Monthly Archives: November 2012

How the UN failed Sri Lanka Civilians

Leave a reply

Between August 2008 and May 2009, as the war between the Government of Sri Lanka and the Liberation Tigers of Tamil Eelam (LTTE) entered its final stages, an estimated 360,000 or more civilians were crowded into an ever smaller part of ‘the Wanni’ area of Northern Sri Lanka where many died as a result of sustained artillery shelling, illness and starvation. Almost 280,000 survivors were forcibly interned in military-run camps outside the area of conflict. The UN responded mainly through its humanitarian assistance and development frameworks; its political and human rights roles were limited. Despite the gravity of events, UN Member States did not formally consider the situation until the war ended. During the final stages, and the aftermath from May 2009 onward, the UN provided assistance to IDPs in internment camps, even as IDP rights and UN principles of intervention were not respected. Most IDPs were eventually allowed to return home. (Annex III provides a detailed account of events and UN actions)

In April 2011, the Secretary-General’s Panel of Experts (POE) on accountability in Sri Lanka issued a report recommending a review of the UN’s own actions. In a letter to the Secretary-General, the POE described UN action as a low point for the organization as a whole, and said that some UN agencies and individuals had failed in their mandates and did not uphold the UN’s founding principles. Pursuant to the POE’s recommendation, the Secretary-General established an “Internal Review Panel on UN action in Sri Lanka” (the Panel), led by Charles Petrie, tasked with providing an assessment of UN action during the final stages of the conflict and its aftermath, identifying institutional and structural strengths and weaknesses, and making recommendations to ensure a more effective UN response in similar situations. The Panel began work in late April 2012 and submitted the present report at the end of September.

For the UN, the last phase of the conflict in Sri Lanka presented a major challenge. The UN struggled to exert influence on the Government which, with the effective acquiescence of a post-9/11 world order, was determined to defeat militarily an organization designated as terrorist. Some have argued that many deaths could have been averted had the Security Council and the Secretariat, backed by the UN country team (UNCT), spoken out loudly early on, notably by publicizing the casualty numbers. Others say that the question is less whether the UN should assume responsibility for the tragedy, but more whether it did everything it could to assist the victims.

The Panel’s conclusion is that events in Sri Lanka mark a grave failure of the UN to adequately respond to early warning and the evolving events during the final stages of the conflict and its aftermath, to the detriment of hundreds of thousands of civilians and in contradiction with the principles and responsibilities adopted by Member States and the Secretariat, agencies and programs.

Decision-making across the UN was dominated by a culture of trade-offs – from the ground to UN headquarters (UNHQ). Options for action were seen less as responsibilities and more in terms of dilemmas. Choosing not to speak up about Government and LTTE broken commitments and violations of international law was seen as the only way to increase UN humanitarian access. Choosing to focus Security Council briefings on the humanitarian situation rather than the causes of the crisis and the obligations of the parties to the conflict was seen as essential to facilitate Secretariat engagement with Member States. There was a sustained and institutionalized reluctance among UNCT actors to stand up for the rights of the people they were mandated to assist. In Colombo, many senior UN staff simply did not perceive the prevention of killing of civilians as their responsibility; and agency and department heads at UNHQ were not instructing their staff in Sri Lanka otherwise.

The UN’s failure to adequately counter the Government’s under-estimation of population numbers in the Wanni, the failure to adequately confront the Government on its obstructions to humanitarian assistance, the unwillingness of the UN in UNHQ and Colombo to address Government responsibility for attacks that were killing civilians, and the tone and content of UN communications with the Government and Member States on these issues, contributed to the unfolding of dramatic events.

UNHQ engagement with Member States regarding Sri Lanka was ineffective and heavily influenced by what UNHQ perceived Member States wanted to hear, rather than by what States needed to know if they were to respond. Reflection on Sri Lanka by UNHQ and States at the UN was conducted on the basis of a mosaic of considerations among which the grave situation of civilians in Sri Lanka competed with extraneous factors such as inconclusive discussions on the concept of the ‘responsibility to protect’ and Security Council ambivalence on its role in such situations. In the absence of clear Security Council support, the UN’s actions lacked adequate purpose and direction amid the many competing factors.

Most crucially, the UN did not use all the political and advocacy tools at its disposal. In particular, it did not keep Member States or the public fully informed. Nor did it warn the Sri Lankan Government or the LTTE of the consequences of their actions, including their responsibility for possible war crimes and crimes against humanity.

Systemic failure in Sri Lanka can be distilled into the following:

(i) a UN system that lacked an adequate and shared sense of responsibility for human rights violations;

(ii)  an incoherent internal UN crisis-management structure which failed to conceive and execute a coherent strategy in response to early warnings and subsequent human rights and international humanitarian law (IHL) violations against civilians, and which did not exercise sufficient oversight for UN action in the field;

(iii)  senior staff on the ground who lacked the necessary armed conflict, political and IHL experience to deal with the challenge presented by Sri Lanka, and who were given insufficient support;

(iv) the ineffective dispersal of coordination of UN action and monitoring of human rights and IHL violations across several different UNHQ entities in Geneva and New York with overlapping mandates;

(v) inadequate political support from Member States and inadequate efforts by the Secretariat to build such support;

and (vi) a framework for Member State engagement with human rights and IHL protection crises that is outdated and often unworkable.

Overview of Recommendations

The Panel’s Terms of Reference imply that it should gather lessons from an historical event that has passed. However, the magnitude of the violence in the Wanni, following decades of strife and injustice, continue to be felt by Sri Lanka’s communities. Sri Lanka’s peaceful and stable progress will require a process of accountability and reconciliation and a political solution to the long-standing grievances of all communities, as well as a response to ongoing and new concerns, and prevention and protection in the future. Working closely with the Government of Sri Lanka, the UN needs to take on this further challenge.

This report’s recommendations for the UN system are designed to be politically feasible and resource neutral, while encouraging profound changes in the institution’s approach to similar situations in the future. The broad lines of the recommendations include the need to:

Restate the vision of the UN: The Secretary-General should restate a vision of the UN’s most fundamental responsibilities to include the defence of human rights. The vision should help frame strategy and policy responses by senior levels of the organization to situations of massive human rights violations.

Embed a UN human rights perspective into UN strategies: The UNHQ needs stronger capacity to include human rights, IHL and international criminal law perspectives in overall analysis and strategy for any situation. It should also have stronger capacity to build political support from Member States for addressing grave concerns.

Strengthen the management of the UN’s crisis response: To ensure coherent UNHQ oversight for UN strategy and action, the Secretary-General should strengthen management of the whole-of-UN response to situations of massive human rights violations.

