Friday, December 23, 2016

[biofuelwatch] Fw: 'Worst kind of company': Alarm in Britain over Macquarie Bank's proposed takeover of UK's Green Investment Bank

'Worst kind of company': Alarm in Britain over Macquarie Bank's proposed takeover of UK's Green Investment Bank

London: A bipartisan coalition of former and serving British MPs has raised alarm about Macquarie Bank buying up the UK's Green Investment Bank, with the former business secretary saying the Australian investment bank is the "worst kind of company" to be acquiring the £2 billion ($3.4 billion) fund.

MPs expressed fears that Macquarie Bank, known in Australia as the "millionaires factory", would acquire the Green Investment Bank (GIB) only to strip it of its most profitable parts, abandoning its environmental purpose.  Initially Parliamentarians had feared that if owned privately the Green Bank would expand beyond its remit.  But sources said that with Macquarie Bank as the likely owner, the fear is now that the Green Bank will be chopped up and sold off according to its financing arrangements, a practice known as "asset stripping" which would trigger a flight of staff and destroy the Bank's ability to carry out it's green mission.

Banks admit breaking cartel laws

ANZ Bank and Macquarie Group are facing multimillion-dollar fines over allegations of engaging in cartel conduct over trading in the Malaysian ringgit. Vision courtesy ABC News 24.

The British government had been expected to announce by the end of 2016 who would purchase the GIB, which the Tory government, under the leadership of the then Prime Minister David Cameron announced would be privatised in June 2015. The formal sell-off process began in March and Australia's Macquarie Bank is poised to be announced as the winning bidder. Bloomberg on Wednesday, citing a source familiar with the process, reported the UK government is set to agree to a deal to sell the GIB to Macquarie Group in early January.

But that prospect has alarmed some MPs who say Macquarie Bank's past behaviour disqualified it to look after the green bank
The former Tory minister for energy and climate change Gregory Barker who helped create the Bank has called for an urgent halt to the privatisation process.

"Am increasingly alarmed that sale of #GIB will now see it broken up so much it threatens its future as enduring institution," he wrote on Twitter.
"#slamonthebrakes," he added.

In 2013, Britain's influential Sunday Times published an article calling Macquarie Bank "the vampire kangaroo" over the Macquarie-led consortium's management of Thames Water which it acquired in 2006.
The former Liberal Democrat MP Simon Hughes told the paper that under Macquarie "Thames has paid out large dividends, run down its capital [and] not paid taxes."

Former Liberal Democrat MP and secretary of state for business Sir Vince Cable echoed this, telling Fairfax Media the Australian investment bank was "notorious for pursuing short-term profitability at the expense of long-term sustainability".
This is the worst kind of company to be entrusting maintaining the integrity and green mission of the bank.
Britain's Former Secretary of State for Business Vince Cable
"This is the worst kind of company to be entrusting maintaining the integrity and green mission of the bank," he said.
Sir Vince said while he opposed the privatisation of the bank, he would prefer a different company to Macquarie if the sale had to go ahead.

"A company whose track record is better aligned with the objectives of the bank," he said.
He also proposed a "golden share arrangement" where the UK government would be able to force Macquarie to uphold the Bank's green mission.

"But if it did so I suspect that Macquarie would no longer be interested," he said.
Sir Vince said he believed the Tory government was having second thoughts about offloading the bank to Macquarie, fearing "reputational damage".

The Labour MP and opposition spokesman for business, energy and industrial strategy, Clive Lewis, also backed a golden share arrangement "to ensure beyond any doubt that the bank will be retained as a single institution … even if it causes Macquarie to pull out of the deal."

"If it's broken up, sold off and its green commitments forgotten, not only will the taxpayer lose the healthy returns the GIB has been providing, but the UK risks breaching international and domestic climate targets," he said.

