to compl the romestatue and iccrulesprocevid.

Gravity is the predominant case selection criteria and is
embedded also into considerations of both the degree of responsibility 

the goal of the Statute to combat impunity and prevent the
recurrence of violence, by combining the activities of the Court and nations

See Rule 45. Causing Serious Damage to the Natural Environment, ICRC

the ICC’s Preamble: ‘‘well-being of the world’’ , includes the
protection of the natural environment as one of the recognised protected values of
the Statute

Rule 43 clarifies that the international humanitarian law principles of distinction,
military necessity, and proportionality apply to attacks against the
natural environment resulting from military operations....Moreover, the destruction of the environment during hostilities in the absence of
any military objective, is criminal, just as the destruction of civilian
objects is criminal.
Yet even though serious environmental damage often accompanies armed conflicts , so far there have been very few prosecutions for
environmental damage since the Second World War......despite the serious environmental damage that are inflicted in the course of
armed conflicts, it is disappointing that Article 35 (3) of Additional Protocol I
 has not been the subject of prosecutions in international tribunals

tribunal.60 Although those crimes which have an impact on one or
more States (including transboundary environmental crimes) ARE international crimes, 
environmental crimes cannot be defined as international crimes because international criminal law
currently only recognises war crime, crimes against humanity, genocide, torture,
crimes of aggression, international terrorism and maritime piracy

- distinguish:

a. cross-boundary crimes:
egs: drug or human trafficking or illegal movement of hazardous waste,

b. international crimes (int.crime tribunal), such as the International Criminal Court,

the UN Security Council recognized in 2007 that climate change poses a threat to peace and security of
mankind. This view was shared by the Extinction Rebellion protest
group who have advocated recently for the ICC to play a role in
prosecuting climate change-related damage. Moreover, the Security
Council has recognised that attacks on the environment have consequences for
 international peace and security.eg illegal fishing is not only an environmental concern, and should be
regarded as a maritime security concern of coastal states.
one of the challenges would be to establish the degree of [mens rea = the intention or
 knowledge of wrongdoing/recklessness] to establish a crime of ecocide

accidental oil spills or nuclear accidents are not ecocides.

to prove an ecocide, most authors have argued that intention or recklessness would be required, 
and that negligence and strict liability would be insufficient.

It is argued that the sheer harm caused by ecocide
justifies its application even during peacetime. In this vein, they have built the
case that peacetime ecocides should rise to the status of juscogens [=a peremptory norm],
 similar to the prohibition on slavery, or the general prohibition on the use of force...
causing severe environmental harm should lead to the breach of an erga omnes duty of care arising from
international environmental law and human rights obligations and so
to the commission of an international delict

If the rationale for criminalisation at the international level based
on the seriousness of the harm or threat of harm to the environment
is correct, then some of the most serious incidents of environmental
damage could amount to acts of ‘‘ecocide’’...eg: the state failure to prevent a nuclear accident,
, significant oil spills, or a major industrial accident 

when indigenous peoples are subject to serious human
rights violations, including dispossession and grabbing of their lands
and natural resources and the causing of environmental damage in
their lands, it is very likely that the high threshold for establishment
of an international crime of ecocide (or ‘‘ethnocide’’) would be met....
Yet, not every human right violation constitute an international crime.....
so human rights abuses [against indigenous peoples] are not necessarily international crimes

egs of recognised PEs [PEACETIME ecocides]: nited Nations Environment Programme’s (UNEP):
‘‘The State of Knowledge of Crimes that have Serious Impacts on the Environment’’ 2018...EGS:

-wildlife crime is a particularly persistent problem in Africa, Asia and
Latin America, where all kinds of species – mammals, birdlife, reptiles and amphibians, insects, and plants

-North America, and the European Union are common destinations for wildlife trafficking, 

-the Gulf countries, for illegal charcoal and illegal gold from African countries

- countries in Asia are increasingly becoming major consumer markets of a wide
range of illegal wildlife resources and products including rare highly
valuable wood like rosewood

-the 600 tons of caustic soda and petroleum residues dumped in
open-air public waste sites in Abidjan, Ivory Coast, in August
2006

the difficulties in identifying and assigning
liability to individual offenders, is a very strong argument for a a change in law or policies, 
to more easily assign State liability for environmental damage in the civil sphere to complement 
the mechanisms under international criminal law for assigning individual criminal liability

<> cocoo will challenge govs' decisions not to change law/policies so that they can be more easily liable.
...specially the 9ANs.

the UN Committee on Economic, Social and Cultural Rights uncesc, regarded
the contamination of the areas inhabited by people by various toxic
wastes as a violation of fundamental social and economic rights.
case: Oneryildiz v Turkey: the European Court of Human Rights
established criminal offences for loss of life involving the disposal or treatment of hazardous waste.

case: M.C. v. Bulgaria:  2003, the Echr held that ‘‘effective protection against rape and sexual abuse requires
measures of a criminal-law nature

***growing cross-fertilization between human rights and the international criminal justice system

- prosecutions for incitement to genocide and hate speech as a crime against humanity at the International Criminal Tribunal for Rwanda raised
difficult issues concerning the scope of freedom of expression....intrusion in the freedom of the media.

-case: Center for Economic and Social Rights v Nigeria , before the African
Commission on Human Rights, concerned the negative health and
environmental impacts of oil exploration in Ogoniland due to the
contamination of water on indigenous land with lead and mercury
affecting community health, particularly that of the children. Nigeria
was found to have violated several articles of the African Charter and
the African Commission called on the government to ensure protection
of the environment, health and livelihood of the Ogoni people


Moreover, the Commission called for the compensation to victims of
human rights violations, and undertaking Comprehensive CleanUp Of Lands And Rivers Damaged By Oil Operators.
 Yet the jurisdiction of international and regional human rights courts and tribunals is often
limited to a certain region or in scope – providing remedies against
the State rather than establishing individual (criminal) responsibility
– and States are not concerned with international criminal justice for serious environmental damage or illegal natural
resources exploitation

LIMITS OF ICC JURISDICTION OVER SERIOUS ENVIRONMENTAL DAMAGE, ILLEGAL NATURAL RESOURCE EXPLOITATION
AND LAND GRABBING
The ‘‘Environmental’’ War Crime Under the ICC Statute:

The war crime under Article 8(2)(b)(iv) of the ICC Statute:

requires an international attack with the knowledge that it would cause ‘‘widespread,
long-term and severe damage to the environment which would be
clearly excessive in relation to the concrete and direct overall military
advantage anticipated

it mirrors Article 20 (g) of the ILC Code of Offences against Peace and Security

Although the ICC statute does not define ‘‘damage to the environment,’’ 

 Does the illegal exploitation of natural
resources in conflict situations (such as illegal logging or the
destruction and trafficking of endangered species) could amount to
‘‘pillage’’ and therefore to a war crime under Article 8 (2) (b) (xvi) ??
there are proven interconnections between the exploitation of natural
resources and armed conflicts, including in the contexts of the conflicts in Sierra Leone and the Democratic Republic of Congo

 In the more recent ICC Trial Chamber case, Bosco Ntaganda was found guilty of 18
counts of war crimes and crimes against humanity committed in the
Democratic Republic of Congo in 2002–2003.156 In the proceedings it
was alleged that the UPC (Union Patriotic Congolose) entered into
agreements with private companies providing for exploitation of
natural resources in the territory under its control, in exchange for
payment.  In fact, Ntaganda was not charged with
pillage of natural resources but that the UPC entered into agreements with private companies for the exploitation of natural resources

-in the Bemba case the icc Trial Chamber found the MLC soldiers committed the war crime of pillaging
throughout the 2002–2003 
the Appeals Chamber found errors in the judgment and reversed all charges against the defendant
for war crimes and crimes against humanity... And as with the
Ntaganda case, Bemba was not charged for pillaging natural resources but for pillaging a number of goods and appliances such as
household items (such as furniture), business supplies, tools, money, vehicles and/or livestock

because icc statute: Article 8 (2)(b)(iv) and Article 8 (2) (b) (xvi) only apply
in cases where environmental damage occurs in the course of an
international conflict, they preclude cases where environmental damage occurs during peacetime
 or in the course of domestic conflict

illegal natural resources exploitation and land grabbing to be prosecuted under the existing crimes 
listed in Article 5 of the Rome Statute if within crimes of genocide and crimes against
humanity. .....so, the only other possible avenues for prosecution of environmental damage before the ICC would be in the
context of war crimes, genocide and crimes against humanity.

Like genocide, crimes against humanity do not need to occur in the context of an armed
conflict. 

The Rome Statute defines crimes against humanity CAH:

  ‘‘widespread or systematic attack against any civilian population, with knowledge of the attack’’ and
includes murder, extermination, ‘‘or other inhumane acts intentionally causing great suffering or serious injury to body
or to mental or physical health,’ which could include for example:  water contamination caused to kill a civilian population.

 But to what extent could environmental damage, be a cah under the Rome Statute? 

Article 7 (1) (k) of the Rome Statute says that only an attack to the environment that endangers human health, may be a CAH....thus,
when the continuous and foreseeable result of the extraction, produces severe environmental damage which kills local
populations, a policy to continue such extraction is a policy to carry out attacks against a civilian population. eg. indiginous in amazon.