Promote accountability and responsibility: All staff should be fully informed of, and have easy access to, procedures under which allegations of serious misconduct by staff can be reported and promptly investigated.

Improve UN engagement with Member States and building of political support: For every such crisis, the Secretary-General must have an array of options that will permit him to fully inform Member States and suggest appropriate actions.

Better address violations of privileges and immunities: When a Member State engages in sustained actions against UN personnel and institutions, including violations of UN privileges and immunities, the Secretary-General should review options for response by the Secretariat and invite Member States to consider what action they could also take.

Coming at the beginning of his second term, the Secretary-General’s decision to commission an internal review is an extremely courageous step. The Panel believes that the report’s findings and recommendations provide an urgent and compelling platform for action. The UN’s failure to adequately respond to the events in Sri Lanka should not happen again. When confronted by similar situations, the UN should be able to meet a much higher standard in fulfilling its protection and humanitarian responsibilities. In support of this effort, the Panel strongly urges that its report be made public.

This executive summary was obtained fromhttp://www.innercitypress.com/

Final redacted version of UN report

BBC initial report (unfortunately does not contain the leaked version as a pdf)

Oil Sands of Canada

Leave a reply

Canada’s oil sands contain some 170 billion barrels of oil that can be recovered economically with today’s technology (and perhaps ten times that in total). Canada thus has the world’s third-largest proven oil reserves, after Saudi Arabia and Venezuela. And since most oil-rich nations’ reserves are under state control, Canada has the largest reserves that private companies are free to invest in—more than half of the global total, reckons Ken Hughes, Alberta’s energy minister.

Other countries welcome the idea of plentiful energy from a stable democracy. It could reduce the rich world’s dependence on the Middle East. There are “no bribes or body bags”, grins an oil-industry booster. And the potential is immense. A new study by the Alberta Geological Survey estimates that the province has huge resources in its shale beds as well as its oil sands: 3,400 trillion cubic feet of natural gas and 420 billion barrels of oil—numbers comparable to America’s.  However, Canada’s output of 3.5m barrels of oil a day is less than half that of America. (America’s output is set to exceed Saudi Arabia’s; see article.) Several problems hobble Canadian energy: geology, capital, people and pipes.

First, geology. Canadian oil is hard to extract. It mostly comes in the form of bitumen, which is “hard as a hockey puck” at 10°C, as the Canadian Association of Petroleum Producers (CAPP), an industry body, puts it. If it is far below ground, it must be blasted with steam to make it flow, and then pumped out. This process (known as “steam-assisted gravity drainage”) was developed in Alberta. In the past decade, with high oil prices, it has made the oil sands economical to exploit. But precariously so: the best projects break even when oil is $30 a barrel, but many new ones need it to be $80 or more. (West Texas Intermediate is currently $85.)

Canada gets less than it should for its oil because it lacks enough pipelines. Environmentalists oppose them, arguing that pipes leak (which is always possible) and that Canada’s heavy oil causes more greenhouse-gas emissions than other oil (which is true, but not by much). President Barack Obama has delayed the approval of a pipeline called Keystone XL, which would move Canadian oil to America’s Gulf coast. A decision is expected soon.

Alex Pourbaix of TransCanada, the firm behind the Keystone pipeline, insists that the project will be good for both countries. Canada forgoes a fortune—perhaps $20 a barrel—because it cannot get its oil to the sea. Canadian gas sells at a discount, too: North American prices are far lower than those in Asia.  Another proposed pipeline, Northern Gateway, would carry oil to Canada’s west coast, whence it could be shipped to Asia. Canada would benefit from having a choice of customers. But the government of British Columbia, and various aboriginal groups, have yet to say yes.

To exploit its hydrocarbons, Canada needs capital: some $50 billion-60 billion a year, on recent trends. Such sums are “far more than Canadian capital markets can raise,” says Dave Collyer of the CAPP. Canada gets plenty of foreign investment: Syncrude, one of the biggest oil-sands developers, is a joint venture that includes American, Chinese and Japanese partners. But lately the country has grown frostier towards foreign capital.

In October Canada’s federal government temporarily blocked a $5.2 billion bid by Petronas, Malaysia’s state energy giant, for Progress Energy Resources, a Canadian natural-gas company. It has yet to approve a $15 billion offer by CNOOC, a Chinese state-owned firm, for Nexen, a Canadian oil-and-gas firm. A deadline passed last week; a decision may come next month. Mr Hughes says he is keen on foreign investment so long as foreign firms abide by the same rules as Canadians; but it is not up to the provincial government.

The other big bottleneck is human capital. Hardly anyone lives near the oil sands, so labour must be imported, from other parts of Canada and from abroad. People from 127 countries live in Fort McMurray, says Ken Chapman of the Oil Sands Developers’ Group. They speak 69 languages. The Walmart in town looks like the United Nations, except that all the shivering Africans are buying woolly hats. Mr Hughes expects to see a skills shortfall of 100,000 people in Alberta by 2017. Canada’s immigration rules are more liberal than America’s, but firms still gripe about delays. An Irish worker in Fort McMurray complains of having to fly to Calgary to sit a test of English proficiency. It’s her native language, and the test is online.

Companies poach staff from each other, bidding up labour costs. It would be easier to attract workers to Fort McMurray if the town were more liveable; a one-bedroom flat can cost $2,000 a month. To build more homes, however, the town must wrestle with provincial red tape—and also attract legions of builders, plumbers and electricians, all at inflated wages.

Working conditions in the oil sands are tough. Touch a metal pipe with your bare hand at minus 40 and it sticks. “It’s not for everybody,” shrugs an oil-firm boss. At remote work camps, companies provide hot food, warm cabins, broadband and squash courts. All this is costly. Many firms make equipment elsewhere and truck it in, so that fewer people have to toil in the cold. Some are hoping dramatically to raise the proportion of man-hours worked off-site.

With so many bottlenecks and a volatile oil price, firms are growing cautious. Suncor Energy and Canadian Natural Resources, among others, are putting new investments on hold. “It’s the uncertainty,” says Marcel Coutu, the boss of Canadian Oil Sands, a firm that owns 37% of Syncrude. “No one knows when or whether those pipelines will be built.”

Canadian energy: The sands of grime, Economist, Nov. 17, 2012, at 62

Wall Street Manipulation of Energy Markets

Leave a reply

The U.S. Federal Energy Regulatory Commission (FERC) is taking on big banks for their questionable energy trade.  The Federal Energy Regulatory Commission has slammed Barclays (pdf) with a demand to pay $470 million in fines for allegedly manipulating electricity markets in the western US to benefit the bank’s financial swap positions from 2006 to 2008.  Messages and email exchanges between Barclays energy traders released earlier this month reflect their efforts to manipulate and cheat their way to profits. What’s more disturbing is the glee the Barclay’s traders took in manipulating the energy markets with a total disregard for the costs to consumers.