And the first Greens MP elected to Britain's parliament, Caroline Lucas, said Macquarie Bank had a track record of supporting "climate-wrecking projects". "The government's preferred bidders, Macquarie, are an Australian-based bank funding fossil fuel extraction projects across the world. From open-cast coal mines in China to fracking here in the UK, Macquarie has a track record of [supporting] climate-wrecking projects."

Fairfax Media approached Maquarie Bank in London for a response to the MPs concerns but the bank said it would not be commenting.  The UK's Green Investment Bank began investing in green energy and infrastructure projects in 2012, making it the first green bank in the world at the time.
Australia's Clean Energy Finance Corporation, established by the former Labor Gillard government in 2012, mimics the bank.
Both banks take a commercial approach to financing clean energy projects which would otherwise struggle to find private sector funding.
The CEFC said in July this year that since its inception in 2013 it has invested $2.3 billion in projects with a total value of $6.6 billion.  The GIB says it has funded £2.7 billion worth of a total £11.1 billion worth of transactions in the green economy. In 2015 it began turning a profit.


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Thursday, December 15, 2016

[biofuelwatch] British government’s foreign investment arm owns a 67% shares in controversial palm oil company

'Exploited' workers, hotels and online shopping funded by aid
Published: 09 Dec 2016
Posted in:  CDC | Canada | DRC | Feronia | Phatisa | UK
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Workers at Feronia's Lokutu nursery, DRC, March 2015 (Photo: GRAIN)
The Times | 9 December 2016

'Exploited' workers, hotels and online shopping funded by aid
Billy Kenber, Investigations Reporter | Alexi Mostrous, Head of Investigations
Deep in the tropical jungle in the north of the Democratic Republic of Congo lie three palm oil plantations.
Run by Feronia Inc, which is based in Canada and, until recently, had subsidiaries in the Cayman Islands, the plantations are the perhaps unlikely recipient of tens of millions of pounds in British aid money.
CDC Group, the British government's foreign investment arm, owns a 67 per cent stake in the company, having put $41 million into it since 2013.
Feronia Inc's website prominently features photographs of smiling children and slick videos showing workers playing football or talking about how much they like their job. One worker, Manu, who uses the nickname Botalu Boyi, describes how he is given a house and medical access and is "employed on a contract" and paid well.
However, a recent report by nine charities including RIAO-RDC, a Congolese NGO, and the western charities Grain and War on Want, levels a string of criticisms against the company, including allegations of land grabs, low pay and exploitation.
"Living conditions for communities within Feronia's oil palm plantation concessions remain abysmal," the report claims. "The company occupies lands that are essential to the livelihoods of local people and fails to provide decent wages and basic services."
The report claims that some workers receive as little as $1.25 a day, well below the DRC's minimum wage.
Feronia runs three large plantations along the Congo River, where palm fruits are harvested and ground up to extract their oils. It has been heavily backed by CDC and other development finance institutions that have said they want to improve workers' conditions.
CDC policies mean it cannot invest in companies with land disputes, employment rights violations or corrupt practices.
Feronia rejected the charities' criticisms and said that its purchase of the plantations in 2009, followed by the investment of CDC and others, had saved thousands of jobs. It said it was striving to improve conditions and had provided access to schools and hospitals for the community.
Last year, CDC said its investment had allowed average wages for plantation workers to increase by 70 per cent to $4 a day. However, the report said pay stubs from workers at Feronia's plantations showed that "superior" workers were still paid $2 a day all last year and casual workers, the vast majority, received no more than $1.25.
The minimum daily wage in DRC is 1,680 Congolese francs, which is worth $1.75 but has actually fallen in dollar terms since it was set in 2009, when it was worth $3.
About 80 per cent of plantation workers are not permanent employees and are paid for units of work carried out instead of a day rate. Feronia and CDC said that permanent workers received at least 100 per cent of the DRC minimum wage and that its use of casual staff was necessary because the plantations had "an ageing permanent workforce who are not fully able to undertake some of the more physical work required at this stage in the company's redevelopment".
Workers have also complained that wages are often paid several months late and that on occasion they receive refined palm oil or soap in lieu.
Feronia and CDC admitted that workers were sometimes paid late because of a complicated payroll process and difficulties transporting cash to the sites. It said that permanent staff could choose to receive up to 15 litres of palm oil at a reduced rate and could also buy soap, but were not forced to.
The largest of Feronia's three plantations is called Lokatu and covers 63,000 hectares. The company's ownership is heavily disputed by local community leaders.
Last year 60 local chiefs from the areas covered by Lokatu issued a signed declaration stating that the company had never consulted them.
Feronia also faces allegations that local communities have been illegally deprived of their lands at its Boteka plantation. A 2013 letter from village elders to the DRC's prime minister concluded: "With all our energy, we deplore and denounce this illegal occupation of our territories, an occupation . . . which has made us extremely poor and will end in our collective death."
Feronia said it did not own the land on which it operated but leased it from the DRC government through "more than 200 fixed-term, renewable land titles", many dating back at least 100 years. It said it "strictly follows legal process" when renewing leases.
Saranel Benjamin of War on Want, one of nine organisations behind the report, said the CDC had not done due diligence before investing. "The lack of oversight and due diligence is shocking, particularly when Dfid is now seeking to funnel more public money through its private equity arm," she said.
Dfid said that Feronia was the type of challenging investment that CDC should be undertaking and that robust due diligence had been undertaken.
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Source: The Times