According to Article 7 (2) (a) of the Rome State, this act must be ‘‘a State or organizational policy’’ to commit such attack.
The policy does not need to emanate from the State – non-State actors or private individuals who exercise de facto power can constitute the
entity behind such policy....eg. when a pipeline operated by Texaco Petroleum Company / Chevron in Ecuador continuously
discharged millions of gallons of toxic waste and oil over a period of twenty years, causing damage to the environment and indigenous
people...Texaco / Chevron started its oil extraction in Ecuador since 1964 and was only forced to cancel all operations in 1993. 
The indigenous groups that inhabited the Ecuadorian Amazon region have been
deeply affected.  A Communication representing several victims (the ÔLago Agrio Victims’ request’’) was brought before the ICC
prosecutor in October 2014, arguing that it as CAH under Article 7 of the Rome Statute, but that communication was dismissed 
by the ICC prosecutor in 2015 based on evidentiary grounds. 
A similar fate is looking set to happen to a Communication brought by Global Diligence LLP on behalf of the victims (‘‘Filing
Victims’’) before the OTP in October 2014. The Communication alleged that widespread and systematic large-scale land grabbing
 conducted by the Cambodian ruling elite since  2000 by way of illegally seizing and re-allocating millions of hectares of valuable land
(and leading to the displacement of over 60,000 victims) for exploitation or speculation by its members and foreign investors
amounted to CAH as defined under Article 7 of the ICC Statute. The Communication alleges that the land grabbings amounted
to a ‘‘deportation or forcible transfer of the population’’ which is defined in the Rome Statute as the ‘‘forced displacement
 of the persons concerned by expulsion or other coercive acts from the area that they are lawfully present, without grounds permitted 
under international law.’’ 

 land disputes in Cambodia had been highlighted previously by the UN Special Rapporteur on Cambodia....
However, to date no preliminary examinations have been initiated by the ICC prosecutor 

<> cocoo will look at un special rapporteur reports...as a source for new cases

However, since the Cambodian government’s economic policy was
driven by the interests of foreign investors, the forced evictions may not amount to a ‘‘State or
organizational policy’’ as required under Article 7 (1) of the ICC Statute, and this may help to explain the reluctance of the OTP to allow the claim.

 defining international environmental crimes as crimes against humanity has more chances to win, than under genocide
....the ability of the OTP to prosecute crimes against humanity cannot be using recklessness, because recklessness is not within the jurisdiction of the court.’’

-Another significant limitation of classifying environmental offences as genocide (or as CAH), is that these crimes require a
specific result (e.g. ‘‘killing members of the group’’), but not harm to environment or human health

-precedent in the ICC’s own practice:  the Pre-Trial Chamber found a nexus between
the underlying environmental harm (water contamination) and the crime of genocide

-the main limitation is that the prohibited acts of ‘‘ecocide’’ would amount to a serious crimes against persons, committed
through environmental means......

icc should have a 'crime against the environment' but it does not... and also should have criminal liability of firms for international crimes,
but it does not....direct corporate accountability would necessitate an amendment to art 25 of the ICC Statute, which gives the ICC authority only over human actors 

<> cocoo will claim that icc is failing to create such crime typology, and the amendment to art 25 icc.

- the icc 2016 OTP Policy Paper may encourage the prosecution of firms ceos

<> cocoo v firms/banks ceos...claiming corporate ‘‘aiding and abetting’’ v. firms/bank ceos,
 for funding or directly violationing, international criminal law.

Under the ‘principles on protection of the environment in relation to armed conflicts, ’’:

- Principle 10 on ‘‘Corporate Due Diligence’’:  States should take appropriate legislative and other 
measures to ensure that their firms, exercise due diligence with respect to the protection of the environment, including in relation to
human health, when acting in an area of armed conflict, or in a postarmed conflict situation.

-Principle 11: States must ‘‘take appropriate legislative and other measures aimed at ensuring
that their firms can be held liable for harm caused to the environment, including in relation to human health, in an area of
armed conflict or in a post-armed conflict situation.’’

<> cocoo will claim v SNs for their failure to make and implement laws, as per principle 10 and 11....and v 
because most SNs failure to make/enforce such laws, the accountability of corporations 
should be recognized under the ICC Statute...but is not, because, as not all legal systems recognise the criminal liability of corporations
, it would be challenging for the ICC Statute to reconcile those differences in SNs' assignment of criminal responsibility to corps/banks.

Challenges for environmental and indigenous peoples’ rights in the Amazon region
Policy Department for External Relations
Directorate General for External Policies of the Union
June 2020 EN

DIRECTORATE-GENERAL FOR EXTERNAL POLICIES . POLICY DEPARTMENT

the Amazonian countries pursue development policies based on the exploitation on an industrial scale of natural and non-renewable resources that have caused and continue to cause deforestation, loss of biodiversity and engender human rights violations in particular affecting indigenous peoples

<> COCOO WILL CHALLENGE THE DEVELOPMENT POLICIES OF ALL AMAZON COUNTRIES

EU has an interest in contributing to the protection of the Amazon and
its indigenous peoples. EU’S policies should include a strengthening of its direct support to Amazonian indigenous peoples and environmental defenders [cocoo], and develop measures to target EU-based companies causing deforestation

Marika.lerch@europarl.europa.eu

WHY COCOOS TOP PRIORITY IS THE AMAZON

The Amazon is the largest rainforest in the world and plays a vital role in absorbing carbon dioxide,
reducing greenhouse gases, and maintaining regional and global weather patterns. An estimated 10 % of
the planet’s biodiversity is found in the region and with nearly 400 distinct ethno-linguistic groups, it is also
one of its most culturally diverse

The region is within the territories of nine States, including a French
Overseas Department. Nearly two-thirds of the Amazon is in Brazil.

The Amazon is in crisis. Some scientists believe it is 10 years short of reaching a point of no return when it
will no longer be absorbing CO2 but contributing to its generation (Bolle, 2019). Efforts have been made
over the last decades by the governments in the region to slow deforestation through new laws, satellite
monitoring, policing, and the establishment of protected areas and indigenous territories where forest can
be regenerated and sustainably used. These restorative policies, however, face pressures from
development activities seeking to extract wealth through mineral, oil, gas and timber extraction, energy
generation, agribusiness and ranching, facilitated by ambitious and potentially destructive road-building.
The present government of Brazil has made it clear that it will do all it can to open up further the Amazon
region to these interests, even to the extent of permitting these developments in protected areas and
indigenous territories.
The impacts of these developments fall disproportionately on the indigenous peoples living in the Amazon
region. They number about 1.5 million and have recognised land rights over approximately 30 % of the
forest (according to Rede Amazonica de Informacao Socioambiental, RAISG). These lands, however, are
tenuously held, largely unprotected by the public authorities and increasingly invaded by outsiders
extracting timber, minerals or oil and gas. A climate of violence has established itself in the region as
logging and other extractive activities are increasingly undertaken without consultation or the consent of
the traditional owners. Threats and violence against indigenous peoples and environmental defenders are
rising and the murder of activists opposing these developments and trying to protect the forest have
reached an all-time high.

THE LOCAL LAWS OF THE 9 AMAZONIAN COUNTRIES

The laws in Amazonian countries and their ratification of international and regional environmental and
human rights treaties explicitly commit them to respecting the human rights of indigenous peoples,
recognising their lands, territories and resources and their self-determination in setting their development
priorities as well as to protect the environment and biodiversity and implement the targets set by the Paris
Climate Agreement. All countries fall short in implementing these obligations. Overlapping laws result in
contradictory policies so that indigenous lands may be protected in Constitutions and land rights
legislation but contradicted by concessions authorizing extractive industries. At present the countries in
the region are not on track to comply with commitments made at the Paris Climate Meeting.

The European Parliament (EP) and European Union (EU) have taken strong positions regarding sustainable
development and indigenous peoples’ rights. In December 2019, the European Commission (EC)
announced a region-wide Green Deal. But how do these commitments translate into action and what are
the implications for the Amazon of these policy pledges? Europe historically carries a responsibility for the
present crisis. The EU’s progress towards the Paris Agreement targets is considered insufficient by Climate
Action Tracker, an independent scientific body measuring climate action of 32 countries and it recognises
it needs to engage further internationally to contribute to the efforts made by other countries to bring
down CO2 emissions.

cocoo’s goals

• an enhanced and targeted programme on Amazonia under EU budgets for climate change and
green development to channel technical assistance and funding that directly reaches indigenous
peoples to support self-government, territorial control and management;
• support to sustain forest-related knowledge and pilot alternative sustainable indigenous economic
activities including by facilitating access to EU markets, in line with the proposal to redirect finance
to support more sustainable land-use practices in the EU communication of July 2019 on stepping
up EU action to protect and restore the world’s forests;
• support to civil society organisations [cocoo] and academic institutions, cooperating with indigenous
peoples, to continue research on the impacts of extractive and development activities on indigenous
communities in the Amazon as well as on the root causes and structural problems affecting their
human rights;
• support for the implementation of the recommendations issued by the Inter-American Commission
on Human Rights (IACHR) in its December 2019 report on the Situation of Human Rights of the
Indigenous and Tribal Peoples of the Pan-Amazon Region and in its 2013 report on Indigenous
Peoples in Voluntary Isolation and Initial Contact in the Americas.

EU has a duty to continue to assist states in extending Protected Areas in the Amazon region….EU should give:

• continued support to Amazonian countries to extend and rehabilitate Protected Areas through
technical and financial assistance;
• working with the Amazonian countries, the Amazon Cooperation Treaty Organization and the United
Nations Educational, Scientific and Cultural Organization (UNESCO), to identify and protect further
World Heritage sites containing rich cultural and biological diversity in the region ensuring that,
where these areas coincide with indigenous lands, indigenous peoples are active managers;
• support for indigenous initiatives for sustainable forest management in political dialogues with
Amazonian countries.

<> cocoo will demand policy changes in the 9 amazonian countries, and more funding (eu etc), for:

• • better monitoring of forest to prevent illigal fires.
  • indigenous health and safety: …eg: growing violence, impunity and organised crime affecting environmental and human rights defenders and indigenous peoples and others…eg: covid virus is doubly threatening. Environmental protections and health law enforcement have been reduced
  • strengthening the rule of law
    • , eg: laws that allow contracts oil firms, will be made illegal by cocoo;
    • eg: cpcl is infringed as such laws distort competition, as alternative energy companies are not getting those big contracts that oil firms are getting
    • • support to civil society organisations working to protect the environment of the Amazon and human and indigenous peoples’ rights;
    • • EU delegations in the region systematically take up cases of environmental defenders facing threats of violence with the countries concerned;
    • • the establishment of a specific Amazon programme to promote the rule of law in the region as part of the EU – Latin America and Caribbean relations agreement of May 2019 to promote, inter alia,democracy, the rule of law and human rights, including through technical assistance to supportministries charged with environmental protection and justice in the Amazon;
    • • collaboration with member states of the Amazonian Cooperation Treaty Organization and indigenous peoples and environmental defenders to develop initiatives to combat organised crime, and illegal land grabs and deforestation in the Amazon.

