March 13, 2014

Swiss Step Up Arms Exports, Peacefully

Switzerland has eased its restrictions on arms exports – in order to save a few thousand workplaces. Critics fear that Switzerland’s credibility as an international peace broker will now suffer.

Switzerland’s army doesn’t go to war – but its military equipment does. In 2011, Saudi Arabia used Swiss Piranha tanks to crack down on protests in Bahrain. Libyan rebels used Swiss ammunition against Muammar Gaddafi’s troops, and Syrian rebels have been throwing Swiss hand grenades against President Bashar Assad’s soldiers.
Only a few weeks ago, videos circulating on the internet offered proof that Swiss sniper rifles where used against civilians on Kiev’s Maidan square. Many died in brutal police action.

Switzerland, a neutral country at the heart of Europe known for an active promotion of a peace policy in diplomatic forums, is in fact the world’s fifth-largest producer of small arms. It ranks eighth in arms exports per capita, according to the Stockholm International Peace Research Institute (Sipri).

Last year, 34 percent of exported military equipment consisted of ammunition. Other major exports were fire control systems, weapons and armoured military vehicles. In all 73 percent of military exports went to European countries.

But in 2013, Swiss arms exports dropped from 700 to 461 million Swiss Francs (524 million dollars). The country’s three-biggest arms producers, General Dynamics European Land Systems – Mowag, RUAG, and Rheinmetall Air Defence sacked 415 employees.

The lobby of the 70 Swiss arms producers called for the government to act. It demanded the lifting of export restrictions.

Judging whether or not the Swiss arms industry is on decline depends on how one reads the statistics. Ten years ago, these companies exported less than in 2013 and long-term statistics show that the high export values 2008-2012 were exceptional.

Further, arms exports statistics do not include “special military goods”, a category designed for dual use goods. Under this category, Swiss companies last year additionally exported military material worth 405 million Swiss Francs (461 million dollars).

Dismissing the alarming rhetoric of cuts and a crisis by the arms lobby, the Swiss Peace Foundation (SPF) says the sector is  “ridiculously insignificant”, as it accounts only for 0.33 percent of Swiss exports, and employs less than 10,000 people.

SPF director Heinz Krummenacher told IPS the Swiss arms industry should be dissolved totally or at least produced only for the domestic market.

The Swiss government had tightened export restrictions in 2008. A year later Swiss voters turned down an initiative by the pacifist Group for Switzerland without an Army (GSoA) for a ban of Swiss arms exports. On Mar. 6, the Swiss parliament narrowly gave in to the demands of the arms lobby, and eased arms exports regulation drastically.

Under the former regulation, arms exports to countries known for systematic and grave human rights violations were forbidden. Also, arms exports to countries engaged in an internal or international, armed conflict were not permitted. The new clause will be more elastic.

Now, permits will be denied if there is “a high risk” in the receiving state that the military equipment will be used for serious human rights abuses, if the country is “illegally” engaged in an international, armed conflict or if an internal, armed conflict prevails. The “high risk” provision especially leaves room for manoeuvre.

The State Secretariat for Economic Affairs (SECO) assesses risks of human rights abuses in potential receiving states and issues export permits. Alain Bovard, arms expert at Amnesty International Switzerland is sceptical about these investigations.

“Over the past few years, we’ve seen how little they help. Despite thorough investigations, Swiss assault rifles were exported to Ukraine and have now been used against civilians.”

In the end, it’s all about how specific criteria are checked and assessed. “The human rights criteria hasn’t always been carefully evaluated,” Bovard says.

Switzerland has been using post-shipment verification clauses to make sure that delivered military equipment isn’t re-exported by the receiving states. In practice, these clauses have often been ineffective.

Boxes full of Swiss hand grenades, which were found last year in the Syrian civil war, were originally purchased by the United Arab Emirates. In 2011, Swiss ammunition was detected in the hands of Libyan rebels that was originally delivered to Qatar. Both countries signed a non-re-export clause.

“It’s illusive to believe that Swiss authorities are able to control whether exported Swiss weapons and ammunition are used for human rights abuses,” Stefan Dietiker, secretary general of GSoA, tells IPS. “Once they’ve left our country, they’re gone, no matter how many clauses the purchasers sign and how many promises they make.”

Besides the material consequences of the Swiss parliament’s decision to ease its arms exports regulation, critics stress its symbolic effect. “The decision contradicts Switzerland’s foreign policy goals which prioritise protection of human rights,” says Amnesty International’s Bovard.

He points to Switzerland’s important role in negotiating and pushing the international Arms Trade Treaty (ATT). ATT is a landmark effort to regulate the global arms trade, which more than 100 states signed in 2013. The treaty currently awaits ratification. Switzerland has offered to host the ATT secretariat.

“Switzerland loses credibility,” says Alain Bovard. Switzerland, he says, must have stricter arms exports regulation than ATT’s minimum standards demand.

He also worries about the country’s reputation. “Having close arms trade ties with countries like Saudi Arabia, which systematically violates human rights, damages Switzerland’s image.”

Economic Minister Johann Schneider-Ammann insisted through the parliamentary debate that Switzerland would continue to keep up its humanitarian tradition – while not neglecting its security interests. “It’s not about surrendering the protection of human rights for the sake of preserving work places,” he stressed.

Critics like Stefan Dietiker say Switzerland has to make up its mind. “Ultimately, we have to decide whether we want to deliver weapons or protect human rights.”

This report was first published here by IPS Inter Press Service.  

February 23, 2014

Swiss Vote for New Squeeze on Migrants

Swiss voters have approved an initiative by the right-wing Swiss People’s Party (SVP) aimed at limiting immigration. The result not only threatens the free movement of people, but all agreements between Switzerland and the European Union. The voting results have been a shock for open-minded Swiss citizens, foreigners living in the country and the whole European audience.

In all 50.3 percent of the Swiss voted in favour of the SVP’s “initiative against mass immigration”, which demanded the introduction of quantitative limits and quotas for foreigners and a renegotiation of the “Agreement on the free movement of people” with the EU. The Swiss government now faces the difficult task of introducing the new constitutional measures at the legislative level.

Several foreign ministers of EU member states, and the European Commission (EC), the executive arm of the EU, have regretted the Swiss decision. In its initial statement, the EC wrote that the introduction of quantitative limits to immigration “goes against the principle of free movement of persons” and that the EC intends to “examine the implications on this initiative on EU-Swiss relations as a whole.”