The Barclays traders’ own words are damning:

“I totally f**kked with the Palo mrkt today. . . . Was fun. Need to do that more often.”

The attitude expressed doesn’t get much clearer than that.

In another instant message, the same Barclays trader wrote, “I’m gonna try to crap on the NP light and it should drive the SP light lower.”

The response from his colleague: “That is fine.”

Enron’s energy traders could have written the Barclays’ traders’ scripts. Remember Enron traders gloating, “He just f—s California,” and “He steals money from California to the tune of about a million” a day?  Only the traders’ attitudes are more obscene than their language. So saturated in arrogance, the traders had no concern they might get caught — which makes it even better that they did.

Though FERC hasn’t historically had much to do with regulating Wall Street, that is changing. FERC now also is going after JPMorgan Chase (pdf) and Deutsche Bank  (pdf) on similar charges.  The Los Angeles Times reports that JP Morgan’s questionable trades in the power market in 2010 and 2011 may have cost California residents and businesses more than $200 million. The no-holds-barred pursuit of profiteering no matter what laws and regulations are violated or what the cost is to the public has become a hallmark of Wall Street from Enron to Barclays.

While Wall Street may not have gotten the message that Enron-esque conduct is wrong, it’s gratifying to see FERC step up to hold banks accountable using the power from a post-Enron law. The 2005 Energy Policy Act gave FERC the authority to prevent market manipulation in the energy markets.  Not only does FERC have the power to fine companies as much as $1 million a day per violation, but it also has the ultimate weapon: the ability to suspend authorization to sell. JP Morgan knows that FERC is not afraid to flex this muscle.

Just last week, FERC suspended the authorization for a JPMorgan unit, J.P. Morgan Ventures Energy Corp., to sell electricity at market-based rates for six months beginning next April. FERC took this step because it found that JPMorgan had filed “factual misrepresentations” and omitted material information in filing with FERC and in communications with the California Independent System Operator. JPMorgan will be able to offer electricity for sale only at prices based on specified factors, so that utilities can continue to be able to meet demand.  FERC is relatively new to dealing with Wall Street, but it is quickly learning that a strong jolt is necessary to get banks to comply.

The Commodity Futures Trading Commission, which often works side-by-side with FERC, is expected to see similar cases of energy market manipulation as a result of whistleblower information provided to the CFTC’s new whistleblower reward program created under Dodd-Frank. The outcome of the FERC cases against Wall Street could provide a useful roadmap for future whistleblowers.

Excerpt from, Erika Kelton, Barclays’ Traders Show How Much Fun Wall Street Has Manipulating Markets, Forbes, Nov. 20, 2012

Rating Agencies on Fire

Leave a reply

The ruling in the Federal Court of Australia on November 5th held Standard & Poor’s (S&P) jointly liable with ABN AMRO, a bank, for the losses suffered by local councils that had invested in credit derivatives that were designed to pay a high rate of interest yet were also meant to be very safe. The derivatives in question were “constant proportion debt obligations” (CPDOs). These instruments make even the most ardent fans of complex financial engineering blush: they are designed to add leverage when they take losses in order to make up the shortfall. S&P’s models, which the court said blindly adopted inputs provided by ABN AMRO, gave the notes a AAA rating, judging they had about as much chance of going bust as the American government.

S&P denies that its ratings were inappropriate, and plans to appeal. But evidence before the court suggests a world of harried analysts being outsmarted by spivvy bankers. It also indicated a disturbing lack of curiosity by S&P analysts and a desire to cover up for the firm’s failings even when they fretted about a “crisis in CPDO land” and worried that some buyers of these products were “in no hurry to stay in front of the truck”. Instead of warning investors that it had made mistakes, the court found that the firm continued to provide glowing opinions on new CPDOs coming out of the ABN AMRO factory.  There is nothing in the ruling to suggest the shoddy behaviour that took place in this instance was widespread across the firm. It would be a mistake to attribute all ratings that subsequently turn out to be wrong to negligence. Making predictions is hard, as Yogi Berra, a famously quotable baseball player, noted, especially when they are about the future.

But the Australian case does challenge a central part of the defence proffered by S&P and other ratings agencies (Moody’s and Fitch are the other two big ones) in some 40 ongoing cases worldwide alleging negligence. They argue that ratings are merely opinions and protected by constitutional safeguards on free speech, and that only imprudent investors would take decisions solely based on them.  This defence has already worked in a number of high-profile cases in America. Investment analysts and lawyers reckon that there is no sign that courts elsewhere are likely to follow the Australian ruling; it may not even survive the appeal. But the reasoning in the Australian case is persuasive. The judge argued that agencies could not wash their hands of all responsibility if investors took their ratings at face value and then lost money. “The issuer of the product is willing to pay for the rating not because it may be used by participants and others interested in financial markets for a whole range of purposes but because the rating will be highly material to the decision of potential investors to invest or not,” the judge wrote.

The tendency of investors to rely on ratings is reinforced by the privileged access that agencies have to information about issuers. The agencies’ defence that theirs is just an opinion wears thin when, having looked under the hood and kicked the tyres, they then tell investors to make up their own mind from a distance. It would help if regulators forced issuers of bonds and other rated securities to provide more public information. That would allow investors to do more of their own due diligence and enable more competition between agencies to provide the best analysis to investors rather than the best service to issuers.

Ratings agencies: Crisis in ratings land?, Economist, Nov. 10, at 74

__________________________________________________________

Italian prosecutors filed suit against five former employees of Standard and Poor’s (S&P) and two former employees of Fitch [corporate websites] for allegedly manipulating the market and abusing privileged information that led to the rating agencies’ downgrades of Italy. Though magistrates in Rome and Milan have refused to support the claim, prosecutors from the southern town of Trani contend that the agencies failed to respect European rules of transparency.

Divide and Conquer: the Mekong River

Leave a reply

Laos has given the go-ahead to build a massive dam on the lower Mekong river, despite opposition from neighbouring countries and environmentalists.  Landlocked Laos is one of South-east Asia’s poorest countries and its strategy for development is based on generating electricity from its rivers and selling the power to its neighbours, says the BBC’s Jonah Fisher in Bangkok.  Xayaburi is being built by a Thai company with Thai money – and almost all of the electricity has been pre-sold to Thailand, BBC says.