SO THAT ALL AMAZON EVILS END SOONER RATHER THAN LATER, COCOO IS LEFT WITH NO CHOICE BUT TO EXERCISE ITS CONSTITUTIONAL DUTIES (UNDER BOTH COCOO’S CONSTITUTION AND THE ENBB’S CONSTITUTIONS], TO CHALLENGE ENBB TO CHALLENGE ANSR…HOW?: All 9 Amazon nations (AN), have a SR = soverign right [= right to determine their own policy (development) priorities]…BUT IS SUBJECT TO A BALANCING EXERCISE. COCOOS JOB IS TO ADD ARGUMENTS TO TURN THE BALANCE IN FAVOUR OF WPIS.

WPIS > SR  =  SR EXCEPTIONS

ENBB+AN HAVE A STATUTORY DUTY TO FUND COCOO TO PROTECT THESE WPIS:

1- silogism:

1. true: the principal driver of all amazon evils, are the extractive industries : mining and oil extraction, and large-scale agriculture (eg mcdonnalds) and logging and associated infrastructure projects
2. true: the Amazon‘s carbon sink capacity is predicted to reach zero by 2035. “This decrease is decades ahead of what even the most pessimistic climate models predicted…SO BY 2035, a collapse in amazon’s capacity to absorb CO2 means it will subsequently become a contributor to greenhouse gases with impacts on livelihoods locally, regionally and worldwide
3. true: ENBBs [EU/nations/banks/businesses operating in eu], are themselves the amazonian extractive industries, or at least their collaborators giving them funding, housing them etc
4. conclusion 1: ANSR CAN BE WAIVED, ON DIFFERENT WPIS GROUNDS [BALANCING EXERCISE]
5. conclusion 2: contribute to amazon deforestation and human rights violations
6. conclusion 3: ENBB have a duty to challenge their business partner, the ANSR [exclusively on this particular issue], so that all amazon evils end.

2-CLCP IS INFRINGED…COCOO TO RESTORE COMPETITION

3-AN+ENBB’S duty to further strengthen its measures on business and due diligence, by way of:

• that implementation of the EU-Mercosur Treaty respects the rights of indigenous peoples including
the right to be consulted and to obtain their free and informed consent prior to any development
activity affecting their lands, territories and resources;

• an effective, affordable, and culturally accessible grievance mechanism be established where
indigenous peoples can address allegations of European corporate violations of their rights,
including their decision-making rights over developmental activities in their territories or impacting
on their rights;

• support for mandatory due diligence legislation for companies taking into account findings of the
EC study on due diligence requirements through the supply chain of January 2020 so that companies based, registered or otherwise having a significant market or administrative presence in the EU are held to account for violations of indigenous peoples´ rights in the Pan Amazon region and such due diligence should also be required of investors;

• support for the maintenance of the Soy Moratorium and its extension to the Amazon savannah
(‘Cerrado’) and forest certification schemes to ensure that products and commodities entering the
EU market are not sourced from the Amazon where customary land tenure is not respected or where land conflicts are associated with natural resource extraction;

• an EU-initiated multi-stakeholder dialogue on indigenous peoples´ rights and business enterprises operating in the Amazon region focused on regulation in accordance with the United Nations Declaration on the Rights of Indigenous Peoples and other relevant international standards, including with businesses from outside the EU area

4- AN+ENBB’S duty to implement POLICY changes in:

•  enbb’s trade, finance and development activities and policies…EG:ANSR policies are potentially life-threatening to the indigenous inhabitants, particularly those in voluntary isolation or uncontacted.
• to establish a legal framework that prohibits actions that would deliberately or inadvertently undermine the Paris Climate Agreement PCA, 
• in cpcl

5- AN+ ENBB’S DUTY TO  alert the International Criminal Court (ICC) to a possible crime against humanity CAUSED BY THE 9 ANs+ENBB, affecting the integrity of the Amazon biome, causing the illegal dispossession of indigenous peoples’ lands and threatening the lives of indigenous peoples in voluntary isolation
.
6- AN+ENBB DUTY TO build on the initiatives they have taken on these matters and
support the efforts of the Amazonian countries working for a sustainable forest programme, give political
and financial backing to the indigenous peoples as forest guardians and establish obligations on its
businesses and trade activities so that they do not contribute to deforestation in this unique ecosystem

Raoni Metuktire, the Kayapo leader in his visit to Europe in September 2019 told us:
You have to change the way you live because you are lost, you have lost your way. Where you
are going is only the way of destruction and of death. To live you must respect the world, the
trees, the plants, the animals, the rivers and even the very earth itself. Because all of these things
have spirits, all of these things are spirits, and without the spirits the earth will die, the rain will
stop and the food plants will wither and die too. We all breathe this one air, we all drink the
same water. We all live on this one planet. We need to protect the earth. If we don’t, the big
winds will come and destroy the forest. Then you will feel the fear we feel.

7- ENBB+AN, DUTY TO PRIORISISE cases that cause environmental destruction.  THE ICC HAS ALREADY PRIORITISED THEM: ‘The ICC will give particular consideration to prosecuting Rome Statute crimes that are committed by means of, or that result in, inter alia, the destruction of the environment, the illegal exploitation of natural resources or the illegal dispossession of land.’

ICC PROSECUTOR Policy paper on case selection and prioritisation’, International Criminal
Court, 2016.

List of POTENTIAL COCOO PARTNERS/DONORS/CLIENTS  

ACTO Amazon Cooperation Treaty Organization
ARPA Amazon Region Protected Areas Programme
CIDH Comisión Interamericana de Derechos Humanos
COHOM EU Working Party on Human Rights
CONAMA National Environmental Council of Brazil
CSR Corporate Social Responsibility
DETER Real Time Deforestation Detection System of Brazil
EC European Commission
EP European Parliament
EU European Union
FARC Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia)
FPIC Free, Prior and Informed Consent
FTA Free Trade Agreement
FUNAI Brazil’s National Foundation of the Indian (Fundação Nacional do Índio)
G7 Group of Seven
GDP Gross domestic product
GLEAM (United Nations) Global Livestock Environmental Assessment Model
GMO genetically modified organism
GRSB Global Roundtable for Sustainable Beef
HRW Human Rights Watch
IACHR Inter-American Commission on Human Rights
IACtHR Inter-American Court of Human Rights
IBAMA Brazil’s Institute of the Environment and Renewable Natural Resources (Instituto Brasileiro
do Meio Ambiente e dos Recursos Naturais Renováveis)
ICC International Criminal Court
ICCPR International Covenant on Civil and Political Rights
ICMBio Chico Mendes Institute for the Conservation of Biodiversity (Instituto Chico Mendes de
Conservação da Biodiversidade)
IIRSA Initiative for the Integration of the Regional Infrastructure of South America
ILO International Labour Organization
IMF International Monetary Fund
INPE Brazil’s National Institute for Space Research (Instituto Nacional de Pesquisas Espaciais)
IP Indigenous Peoples
IT Indigenous Territory
Policy Department, Directorate-General for External Policies
ITTA International Tropical Timber Agreement
IWGIA International Work Group for Indigenous Affairs
LSE London School of Economics
MERCOSUR South American trade bloc ‘Mercado Común del Sur’ (Common Market of the South)
NAP National Action Plan
NGO Non-governmental organisation
NYDF New York Declaration on Forests
OAS Organization of American States
OECD Organization for Economic Co-operation and Development
OHCHR (United Nations) Office of the High Commissioner for Human Rights
PA Protected Area
PNAS Proceedings of the National Academy of Sciences of the United States of America
PNGATI Brazil’s National Policy on Environmental and Territorial Management of Indigenous Land
(Política Nacional de Gestão Ambiental e Territorial em terras indígenas)
REDD+ Reducing Emissions from Deforestation and Forest Degradation and the role of
conservation, sustainable management of forests and enhancement of forest carbon
stocks in developing countries
Rio+20 United Nations Conference on Sustainable Development 2012
RSPO Roundtable on Sustainable Palm Oil
RTRS Roundtable on Responsible Soy
SDG Sustainable Development Goals
SEI Stockholm Environment Institute
SIA Sustainability Impact Assessment
TEU Treaty on European Union
TFEU Treaty on the Functioning of the European Union
TIPNIS Isiboro Sécure National Park and Indigenous Territory (Territorio Indígena y Parque
Nacional Isiboro Sécure), protected area and Native Community Land in Bolivia
UN United Nations
UNDRIP United Nations Declaration on the Rights of Indigenous Peoples
UNESCO United Nations Educational, Scientific and Cultural Organization
UNGPs United Nations Guiding Principles on Business and Human Rights
USA United States of America
WHO World Health Organization
WRI World Resources Institute
WWF World Wide Fund for Nature

The wildfires that consumed thousands of hectares of forest in Bolivia and Brazil during 2019 brought
international attention to the Amazon. The loss of the forest, noted the world’s press, is not just the concern
of the countries themselves but is a preoccupation of humanity as a whole since it serves a

AMAZON is a our best protection against further catastrophic global warming.

The initial rejection by both governments of outside assistance for the fires, was on sovereignty (SR), and on the grounds that the fires were part of a normal cycle of tropical forestry management only exacerbated the situation. The President of France’s call for emergency talks on the Amazon fires at the G7 meeting in August 2019 led to an undiplomatic altercation with President of Brazil. Others within Brazil including scientists, former ministers, indigenous peoples and non-governmental organisations criticised the stance of the President

sovereign state is a state that has the highest authority over a territory

 International law exceptions to state soverignty : COCOO TO CHALLENGE ANSR, TO SAVE AMAZON

• no defined population,
• no defined territory,
• a government under another,
• no capacity to interact with other sovereign states.
• is not independent

In the end both Brazil and Bolivia accepted assistance and the worst of the fires were brought
under control.

international treaties such as the Paris Climate Agreement and the International Labour Organization’s Convention 169 on the rights of indigenous and tribal peoples.

harms:
 infrastructure development, mining, hydroelectric projects, large-scale agriculture, ranching,
indiscriminate logging, small-scale farming, oil and gas exploitation and organised crime. All of which are
contributing to loss of forest cover, pollution of soils and rivers, destruction of biodiversity, disruption of
local climate conditions and resulting in devastating impacts on indigenous peoples on their ancestral
lands.