Martin Schultz, president of the European Parliament, said that as long as the Swiss government didn’t suspend its bilateral agreements with the EU, they would remain valid, signalling that the EU for now will not terminate either the agreement on the free movement of people or any of the other accords.

However, Schultz stated that it would be “difficult to limit the free movement of citizens and not limit the free movement of services, for example.” He made it clear that if Switzerland is no longer able to fulfil the conditions of the agreement, all other bilateral agreements were at risk.

Currently, about 430,000 Swiss citizens live in the EU, while more than a million EU citizens call Switzerland their home, and another 230,000 commute to their Swiss workplaces daily. Major sectors of the Swiss economy such as construction, the hotel and restaurant industry, and health services depend on foreign workers.

There’s been strong resistance in Switzerland to joining the EU. However, the two entities are bound by at least a hundred bilateral agreements. As regards trade in goods and services, Switzerland is the EU’s third-largest economic partner, while 57 percent of Swiss exports in goods go to EU member states and 78 percent of its imports come from there.

For Andreas Kellerhals, Director of the Europe Institute at the University of Zurich (EIZ), the EU’s reaction to the Swiss vote isn’t just a strategic threat. “In the eyes of the EU, the Agreement on the free movement of people isn’t negotiable, as freedom of movement is one of its four basic pillars,” Kellerhals told IPS. He points out that in 1999, the EU only agreed to the bilateral path because the Swiss gave in to an accord on the free movement of people.

The Federal Council is now exploring ways to put its relationship with the EU on a new footing, as it hardly sees how immigration quotas could be compatible with the principle of free movement of people. “Legally, that isn’t possible,” Kellerhals agrees. “Technically, Switzerland could set the quotas high enough so they couldn’t be exceeded; however I don’t think the EU will accept that.” Further, that strategy would jar with the SVP initiative and allow the right-wing party to further criticise and pressure the Swiss government. No matter how the Federal Council negotiates with the EU, it can only lose.

For foreigners living and working in Switzerland, the vote was a disaster. Or, as Rita Schiavi, member of the executive board of the largest Swiss trade union Unia puts it: “A slap in the face of nearly two million migrants, who have a huge hand in making Switzerland as prosperous at it is.” Schiavi told IPS that migrants are frustrated and alienated.

In concrete, the SVP demands a return to the so-called Saisonnierstatut, a regulation for seasonal workers that had been in place for seven decades. It means that migrant workers wouldn’t be allowed to bring with them their families, that they would depend on their employers, and would risk losing their stay permits in case of unemployment. “Those who have voted for the SVP initiative regard migrants not as human beings, but as pure workforce,” said Schiavi.

Returning to some kind of Saisonnierstatut wouldn’t just harm affected migrants, but the Swiss economy as a whole. Swiss companies have a strong desire for skilled foreign personnel, who in the future may find Switzerland less attractive than before, despite higher wages.

Switzerland’s economic lobby has long fought the initiative against immigration, as a return to quotas and contingents would complicate their business and reduce planning reliability. “Multinational companies may relocate or strengthen their branches abroad which could threaten the jobs of Swiss employees, too,” said Schiavi.

In Schiavi’s opinion, urgent political action is now required to deal with those worries and fears that had motivated voters to approve the SVP initiative. It’s measures that trade unions have demanded for many years: “We need to reduce wage dumping, improve job protection, introduce measures in the housing sector and set a national minimum wage,” said Schiavi.

For the moment, half of the Swiss population is licking their wounds, while the other half led by the SVP triumphs. Nevertheless, the right-wing effort to regain control over immigration and the Swiss-EU relations may lead to the opposite: to a massive loss in sovereignty. Soon the Swiss delegation travelling to Brussels may have no option but to hope for the EU’s goodwill.

This report was first published here by IPS Inter Press Service

February 15, 2014

European Ruling Ignites Freedom Debate

A ruling by the European Court of Human Rights (ECHR) in relation to a Turkish national has kicked up a new row on anti-racism legislation. The court ruled in December that Switzerland violated the right to freedom of speech of the Turkish national Doğu Perinçek by convicting him for calling the idea of an Armenian genocide an “international lie”.

In 2007, a court in the Swiss Canton of Vaud had found Perinçek guilty of racial discrimination as defined by Section 261 of the Swiss Criminal Code, ruling that the Armenian genocide was a proven historical fact. Already in 2003, the Swiss National Council had acknowledged the Armenian genocide.

Perinçek subsequently appealed in Switzerland’s Federal Court, which dismissed his claims. After that, Perinçek took his case to the ECHR in Strasbourg.

In its ruling, the ECHR found that Perinçek’s conviction by the Swiss court was wrong, as it violated Article 10 of the European Convention of Human Rights on freedom of expression. The court argued that Perinçek had never questioned the massacres and deportations perpetrated by the Ottoman Empire during the First World War, but had denied their characterisation as “genocide”. He didn’t mean to incite hatred against the Armenian people, the ECHR pointed out.

In fact, Perinçek’s view corresponds with Turkey’s official stance that is widely shared by the Turkish public, all main political parties as well as the state-run Historical Society. Turkey’s Foreign Ministry called the ECHR decision “a victory for the rule of law.”

Schools and universities in Turkey teach that the killings of Armenians were neither deliberate, nor orchestrated by the Ottoman leadership in Istanbul. Further, Turkish historians doubt that up to 1.5 million Armenians had died, as many Western scholars claim.

However, Turkish estimates vary, starting around 10,000 Armenian casualties. Turkish historians argue that most of the death occurred due to illness and malnutrition.

Beyond Turkey’s eastern border, lobbying for worldwide genocide recognition is a fundamental part of Armenia’s foreign policy. Until today, diverging interpretations of what happened in Armenia during and after the First World War strain bilateral relations.

The ECHR highlighted that it wasn’t called upon to address either the veracity of the massacres and deportations perpetrated against the Armenian people or the appropriateness of legally characterising those acts as “genocide”. It doubted that there could be a consensus on the issue.