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Monday, December 12, 2016

[Biofuelwatch] Biofuelwatch December Newsletter


Biofuelwatch December newsletter, 2016
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Dear subscriber,

Welcome to our December newsletter, with information on our recent and upcoming events and campaigns. It's the darkest time of year and currently easy to feel pessimistic, but let's use 2017 to work towards a safer future for biodiversity and the climate.

1.Tell the UK Government: Stop subsidising more polluting, forest-destroying biomass power
2. Still spaces left at the cross-party biomass briefing - December 14
3. UK Coal Phaseout Consultation: Joint briefing by Coal Action Network and Biofuelwatch
4. October's #AxeDrax demonstrations in London and Yorkshire
5. European Commission releases draft post-2020 Renewable Energy Directive - lessons not learned
6. Update from the Campaign to Stop GE Trees
7. Gene drives and the Convention on Biodiversity meeting, Cancun
8. Is Ecotricity's "Green Gas from Grass" the answer to fracking?

Interested in hosting a talk about the impacts of biomass power stations, biofuels or large-scale bioenergy in general?  Please contact us and we will try and get a speaker.

You can also make a donation, and get in contact with us here.

1. Tell the UK Government: Stop subsidising more polluting, forest-destroying biomass power

The government is asking for your views on subsidies for biomass electricity. Biomass generates about 9% of the UK's energy, and that proportion is steadily growing, largely because of the generous subsidies biomass is given - about £817 million in 2015. Biofuelwatch has a form you can use, with a letter to base your submission on if you don't have time to write your own. The deadline for this is 20 December.

For more information on all the reasons why we want to end biomass subsidies, take a look at our new webpage.  We have uploaded a fully referenced version of the draft letter to the Government here.

3. Still spaces left at the cross-party biomass briefing - Wednesday, December 14, 1-2.30 pm

Wednesday 14 December 13.00-14.30 
The Wilson Room, Portcullis House, Victoria Embankment, London, SW1A 2JR
​​Hosted by Glyn Davies MP, member of the Environmental Audit Committee​,
Tommy Sheppard MP (SNP)​ and
Caroline Lucas​ MP​.​
The briefing will cover:
  • Why the ​​EU's​ historic​ approach to bioenergy is wrong – and
    how it can be fixed in UK policy
  • The size of the bioenergy carbon loophole, and what it means for efforts to address climate change
  • The sources and net greenhouse gas impacts of biomass currently burned in the UK, and what the future holds
​​Dr Mary Booth, PhD​ (Director of the US NGO Partnership for Policy Integrity) will discuss climate impacts and regulation of biomass burned in the UK, including North American wood pellets.
Duncan Brack (Associate Fellow, Chatham House) will discuss implications of bioenergy carbon accounting loopholes for current efforts to reduce greenhouse gas emissions.
​Please try and let us know you are coming.​
​ For people outside the Palace of Westminster we have set up ​an eventbrite page backed up by a facebook event page.​

