FORUM for ACTION
No.
56 - June 2011
Content
Prizes instead of patents p. 11
In the 21st
century, the security of nations will depend increasingly on the availability
and access to natural resources. Countries need natural resources to meet the
rising needs of their growing populations and the requirements for growth of
the neoliberal economy. When key resources are not found locally but need to be
imported, the main concern is to secure their “access”. In the race to get the
giant’s part of the resources, the respect of the populations where the
resources are found, the sustainability of the resource, the environment, and
the needs of future generations are rarely considered. Also,
new
technologies increase production depleting the resources at rates unknown until
now. This puts great pressure on the planet,
favours the ecological decay, the loss of biodiversity, and influences climate
change, which in turn, constitutes a threat to the security of countries and
peoples where the resources are located.
1. Security and access to resources
Natural
resources can promote development, but they can also attract the greed of
groups, businesses, and powerful countries searching for easy and cheap access
to the resources to get benefits, even at the price of fuelling insecurity and
conflicts. Though a peaceful and stable situation in the country where the
resources are found and in the distribution chain seem essential for both
demanding and supplier, the fact that many big players benefit from the current
situation of insecurity in certain resource rich areas questions this
assertion.
Global commons
Natural
resources essential for life such as water, land, air, biodiversity, etc.
should be considered as global common goods not to be exploited and marketed as
any other good. They need to be recognized and protected by binding
international agreements and collectively managed by the community of nations (not
exclusively by the state), in order to serve
the needs of all.
Resource security for both exporters and importers of resources
Resource security refers to the security of access to the
resource for the foreign country or company that wants it; however, it does not
include the security of the country and population where the resources are
found. The distribution of resources in the
earth leads to significant vulnerabilities. Oddly enough, this vulnerability
affects not only the countries missing the resources, but often even more those
where the resources are found, as these attract the greed of many. Thus, free
access to cheap natural resources has become essential, and, as such, it is
part of national security and of foreign policy interests.
To
facilitate the access to the resources, international
and cooperation agreements and charters are signed between those needing them
and those owning them. The problem comes when the two signatories of the
bilateral agreement are not on equal terms. The strong player will try
to get the resource at the lowest price possible to maximize benefits and
minimize costs that will translate into lower prices for consumers, but it will
have little or no concern for the needs of the country and
population owning the resource.
Factors affecting resource security
The security linked to
the resources depends on the scarcity of the resource and its price. As
“resource security” is seen from the demand side, increases
in price and barriers to access
are considered threats. Companies can put pressure on their
governments to act politically in order to facilitate their access to cheap
resources. Western countries consider increased
competition for African resources by China, India and Brazil
as threat as well as the recent
restriction of China’s exports of rare earth minerals[1].
Political and
social unrest, warfare, terrorism, natural disasters, competition over resource sources, and manipulation of prices are some
of the threats to
resource security. Lack of transparency in
buying and selling the resource contributes to insecurity.
2. Environmental security
Environmental
security considers
how environmental
factors can contribute to social and political tension or future conflict,
as well as the impact of conflict and international
relations on
the environment.
Increasing
competition for scarce natural resources needed for life - water, fisheries,
land, and biodiversity - can instigate conflicts, instability, and waves of
environmental refugees. Some late environmental conflicts confirm this claim:
the forest fires in Indonesia, the turbot fishery dispute between Canada and
Spain, and the land conflict in Rwanda.
3. Resource conflicts
The
search
for resources has stimulated conquests and wars since ancient times and
continued in recent times by colonization. The goods, strategies, and methods
may have changed, but the motivation remains: the thirst for benefits provided
by the resources wherever they are (countries, Arctic, oceans, deserts, moon,
universe) without concern for the consequences for the population and nature.
Multinational companies helped by their government, roam the
planet in search of new reserves as they compete for control of hugely
profitable resources.
Natural
resources, mainly oil and hard-rock minerals (gold, coltan, diamonds,
wolframite) but also timber and water, play a key role in triggering,
prolonging, and financing conflicts. Conflict can emerge over how a resource is used, allocated, or exploited
and over who benefits from it. Different
actors fuel the conflict as a means to gain access to and
control over natural wealth. The
demonstrations of the Arab Spring kindled by high food prices show how poverty
and declining living standards can cause internal turmoil ending in war. Poverty, injustices,
ethnic or religious grievances, and unstable governments play major roles, but
natural resources heighten the danger that a civil war will break out.
Resources
influence insecurity through the effect on their: economies - by paying low prices and repatriating all benefits; governments - by weakening it,
corrupting it, and lacking accountability; people
-by unjust working conditions; environment
- depletion and destruction; and
rebel movements - by financing. To
secure the access to resources, foreign governments are ready to use any means:
support and fund dictators, side with rebel groups, use military/intelligence,
diplomacy, etc. The NATO occupation of Iraq and the
bombing of Libya, and the French intervention in the Ivory Coast are recent
examples. The losers in the equation are the population where the resources are
found and the less developed economies.
The “curse” of natural resources and security in Africa
In the last decades, the hunger for African
resources - minerals, hydro-electrical power
reserves, and offshore oil - has led to
nine 'resource conflicts'. The link between natural resources
and conflicts is so strong in the continent that the rich African natural
resources are sometimes described as a “curse” as they have contributed to the
use of violence and gross human rights violations.