The Switzerland-Armenia Association (SAA) said it was “deeply disappointed and appalled by the ECHR verdict.” Dominique de Buman, Swiss national councillor and co-president of the SAA told IPS: “The ECHR ruling isn’t just a setback for human dignity, but also contradicts a European Council Framework Decision that ordered member states to ensure that publicly condoning, denying or grossly trivialising crimes of genocide, crimes against humanity and war crimes were penalised.”

Such framework decisions do not pose a legal basis for the ECHR, however. De Buman also referred to the UN Convention on the Prevention and Punishment of the Crime of Genocide. “Don’t forget that the convention was adopted in reaction to the Holocaust as well as the Armenian genocide,” he told IPS.
The ECHR ruling has sparked a debate in Switzerland on whether or not the government should appeal the decision and if and how Swiss anti-racism legislation may be amended.

Councillor De Buman told IPS he was optimistic that an appeal could lead to a further examination of the case, as the ECHR ruling wasn’t unanimous: “Two of the seven judges had expressed a joint concurring opinion. They stated that there existed an international consensus regarding the characterisation of the massacres against the Armenian people.”

Judges András Sajó and Guido Raimondi would welcome a Swiss appeal to the Grand Chamber, as so far the court has never taken a view on the massacres and deportations of the Armenians. “It’s our symbolic and moral obligation to define and qualify these events,” they wrote. Switzerland’s Federal Office of Justice hasn’t yet taken a decision in that regard.

The ECHR ruling plays into the hands of right-wing groups such as the Swiss People’s Party (SVP) who have repeatedly tried to knock down the country’s anti-racism legislation. Consequently, the party’s long-time leader Christoph Blocher demanded a change of the criminal code. Legally, the ECHR ruling doesn’t force Switzerland to amendments.

Silvia Bär, the SVP’s secretary general, told IPS that the party is preparing a parliamentary request to specify or even abolish Swiss anti-racism legislation. “We reject racism. However, the current application of the legislation is getting increasingly absurd and incorrectly limits the right to freedom of expression.”

According to Bär, the anti-racism legislation is being misused to discipline and sanction unwelcome opinions. In addition, the SVP demands that Switzerland resigns from the International Convention on the Elimination of Racial Discrimination and that it dissolves the Federal Commission against Racism (EKR).

Martine Brunschwig Graf, National Councillor for the Liberals and President of the EKR has doubts about these intentions. “The ECHR ruling is complex and doesn’t put the Swiss anti-racism paragraph in question,” she told IPS. From 1995 to 2012, Swiss courts have sentenced accused persons in 310 cases under that paragraph. Brunschwig Graf calls the legislation an indispensable instrument: “The fight against racism requires prevention at all levels, but also repression if certain limits are surpassed.”

Among the other parties, the Swiss anti-racism legislation enjoys broad support. Hansjörg Fehr of the Social Democrats told the Swiss national radio that if the criminal code was to be changed, then “we need a passage that explicitly punishes the denial of the Armenian genocide.”

The debate is expected to ignite at the next parliamentary session in March.

This report was first published here by IPS Inter Press Service

January 25, 2014

Swiss Spring for Syrian Refugees Passes

Switzerland facilitated family reunification for Syrians in September. So far, more than 1,100 Syrian refugees have benefited from the programme, while thousands are waiting at Swiss embassies in the region, hoping for a similar chance. Surprised by these numbers, Switzerland put an end to the programme.

Several European countries responded to an appeal by the U.N. High Commissioner for Refugees  (UNHCR) last summer to admit Syrian refugees. Switzerland announced it would accept 500 “especially vulnerable refugees” over three years.

Further, the country that hosts about 2,000 citizens of Syrian origin pledged to open its borders for their relatives. By the end of November, Swiss embassies in Turkey, Lebanon and Jordan had granted 1,600 Syrians a three-month entry visa.

At least 1,100 of these have already travelled to Switzerland. A further 5,000 Syrians have applied for appointments at Swiss embassies to file similar visa requests.

Either Swiss authorities were surprised by these numbers, or considered their humanitarian action short-lived. Already in early November, they introduced bureaucratic hurdles: Swiss-based Syrians who had invited their relatives now needed to meet certain financial requirements.

“Looking at the size of an average Syrian family, these requirements constitute a killer criteria,” said Beat Meiner, secretary-general of the Swiss Refugee Council (SFH). “Few of the Swiss-based Syrians have enough money to clear these hurdles.”

Meiner’s warnings fell on deaf ears. Even worse, a month later Swiss Justice Minister Simonetta Sommaruga cancelled the family reunification programme entirely. “We assume that most of those Syrians who are entitled to apply for entry visas and face immediate distress have made use of our eased visa requirements,” she argued.

Ashti Amir, a Kurdish Syrian who fled to Switzerland for political reasons more than a decade ago and now runs the charity SyriAid, has a different perspective. Since September, he managed to get the families of one of his brothers and sisters to Switzerland. Amir told IPS that he still had two brothers and his parents back home in Aleppo and wanted to get them to Switzerland, too.

“Escaping from there and travelling to an embassy abroad is not only difficult, but very costly,” he said. Amir knows dozens of other compatriots who have relatives in danger in Syria whom they want to rescue.

Another sister of his as well as a sister-in-law are stranded in Istanbul with their families, waiting for an entry visa to Switzerland. They had applied for an appointment before Switzerland cancelled its reunification programme, and Amir is optimistic that they’ll finally be granted a visa.

“But if not: where should they go? Their long stay in Turkey has eaten up their savings.”

SFH’s Beat Meiner says that many Syrians have embarked on a dangerous trip to Swiss embassies in the Middle East, assuming they can successfully apply for an entry visa there. “Some of them are blocked now: they may neither come to Switzerland, nor return to Syria,” he says.

He’s convinced that Swiss humanitarian action could have been prolonged and that considerably more human lives could have been saved.

Besides that, Switzerland also hesitates to treat about 2,000 asylum requests by Syrians who had fled to the country individually rather than as families. Some of them have been waiting three to four years for a decision.

IPS met Ziad Ali and his family in central Switzerland. Originally from Malikiyah in the northeast of Syria, Ali moved to Damascus as a youth, where he earned his living as a taxi driver. “As a Kurd in Syria, you took any job you may get anywhere,” he says.

Before he fled the country, Ali worked in Idlib region as a gardener. He was arrested at a demonstration in
Qamishli and then tortured in a prison in Deir az-Zour in Syria.