Countries such as Cambodia and Vietnam point to a report last year that said the project should be delayed while more research was done on the dam’s environmental impact. Up to now, Laos had promised not to press ahead while those concerns remained…

Laos has followed the letter, if not the spirit, of the 1995 Mekong Agreement. Under its terms, the countries that share the Mekong agree to prior consultations on the possible cross-border impact of any development on the river before deciding to proceed. Laos believes it has just done that.  Cambodia and Vietnam expressed concerns about the dam’s impact on fish migration and the flow of sediment downstream. So the Laos authorities brought in their own contractors and now say the problems have been solved.  Critics of the dam say many of the modifications to it are untested and the decision to proceed amounts to a huge experiment on one of the world’s great rivers.

Four dams already exist in the narrow gorges of the Upper Mekong in China but until now there have been none on the slower-moving lower reaches of the river..Laos deputy energy minister Viraphonh Virawong said work on the Xayaburi dam itself would begin this week, and hoped it would be the first of many….

Excerpt, Laos approves Xayaburi ‘mega’ dam on Mekong, BBC, Nov. 5, 2012

Barclays and Qatar: an Unholy Alliance?

Leave a reply

U.S. authorities are investigating Barclays  for potentially violating anti-corruption laws during its scramble to raise money from Middle Eastern investors in the early days of the financial crisis.  The probe, being conducted by the Justice Department and the Securities and Exchange Commission, is at an early stage…The U.S. investigation follows a similar probe that British regulators opened earlier this year.

According to people familiar with the probe, it is examining Barclays’ use of middlemen serving as brokers to connect the bank with powerful Middle Eastern interests at a time when the bank was seeking a cash injection from investors in the region.  Barclays disclosed the investigation at the same time it reported a GBP106 million third-quarter loss…The new investigations represent the latest blows to a once-proud British institution. This summer, Barclays paid about $450 million to settle U.S. and British charges that it sought to manipulate benchmark interest rates, sometimes at the behest of top executives. The ensuing political furor led to the abrupt resignations of Barclays’s chairman, chief executive and chief operating officer.

The Justice Department and SEC investigation involves possible violations of the Foreign Corrupt Practices Act, which among other things bars companies with U.S. operations from bribing overseas politicians or corporate executives in order to win business.  In June 2008, as the financial crisis was gaining steam, senior bankers at Barclays persuaded the Qatar Investment Authority and other investors to inject about GBP4.5 billion into the British bank, seeking to erase fears about Barclays’s health. As part of that deal, Barclays hired the Qatar fund to provide “advisory services’ in the Middle East. The bank later disclosed that it was paying about GBP238 million in fees and commissions to Qatar Investment Authority and related entities.

This summer, the U.K.’s Financial Services Authority launched a formal investigation into Barclays’s public disclosures of those arrangements. The probe focused on past and present Barclays executives, including finance chief Chris Lucas, as well as on the manner in which Barclays wooed the Qataris to invest, according to people familiar with the matter.

Excerpts, Barclays Faces U.S. Anti-Corruption Probe, MarketWatch, Oct. 31, 2012

An Independent Kurdistan? Ask the Oil Companies

Leave a reply

Iraq is blessed with abundant oil that is cheap to extract and close to newly built export terminals. Production has hit a three-decade high and continues to rise steadily. By 2035, predicts the International Energy Agency (IEA) Iraqi output could more than double, to 8.3m barrels per day (b/d).  But Western oil firms are increasingly reluctant to play a part in this boom. ExxonMobil appears keen to sell its stake in West Qurna, one of the giant fields in southern Iraq that will provide much of the production growth. Royal Dutch Shell and BP are both still working in the south, but unhappily so. Suffocating bureaucracy and onerous contract terms make life difficult. Heavier-than-expected costs and delays to infrastructure undercut profits.

Three years ago when they signed contracts with the Iraqi government, the oil majors were prepared to accept hiccups. But their patience has thinned with the arrival of an alternative source of Iraqi oil. Kurdistan, the semi-autonomous province in the country’s north, has been offering competing and much more lucrative deals. ExxonMobil’s decision last year to acquire six blocks in the region angered the central government, which considers the deal illegal and lays claim to Kurdish oil. But the world’s largest oil company started a trend. In July Total, Chevron and Gazprom all signed contracts with the Kurdistan regional government, potentially dooming their chances of winning future business in the south. BG, a British firm, was in Erbil, the Kurdish capital, on a scouting mission in late October.

“Kurdistan is 11 years ahead of the rest of Iraq in terms of political and commercial development,” says Luay al-Khatteeb, head of the Iraq Energy Institute, a London-based think-tank. Kurdistan’s potential oil reserves of around 45 billion barrels are less than a third of those in southern Iraq. Still, the Kurdish oil minister, Ashti Hawrami, believes output of 1m b/d is possible within three years.

The tricky part is getting the oil to market. The Kurds today export around 200,000 b/d through pipelines controlled by the central government. Mr Hawrami wants to build a new Kurdish-owned pipe to Turkey, feeding long-held dreams of Kurdish independence. That unnerves Turkey which is fighting Kurdish separatists in its south-east. Some Turkish officials seem to acknowledge the possibility of an eventual Kurdish state in northern Iraq and seek to make it commercially dependent on Turkey. Co-operating with the Iraqi Kurds would also generate lucrative transit fees and offer Turkey an alternative to oil from Russia and Iran.

The Iraqi government is pondering how to respond. It could sweeten the terms of its contracts with the oil firms in the south. That might staunch the flow of Western capital to Kurdistan. In the meantime, the main beneficiaries of the majors’ receding interest in southern Iraq are Asian oil firms. Chinese will account for about 2m b/d of Iraq’s production by 2020. Fatih Birol, the IEA’s chief economist, talks of a “Baghdad-to-Beijing” axis.

Iraq’s oil: The Kurdish opening, Economist,Nov. 3, at 49

Fradulent Quality Certificates for Nuclear Reactors: South Korea

Leave a reply

South Korea’s ambitious nuclear energy program is under intensive scrutiny and criticism after the discovery of microscopic cracks in the structure of a nuclear power plant and forgery of quality certificates vouching for thousands of components in at least two reactors.  Officials in all three major agencies responsible for monitoring the program said Friday there’s no danger to nuclear safety, but the government ordered the shutdown of the two reactors with the uncertified parts. At the same time, the head of the state company overseeing the program, Korea Electric Power Corp. has resigned for what he said were personal reasons.