2. Coal Phase-out consultation

The government has announced plans to phase out coal by 2025, and has released a consultation paper about its proposals. This sounds like a good thing, right? However, permitting a decade of further coal burning for electricity is not in keeping with the severity of the climate crisis, nor with the disastrous impacts of coal mining on communities and their environments around the world. The government is actually proposing to prevent a phaseout of coal before 2025, even though without government intervention, several more coal power stations are likely to close earlier. Furthermore, they propose loopholes which could allow coal to be burned indefinitely.  Those include burning even more wood in coal power station, despite the fact that Drax alone already burns more wood annually than the UK produces every year!

Coal burning for electricity should end as quickly as possible, not continue for a decade or beyond. We need to switch to lower energy consumption from more sustainable, genuinely renewable low-carbon sources as soon as possible.

You can read all about the consultation, and guidelines for making a submission, in our joint briefing with the Coal Action Network. The consultation is open until 1st February 2017. The coal industry will doubtless respond to the consultation to push for the greatest loopholes possible. We can counter this narrative by responding to the consultation, and in public.

4. October's #AxeDrax demonstrations in London and Yorkshire

This October, we helped to organise two demonstrations in collaboration with the Coal Action Network, London Mining network and others:
First we went to London for a small protest against subsidies for Drax's biomass burning at the new department for Business, Energy and Industrial Strategy (BEIS), urging the department to turn over a new leaf and stop subsidising energy that damages the climate, forests and communities.
We heard speakers including visitors from coal-affected areas of Colombia and Indonesia, as well as members of Fuel Poverty Action, the London Mining Network and Biofuelwatch. We finished by delivering a petition signed by 145,000 people to BEIS, calling for an end to subsidies for biomass at Drax.
Then on October 22 in Yorkshire, about 60 people gathered at Drax power station itself, to commemorate ten years since the world's first Climate Camp at Drax and to name the work still to be done for climate justice, such as shutting down Drax.
There were a range of speakers and performers, reflecting the diversity of extreme energy problems - and possibilities for change - that we are currently experiencing.

More activities against Drax will be happening in the new year - please contact us if you would like to get more involved in making these protests happen. If you are based in Yorkshire we can put you in touch with other local campaingers there, and if you are in London you can get involved with London Biomassive to create the next London event.
If you missed this demo, see the zine that people collaborated to produce for it online.
See also new Drax movie by Jo Syz, with footage of this demo and previous Biofuelwatch actions. 