After his release, escaping the country appeared to him the only option. His wife and their two children reached Switzerland in June 2011, while Ali followed in January 2012.

Ali says the fate of his sister and his father, who were arrested by the Syrian regime in 2011, is constantly on his mind. He hasn’t heard from them since then.

His daughter Fatima and his son Mohamed go to school locally and already speak better German than Kurdish. A year ago, their youngest brother Azad was born. The family lives in a barracks established for asylum-seekers, occupying three rooms.

Their asylum request is still in limbo, leaving the family in constant insecurity about their destiny.

Moreno Casasola, secretary-general of the refugee rights organisation Solidarité sans Frontières, says that asylum requests of Syrians are mostly put aside by the Federal Office for Migration. Like any other European country, Switzerland fears that answering asylum requests positively would attract even more Syrian refugees.

Federal Office for Migration spokesperson Michael Glauser acknowledges that asylum requests of Syrians aren’t treated with priority. He denies, however, any decision moratorium. Glauser asserts that Syrian asylum-seekers enjoy Switzerland’s protection – and for the moment haven’t been sent back to Syria.

Ziad Ali and his family, along with other Syrian asylum-seekers, have protested in front of the Federal Office for Migration in Bern, demanding a speedy decision on their request. Getting at least temporary official admission would give them a perspective for the next few years and facilitate hunting for a job.

Despite his desperation, Ziad Ali hopes for a positive outcome. He says he wouldn’t mind returning to Syria once the war has ended, if Kurds were treated fairly. “But the longer my children live here, the more difficult it would be for them to return.”

This report was first published here by IPS Inter Press Service

January 24, 2014

Big Gap Surfaces in Davos

As self-appointed global leaders gather at the World Economic Forum (WEF) in Davos and discuss ‘The Reshaping of the World’, a stone’s throw away non-governmental organisations named this year’s winners for their dreaded Public Eye Awards.

The jury chose the American textile giant Gap, while 95,000 online voters honoured the Russian energy company Gazprom.

“Sadly, there’s still a need for campaigns like ours that demand corporate accountability,” Silvie Lang said on behalf of the organisers, the Berne Declaration (BD), a Swiss NGO working for equitable North-South relations, and Greenpeace Switzerland.

“We are here to remind the corporate world and those hiding behind closed doors in Davos that the social and environmental consequences of their business activities affect not only people and the environment, but also the reputation of their company.”

Participating in the WEF is no option for the BD. “This kind of inclusion is far less effective than fundamental critique from outside,” its spokesperson Oliver Classen told IPS. “Davos is the global showcase for symbolic policy where arsonists dress up as firemen for a few days.”

This year, international NGOs proposed 15 nominees for the two shame awards, ranging from Glencore Xstrata and BASF as representatives of the extractive industry to pesticide producers and the U.S. garment company Gap. The latter was eventually chosen for the jury award.

On behalf of the jury, Greenpeace International executive director Kumi Naidoo said: “We shame Gap for its monstrous and disingenuous business practices consisting of hindering legally-binding agreements to substantially ameliorate working conditions.”

Gap declined to show up and receive the award. Instead, Kalpona Akter of the Bangladesh Centre for Worker Solidarity and Liana Foxvog of the International Labour Rights Forum (ILRF) collected the prize.

Akter, a relentless grassroots activist, is herself a former child garment worker. “I sewed clothing for multinational corporations and made less than 10 dollars a month for 450 hours of work,” she said. Today, the minimum wage in Bangladesh is 68 dollars a month. “Due to inflation, it’s not much more than I used to earn,” Akter said.

Her main concern isn’t the low wages, however. “When workers speak up with concern about safety risks, they aren’t listened to.”

Three years ago, 29 workers were killed in a fire at one of Gap’s Bangladeshi supplier factories. After that, labour groups and unions negotiated with Gap to put an end to the constantly climbing death toll in the garment industry.

In all 1,129 Bangladeshi workers died in a deadly fire in a garments factory last year.
In a press statement, Gap stressed that it is a founding member of the Alliance for Bangladesh Worker Safety: “The Alliance is a serious and transparent, binding commitment on the part of its members to make urgent improvements to worker safety in Bangladesh.”

For Foxvog, the Alliance is “hardly more than a facelift.” She vowed to take the award directly to the Gap headquarters in San Francisco.

“We don’t want the companies to leave our country,” Akter said. “We want jobs, but they must be jobs with dignity. Global corporations must stop profiting off this low-road system.”

A third of the 280,000 people taking part in the online voting chose the energy giant Gazprom for the people’s award. That was not surprising, as the company had been in the spotlight for the past few months.

In September, Russian security forces arrested 28 Greenpeace activists and two journalists during a protest against oil drilling at their offshore platform Prirazlomnaya. In December, Gazprom became the first company that started to drill oil in the Arctic.

According to Greenpeace, Prirazlomnaya is far from some ultra-modern drilling unit. The absence of a publicly available and convincing response plan for any oil spill in one of the world’s most extreme environments worries activists deeply.

Greenpeace argues that Gazprom’s reliance on traditional clean-up methods would simply not work under icy conditions.

IPS requested Gazprom to comment on receiving the anti-award for “irresponsible business conduct at the cost of people and the environment.” Gazprom spokesperson Sergey Kupriyanov did not elaborate on its response plan, but stressed that the company was fully committed to the highest ecological standards.

“Therefore we are quite puzzled by the decision of the Public Eye Awards jury which seems to be motivated by anything but ecological concerns,” Kupriyanov told IPS.

He said that the Prirazlomnaya platform had been specifically designed for operation in the most hostile climate. “The applied drilling techniques prevent subsurface water pollution and the mixing of drilling and production waste with sea water.

“Specially designed oil spill prevention and response plans ensure that the platform crew is well equipped for emergency situations,” Kupriyanov told IPS.

Greenpeace’s Naidoo said his organisation considered calling for a boycott of Gazprom and its partner Shell, who had last year received an anti-award in Davos. “Our peaceful protest in the Arctic raised a lot of awareness,” he told IPS. “About five million people have signed up for our Arctic campaign, while the best of it is yet to come.”

Using the shame award to raise further awareness may be easier for the organisations dealing with Gap, as its consumer base differs much from that of Gazprom. Nobody depends on Gap clothes, but many depend on Gazprom’s oil and gas.