A sequence of problems at a nuclear power plant on the southwestern coast fueled rising doubts about a program that’s been a centerpiece of the government’s energy policy since the first reactors went on line more than 30 years ago. Korea counts on nuclear energy for 30 percent of its electrical power, but critics are now demanding the government shut down some of the older plants and pull back from plans to build enough reactors to fulfill half the country’s power needs.  “I am worried about safety standards,” says Lee Chang-choon, who served as South Korea’s ambassador to the International Atomic Energy Agency during his long diplomatic career. “I do not have confidence and trust in the care of sensitive machinery operations.”

The trouble seemed to begin at the nuclear power plant at Yeonggwang where inspectors this week reported thousands of  “noncore components” were installed on the basis of fraudulent quality certificates. The Korea Hydro and Nuclear Power Corporation, which operates Korea’s four nuclear power plants, including 23 reactors, promised to replace all the parts by the end of the year while asking prosecutors to investigate alleged bribery.

Compounding the difficulties at the Yeonggwang plant, the ministry also reported the discovery of microscopic cracks in passages linking control rods to one of the reactors. An official at the Korea Hydro and Nuclear Power Corporation said the cracks affected warning signals on control panels but not operation of the reactors…

The underlying problem, however, is that South Korea has virtually no oil or natural gas deposits and is running out of coal. Nuclear power has long been seen as the only way to meet the demands of a growing industrial economy. Hong Suk-woon, Korea’s knowledge and economy minister, warned of severe power cuts that might affect industry and individual consumers as a result of shutdown of the two Yeonggwang reactors….

Others are still more critical. Yun Sun-jin, a professor who teaches courses on energy policy at Seoul National University, accuses the Korea Hydro Nuclear Power Corporation of placing higher priority on output with reduced emphasis on safety.  “They are decreasing the time for periodic overhaul of reactors,” she says. “They think a high operation rate means a more competitive strategy.”  She agrees with the view of the nongovernmental Korea Federation for the Environment that the government should shut down older plants and cancel plans to build new ones.  “We cannot believe nuclear power plants are safe,” says Yang-yi Won-young, in charge of the organization’s “nuclear phase-out” campaign. “The government says nuclear energy is the cheapest and cleanest, but they don’t take account of the cost of getting rid of nuclear waste.”…An official at the ministry of knowledge and economy listed 60 forged quality certificates since 2003 including more than 7,600 components, 98.4 percent of which, he says, were for the Yeonggwang plant. “These are noncore parts,” he says, including fuses, switches, and resistors that cannot be used for the core safety-related facility” and therefore “posing no threat of radiation leakage.”  The government, he adds, “will prepare and implement a comprehensive package of measures as soon as possible starting later this month to cope with the possible power shortages during this winte

Excerpts, By Donald Kirk, Cracks at South Korean nuclear plant raise safety concerns, Reuters, Nov. 9, 2012

Tricks of Illegal Waste Dumping

Leave a reply

The US Navy has launched its own investigation into allegations that its contractor has been dumping on Subic Bay hazardous wastes which it siphons from US Navy ships docked here.  In an e-mailed statement on Saturday, Cynthia Cook, deputy press attache of the US Embassy in Manila, said the US Navy had “initiated its own inquiry into allegations of hazardous waste dumping by Glenn Defense Marine Philippines, a contractor for the US Navy in the Philippines.”  Cook said the embassy was aware of the investigation being conducted by the Subic Bay Metropolitan Authority (SBMA), and that it would “take appropriate action depending on the outcome of those processes.”

The SBMA board of directors is meeting on Monday to discuss the results of the initial investigation into the reported dumping by Glenn Defense Marine Philippines, the local operator of the Malaysian-owned Glenn Defense Marine Asia, said SBMA Chair Roberto Garcia.  In a letter to the SBMA earlier, the lawyers of Glenn Defense claimed that the Presidential Commission on the Visiting Forces Agreement (VFACOM) was the only agency authorized to address complaints about toxic dumping at Subic Bay.  Also on Saturday, the Subic Bay Freeport Chamber of Commerce announced it had suspended the membership of Glenn Defense, a registered locator of the Subic Bay Freeport.

Danny Piano, SBFCC president, said the group was aware of the alleged dumping in Subic waters since October. He said the chamber’s environmental committee has been on the lookout for potential environmental problems around the freeport.  Piano recounted: “At around 8 a.m. on Oct. 15, members of the committee spotted a marine [vessel] collecting liquid waste from a US Navy ship at Alava Pier. They became curious [as to] why a [ship], and not a [sewage] truck, would be performing waste collection [for] a naval ship already berthed at a pier…  “Sensing potential hazard, the members reported the situation to the SBMA ecology department for a spot check and to make sure that proper procedures were followed in dumping the waste.”

The vessel, MT Glenn Guardian, had been carrying around 50,000 gallons of domestic waste and around 200 gallons of bilge water (or a combination of water, oil, and grease), which were untreated according to laboratory tests, Piano said.

By Robert Gonzaga, US Navy begins inquiry into toxic waste dumping, Inquirer Central Luzon, Nov. 10, 210

Bankers with Chainsaws – logging companies and their banks

Leave a reply

Some big banks do little more than pay lip service to environmental issues. HSBC likes to think of itself as different. It has signed up to many initiatives, including the Equator Principles, a set of social and environmental standards launched in 2003 for project financiers….

Sarawak (Malaysia) has lost more than 90% of its “primary” forests to logging and has the fastest rate of deforestation in Asia. Sarawak has only 0.5% of the world’s tropical forest but accounted for 25% of tropical-log exports in 2010. As timber stocks have become depleted, the loggers have moved into the palm-oil business, clearing peat-swamp forests to make way for plantations. The deforestation has been accompanied by abuses against indigenous groups, including harassment and illegal evictions. Allegations of corruption and abuse of public office dog Abdul Taib Mahmud, Sarawak’s chief minister, finance minister and planning-and-resources minister, who is believed to have firm control over the granting of logging licences. Mr Taib has long denied being corrupt.

Global Witness, a campaigning group, has analysed the publicly available financial records of seven of Sarawak’s largest logging and plantation companies.  It identified loans and other financial services from HSBC that it estimates have generated at least $116m in interest payments and $13.6m in fees for the bank since 1977. Although lending has declined over the past decade, HSBC continues to list Sarawak loggers among its clients, in apparent violation of its own Forest Land and Forest Products Sector Policy.

On paper HSBC’s forest policy gets high marks, including from BankTrack, a network of NGOs that monitors lenders. When it was drawn up in 2004, the policy required clients to have 70% of their activities certified by the Forest Stewardship Council (FSC), or equivalent, by 2009, with evidence that the remainder was legal. (The FSC is a global non-profit body that sets standards and does independent certification for logging and forest products.)