5. European Commission releases draft post-2020 Renewable Energy Directive: Lessons not learned

At the end of November, the European Commission finally published the long-awaited proposal for a new Renewable Energy Directive (RED), which would come into effect in 2020.  Unfortunately, they seem to have learned nothing from the disastrous experience with the expansion of biofuels and wood-based bioenergy triggered by the EU's existing directive since 2010.
See here for a good article about the proposals, which refers to a joint press release by civil society groups including Biofuelwatch.
The overall renewable energy target is to be raised from 20% in 2020 to 27% in 2030.  If by renewables the EU simply meant wind and solar power and other low-carbon, no-burn technologies, then the new target would simply be way too unambitious.  But unfortunately, biofuels and biomass remain part of the mix.  And this means they'll almost certainly account for most of the additional 'renewables', since they already make up two-thirds of those across the EU.
The biofuel target for transport fuels is to be replaced with a much smaller one for waste based and  'advanced biofuels', even though the majority of 'advanced biofuels' proposed don't exist and aren't likely to become commercially viable in the foreseeable future.  But biofuels made from food, including palm oil, soya and cereals, can still account for the equivalent of 7% of total transport fuel, which is a lot more than current production.  Their share is to be gradually reduced - but too slowly, and way too late, given their disastrous impacts on forests, communities, food sovereignty, biodiversity and, last but not least, on the climate.
The use of biomass, which means mainly wood, on the other hand, is to be drastically expanded.  Some extremely weak sustainability standards are proposed for biomass burned in larger power stations, but as with biofuel standards, there will be no external auditing and verification as to whether they are being complied with.  And standards could never make a fundamentally unsustainable demand for wood (or anything else) sustainable.  Interestingly, the proposed biomass standards closely resemble those introduced by the UK government last December.  Both the UK government and the EU Commission have been lobbied strongly by industry, including by the Sustainable Biomass Partnership, set up and run by large European Energy companies and chaired by Drax's CEO. 
The European Parliament, European Council and European Commission will be debating and finalising the proposal over the next two years.

6. Campaign to Stop GE Trees update

The Campaign to Stop GE Trees organized a Southeast Strategy Meeting in South Carolina from October 7-12, just days after hurricane Mathew passed through with devastating consequences to the region.  The purpose was to build relationships with organizers in the southeast region to oppose the expansion of tree plantations, and introduction of genetically engineered trees to the southeast states.  The Southeast USA is considered 'ground zero' -  the source for majority of wood pellets exported to Europe, including Drax in the UK.  Government and industry views the region as the area most suited to provide biomass not only for European pellet demands, the pulp and paper industry, but an entire bioeconomy.  They cite favorable growing conditions, though the region has been suffering from multiyear drought and is currently experiencing the worst spate of wildfires in its recent history. The strategy meeting was a well organized and attended opportunity to share knowledge, build relationships, and plan future steps for building the campaign to stop GE trees.  Among other activities, the group visited a 'supertree' farm belonging to GE tree company, Arborgen, as well as a loblolly pine plantation.  Topics included the exploitation of migrant labor for industrial tree plantations promoted by South Carolina based GE tree company ArborGen, the dangerous impacts of toxic herbicides and pesticides used in tree plantations, and the links between GE trees, biomass energy and worsening climate change.

7. Gene Drives and the Convention on Biological Diversity, Cancun

The Convention on Biological Diversity is meeting in Cancun at the beginning of December.  Among issues on the agenda is continuing process on synthetic biology.  The collaboration to oppose gene drives that began in conjunction with the IUCN meetings in September, spearheaded by groups including ETC Group, Friends of the Earth US and Biofuelwatch, has been carried forward to Cancun including a demand for a moratorium on the use of gene drives put forward by 160 civil society organizations. In a press released announcement, Ricarda Steinbrecher (Federation of German Scientists) stated: "We lack the knowledge and understanding to release gene drives into the environment - we don't even know what questions to ask. To deliberately drive a species to extinction has major ethical, social and environmental implications." 

8. Briefing on Ecotricity's 'Green Gas from Grass'

Several people have contacted us with queries about Ecotricity's 'Green gas from grass' claims. Ecotricity has recently been granted planning consent for the UK's first biomethane plant using grass as the main feedstock. The company claims that such 'green gas from grass' can replace 97% of natural gas for domestic heating and hot water by 2035, and remove the 'need' for fracking, whilst helping restore biodiverse flowering grasslands. While this sounds positive, we were curious and have produced this briefing to critically examine Ecotricity's claims.
Unfortunately, what we found on looking more closely at the proposal is not encouraging.  Replacing all current domestic natural use in the UK would require at least 10.2 million hectares of grassland, which is more than twice the area used to grow agricultural crops in the UK.  It would inevitably lead to very significant and negative indirect land use change.  There are also worrying risks of methane leakage from biogas production and upgrading to biomethane.
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