 Information has been taken into account from indigenous organisations active in the Amazon such as
COICA (Coordinadora de las Organizaciones de la Cuenca Amazonica), APIB (Articulacao dos Povos
Indigenas do Brasil) and CIDOB (Coordinadora de Pueblos Indigenas del Oriente Boliviano)

AN = Bolivia, Brazil, Colombia, Guyana, Ecuador, Peru, Suriname, Venezuela and the French Overseas Department of French Guiana

WHY COCOO MUST PROTECT THE AMAZON

Indigenous peoples in the Latin America region comprise a population of 42 million, approximately 8 % of
the total population, and represent 17 % of those in extreme poverty (World Bank, 2015)

The Amazon region covers 40 % of the land mass of South America. The EU member countries could be fitted into this area one and a half times. The region is within the territories of nine States – Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname, Venezuela and French Guiana, a French Overseas Department and part of the EU.

The Amazon draws carbon dioxide from the atmosphere thereby cooling the planet and stores through its 390 billion trees an estimated 300 billion tons of carbon.
It is often referred to as the lungs of the planet. It represents over half of the world’s remaining tropical
forest. It is also and vitally the most biodiverse place on earth, with 16 000 species of tree, more than 1 000
species of bird, 80 000 species of plant and more than 3 000 species of fish (WWF, n.d; Val, 2019). An
estimated 10 % of the planet’s biodiversity is believed to be found in the region although scientists
acknowledge that they have barely scratched the surface of the vast multiplicity of flora and fauna that the
forest contains. The Amazon is also a vast river system supplying 20 % of the world’s fresh water into the
ocean. It recycles half of the rainfall in water vapour creating what have been termed flying rivers that
sustain agriculture in the Amazon and far beyond. It is above all a complex environment which is largely
self-regulating comprising a multitude of different ecosystems forming ‘a single ecological functioning
entity, in which the many parts depend on the ecological integrity of the whole biome’ (WWF, 2014, p. 21).
As such it is vulnerable to large-scale human disturbances which have over time disrupted its natural
balance.

‘extractive activities within indigenous peoples’ lands and territories undertaken without
adequate consultation or consent are the main source of serious violations of their human rights, including violence, criminalisation and forced displacement’.

The Amazon is home to 38 million people, including an indigenous population of 1.5 million, composed of
about 385 distinct ethno-linguistic groups. There are also an estimated 200 uncontacted or voluntarily
isolated indigenous groups living in the Amazonian region of Bolivia, Brazil, Colombia, Ecuador, Peru and
Venezuela (IACHR, RAISG, ACTO12). In addition to the indigenous population, there are afro-descendant
communities (Quilombolas in Brazil) which benefit from a similar status to the indigenous peoples as well
as riverine and forest-dwelling communities who gain their livelihoods through low impact subsistence.
There are 522 conservation areas in the Amazon covering 22 % of the region and 3 344 recognised
indigenous territories accounting for a further 30 %. Together these lands represent over 50 % of the
Amazon that is officially subjected to strict regulations regarding the protection of forestland and
biodiversity (Walker, 2020). By far the largest extent of protected areas is in Brazil. Brazil, Bolivia, Venezuela
and Ecuador have between 20 % and 30 % and Colombia, Peru and Suriname between 10 % and 20 % of
the Amazon biome within protected areas (WWF, 2014). These areas are not always respected in practice,
however, and there are cases where, despite having declared them as protected areas, concessions for the
exploitation of resources are granted (Walker, 2020).

Environmental challenges

Forest clearance worldwide causes 15 % of greenhouse gases(Ricketts, 2010). As one of the largest carbon
stocks, the rate of deforestation in the Amazon is critical. Since 1978, it is estimated that over 750 000
square kilometres of forest have been destroyed in the Amazon (Mongabay, 2018). In Brazil alone, in the
period 2012 to 2019, over 500 000 square kilometres of forest were lost.

For a few short years, rates of deforestation slowed as a result of tighter environmental laws, forest codes and better implementation but resumed their high levels after 2012-14. In Brazil deforestation increased again in the months following the election of President Bolsonaro. The wildfires that occurred in 2019 in the Brazilian, Bolivian and other parts of the Amazon reduced forest cover significantly16. At one point the Brazilian Space Institute
identified 76 000 separate fire incidences in the region17. It is estimated that 27 % of the Amazon biome
will be without trees by 2030 if the current rate of deforestation is not stopped

Unsustainable exploitation of natural resources

Small-scale farming developed with the spread of highways through the region in the 1970s bringing
colonists ready to clear the forest and make a livelihood and escape poverty and landlessness in other parts
of the country. However, it is large-scale mechanised agriculture for the production of soy and other export
commodities such as palm oil together with ranching which have been the two principal drivers of the
severe deforestation in the Amazon (Piotrowski, 2019). In Brazil, for example, conversion of forest to
pasture for cattle ranching is estimated to be responsible for about 80 % of deforestation much of the rest

In addition to authorised mining, the Amazon region has been impacted by illegal mining especially of
gold. A map prepared by an environmental network in 2018 shows 2 312 illegal GOLD mining sites in 245 areas in six countries

 68 % of the region’s protected areas and indigenous territories overlap with planned or
existing oil and gas, mining, hydro-electric and road-building projects23.
In 2007 former President Rafael Correa of Ecuador offered to desist permanently from exploiting oil in the
Yasuni National Park in exchange for USD 3.6 billion from the international community. The socalled Yasuni-ITT initiative was abandoned after less than 10 % of the target was received….SO, government has re-opened the Yasuni reserve up to further oil extraction including in areas where
voluntarily isolated indigenous peoples live.

The human and environmental damage of these activities is
recognised. In Peru’s western Amazon, for example, decades of pouring waste into rivers or leaking open
pits and pipelines have infiltrated water supplies with heavy metals which have moved up the food chain
affecting animals and people

. In Peru, companies involved often threaten communities with job losses
or other retribution for objecting to the environmental impacts or else leaders are co-opted by bribes

Critical to the industrialisation of the Amazon and its deforestation, have been the extensive highways and
energy infrastructure that has been developed. The first major highways were constructed in the 1970s. In
Brazil, BR 230 cut east – west and BR 163 cut north – south. Initially developed to open up the region for
economic development, they were also part of a massive resettlement programme offering land and loans
to poor landless peasants. Funded by the World Bank,

cocoo v world bank

the programme turned out to be a failure as small
farmers were soon unable to make a living on the thin exhausted soils. Large-scale ranching and soy
plantations incorporated these small farms and further cut back the forest. The highway network facilitates
the access of these commodities to foreign markets. The highways helped create the conditions for a
multitude of roads to be constructed off them, many unauthorised. They have become conduits for further
incomers, loggers and miners and resulting deforestation. An estimated 85 % of deforestation takes place
within 50 kilometres from a road and nearly all is illegal26. The Interoceanic highway linking Brazil to the
Peru’s Pacific ports and running through both country’s tropical forest has caused increased
deforestation. The regional infrastructure project involving 12 countries, the Initiative for the Integration
of the Regional Infrastructure of South America (IIRSA), if previous experiences are any guide, may put
further pressures on the Amazon28. Some projects under the auspices of IIRSA have already generated
resistance from indigenous peoples and local communities as was the case with the Jirau and Santo
Antonio dams on the Madeiro River in Brazil or the highway through an indigenous territory and
conservation area in Bolivia (TIPNIS). A study suggests that 1 347 indigenous and local communities are
affected29.

The USD 37.4 billion project consists of 335 projects including dams, roads, waterways and ports to help to increase exports. The
impacts on indigenous peoples and local communities and the environment for those projects planned in the Amazon have not
been evaluated.

bolsonaro in 2017 allowed those who have illegally cleared areas of public land in the Amazon to
legalise their landholdings. It has been dubbed a land-grabbers charter32. President Bolsonaro greatly
weakened the environmental ministry in 2019 by cutting its budget by 25 %, a decision which led to the
suspension of contributions by Norway, Germany and other states to the Amazon Fund, a mechanism to
raise funds to support action to prevent deforestation in the Brazilian Amazon.

While indigenous peoples’ right to lands and resources is generally recognised in the Amazon countries,
there are ongoing delays in legal recognition and demarcation, the unlawful appropriation of indigenous
territories by State or third parties, and lack of monitoring by State authorities to prevent incursions by
unauthorised outsiders

Indigenous peoples’ lands may be protected in law, but ministries of mining, energy or agriculture have
authorised developments on indigenous peoples’ lands notwithstanding. Concessions to oil and mining
operations, for example, are estimated to overlap as much as 24 % of indigenous peoples’ territories
(Wayne Walker, 2020). The conflicts that these activities engender, sometimes leading to formal complaints
to the authorities, the intervention of national courts or international bodies, and civil disobedience should
in the Amazonian countries be regulated through the consultative procedures established under ILO
Convention

Indigenous peoples have a right to be consulted in order to obtain their free and informed
consent prior to the development of activities that may affect their lands and resources. In practice, this is
not always the case,

as noted by the UN Special Rapporteur on the Rights of Indigenous Peoples and the
ILO , Hydroelectric dams have had damaging impacts on indigenous peoples. In Brazil, the water level on the
Xingu River has fallen as a result of the construction of the Belo Monte hydroelectric project, which has in
turn impacted the region’s ecosystems and the survival of local communities (IACHR, 2019, para. 83). The
Bala-Chepete Project in the Madidi Park, Bolivia, will potentially affect four indigenous territories and it is
estimated that at least 49 communities would be flooded (IACHR, 2019, para.82). The oil and gas sector has
also important impacts in the Amazon region. For every hectare allocated for conservation in the region,
there are around 2.5 hectares on which the petroleum industry has a concession (Quintero et al, 2017). In
many cases they are situated near to or overlap with natural parks, forest reserves, and indigenous lands.

Violence and criminalisation

Intimidation, violence and murders of indigenous leaders and activists are increasingly prevalent.
Altogether, registered murders, attempted murders, and death threats against leaders and members of
indigenous communities and peoples in the Brazilian Amazon totalled at least 235 cases between 2007
and 2018. Those cases were reportedly associated with territorial conflicts or the defence of land ownership

In several cases, the crimes are not investigated with due diligence and most
perpetrators stay unpunished. Likewise, there is a pattern of criminalisation of
demonstrations or social protests. Indigenous women are particularly affected
by the climate of violence. Mining and other operations bring large numbers of males into the local area
and cases of sexual harassment of indigenous women are prevalent. Contamination of rivers can mean
that women often have to travel further to find uncontaminated water. Indigenous women leaders have
also been victims of the spate of killings of environmental defenders37.