Not only did the seven firms analysed fail to meet that deadline, but none has any FSC-certified operations today. Ta Ann Holdings, for example, listed HSBC as a “principal banker” in its 2011 annual report. Ta Ann does not have FSC certification, and has failed to obtain full verification of the legality of its Sarawak concession under the independent “Verified Legal Origin” scheme. The firm has been accused of clear-felling rainforest that is home to endangered orangutan and of cutting down conservation forest for plantations. Ta Ann told Global Witness it is “collaborating closely with HSBC towards achieving full compliance” with its forest policy.

Another forestry conglomerate that is still banking with HSBC, according to its annual report, is WTK Holdings, whose intensive logging is widely believed by pressure groups to have caused landslides that ended up blocking a 50km (31-mile) stretch of river in 2010. None of WTK’s operations is FSC-certified.

In all, Global Witness identified six loans, totalling $25m, made by HSBC to non-compliant Sarawak loggers since the bank introduced its forest policy. HSBC said in 2004 that it would stop doing business with clients that failed to make a reasonable effort to comply by 2009.  The Economist asked HSBC to comment. The bank declined to discuss its clients because of confidentiality, but said it is “not accurate” to state that its clients are in violation of its forestland and forest-products policy. It said current data show that 99% of its forest-sector clients worldwide (by size of lending) are “compliant” or “near-compliant” with its policy. What precisely it means by “near-compliant” is unclear…..HSBC’s  continued involvement, however modest, allows logging firms to claim credentials they don’t deserve. Ta Ann, for instance, has run adverts saying it holds forest-policy certification from HSBC. That looks like a figleaf.

Deforestation in Sarawak: Log tale, Economist, Nov. 3, 2012, at 75

Nuclear Waste in Egypt – illegally dumped?

Leave a reply

Egypt’s prosecution begins reviewing charges against ousted president Hosni Mubarak and his former prime ministers, Ahmed Nazif and Atef Ebeid, of negligently burying nuclear waste in Egypt, endangering citizens.  The lawsuit was filed by attorneys Hamed Mohamed, Nasser El-Askalani and Tarek Ibrahim, who are members of the Protection of Freedoms Committee of the Lawyers’ Syndicate.

The three lawyers accused Mubarak and his former regime of allowing Egyptian and European businessmen to bury nuclear waste in Egypt, particularily in desert areas close to the Mediterranean known as Al-Alamein and Al-Hamam. These areas are 71km and 106km, respectively, from Egypt’s second-largest city, Alexandria.  Hosni Mubarak is currently serving a life sentence for failing to prevent the killing of protesters during the 18-day uprising that led to his ouster on 11 February 2011.  In September, Nazif, who served as prime minister between 2004 – 2011, was founded guilty of abusing his political position for personal gain and was given a three-year prison sentence.

Prosecution reviews charges against Mubarak of burying nuclear waste, Ahram Online,Nov. 10, 2012

Nuclear Waste and Environmental Justice

Leave a reply

After California regulators refused to allow the U.S. Air Force to label residue from radioactive aircraft instruments as “naturally occurring” – declaring it unsuitable for a Bakersfield-area dump – the military turned to Idaho with the same story.  There, military officials met with success. The Air Force is now sending radioactive waste from Sacramento County’s McClellan Air Force Base to a Grand View, Idaho, hazardous waste landfill.

This solution involved a bit of legal semantics rejected in California despite 10 months of Air Force lobbying: The military claimed radium dust left over from glow-in-the-dark aircraft instruments actually was naturally occurring, putting it the same relatively lax regulatory category as mine tailings, according to government memos obtained by California Watch through a public records request.  Larry Morgan, a health physicist with the California Department of Public Health, disagreed with that characterization. Radioactive paint does not “meet the definition” of naturally occurring waste, he wrote in a September 2011 memo.

The Idaho facility’s permit allows it to accept materials defined as natural without notifying state regulators, leaving the state’s hazardous waste manager in the dark.  “I’m not familiar with this particular waste stream. I intend to find out now that you’ve contacted me,” Robert Bullock, hazardous waste permits manager for the Idaho Department of Environmental Quality, said during an October interview.  The redefinition of the waste as natural might not even have been necessary, given Idaho’s different standards for waste containing trace amounts of radium.

Days after the Idaho Department of Environmental Quality told California Watch that the agency was unaware of the Air Force waste, an official went out to inspect the landfill. Interviewed after that visit, engineer Dennis Meier said the dumping was legal because of the low concentration of radium in the soil, despite the source.  “It’s not waste that has to go to a radioactive waste facility,” he said. “The concentration is way below what we would accept.”

Nonetheless,California health officials and environmental activists accused the Air Force of bending the truth to get its way.  “Illuminated instrument dials do not naturally occur,” said Daniel Hirsch, a lecturer on nuclear policy at UC Santa Cruz who leads the environmental group Committee to Bridge the Gap. “I can’t dig into the soil and discover naturally occurring radium instrument dials.”

The radioactive dirt in question hails from the former McClellan Air Force Base northeast of Sacramento,now a commercial development site.“At least 24 sites” on the base “all have low levels of radium mixed in with the soil, and there are many thousands of cubic yards” of contaminated soil, according to Philip Mook, Western region senior representative for the Air Force Civil Engineer Center, which is in charge of cleanups at Air Force installations. “A little bit of radium goes a long way.”  The Air Force has sent 22,000 tons of radioactive dirt from McClellan out of state so far, according to Charlotte Fadipe, a spokeswoman for the California Department of Toxic Substances Control.

According to the federal Environmental Protection Agency, if significant radium is inhaled or ingested, it can increase the risk of diseases such as lymphoma, bone cancer and leukemia. While the concentrations in the McClellan soil are low, they are above limits the federal government has set to protect human health.  Before these medical effects became evident, aircraft dials and gauges were painted with glowing radium so pilots could see them better at night. Air Force officials speculate that the radium became dispersed in the soil at McClellan “probably in cleanup water, like mop water or solvents that were used to clean the equipment or to clean up spills of radium,” Mook said. Although radium paint wasn’t used on the base after the 1950s, items contaminated with it remained…

Stephen Woods, chief of the California Department of Public Health’s Division of Food, Drug and Radiation Safety, argued in a Nov. 4, 2011, letter that the dirt should be sent to “a licensed low-level radioactive waste disposal facility.” The Idaho facility where the soil is now going does not meet that criteria. Neither do any California waste disposal facilities.  That’s partly because of vocal opposition from local Kern County residents and environmental groups.  “Hazardous waste landfills in low-income communities of color in California aren’t the right places for” nuclear waste, said Caroline Farrell, executive director of the Center on Race, Poverty & the Environment, which for almost two decades has fought to limit the Buttonwillow landfill’s expansion and impact on local residents.