Criticising the energy giant my fall on deaf ears. “Even Gazprom, Rosneft or Chevron aren’t completely immune from public pressure though,” argued Naidoo. He said that these companies had so far ignored one thing: “Relations and reputation are a capital which is just as important for success as conventional capital.”

This report was first published here by IPS Inter Press Service

January 22, 2014

Elites Will ‘Consider Inequality’

With no acute crisis on the radar, this year’s Annual Meeting of the World Economic Forum (WEF) will move away from the response mode of the past years and “look for solutions for the really fundamental issues,” its founder Klaus Schwab said at the pre-meeting press conference.

“We cannot afford to allow the next era of globalisation to create as many risks and inequities as it does opportunities,” Schwab wrote in a blog post a few days earlier. “Today we face a situation where the number of potential flashpoints are many and are likely to grow.”

Even Schwab and his organisation have finally realised that globalisation has increased global inequality and that its consequences have not been managed and mitigated well on the global level.

According to Schwab, the WEF is the “biggest assembly of political, business and civil society leaders in the world.” For decades, he has been gathering the world’s richest and most powerful people and companies once a year in the mountain resort of Davos under the banner of “improving the state of the world”.

This year, the annual meeting beginning Wednesday takes place for the 44th time. Schwab welcomes around 2,500 participants, among them more than half of the CEOs of the 1,000 largest companies of the world, over 30 heads of state, and numerous leaders of international institutions.

A report published by the WEF has spoken of widening income disparities. The report states that increasing inequality impacts social stability within countries and threatens security on a global scale.

“It’s essential that we devise innovative solutions to the causes and consequences of a world becoming ever more unequal,” its authors wrote.

With a well-timed report, the renowned aid and development charity Oxfam International picked the issue up this week. According to Oxfam, the world’s richest 85 people own the wealth of half of the world’s population – a fact that the charity’s executive director Winnie Byanyima called staggering.

“We cannot hope to win the fight against poverty without tackling inequality,” she said. Oxfam locates the roots of the widening gap in fiscal deregulation, tax havens and secrecy, anti-competitive business practice, lower tax rates on high incomes and investments and cuts or underinvestment in public services for the majority.

According to Oxfam, the richest individuals and companies hide trillions of dollars in tax havens around the world. “In Africa”, the report says, “global corporations – particularly those in extractive industries – exploit their influence to avoid taxes and royalties, reducing the resources available to governments to fight poverty.”

Over the last years, tax avoidance has become a major focus of non-governmental organisations especially in countries like Switzerland, where some of the world’s biggest companies involved in raw materials mining and trade have their headquarters.

“Tax avoidance and harmful tax incentives are strongly linked with inequality,” said Martin Hojsik, tax campaign manager of ActionAid International, an international coalition fighting poverty across the globe.

“With a lack of revenue caused by tax dodging, developing countries in particular have very little resources to finance essential services like education and health care,” he told IPS.

ActionAid doesn’t participate at the WEF, which Hojsik calls a talking shop for elites in a fancy resort. “Real progress requires commitment from governments and processes that are inclusive of all stakeholders including people living in poverty,” he said.

Hojsik has no illusions about Davos: “This year, Deloitte, a company among other things advising companies how to avoid taxes when investing in Africa, is tweeting about income disparity on their #DeloitteDavosLife event, clearly showing some of the absurdity.”

Unlike ActionAid, Oxfam will take part at the global leaders’ meeting. The charity is asking participants to pledge to supporting progressive taxation, to making public all the investments in companies and trusts, to demanding a living wage in their companies and to challenging governments to use tax revenue to provide universal healthcare, education and social protection for citizens.

Oxfam’s effort is doomed to fail. A look at the WEF’s more than 260 sessions shows that hot potatoes like tax avoidance won’t be addressed. Even though there is a workshop specifically on the extractive industry, it aims only to discuss how the industry may drive growth in the future in the light of rising concerns over scarcity and environmental deprivation.

Hardly any of the workshops scheduled specifically address developing countries. There’s a session on the post-2015 development goals, however. It asks how a new spirit of solidarity, cooperation and mutual accountability may carry those goals from vision to action.

Peter Niggli, director of Alliance Sud, an alliance of the six biggest Swiss charities, isn’t attracted by such debates. Alliance Sud doesn’t go to Davos.

“We lobby at the Swiss government which makes more sense,” he told IPS. As a discussion forum, the WEF in Niggli’s opinion doesn’t have any influence at all on defining the post-2015 development agenda.

Niggli said that it is in any case not the WEF’s official programme with all the debates and workshops that draws businessmen and politicians, but the opportunity they have to meet others informally or set up new projects behind closed doors.

Surely it also isn’t the fake refugee camp the WEF has set up in Davos that draws the global elite. “We are simulating the experience of a Syrian refugee in a Jordanian refugee camp,” Schwab said. “It is so important that people can really imagine what it means to be a refugee.”

The United Nations Refugee Agency has appealed for 6.5 billion dollars for Syrian refugees. International donors have pledged 2.4 billion dollars so far. If the WEF is serious about “improving the state of the world”, its wealthy members could come up with the lacking sum.

This report was first published here by IPS Inter Press Service

October 29, 2013

Swiss Knife Sharpened to Cut Bosses’ Pay

Swiss voters will decide Nov. 24 on introducing a salary cap that would limit the wage spread in companies to 1:12. The economic lobby is nervous – success for the proposal in the referendum is not as unrealistic as once expected.

It wasn’t just the smallholders in the Swiss multinational pharmaceutical company Novartis who were disgusted by a 79-million-dollar farewell package to resigning CEO Daniel Vasella earlier this year. Public outrage was huge.

Two weeks later, Swiss citizens sent a clear message to executives that their increasingly excessive salaries and bonuses would not be tolerated: 68 percent of voters supported the “fat cat initiative” which promised to curb salary excesses and to ban big payouts.

That referendum was more about strengthening shareholder democracy. Once the initiative is fully implemented, shareholders of Swiss companies will have a veto right on payments to executives. Within a one-share-one-vote frame however, concerned shareholders usually get outvoted by large investors.

“The fat cat initiative includes some good aspects. However, it neither helps much in limiting big salaries, nor in providing a solution to unequal income distribution,” argues David Roth, president of the Swiss Young Socialists Party (Juso).