The multiple obstacles to access to justice faced by indigenous peoples are often a result of the lack of
funds needed to hire a lawyer, language barriers, ignorance of their human rights or the absence of an
intercultural approach by the justice system operators. Those initiating a lawsuit encounter a very high
burden of proof to make a case of environmental damage (high costs of technical tests and scientific or
expert opinion) and face constant threats. Moreover, the companies or business groups they are up against
are typically powerful economic agents in the countries in which they operate, so that there is little political willingness to guarantee due access to justice. These circumstances have forced indigenous peoples to seek justice in countries where the companies are registered, with only limited success

 Regional environmental treaties

All Amazonian States (apart from French Guiana) are members of the Amazon Cooperation Treaty
Organization (ACTO) with a mandate to promote sustainable development in the Amazon basin. Founded
in 1978, with the aim of balancing economic development with conservation while respecting national
sovereignty, it is a space for soft diplomacy rather than dynamic action in the face of the disasters now
impacting the Amazon

cocoo: acto must be amended

-Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru and Suriname signed the Leticia Pact (Pacto de
Leticia por la Amazonía) in September 2019 with the aim of tackling deforestation and forest degradation
of the Amazon.

-the Regional Agreement on Access to Information, Public
Participation and Justice in Environmental Matters in Latin America and the Caribbean (2018), also known
as Escazú Agreement, which has been signed by all Amazonian countries apart from Venezuela and
Suriname, and has been ratified by Bolivia and Guyana …Its goal is to protect the right to a healthy environment for both present and the future generations. It is the first regional environmental agreement in Latin Americaand the only binding agreement stemming from the UN Conference on Sustainable Development(Rio+20)…. it is the first environmental agreement that includes specific provisions on environmental human rights defenders. In 2011, the IACHR appointed a Rapporteur on Human Rights Defenders

International framework of environmental rights

The significance of the biodiverse Amazon forest has been acknowledged by the UNESCO which declared
National Parks in seven Amazonian countries (Brazil, Bolivia, Colombia, Ecuador, Peru, Suriname and
Venezuela) as world heritage sites meaning that these sites need conservation and protection. Of particular
relevance for the Amazon biosystem is the Convention on Biological Diversity (1992) and the resulting
legally binding Cartagena Protocol on Biosafety (2000) as well as the Nagoya Protocol on Access to Genetic
Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation to the Convention
on Biological Diversity (2010). While the former has been ratified by all countries of the Amazon region, the
Nagoya Protocol has been ratified by Bolivia, Ecuador, Guyana, Peru, Venezuela and France, signed but not
ratified by Brazil and Colombia, and not signed at all by Suriname. With the exception of Bolivia, all other
countries in the region have also ratified the third and latest International Tropical Timber Agreement
(ITTA) by the International Tropical Timber Organization, which was adopted in 2006 and promotes the
trade of sustainably and legally harvested timber, and the conservation of tropical forests. All countries but
Venezuela, which has only signed the treaty, have also ratified the UN Minamata Convention on Mercury
with its aim to phase out the manufacturing as well as the export and import of products containing
mercury by 2020. Given the detrimental effects of the mercury used in gold mining and the resulting
pollution of the Amazon basin, this commitment is of particular importance in order to protect a healthy
environment (WWF, 2018).

The Amazonian countries, with the exception of Guyana, are States Parties to the American Convention on
Human Rights and have, apart from Venezuela, also ratified its Additional Protocol on Human Rights in the
Area of Economic, Social and Cultural Rights, also known as ‘Protocol of San Salvador’ which in Art. 11
guarantees the right to a healthy environment and declares States parties as responsible to ‘promote the
protection, preservation, and improvement of the environment’ (Art. 11.2). All countries have ratified the
Paris Agreement and have thus obligated themselves to limit the global temperature rise to below 2
degrees Celsius before industrial levels and aim to keep the increase at 1.5 degrees Celsius.

Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos
Naturais, IBAMA), the Chico Mendes Institute for the Conservation of Biodiversity (Instituto Chico Mendes
de Conservação da Biodiversidade, ICMBio), a National Environment Council (Conselho Nacional do Meio
Ambiente, CONAMA) and a National Space Research Agency (Instituto Nacional de Pesquisas Espaciais,
INPE) providing annual official estimates of deforestation in the Amazon and forest fire information.

The implementation gap

Despite the ratification of international treaties concerning environmental and indigenous peoples’ rights
as well as extensive national legislation and decisions binding on States made by the IACtHR,
implementation in the Amazonian States is generally weak. One reason for the lack of implementation is
that States have contradictory laws

 Role of the EU

 Art. 3 of the Treaty on the European Union (TEU) the EU pledges to contribute to the
protection of human rights in its relations with the wider world

. In Art. 21 of the TEU the EU acknowledges that its external action shall be guided by its founding principles including ‘the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Charter and international law’, which is reiterated in Art. 205 of the Treaty on the Functioning of the European Union (TFEU).

The 2015 – 2019 EU Action Plan on Human Rights includes policies on indigenous peoples in action points 9, 16 and 17 including the commitment to develop EU policy in line with the UNDRIP.102 The proposed 2020 – 2024 EU Action Plan on Human Rights and Democracy commits to supporting indigenous peoples including “by upholding the principle of free, prior and informed consent in all decisions affecting them”

FUNDING

-Plan for the Sendai Framework for Disaster Risk Reduction, provides FUNDS for the protection of
biodiversity and ecosystems in the EU’s external relations.

-ec’s European Green Deal (2019)108 stress that the EU
ensures that all its policies are consistent with the Paris Climate Agreement and the 2030 Agenda, and
therefore promote sustainable agriculture and contribute to the climate neutrality objective.

– The European Instrument for Democracy and Human Rights (EIDHR)

-the Emergency Fund has provided grants to indigenous human rights defenders [COCOO], at risk in Latin America, Asia and Africa in order to ensure their safety by covering expenses for legal representation and medical assistance, inter alia .egs:  The EU has provided financial support to projects:  addressing land-grabbing;  strengthening land governance in 40 countries, with a budget of 240 million Euros. ;  GRANTS to support human rights defenders and organizations working on land-grabbing, climate change and indigenous peoples’rights….in Brazil human rights defenders including indigenous leaders are supported through grants

The EP asks the European Union to conduct independent impact assessments prior to the conclusion of
trade agreements, to provide for an effective complaint mechanism for victims of human rights violations
and to appoint a standing rapporteur on the rights of indigenous peoples, who will monitor the human
rights situation of indigenous peoples and the implementation of UNDRIP and ILO Convention

 EP adopted the Resolution on transparent and accountable management of natural resources in developing countries: the case of forests (2018), recognises that forests are often the traditional territories of
indigenous peoples, who are thus particularly affected by forest destruction and land grabs for the
expansion of plantations.  indigenous peoples have a crucial role in the
sustainable management of natural resources and forest conservation, and  suggests a complaint mechanism which gives special consideration to the rights of indigenous peoples. Moreover, based on its Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan 2003, the EU created the EU Timber Regulation which came into force in March 2013113. The Regulation aims to reduce illegal logging by ensuring that illegally harvested timber cannot be sold on the EU

On 23 July 2019, the EC adopted an EU Communication on Stepping up EU Action to Protect and Restore the World’s Forests

EU policy frameworks addressing the climate emergency : 

– the Renewed Sustainable Finance Strategy:  climate and environmental risks MUST be fully
managed by financial institutions

-Euroclimaplus programme, supports environmental sustainability and climate change in Latin
America, including Amazon.

 the (EU-MERCOSUR) FTA

On 2019, after 20 years of negotiations, the EU and the MERCOSUR  reached an agreement in principle

(to set up a trade union)

Brazil is the only ‘full’ Amazonian member of the Mercosur, the other
Amazonian countries with the exception of French Guyana are all ‘associate countries’ of the trade union

 By removing tariffs and allowing certain quotas of duty-free MERCOSUR and EU exports, the production of these commodities will further increase climate change….and the agreement is the largest trade agreement the European Union has ever concluded

However, ec argues that the agreement will protect the environment by combatting climate
change and deforestation in the MERCOSUR region, as both sides are obliged to
implement environmental laws by neither derogating from laws nor by failing to enforce
their implementation…also, the agreement ‘will promote sustainable production chains. 

the FTA, is still subject to the ratification of all Member States of the Eu and MERCOSUR. 

the fta says that ‘increased trade should not come at the expense of the environment or labour
conditions’ and states that the agreement shall in fact promote sustainable development, and that will include sustainability commitments on management of forests, including the fight against illegal logging

<> cocoo:  eu and members should ban imports of: beef, timber, fruits/vegs(illegal pesticides) etc .. from the 9AN…on wpi grounds… but also on clcp grounds, as good firms/banks [that do not produce/import/fund, bad firms -that cause externalities-, are at a clcp disadvantage wrt bad firms/banks

When deforestation in the Amazon increased by 84 % in just one year in 2019, and brasil President
Bolsonaro declared his intentions of withdrawing from the Paris Agreement, the French President and Irish
Prime Minister threatened to block the FTA if Bolsonaro’s government would not stop the deforestation in
the Amazon, a statement that later was also backed by the government of Luxembourg and
Austria.

 so far, the EU-Mercosur proposal lacks sufficient safeguards to ensure it will not contribute to deforestation. 

Corporate Social Responsibility and European Businesses

The international community has a common interest in preserving the world’s forests, and their ability to
absorb carbon dioxide and release oxygen back into the air, in order to reduce the impacts of climate
change. Moreover, the very causes for deforestation and human rights violations in the Amazon have
increasingly been linked to operations of European companies and the globally rising demand for
commodities like soy and beef (Amazon Watch, 2019) .

To date, there is no international legally binding
treaty on the responsibilities of businesses across borders, although the UN is currently drafting such a
treaty.

<> when will that treaty be ratified??

EU has so far been only relied on voluntary commitments of businesses, known as
CSR and Responsible Business Conduct.  Exceptions : such as the conflict
minerals regulation and the timber regulation.