But in the past, the landfill has accepted nuclear waste. In 1998 and 1999, the Army Corps of Engineers sent residue from the Manhattan Project, the World War II-era research and development program that produced atomic bombs dropped in Japan, to the landfill.  The move outraged civilian officials.  Democratic U.S. Sen. Barbara Boxer testified before a Senate committee on July 25, 2000: “When I learned that the Corps had disposed of 2,200 tons of radioactive waste at an unlicensed hazardous waste facility in Buttonwillow, California, I was shocked. The facility sits atop aquifers that supply water to the Central Valley of California.”  Since the Manhattan Project controversy, the facility’s permit has been tightened. Yet the landfill’s current permit states that it may accept naturally occurring radioactive materials at low concentrations….

US Ecology, which operates the hazardous waste landfill in Grand View, Idaho, seemed to accept the terminology.  Steve Welling, senior vice president of sales and marketing for US Ecology, said in an interview that “state law and our permits” allowed the facility to accept the waste that the Air Force had characterized as naturally occurring.

Katharine Mieszkowski and Matt Smith, Air Force Ships Calif. Radioactive Waste To Idaho Landfill, NBC, Nov. 9, 2012

Ship Breaking – Greens against workers

Leave a reply

At its height in 2008 Bangladesh’s ship-breaking industry accounted for half of all ships scrapped in the world, according to IHS, a consultancy. Today the country accounts for around a fifth. In these years Bangladeshi ship breakers found themselves at the forefront of criticism as NGOs and pressure groups exposed some of the worst practices causing environmental and human harm. These included high health risks due to injuries, noxious fumes and the handling of asbestos. Critics say one way in which Bangladesh competes on cost is that poor workers are unlikely to file claims for accidents or bad health. Another advantage is (or was) the use of child labour.

In 2009 the Bangladesh Environmental Lawyers Association (BELA), a public-advocacy group, convinced the Supreme Court to ban all ship recycling not meeting certain environmental standards. The court’s decision meant that by 2010 the ship-breaking industry had come to a halt. Zahirul Islam of PHP, a local manufacturer with a big ship-breaking division (the industry prefers to call it ship recycling), says that for 14 months the company was unable to import a single vessel for breaking.  Knock-on effects hurt the wider economy. A World Bank study estimated that ship breaking employed over 200,000 in Bangladesh. Many of the jobs were subsequently lost. And domestic steel prices rose sharply. Half of all Bangladesh’s steel comes from breaking ships.  Under pressure from the ship breakers, Bangladesh’s prime minister, Sheikh Hasina, has since relaxed the regulations. Hefzatur Rahman, president of the Bangladesh Ship Breakers Association, believes this has saved the industry. From just a score of vessels scrapped in the main part of Chittagong two years ago, about 150 were broken up in 2011.

Greens are not happy and want the ban reimposed. Delphine Reuter of the Shipbreaking Platform, an NGO in Brussels, describes ship recycling as “close to slavery”. It and BELA are leading the call for more regulation. That bothers international shipping firms and ship brokers, which argue that Bangladeshi ship breakers have cleaned up their act.

At the International Maritime Organisation, the UN agency responsible for curbing shipping pollution and ensuring safety, the head of pollution prevention, Nikos Mikelis, says environmentalists present Bangladesh with a false choice. “They say they are happy to have the industry, but not on the beaches. Where do they want it? In the mountains?”

Ship breaking in Bangladesh: Hard to break up, Economist, Oct. 27, 2012, at 44

Chevron, 50 Activists and their Email Accounts

Leave a reply

The Electronic Frontier Foundation (EFF) and EarthRights International (ERI) asked judges in California and New York today to quash subpoenas issued by Chevron Corporation to three email providers demanding identifying information about the users of more than 100 email accounts, including environmental activists, journalists, and attorneys. The information Chevron wants could be used to create a detailed map of the individuals’ locations and associations over nearly a decade.

The subpoenas are the latest salvo in the long-running battle over damage caused by oil drilling in Ecuador. After years of litigation, an Ecuadorian court last year imposed a judgment of over $17 billion on Chevron for dumping toxic waste into Amazon waterways and causing massive harm to the rainforest. Instead of paying, Chevron sued more than 50 people who were involved in the Ecuador lawsuit, claiming they were part of a conspiracy to defraud the oil giant. None of the individuals represented by EFF and ERI has been sued by Chevron or accused of wrongdoing.

“Environmental advocates have the right to speak anonymously and travel without their every move and association being exposed to Chevron,” said Marcia Hofmann, EFF Senior Staff Attorney. “These sweeping subpoenas create a chilling effect among those who have spoken out against the oil giant’s activities in Ecuador.”

The motions to quash filed today asked the courts to reject the subpoenas, pointing out that anonymous speakers who are not parties in a lawsuit receive particularly strong First Amendment protections. EFF first won court recognition of this protection in Doe v. 2theMart.com in 2001. Chevron’s subpoenas also violate the legal protections for the right of association for political action that were developed during the civil rights era.

“The courts have long recognized that forcing activists to reveal their names and political associations will chill First Amendment rights and can only be done in the most extreme situations,” added Marco Simons, Legal Director of ERI, which has provided legal assistance to third parties affected by the Chevron litigation in two international proceedings. “We look forward to having those longstanding principles applied in this case so that people can engage in journalism and political activism and assist in litigation against environmental destruction without fear that their identities and personal email information will be put at risk.”

EFF and ERI are challenging the subpoenas to Google and Yahoo! in the U.S. District Court for the Northern District of California and the subpoena to Microsoft in the U.S. District Court for the Northern District of New York. .

EFF and ERI Fight to Quash Speech-Chilling Subpoenas from Chevron, Press Release of Electronic Frontier Foundation, Oct. 22, 2012

Palm Oil Industry: environmental and human impacts

Leave a reply

Indonesia’s largest palm oil company, Sinar Mas, ran into trouble recently when communities in Liberia complained about a 33,000 ha. operation being developed on their lands by its indirectly-owned subsidiary, Golden Veroleum in Butaw District, Sinoe County. Alfred Brownell, the lawyer from Green Advocates representing the Kru tribes impacted by the project who is attending the 10th Roundtable on Sustainable Palm Oil (RSPO) being held in Singapore this week noted:

Golden Veroleum is in clear violation of the RSPO’s New Planting Procedure as it has not advertised its plans to clear and plant oil palms and carry out and publicise a High Conservation Value Assessment in advance of expanding its operations. Under the RSPO procedure, the company should now cease clearance until due process is followed. The villagers are concerned that their lands are being taken without their fully informed or free consent.