Juso therefore launched the 1:12-initiative which demands that executives’ salaries be capped at 12 times that of the lowest-paid worker in the same company. “No manager should earn more in a month than his employees get in one year,” Juso demands.

Switzerland’s powerful neoliberal lobby had worked hard to prevent the success of the fat cat initiative. After its expensive campaign failed and with the 1:12-initiative already on the horizon, it became increasingly nervous. Further, a referendum on the introduction of a national minimum wage is scheduled in 2014.

Once the poorhouse of Europe, Switzerland has transformed into one of the richest countries on earth. Today, it has one of the highest GDP per capita in the world and unemployment at just three percent.

In terms of income inequality, Switzerland ranks around Europe’s average. According to the freshest numbers, 3.5 percent of the employed in Switzerland are considered working poor, while 11,586 top earners make more than half a million Swiss francs a year.

According to Daniel Lampart, chief economist of the Swiss Federation of Trade Unions (SGB), the growing salary excesses over the past 20 years were caused by the fact that executives’ earnings were increasingly connected to profits and the stock prices of their companies. “The introduction of bonuses allowed managers to divert big amounts of money from the aggregate wages into their own pockets.”

In Switzerland, trade unions are comparatively weak and the number of collective bargaining agreements is low. A national minimum wage doesn’t exist, the relationship between employees and employers clings to the concept of social partnership, and strikes are rare. It is mainly the upper income segment that has been profiting from the increased individualisation of wage policies.

The campaigns for and against the 1:12-initiative have just reached the hot phase. In one corner, there’s Juso, the trade unions and the Social Democratic Party. The opposing side is led by the umbrella organisation of Swiss small and medium-sized enterprises (SGV), with the other economy-related organisations as well as the liberal and right-wing parties on their coat-tails.

If the 1:12-proposal is voted in, only 1,000 to 1,300 mostly big companies with about half a million employees would be affected directly. About 4,400 top earners would face a salary cut.

The opponents’ campaign, which is unable to explain why somebody should earn 30, 50 or 100 times as much as an employee, focuses on warning the public how everybody would be negatively affected if the 1:12-initiative succeeds.

Hans-Ulrich Bigler, director of the SGV, recently said that losses to the old-age insurance system and to taxes could amount to nearly 4.4 billion dollars per year. He argued that tax increases would become inevitable.

A closer look at the concerned study shows that this number is based on a rather unrealistic worst-case scenario. Juso believes the initiative would reduce income inequalities, and elevation of the lowest wages would minimise possible fiscal losses.

Nobody is able to estimate economic and fiscal consequences at this point, as everything will depend on how affected companies would react to a new 1:12-rule. Would they elevate the lowest wages? Would they cut the top wages and use the money for investments? Or would they leave the country, as for example Ivan Glasenberg, CEO of the commodities giant GlencoreXstrata, has threatened?

The Swiss government fears first and foremost for the country’s competitiveness. “There is a real danger that Switzerland-based companies could leave the country, while foreign companies searching for a new location could be deterred by the limitations on high wages and not settle here,” Swiss Economics Minister Johann Schneider-Ammann said at a press conference.

When in 2009 Juso, led by David Roth, began to collect signatures for the 1:12 initiative, nobody expected that the proposal could have real chances for success. “The approval of the fat cat initiative in spring represented a break with the past. After years of deregulation and liberalisation people again started to demand rules for the economy,” Roth says.

Roth is aware of the fact that only one in ten popular initiatives turn out successfully. Nevertheless, he is confident that on Nov. 24, David will win against Goliath.

This report was first published here by IPS Inter Press Service

October 15, 2013

Giant Companies Pinpricked by ‘Direct Democracy’

A Swiss village has decided to reject tax money from the firm Glencore and to instead donate it to charities. Other towns may follow, sending a strong signal to the government to follow the U.S. and the EU and introduce transparency rules for the extractive industry.
It’s rush hour in the city of Zug in Central Switzerland as Mrs Sandra Räppli struggles to raise her voice over the traffic noise. About 35 people listen as she lectures about commodity extraction and trading companies based in the city and the neighbouring town of Baar.

Räppli talks about complex company structures and tax optimisation, finally asking the audience: “Could you follow my explanations? Did you understand?” Then she smiles: “You couldn’t? No problem, because that is what those companies intend.”

Once a month, actress Maria Greco slips into the role of Sandra Räppli and guides groups of inhabitants and visitors through the streets of Zug. The canton counts 116,000 inhabitants and more than 30,000 companies, 105 of which belong to the commodity cluster formed by GlencoreXstrata, Northstream, Rusal and Gazprom, to name just a few.

Privileged taxation for holding, domicile and mixed companies brought these firms here. Holding companies are exempt from cantonal income tax, and pay almost no capital tax. Incomes of management companies generated abroad are hardly taxed, too.

Critics say Zug’s tax environment is an invitation to ‘transfer pricing’, a method to allocate a corporation’s net profit before taxation; in other words a means for tax evasion. Despite sales of 214.44 billion dollars in 2012, Glencore paid no tax on earnings at all in the canton of Zug last year.

The commodity cluster as a whole is estimated to have paid only 40 million dollars in cantonal and communal taxes.

Under official secrecy rules, exact taxes paid by Glencore and other companies are not available. Statistics on the number of companies or their employees is also lacking, even at the national level.

“That  lack of transparency is a major problem,” says Andreas Hürlimann, a parliamentarian with the Green-Alternative party in Zug. “Even as a member of parliament I can’t be sure that things are handled correctly if the government on any occasion hides behind the tax secret.”

Hürlimann finds Zug’s tax regulation deeply unfair. “It makes us rich, while people in extraction countries suffer, as the companies evade taxation there.” He says that Zug bears at least some moral responsibility.

At the end of her tour, Sandra Räppli stops in front of Zug’s town hall. “Our politicians are hand in glove with Glencore’s managers,” she tells her audience. “Only if people get active can something be done about these companies.”

Räppli has just ended her second season of city tours. She’s happy that the attendance has remained high – by Swiss standards. Media reports and a campaign run by the Swiss non-governmental organisation Berne Declaration have clearly increased popular interest in the commodity sector.

In the nearby canton of Zurich, these efforts have yielded fruits. Several villages are up in arms against Glencore. The corporation’s flotation on the stock market in 2011 had filled the pockets of CEO Ivan Glasenberg, leading to a huge one-time tax inflow for the canton. That money was redistributed to the communes.