In 2019, the NGO Amazon Watch published a report on the complicity of Northern consumers and
financiers in the destruction of the Amazon. The report makes explicit reference to the biggest financiers
of international soy and cattle companies like Louis Dreyfus, Bunge, ADM and Cargill and Brazil’s biggest
beef importer JBS, which are known to be linked to deforestation in the Amazon and the Cerrado (Amazon
Watch, 2019c). Financiers include European banks such as HSBC (UK), Barclays (UK), Deutsche Bank
(Germany), Commerzbank (Germany) and Santander (Spain). The report points out that while European
companies are mostly not directly participating in deforestation in the Amazon, they nonetheless import
products from companies linked to deforestation and illegal logging. Amazon Watch makes explicit
reference to European companies from Belgium, the Netherlands, Denmark, France, Germany and the
United Kingdom that were importing unsustainably sourced commodities such as soy, beef, leather, timber
or sugar.

<> cocoo v  firms/banks/nations/eu

an important CSR initiative is the UN Guiding Principles on Business and Human Rights
(UNGPs), which were also endorsed in the EU’s 2015 Action Plan on Human Rights and Democracy.

the OECD has adopted Guidelines for Multinational Enterprises which constitute a framework
for responsible business conduct in transnational supply chains.

The EU, as well as many corporations, also supports the Agenda 2030 and the Sustainable Development Goals (SDGs), stating that it ‘will pursue this goal through sustainable consumption and production, sustainably managing its natural resources, ensuring just transition and economic viability, and taking urgent action on climate change’.

definition of ‘sustainable development’ : one that meets the needs of the present
without compromising the ability of future generations to meet their own needs’

Given the current unsustainable production of commodities like palm oil, soy, beef or
timber, many international companies have started to commit themselves: eg, The UN Global
Compact initiative,  is the largest corporate sustainability initiative in the world with over 10 400 companies
[ most of them are GREENWASHERS]

The OECD has coined the term ‘Responsible Business Conduct’. The EU uses both terms interchangeably. 

The Conflict Minerals Regulation will come into force in January 2021 and aims to stem trade in tin, tantalum, tungsten and gold when it is used to fund armed conflict or involves forced labour

The Timber Regulation adopted in October 2010 prohibits illegally
harvested timber on the EU market.

EU Member States

France was the first EU Member State to pass a Corporate Duty of Vigilance Law in 2017 which
addresses the impacts of multinational companies on human rights and the environment and requires
companies to implement vigilance plans to which they can be held responsible.

Several EU Member States have established national action plans (NAPs) to implement the UN Guiding Principles on Business and Human Rights.

In regards to environmental protection, Germany and Norway were the biggest donors of
the Amazon Fund in order to support Brazil with the protection of the Amazon.

In 2014, the New York Declaration on Forests (NYDF), a voluntary and non-binding declaration with the
aim to halt global deforestation, was endorsed at the UN Climate Summit. It now has over 200 supporters
including Governments, multi-national companies, NGOs and groups representing indigenous
communities

<> COCOO WILL BE A SUPPORTER OF NYDF

NYDF Endorsers

In 2015, building on the NYDF and in the context of the Paris Climate Agreement, the
Amsterdam Declarations Partnership, was entered into by Denmark, France, Germany, Italy, The Netherlands, Norway and the United Kingdom. The overall aim of the declarations is to ensure the production of deforestation-free and sustainable commodities through the cooperation with the private sector and with producer countries 

 Consumers

 labelling products that are fair trade and deforestation-free, giving consumers the opportunity to make smart choices and support sustainable companies. Such labels are Fairtrade International, the UTZ Rainforest Alliance and Fair for Life.

However, it is not always clear to consumers on which criteria these labels are based and whether the initiative includes commitments to zero-deforestation or is promoting indigenous peoples’ rights or gender
equality. also, labeling lacks enforceability.

Policy options

constitute together a framework, for eu to address deforestation, biodiversity loss and human rights violations in the Amazon.

1/ Indigenous peoples as forest guardians

A World Resources Institute (WRI) study quantifies the financial gain in securing indigenous territories (ITs) .  ITs in Bolivia, Brazil, and Colombia, prevent the release of up to 59 Mega-tonnes of CO2 amounting to a total value of USD 25–34 billion over 20 years. The contribution of indigenous territories to local and regional ecosystem-service benefits, it states, includes regulation of local climate and water recycling, hydrological services, pollination, nutrient retention, and recreation and tourism. These activities are estimated to bring benefits of between USD 679 and USD 1 530 billion over the next 20 years.

the best and most practical policy for keeping the Amazon intact is to place it in the hands of its
historical owners.

2/ Protected areas

About 20 % of the region is protected through nature reserves and the data available shows they are effective barriers against deforestation …They also provide spaces for scientific study as well as opportunities
for diverse forest to be replanted and restored…. Amazonian States are committed to extending these
conservation areas. Unfortunately, most are still made without proper consent or involvement of indigenous peoples. 

3/ The rule of law and human rights defenders:

 there is nonetheless more than 50 % of the Amazon area under the protection of conservation
areas or within indigenous territories….but, there is illegal expansion of the agribusiness frontier and unauthorised mining and logging. In Brazil, as noted by the indigenous peoples, the Amazon is becoming a lawless place where violence goes unchecked

4/ Legal framework for EU-based companies:

The pressure on companies to source their products sustainably has come from consumers and ngos.

eg. The Soy Moratorium, an agreement by transnational grain companies to stop sourcing soy from deforested lands was a result of consumer and NGO pressure….launched in 2006, it resulted in an almost entire halt to deforesting by soy producers while reaching higher productivity on existing land.

eg. a less successful programme, has been the timber certification, like the Extractive Industries
Transparency Initiative (EITI) and the RACS ,Rainforest Alliance Certification Schemes

eg. the Investor Statement on deforestation and forest fires in the Amazon signed by 230 investor companies in September 2019, calling for companies to ensure they do not contribute to deforestation

but….many EU-based companies continue to source commodities from the
Amazon contributing to further deforestation

5/ The right of nature

-The decision to give nature a legal personality in the Constitution of Ecuador,

-the Maori of New Zealand have seen the Whanganui River recognised as a person in law raising the possibility that nature might effectively sue if it is damaged by humans

The European Parliament SHOULD

WRT Indigenous peoples

1. Use its budgetary and scrutiny competences to enhance support for civil society organisations and
academic institutions, in cooperation with indigenous peoples, to continue research on the impacts
of extractive and development activities on indigenous communities in the Amazon as well as on the
root causes and structural problems affecting their human rights.

2. Recommend a specific targeted programme on Amazonia under EU budgets for climate change and
green development, such as the Euroclima+ programme, to channel technical assistance that
directly reaches indigenous peoples to support self-government, territorial control and
management.

3. Recommend that the above-mentioned programme include support to sustain forest-related
knowledge and pilot alternative sustainable indigenous economic activities including by facilitating
access to EU markets, in line with the proposal to redirect finance to support more sustainable landuse practices in the EU communication of July 2019 on stepping up EU action to protect and restore
the world’s forests.

4. Call for continued support for capacity-building of indigenous peoples in relation to human rights
including on businesses and their responsibility to respect human and indigenous peoples’ rights.
Policy Department, Directorate-General for External Policies

5. Support Amazonian indigenous peoples and other indigenous peoples to secure a dedicated
funding window under the UN’s Green Climate Fund (GCF) for indigenous climate change mitigation
and adaption initiatives.

6. Recommend to EU member states that they scrutinize the implementation of World Bank and other
international financial institutions, including the European Investment Bank, where they are
shareholders, to ensure that lending policies respect the rights established in the United Nations
Declaration on the Rights of Indigenous Peoples and ILO Convention 169 on indigenous and tribal
peoples, in particular the right to self-determination and the principle of free, prior and informed
consent which should be a requirement in the event of large-scale projects likely to affect indigenous
peoples.

7. Call for continued support to the United Nations mechanisms including the Special Rapporteur on
Indigenous Peoples, the Expert Mechanism on the Rights of Indigenous Peoples and the Permanent
Forum on Indigenous Issues and call their attention to the specific situation of Amazon indigenous
peoples, especially to those living in voluntary isolation and initial contact.

8. Examine ways and means of supporting the implementation of the recommendations issued by the
IACHR in its 2019 report on the Situation of Human Rights of the Indigenous and Tribal Peoples of
the Pan-Amazon Region and in its 2013 report on Indigenous Peoples in Voluntary Isolation and
Initial Contact in the Americas.

9. Recommend that EU Member States which have not done so ratify International Labour Organization
Convention 169 on indigenous and tribal peoples.
Protected areas and indigenous territories

10. Call for support to efforts by Amazonian countries to extend and rehabilitate Protected Areas
through technical and financial assistance.

11. Invite the Commission and EEAS to consider working with the Amazonian countries, including the
Amazon Cooperation Treaty Organization and UNESCO, to identify and protect further World
Heritage sites containing rich cultural and biological diversity in the region ensuring that, where
these areas coincide with indigenous lands, indigenous peoples are active managers.

12. Request that Indigenous Amazonian proposals for community conserved forest areas be endorsed
and supported in EU communications and indigenous initiatives for sustainable forest management
be supported in political dialogues with Amazonian countries.
Rule of law and human rights defenders

13. Call for a programme to support civil society organizations working to protect the environment of
the Amazon and human and indigenous peoplesincluding by allocating specific funds under the EU
human rights defenders programme to climate activists and environmental defenders in line with
the commitments of the proposed EU Action Plan on Human Rights and Democracy, 2020 – 2024.

14. Request EU delegations to continue to take up systematically cases of environmental defenders
facing threats of violence with the countries concerned in line with paragraph 10 of the EU Guidelines
on Human Rights Defenders.

15. Recommend the enhancement of programmes to promote the rule of law in the Amazon region, in
line with the EU – Latin America and Caribbean relations agreement of May 2019 to promote, inter
alia, democracy, the rule of law and human rights. The programme could include technical assistance
to support ministries charged with environmental protection and justice in the Amazon.
Challenges for environmental and indigenous peoples’ rights in the Amazon region

16. Propose that the EU institutions work with member states of the Amazonian Cooperation Treaty
Organization and indigenous peoples and environmental defenders to develop initiatives to combat
organised crime, and illegal land grabs and deforestation in the Amazon.
Business and due diligence

17. Ensure that implementation of the EU – Mercosur Treaty respects the rights of indigenous peoples
under ILO Convention 169 which Mercosur states have ratified157, the United Nations Declaration on
the Rights of Indigenous Peoples, the American Declaration on the Rights of Indigenous Peoples and
relevant jurisprudence of the Inter-American Human Rights System, including the right to be
consulted and to obtain their free and informed consent prior to any development activity affecting
their lands, territories and resources.