This is the second palm oil development involving a prominent RSPO member to run into controversy in Liberia. Last year, a subsidiary of Malaysia’s largest palm oil consortium, Sime Darby, was criticised for expanding its operations without respecting local peoples’ rights. The company was in the early stages of developing a 220,000 ha. operation but was halted in its tracks by complaints, which, to its credit, the company has responded to by entering into dialogue with the communities.

The spotlight is now on two large palm oil operations in Cameroon. One is planned by a company called BioPalm, a subsidiary of India-based corporation Siva Group which is marking out its planned operations without consultation on the lands of the Bagyeli “Pygmies” in Océan Département in western Cameroon. The company claims to be an RSPO member but does not show up on the RSPO’s membership lists. Messe Venant, Project Coordinator of the community-based indigenous NGO Okani says:  As the affected Bagyeli communities have told us, the forest is their memory. If they lose it, they lose their past, their present and their future. They will no longer be Bagyeli. To destroy the forest is to reduce them to nothingness.

Another palm oil developer is SG Sustainable Oils Cameroon PLC (SGSOC), owned by Herakles Farms from the USA and an affiliate of Herakles Capital, which is also involved in the telecommunications, energy, infrastructure, mining and agro-industrial sectors in Africa. SGSOC is developing an oil palm plantation further north in Cameroon, but has also run into sustained opposition from local communities and concerned NGOs and has announced it will pull out of the RSPO.

Other cases are highlighted in a searching review of 15 companies’ operations carried out by the Forest Peoples Programme and SawitWatch with a consortium of other NGOs and community organisations in Liberia, Cameroon, the Democratic Republic of Congo, the Philippines, Malaysia and Indonesia.

One case examined is the operation being developed by Genting Plantations, a client of HSBC, and a subsidiary of the vast Genting group which runs a casino, hotel and property empire in Malaysia. Both companies are prominent RSPO members. Genting is now in a protracted land dispute with the Dusun and Sungai peoples in Tongod District in Sabah over the imposition of the oil palm plantation. Leonard Alaza representing the Indigenous Peoples Network of Malaysia or Jaringan Orang Asal SeMalaysia (JOAS) at the 10th Roundtable of the RSPO underway in Singapore, says:  The communities have been objecting to this plantation since 2000 and filed a court case 10 years ago asking the court to recognise their rights and freeze the company’s expansion. But instead of recognising our rights, as the RSPO standard requires, the company has been contesting even the admissibility of our case and meanwhile has taken over and planted all the disputed lands.

Excerpt from Press Release of Forest Peoples Programme, New oil palm land grabs exposed: Asian palm oil companies run into trouble in Africa, Nov. 1, 2012

The Covert War in Sudan: Yarmouk Weapons Factory

Leave a reply

Satellite images of the aftermath of an explosion at a Sudanese weapons factory this past week suggest the site was hit in an air strike, a US monitoring group said Saturday (Oct. 27, 2012) The Sudanese government has accused Israel of bombing its Yarmouk military complex in Khartoum, killing two people and leaving the factory in ruins.  The images released by the Satellite Sentinel Project to the Associated Press on Saturday showed six 52-foot wide craters near the epicenter of Wednesday’s explosion at the compound.  Military experts consulted by the project found the craters to be “consistent with large impact craters created by air-delivered munitions”, Satellite Sentinel Project spokesman Jonathan Hutson said.  The target may have been around 40 shipping containers seen at the site in earlier images. The group said the craters center on the area where the containers had been stacked.

Israeli officials have neither confirmed nor denied striking the site. Instead, they accused Sudan of playing a role in an Iranian-backed network of arms shipments to Hamas and Hezbollah. Israel believes Sudan is a key transit point in the circuitous route that weapons take to the Islamic militant groups in the Gaza Strip and Lebanon.  Sudan was a major hub for al-Qaida militants and remains a transit for weapon smugglers and African migrant traffickers. Israeli officials believe arms that originate in the Iranian port of Bandar Abbas go through Sudan before crossing Egypt’s lawless Sinai desert and into Gaza through underground tunnels.

The Satellite Sentinel Project is a partnership between the Enough Project, a Washington-based anti-genocide advocacy group and DigitalGlobe, which operates three commercial satellites and provides geospatial analysis.  The project was founded last year with support from actor George Clooney, and in the past has used satellite images to monitor the destruction of villages by Sudanese troops in the country’s multiple war zones.

Opened in 1996, Yarmouk is one of two known state-owned weapons manufacturing plants in the Sudanese capital. Sudan prided itself in having a way to produce its own ammunition and weapons despite United Nations and US sanctions.  The satellite images indicate that the Yarmouk facility includes an oil storage facility, a military depot and an ammunition plant.

The monitoring group said the images indicate that the blast “destroyed two buildings and heavily damaged at least 21 others”, adding that there was no indication of fire damage at the fuel depot inside the military complex.  The group said it could not be certain the containers, seen in images taken 12 October, were still there when explosion took place. But the effects of the blast suggested a “highly volatile cargo” was at the epicenter of the explosion.  “If the explosions resulted from a rocket or missile attack against material stored in the shipping containers, then it was an effective surgical strike that totally destroyed any container” that was at the location, the project said.  Yarmouk is located in a densely populated residential area of the city approximately 11km southwest of the Khartoum international airport.  Wednesday’s explosion sent exploding ammunition flying into homes in the neighborhood adjacent to the factory, causing panic among residents. Sudanese officials said some people suffered from smoke inhalation.  A man who lives near the factory said that from inside their house, he and his brother heard a load roar of what they believed was a plane just before the boom of the explosion sounded from the factory.

In the aftermath of Wednesday’s explosion, Sudanese officials said the government has the right to respond to what the information minister said was a “flagrant attack” by Israel on Sudan’s sovereignty and right to strengthen its military capabilities.  In a Friday speech marking Eid al Adha, Islam’s biggest holiday, Sudanese president Omar al-Bashir called Israel “short-sighted,” according to comments published by the Egyptian state-owned paper Al Ahram. The president likened the incident to the 1998 bombing by American cruise missiles of a Khartoum pharmaceutical factory suspected of links to al-Qaida.

Some Israeli commentators suggested that if Israel did indeed carry out an airstrike causing Wednesday’s blast, it might have been a trial run of sorts for an operation in Iran. Both countries are roughly 1,000 miles (1,600km) away from Israel, and an air operation would require careful planning and in-flight refueling.

Satellite pictures suggest Sudanese weapons factory hit by air strike, Associated Press, Oct. 27, 2012