But in several communes, residents were appalled by profiting indirectly from what they call “Glencore’s dubious business conduct abroad.” They collected signatures and demanded that at least 10 percent of the “Glencore money” be donated to charities who support affected communities in extraction regions.

In Hedingen, a village of 3,500, voters approved the donation of 120,000 dollars to charities. Samuel Schweizer, a member of the local citizens’ committee, explained that success to IPS: “Our proximity to Zug was crucial, people could relate to Glencore. Also, we’ve managed to build a broad committee.”

Schweizer explained that donating only 10 percent of the “Glencore money” instead of the whole amount further helped to find a majority.

At least five more communes will soon decide upon similar initiatives. In Affoltern for example, 180,000 dollars are at stake. In Hausen, it’s 80,000 dollars.

There, Franz Schüle of the local initiative committee is optimistic. “We live in a rural area. When I explain that in Colombia the surface of the land belongs to the farmers, while everything below can be owned by extraction companies, people can relate to the problem easily.”

“Direct democracy has hit Glencore,” says Oliver Classen, spokesperson of the Berne Declaration. He’s aware that these communal initiatives are only a drop in the ocean and a one-time effort. “However, Hedingen has a huge political signalling effect,” Classen tells IPS.

This summer, the European parliament introduced the Transparency and Accounting Directives that force mining, oil and gas companies to publish their payments to governments; country by country and project by project. The Swiss government has remained hesitant so far and will present its own measures next spring.

Oliver Classen demands transparency on payments and human rights obligations for commodities companies producing or trading abroad.

GlencoreXstrata neither commented on the tax initiatives nor responded to accusations ranging from tax avoidance to violating basic human rights in extraction countries. Its spokesperson Charles Watenpuhl sent IPS a statement.

“We believe that Glencore’s global presence and economic strength have a predominantly positive impact on the communities in which we operate. We seek out, undertake and contribute to activities and programmes designed to improve quality of life for the people in these communities.

“Glencore’s tax strategy and payments play a vital role in our intention to achieve long-term sustainable development. We are committed to full compliance with all statutory obligations, full disclosure to tax authorities and reporting transparently in the tax payments that we make to the governments of the countries in which we operate.”

This report was first published here by IPS Inter Press Service

October 10, 2013

Europe Failing Syrian Refugees

Refugee rights organisations are demanding an EU-wide temporary protection regime for Syrian refugees. The announcement by some countries that they can take a few thousand refugees is not enough, the groups say.

Sweden has announced a few steps after the number of Syrian refugees seeking shelter abroad has crossed the two million mark in early September.

“The conflict will continue for a long time ahead,” said Fredrik Beijer, director of legal affairs at the Swedish Migration Board. Sweden decided to grant permanent residence to about 8,000 Syrians who currently hold temporary residency permits, and to facilitate family reunification.

Germany and the Scandinavian country have between them received about two-thirds of the Syrian refugees fleeing to Europe. Since early 2012, approximately 14,700 Syrians have asked for asylum in Sweden. In August alone, 1,201 Syrian asylum-seekers arrived in the country.

On Sep. 11, 107 Syrian refugees were flown out of Lebanon to Hanover as part of a temporary admission programme announced by the German government earlier this year. Having committed to 5,000 places, Germany currently runs the biggest refugee relocation programme for the Syria crisis.

In June, the UN Refugee Agency (UNHCR) appealed for 10,000 humanitarian admissions. A group of countries including Denmark, Finland, the Netherlands, Norway and Spain have pledged 960 admissions for 2013 so far.

“Germany is setting an important example,” UNHCR spokesperson Dan McNorton told IPS. “We hope more countries will come forward with similar schemes to help Syrians fleeing the violence.”

Germany’s two smaller neighbours Switzerland and Austria have pledged to accommodate 500 refugees each. Austria’s foreign minister preference for Christian refugees recently drew harsh criticism.

Compared to the hundreds of thousands of Syrian refugees stranded in Turkey, Lebanon, Jordan, Egypt and Iraq, the estimated 40,000 that have applied for asylum in Europe since April 2011 is peanuts.

A comparison with the Bosnian war between 1992 and 1995 makes today’s numbers look dismal. At the time, Germany hosted 350,000 Bosnian refugees, Austria 90,000 and Switzerland nearly 30,000. During the Kosovo war, Germany evacuated more than 15,000 refugees, while Switzerland sheltered 53,000 and Austria 5,000.

The Swiss chapter of Amnesty International calls Switzerland’s present offer “a drop in the ocean.” Austrian and German refugee rights organisations have also criticised their governments.

“Germany’s contribution is yet too small,” Karl Kopp, director of European affairs at the human rights organisation Pro Asyl told IPS, “though, we appreciate that Germany has launched the debate.”

In addition to the 5,000, several German states have announced they will permit up to 1,000 Syrian refugees to stay with their Germany-based relatives. Kopp said that many of these have been trying desperately to get their relatives to come over.

Bureaucratic hurdles for family reunification are high, as Syrians already living in Germany have to prove they can provide for their relatives, host them and pay for their health insurance. “Most of them are unable to do so. But humanity mustn’t fail due to lack of money,” Kopp said.

While Switzerland is facilitating family reunification, too, Austria hesitates to do so. In Austria, upcoming parliamentary elections reduce the willingness of politicians to invite refugees to the country.

Meanwhile, thousands of Syrian refugees are trying hard to find a way into Europe. According to the Italian interior ministry, 3,000 Syrians have already arrived in Italy since the beginning of the year, most of them in boats. At Europe’s other entry gate, Greek coastguards have repeatedly been accused of pushing Syrian refugees back into Turkish waters.

“That is outrageous,” says Kopp. “Europe needs to open legal escape routes. Currently, Europe asks Syria’s neighbours to open up their borders, while its own borders remain closed.”

Anny Knapp, president of the Austrian refugee rights organisation Asylkoordination Österreich says refugees have to turn to the risky and expensive services of people smugglers, as no legal escape routes exist.

“In addition, the Dublin regulation forecloses that refugees can profit from family or community ties in other European states,” says Knapp. According to the Dublin regulation, immigrants may be sent back to the country through which they first entered the European Union.

Knapp’s German counterpart Karl Kopp therefore demands freedom of movement for Syrian refugees within Europe.