18. Call for the establishment by the EU of an effective, affordable, and culturally accessible grievance
mechanism where indigenous peoples can address allegations of European corporate violations of
their rights, including their decision-making rights over developmental activities in their territories
or impacting on their rights.

19. Recommend that the EU and EU Member States include reference to indigenous peoples and the
rights contained in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) in
the relevant and emerging frameworks for due diligence and/or duty of vigilance, and in Business
and Human Rights National Action Plans, especially when activities might affect peoples in voluntary
isolation and initial contact.

20. Recommend that EU Member States harmonise their OECD National Contact Points processes to
facilitate access by indigenous communities and improve mediation and public determinations of
the allegations raised, including to complaints related to indigenous peoples in the Amazon region,
especially to those that include areas where peoples in isolation or initial contact live.

21. Ensure that companies based, registered or otherwise having a significant market or administrative
presence in the EU are held to account for violations of indigenous peoples´ rights in the Pan Amazon
region, taking the decisive steps to allow that companies responsible of those violations can be
accountable of their acts and repair the consequences. To this end the EP should urgently endorse
the findings of the EC study on due diligence requirements through the supply chain of January 2020
and support mandatory due diligence legislation for companies and investors.

22. Explore demand-side initiatives at the EU level that guarantee human rights monitoring and due
diligence, with an associated enforcement and sanctions regime, to ensure that products and
commodities entering the EU market are not sourced from areas in which customary land tenure
regimes are not recognised or respected in practice, or where land conflicts are associated with
natural resource extraction. In this respect support the maintenance of the Soy Moratorium and its
extension to the Amazon savannah (‘cerrado’).

23. Support further discussion under the auspices of the UN Forum on Business and Human Rights on
ways and means of strengthening protection of indigenous peoples’ rights in the Amazon region.
This should include the promotion of discussions and specific standards for the protection of
indigenous peoples, with particular attention to peoples in isolation and initial contact.

24. Continue to push the EU and Member States to engage in the discussions of the Open-ended
Intergovernmental Working Group on Transnational Corporations and other business enterprises
with respect to human rights regarding a proposed treaty on business and human rights as a means
of preventing the most egregious violations of human rights of indigenous peoples arising from
certain practices by governments and business enterprises.

25. Propose an EU-initiated multi-stakeholder dialogue on indigenous peoples´ rights and business
enterprises operating in the Amazon region focused on regulation in accordance with the
Declaration on the Rights of Indigenous Peoples and other relevant international standards. Such a
multi-stakeholder dialogue should include businesses from outside the EU area.

26. Recommend that EU-based companies provide disclosures on land acquisitions in the Amazon
region.

 The right of nature

27. Consider the viability and legal implications of alerting the International Criminal Court (ICC) to a
possible crime against humanity in Brazil’s Amazon affecting the integrity of the Amazon biome,
causing the illegal dispossession of indigenous peoples’ lands, and the threatening the lives of
indigenous peoples in voluntary isolation in line with the ICC’s 2016 Policy Paper158.

28. Consider a study to examine the case for giving legal personality to nature, thereby strengthening
the legal protection of the environment and criminalizing actions wilfully threatening biodiversity.

TI PUBLICATIONS SEARCH

TI : TRANSPARENCY INTERNATIONAL (ANTICORRUPTION ON DEFENCE WORLDWIDE)

TI: EMBARGOED REPORT: THE ETHICS OF THE WORLD’S LARGEST DEFENCE COMPANIES

why [corruption=bribery] is a wpi:   

-because ordinary people suffer the biggest consequences….Money lost to foreign bribery wastes millions of dollars that would otherwise go towards essential, and often lifesaving services, like health care and education

-damages people’s trust in their government, AND IN DEMOCRACY.

-Impedes cross-border investment,

-deters fair competition in international trade and discriminates against small and medium size companies.

-anticomp challenge for companies that play by the rules.

Largest exporters are the worst enforcers against foreign bribery…..

The ti 2018 report reveals that more than half of world exports come from countries that fail to punish foreign bribery. Only 11 countries significantly punish companies that pay bribes abroad (to get exports). Thirty-three countries have limited, little or no enforcement. The inaction of these countries violates their obligations under the convention.

2010:  baes had to pay 2 settlements:

-Under the agreement with the usa doj, which requires court approval, the Company will plead guilty to one charge of conspiring to make false statements to the U.S. Government in connection with certain regulatory filings and undertakings. The Company will pay a fine of $400m and make additional commitments concerning its ongoing compliance.

-Under the agreement with the Sfo, serious Fraud Office, the Company will plead guilty to one charge of breach of duty to keep accounting records in relation to payments made to a former marketing adviser in Tanzania. The Company will pay an agreed penalty of £30m comprising a fine to be determined by the Court with the balance paid as a charitable payment for the benefit of Tanzania….“In connection with the sale of a radar system by the Company to Tanzania in 1999, the Company made commission payments to a marketing adviser and failed to accurately record such payments in its accounting records. The Company failed to scrutinise these records adequately to ensure that they were reasonably accurate and permitted them to remain uncorrected.

BAE Systems plc (BAES) pleaded guilty today in U.S. District Court in the District of Columbia to conspiring to defraud the United States by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act (FCPA) compliance program, and to violate the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR), announced Acting Deputy Attorney General Gary G. Grindler. BAES was sentenced today by U.S. District Court Judge John D. Bates to pay a $400 million criminal fine, one of the largest criminal fines in the history of DOJ’s ongoing effort to combat overseas corruption in international business and enforce U.S. export control laws.

“Today, BAE Systems pleaded guilty to knowingly and willfully making false statements to U.S. government agencies. The actions of BAE Systems impeded U.S. efforts to ensure international trade is free of corruption and to maintain control over sensitive U.S. technology,”

The remediation measures BAE Systems has undertaken, in conjunction with its agreement to retain an independent compliance monitor

“Corporations and individuals who conspire to defeat CL not only cause harm, but also shake the public’s confidence in the entire system.”

baes gave false statements to circumvent U.S. export laws, and to defraud the U.S. Government. baes violated U.S. export controls to unlawfully/fraudulently acquire sensitive technologies

BAES is a multinational defense contractor with headquarters in the United Kingdom and with a U.S. subsidiary – BAE Systems Inc. – headquartered in Rockville, Md. None of the criminal conduct described in the plea involved the actions of BAE Systems Inc.

from 2000 to 2002, BAES represented to various U.S. government agencies, including the Dodj, that it would create and implement policies and procedures to ensure its compliance with the anti-bribery provisions of the FCPA, as well as similar, foreign laws implementing the (OECD) Anti-bribery Convention…..but,.. BAES knowingly and willfully failed to create mechanisms to ensure compliance with these legal prohibitions on foreign bribery. According to court documents, the gain to BAES from the various false statements and failures to make required disclosures to the U.S. government was more than $200 million.

BAES made payments to shell companies and third party intermediaries that were not subjected to the degree of scrutiny and review to which BAES told the U.S. government the payments would be subjected. BAES admitted it regularly retained “marketing advisors” to sell defense items without scrutinizing those relationships. instead, BAES took steps to conceal its relationships with these advisors and its nondisclosed payments to them. For example, after May 2001, BAES contracted advisors through offshore shell companies beneficially owned by BAES. BAES also encouraged certain advisors to establish their own offshore shell companies to receive payments from BAES while disguising the origins and recipients of these payments. BAES admitted that it established one company in the British Virgin Islands (BVI) to conceal its marketing advisor relationships, including who the advisor was and how much it was paid; to create obstacles for investigating authorities to penetrate the arrangements; to circumvent laws in countries that did not allow such relationships; and to assist advisors in avoiding tax liability for payments from BAES.

Through this BVI entity, from May 2001 onward, BAES made payments totaling more than £135 million, even though BAES was aware there was a high probability that part of the payments would be used to ensure that BAES was favored [bribes via 3ps] in foreign government decisions regarding the purchase of defense articles. BAES possessed no adequate evidence that its advisors performed any legitimate activities in justification of the substantial payments.

in the mid-1980s the U.K. and the Kingdom of Saudi Arabia (KSA) entered into a formal understanding. shortly after, BAES was appointed by mod, as the prime contractor to the U.K. government…how?: no public tender[comp], on national security grounds…. but  it was shown that BAES gave substantial benefits to a foreign public official of KSA, who was in a position of influence regarding sales of fighter jets, other defense materials and related support services.

BAES admitted it undertook no adequate review or verification of benefits provided to the KSA official, including no adequate review or verification of more than $5 million in invoices submitted by a BAES employee from May 2001 to early 2002 to determine whether the listed expenses were in compliance with the undertaking made by BAES to the U.S. government regarding its anti-corruption compliance procedures…instead, BAES transfered more than £20 million to a bank account in Switzerland controlled by an intermediary, being aware that there was a high probability that the intermediary would transfer part of these payments to the same KSA official.

Also as part of its guilty plea, BAES admitted to making and causing to be made certain false, inaccurate and incomplete statements, and failing to make required disclosures to the U.S. government in connection with the administration of certain regulatory functions, including statements and disclosures related to applications for arms export licenses, as required by the AECA and ITAR. The AECA and ITAR prohibit the export of defense-related materials to a foreign national or a foreign nation without the required U.S. government license….why?: because to get such licence, applicants must identify the related paid commissions– whether they are legitimate commissions or bribes – to help secure the sales of defense materials.

BAES admitted that, as part of the conspiracy, it knowingly and willfully failed to identify commissions paid to third parties for assistance in soliciting, promoting or securing sales of defense items in violation of the AECA and ITAR. BAES failed to identify the commission payments paid through the BVI entity described above. BAES caused the filing of false applications for export licenses for Gripen fighter jets to the Czech Republic and Hungary by failing to tell the export license applicant or the State Department of £19 million BAES paid to an intermediary with the high probability that it would be used to influence that tender to favor BAES.