Judith Sunderland, senior researcher at Human Rights Watch told IPS that Syrians seeking asylum in other EU member states face a protection lottery, with their fate depending on which country they reach first.

“Those who make it to the EU through external border countries such as Greece, Bulgaria and Cyprus can face problems such as detention, failure to be granted any form of protection, problems with family reunification as well as poor or non-existent reception conditions.”

All refugee rights advocates agree that action at the European level is required urgently.

Kopp finds it “absolutely pathetic” that three years after the beginning of the Syria crisis the EU still doesn’t have an active admission programme. In June, the European Commission had called upon its member states to provide resettlement or humanitarian admission places, to facilitate family reunification and “to admit any Syrians arriving at the external borders of the Union.”

The European Commission also promised to continue efforts to ensure a greater degree of convergence between member states’ approaches to the Syrian refugee crisis. Yet it is far from providing a concerted solution like a EU-wide temporary protection regime, repeating its failure during the Libya war in 2011.
Instead, tons of tents and blankets are sent to Syria’s neighbour states. “Even though they think that the Syrian refugee crisis can be contained regionally, it has in fact long reached Europe,” says Kopp. “The catastrophe’s dimensions render such an approach not just absurd, but highly cynical.”

This report was first published here by IPS Inter Press Service

German Sun Beats Swiss Water

Water power is the backbone of Alpine countries’ energy supply. Despite its important role in Europe’s energy shift, further development of hydroelectric infrastructure in Austria and Switzerland is on hold.

On sunny, windy summer days in Germany, when millions of solar panels soak up the sun and wind turbines run at full speed, the German electricity network can’t cope with the overcapacity. Especially on Sundays, production often exceeds demand. The result is low prices, at times even negative ones; which means customers get paid for buying electricity.

Europe’s energy market is liberalised. What happens in Germany affects all its neighbours. Swiss hydropower stations are unable to compete under these conditions. The heyday of Swiss water power is over.

The energy source that covers 55 percent of the country’s energy supply faces drastically reduced profitability, as electricity prices have sunk 20 percent again compared to the preceding year.

In the light of this market environment, the biggest Swiss energy producers Alpiq, Axpo, BKW and Repower are less willing to invest in optimising and enlarging their infrastructure. Repower has announced a 35 percent cut in investments in the next 10 to 15 years.

Andreas Meyer, media person at Alpiq, told IPS that the massive subsidies for renewable energy have destabilised the market, putting in question the profitability of hydro and thermal power stations and blocking further investments. Currently, Alpiq runs a divestment programme. The company is worried that the price deterioration will continue.

Further development potential of Swiss water power is disputed. While the government estimated four to five terrawatt hours, the World Wildlife Fund assessed only 1.5 terrawatt hours. In any case, the potential is quite low.

Nevertheless, Switzerland subsidises small hydropower stations with a capacity of less than 10 megawatt massively, irrespective of their efficiency and the ecological damage they may cause.

Due to the subventions, small water power projects have become cash cows. The WWF demands that these subsidies be stopped. “Building new power stations at previously unspoilt waters is absolutely silly,” water expert at WWF Switzerland Christoph Bonzi tells IPS. Today, 95 percent of Swiss water is used for energy production.

For once, conservationists and the leading energy suppliers take a common stand on the Swiss subsidy model that favours small hydropower projects. “Isn’t it absurd that subsidising new renewable energy leads to a situation where even other systemic technologies need to be subsidised?” says Werner Steinmann, spokesperson for Repower.

The boom of solar and wind energy in Europe has lead to increased demand for electricity storage, as both energy sources are unsteady. Germany, Switzerland and Austria agreed last year to increase the capacities of pumped-storage hydropower plants in a concerted effort.

Several such plants are currently being constructed in the Swiss Alps. Whether these investments will finally pay off is more uncertain then ever.

Some Swiss energy companies don’t oppose all state subsidies for renewable energy. Repower’s biggest shareholder is the Canton of Grisons. Recently, the canton’s chief councillor Mario Cavigelli broke a taboo when he demanded subsidies even for electricity produced in big hydro power plants. Cavigelli asked for cutting money granted to small hydropower projects.

Within the energy sector, that demand is disputed however. Axpo’s media person Daniela Biedermann says that it can’t be a solution to solve the mistakes of the current subsidies regulation with additional subventions. “We need to discuss how to implement the new renewable energies into a market-oriented system instead,” she told IPS.

The Swiss Association for Water Management (SWV), which represents the industry, demands that subsidies for hydropower may no longer be limited to small projects and that instead the relevant criteria would have to be efficiency, an aspect that the current subsidy system completely ignores. The SWV wants promotion for those projects that produce the most electricity per subsidy-dollar.

Conservationists are less happy about the various further demands voiced by the water power industry though. In the name of “national interest”, water power companies have been trying to tap even nationally protected waters. Instead of using even the last drop of water for electricity production, the WWF prefers to increase energy efficiency.

Just across the border, the Austrian hydropower industry struggles with similar problems. Currently, about 60 percent of the country’s electricity supply is covered by domestic water power. The industry once intended to increase its capacity by seven terrawatt hours until 2020.

“We surely won’t be able to meet up with our expectations,” says Ernst Brandstetter, spokesperson of Oesterreichs Energie, which represents the interests of the Austrian electricity industry. According to Brandstetter, only an additional four terrawatt hours until 2025 are realistic. “Unfortunately, many projects are on hold. The industry is about five years behind its development plans.”

Brandstetter explains that regarding water power stations, the current market situation is characterised by acute insecurity. “Many planned projects are economically no longer justifiable.” Oesterreichs Energie doesn’t demand subsidies. It however wants a more investor-friendly environment.

“Most worrying is that even storage projects are about to become unprofitable,” Brandstetter adds. “Along with the electricity networks, pumped storage hydropower plants are the most important enablers of a renewable energy future.”

Ernst Brandstetter demands a stop to market distortions by introducing a European market design with rules granting all energy sources fair competitive conditions.

For Switzerland’s and Austria’s hydro power industry, much depends on developments at the European Union. On that level, a consultation on Environmental and Energy Aid Guidelines 2014-2020 is currently under way. Whether or not Alpine hydropower may profit from the new guidelines will be seen next spring.

This report was first published here by IPS Inter Press Service