As part of its guilty plea, BAES has agreed to maintain a compliance program that is designed to detect and deter violations of the FCPA, other foreign bribery laws implementing the OECD Anti-bribery Convention, and any other applicable anti-corruption laws, and that is designed to detect and deter violations of the AECA and ITAR, as well as similar export control laws. Under the terms of the plea agreement, BAES has agreed to retain an independent compliance monitor for three years to assess BAES’s compliance program and to make reports to the company and the Justice Department.

 the criminal (fraud) case

was prosecuted under the Foreign Corrupt Practices Act, and The Counterespionage Section[supervises the investigation and prosecution of cases involving the export of military and strategic commodities and technology, including cases under the AECA and ITAR]

The criminal case was investigated by FBI special agents, and special agents of the U.S. Immigration and Customs Enforcement’s Counter Proliferation Unit. Investigative assistance also was provided by the Defense Criminal Investigative Services and the General Services Administration, Office of Inspector General. The Criminal Division’s Office of International Affairs provided substantial assistance in support of the investigation. and the U.K.’s Serious Fraud Office

2010:

A pension fund [ a sh of baes] applied to the U.S. Supreme Court for leave to issue a sh claim v BAE Systems Plc over allegations that the company paid more than $2 billion (1.3 billion pounds) in bribes to win a record Saudi arms deal, the fund’s lead attorney said on Friday.

BUT the U.S. appeals court said that English law, not U.S. law, governed the shareholder lawsuit over alleged bribes to Saudi Prince Bandar bin Sultan and others…..but the claimant said the fund had no plans to take its case to England.

the sh claim is that current and former directors and executives of BAE, Britain’s No. 1 arms maker, breached their fiduciary duties and wasted corporate assets by allegedly allowing illegal bribes and kickbacks in the 1980s arm deal known as al-Yamamah, or “the Dove.”

BAE has denied that wrongful payments were made to secure the deal in which Tornado fighter jets, Hawker trainer aircraft and other military hardware were sold to Saudi Arabia in exchange for oil starting in 1985. The value of the government-to-government barter has been estimated at up to $80 billion, Britain’s costliest arms deal.

In June 2007, BAE said the U.S. Justice Department had opened its own investigation of BAE’s compliance with anti-bribery laws, including dealings with Saudi Arabia

how will cma apply the S.9 [rival collaboration] exemption [so that ua is cleared]?

by using four “efficiency” criteria:

• the agreement must give rise to benefits to production, distribution or technical or economic progress (Condition 1);
• the restriction to competition arising from the agreement must be indispensable to achieve those benefits (Condition 2);
• consumers must receive a fair share of the benefit (Condition 3); and
• there must be no elimination of competition (Condition 4)

Condition 1 – Efficiencies

egs of sustainability benefit [that the CMA will take into account] for S.9 exemption:

• addressing harmful external effects that the markets have failed to correct;
• creating new greener products;
• reducing production and distribution costs, for example by creating economies of scale in relation to a new more sustainable input;
• introduction of cleaner production and distribution technology; and
• driving new innovative environmentally friendly processes.

these benefits must be objective, concrete and verifiable, although longer term future environmental benefits may be relevant

CMA consider environmental benefits to be “efficiencies” for s.9

Condition 2 – Indispensability

parties must demonstrate that the restriction of competition is indispensable = “there must be no less restrictive but equally effective, alternative” [=where the parties can demonstrate that they would not be able to achieve the same level of benefits, or obtain those benefits as quickly, if they were acting independently]

examples [of agreements of indispensable sustainability]:

• competitors entering into a collective purchasing arrangement to increase demand and drive economies of scale for a new more sustainable input (e.g. a plastic replacement); and
• an agreement between competitors to switch to a more environmentally friendly (but more expensive) input in circumstances where no single company would be incentivised to make that change independently – i.e. where there is a “first mover disadvantage”.

…BUT CMA makes clear that where there is a demand for a sustainable product, and customers will buy the more expensive sustainable product, businesses must compete

Condition 3 – Consumer benefit

consumers must receive a fair share of any benefit

-The conservative interpretation: only purchasing consumers can be considered when assessing whether a fair share of the benefits have been passed on. 

However, this interpretation falls down when considering sustainability agreements, because the true environmental cost of a product is not only borne by the purchasing consumer, but spread across society (negative externalities).

-The non conservative interpretation:  both “in-market” benefits and “out-of-market” benefits should be taken into account.  furthermore, if negative externalities were factored into prices (via government policies), e.g. through an effective carbon pricing system, this point would become moot

The CMA’s interpretation, is conservative [that only in-market benefits should be taken into account], except with respect to climate change agreements

This can create challenges where the environmental benefits of a given agreement are enjoyed far beyond its consumers, or where those consumers are insensitive to a given sustainability benefit that has significant value

ec.cma:  consumers in “related” markets can be taken into account, provided the consumers affected by the restriction and receiving the benefit, are “substantially the same or substantially overlap

Once the relevant consumers have been identified, the parties must quantify the benefits of the agreement and demonstrate that they are sufficient to offset the harm [arising from the restriction of competition].

in many cases it will not be necessary to quantify the benefits precisely, particularly where they are clearly sufficient to offset the harm to competition, for example because the agreement will give rise to only a limited restriction of competition but a significant sustainability benefit

example of ‘established techniques’ that can be used: – instruments for carbon pricing – eg the UK Emissions Trading Scheme to put a price on the greenhouse gas emissions

the quantification exercise should be proportionate: “businesses should apply these techniques commensurate with the size of the agreement’s effects” and “follow best practice in the industry”  

<> cocoo will challenge these Calculations done by firms

Climate change agreements [CCAs]

The CMA exempts ccas if the “fair share to consumers” condition can be satisfied, taking into account the totality of the benefits to all UK consumers, not just those that are affected by the distortion of competition

the parties to the cca need to demonstrate that its benefits are in line with legally-binding cca requirements, or well-established national or international targets, that UK consumers, as a whole, benefit, and that the benefits offset the harm…..but is not always be necessary to precisely quantify/balance those benefits…..eg. where the benefits to wider society are obvious and significant, but the competitive harm is likely to be low [eg limited increase in price or reduction of choice to consumers]

What are ccas?

are a subset of environmental sustainability agreements [ contribute towards the UK’s binding climate change targets under domestic or international law]  = uas that reduce the negative externalities from greenhouse gases emitted from the production and consumption of goods and services]

an agreement to reduce or eliminate certain types of plastic packaging , reduces carbon emissions during the production process, thereby “reduces the negative externalities from greenhouse gases” such that it could be classified as a cca…. in practice, the cma will only clasify it as a cca if the ua achieves large reductions in greenhouse gas emissions

<> cocoo will fight plastics, arguing that the reduction in neg.ext. is large enough to be a cca, thus clearing the anticomp merger……or that the merger should be blocked becos the reduction in neg.ext is not large enough to be a cca.

<> the line between cca/noncca, is very fine, invisible, subject to challenge by cocoo <> ask cma directly about particular firms/mergers….CMA has  an open-door policy: businesses to approach the CMA for informal guidance on proposed environmental sustainability agreements]…This is subject to the condition that the parties did not withhold relevant information from the CMA that would have made a material difference to its assessment

CMA publishes anonymised summaries of sustainability agreements that have been shared for cma approval

<> cocoo will seek disclosure

cl and cma are failing their duty to effectively facilitate businesses’ desire to address climate change. how?: cl , and cma interpretation of cl, should be more admissible of accepting agreements as ccas…well beyond the restrictive interpretation by the EC

Procurement Policy Note (PPN) 06/21

Some large companies already self-report parts of their carbon emissions, known as Scope 1 (direct) and Scope 2 (indirect owned) emissions. also requiring the reporting of some Scope 3 emissions, including business travel, employee commuting, transportation, distribution and waste. Scope 3 emissions represent a significant proportion of an organisation’s carbon footprint.

any organisation bidding for a contract of over £5 million per annum, must publish a compliant Carbon Reduction Plan (CRP): how your organisation intends to achieve net zero greenhouse gas emissions by 2050 (at the latest). it is far from just a paper exercise.

What do you need to do to be compliant?

To be compliant, CRPs must cover all Scope 1, all Scope 2, and some Scope 3 emissions.

• Scope 1 includes direct emissions from burning fossil fuels such as coal, oil and gas
• Scope 2 includes emissions from the generation of electricity that you use
• Scope 3 includes everything else across your entire value chain, from raw materials through logistics, processing, packaging, use and disposal of product.

CRPs must comply with the internationally recognised GHG Protocol’s Corporate Accounting and Reporting Standard

<> cocoo will challenge the credibility of firms’ crps, which fail to comply with the GHC protocol standard, thus such firms cannot bid for public tenders..and if they have already won a tender, is void….this will also affect such firms’ green credentials [ are they also greenwashing?]

GLP / CROWDJUSTICE !!!!

THE EVERYTHING NET ZERO CONTRACT [ENZC]. 70 billion pounds.

Body responsible for mediation procedures: E2BN. Unit 1 Saltmore Farm, Hinxworth

SG7 5EZ   Email Tender@E2BN.org Telephone +44 1462834588   www.e2bn.org

a small firm won the ‘public’ tender to manage the contract….why was only 1 tender received??

<> CROWDJUSTICE PAP, AND WON COSTS IN SETTLEMENT, THIS MONTH!, BY JUST ARGUING THAT THE CORNWALL SMALL EDUCTION FIRM SHOULD NOT HAVE BEEN GIVEN THE ENZC MANAGEMENT.

<> cocoo will claim that:

-A particular enzc’s terms + the way collaborating rivals balance, is causing (new or existing) collaborating rivals (eg beneficiaries of the enzc) , to cross the fine line [between wpi <> clcp]…cocoo will be challenging the way collaborating rivals balance [cl<>wpi], in breach of clcp or wpi or of remedies

clcp has a duty to facilitate rival collaboration [on wpi grounds ]…eg via the ENZC [everything net zero contract], so that collaborating rivals ‘should not’ worry about breaching clcp……BUT , indeed, they should worry…as cocoo will be challenging collaborating rivals’ balancing of [cl<>wpi] , and the terms of particular enzcs.

-enzc is strategically flawed.

-enzc management was unlawfully tendered and awarded

-e2bn (mediator contract), is in a FARM???…was unlawful awarded

-the awarded firm is failing to properly manage the enzc

-the beneficiaries of the enzct are failing their duties to implement it properly