Companies, countries,
groups, and individuals have sought to profiteer from Africa’s vast natural
resources playing troubling roles in the region,
either motivating or fuelling armed conflicts in their aim to control valuable
oilfields and minerals or at the expense of the suffering of
the population. Arrays of players also influence the conflicts: shadowy
resource traders, smugglers, corrupt local officials, arms dealers, transport
operators, rebel groups, and mercenary companies. In Angola, Liberia, and
Sierra Leone, rebel groups financed a long, violent civil war by selling
diamonds. In the eastern DR Congo, the exploitation of the mines plays an
important role in the conflict and in the violation of human rights.
Africa has not been able
to transform its enormous economic potential and wealth into benefits and
development for its people. The control
over natural resources and their revenues often stay in the hands of small
elite. Revenues from the resource exploitation are not only used for sustaining
armies but also for personal enrichment and building political support.
The main “external” players AFRICOM and the EU
The role played by the “internal” actors: government, rebel groups,
suppliers, and beneficiaries of the exploitation of natural resources in
conflicts, warfare, and their cessation is well known. Their responsibility is certain, but we will
look only at some “external” actors.
AFRICOM, the US military's new command for Africa
says “to bolster regional security and upgrade humanitarian efforts”, but is
seen by many as a US’s tool to push its corporate agenda on Africa to get
access to its vast natural resources. The US supported Rwanda to move into
eastern DR Congo to open up its vast mineral riches to North American based
mining companies[2]. Millions of AFRICOM’s US dollars go to
military contractors[3] to train and provide military logistics
for African Union peacekeepers. AFRICOM's inaugural mission to help
establishing a no-fly zone over Libya has reinforced African’s belief that
AFRICOM intents the promotion of US strategic interests.
The European Union (EU) has not yet set an external policy, though the new
European External Action Service (EEAS) aims at increasing EU's influence in the world. EU countries have
intervened in different African conflicts. The recent French intervention in
Ivory Coast is an example. They also actively participate in NATO actions in Iraq and
Libya. The EU feels threatened by the entering of China, India, and Brazil in
the search for African resources, and different means are taken to maintain
EU’s influence in Africa.
4. Towards
resource security for all
Different approaches are
needed to promote resource security for all.
At short term transparency at all levels (companies and governments);
international cooperation through multilateral[4]
fair agreements; economic security for all; restriction
of conflict commodities; sustainable and
responsible use of natural resources; reduce dependence by repairing,
recycling, and reusing; fair leadership of national stakeholders;
including the social and ecological
‘externalities’ in economic calculations. Better policies should help direct resource wealth to development and
poverty reduction.
At medium term, there is need of a new relationship with nature, the recovery by states of their
sovereignty over their natural resources, and an end to their private
appropriation. This equilibrium needs
not only political will on the side of all the stakeholders but mainly a change
in the international system.
At long term, enhanced
security demands a new and just
international order and a personal
change of behaviour. This
means a new approach to the relationships between human beings and to their
relation to nature - the source of all life - moving from exploitation to
respect. The “new order” needs international frameworks for resource governance
and collective management of global common goods to make them available to all.
This new order needs to serve the live of all on the planet
Earth; answer the needs of developing countries; make the populations where the
resources are found the main beneficiaries of the exploitation; foresee the protection
of the environment; and prevent the degradation of the resources. But together
with political and structural changes, a change
of personal behaviour is also essential to diminish consumption and to live
more austere.
Some
other possible orientations could be: the sovereignty of nations over their
energy resources; the prohibition of speculation on food products; the
regulation of agro-fuels so that they respect biodiversity, the conservation of
soil and water quality and the principle of peasant agriculture; the adoption
of measures necessary to limit the increase of the earth’s temperature to 1ºC
during the 21st century; and public control over oil and minerals
through an international code of exploitation, verified and authorized,
concerning the ecological and social effects (including, inter alia the
rights of indigenous peoples).
Begoña
Iñarra
Africans already suffer from
effects of global warming on agriculture, fishery and forests. But conducting a
climate policy without questioning the
other policies should be inefficient.
Africa is very vulnerable to
changes in the climate and to the variability of the climate, not only because
of the aridity or semi-aridity of is
soil, but also because of economic and political factors such as endemic
poverty, weak institutions, the complex reality of conflicts and policy trends
concerning water management, agriculture, fisheries, the environment, energy
and trade.
Policy trends and investment
choices are crucial. They have serious
consequences for many poor people in developing countries.
This article highlights some
links between some resources for food production affected by global warming and
the need to review the policy relative to these.
1. The impact on water
The agricultural sector is the
most affected by the reduction in available water. Nicholas Stern[5] predicts that
an increase of 3-6˚C in eastern Africa will bring about a reduction of water
supplies of 30-50% in the coming years!
Increasing evaporation, an increase in the
frequency and intensity of floods and droughts and the reduction in rain and
river flow[6] – as well as
the shortening of seasons – threaten to reduce farming productivity and the
variety of crops that will thrive.
It is vital, then that both
citizens and governments of Africa pay attention to improved management and use
of water. Promotion of farming
techniques that do not use much water, that reduce evaporation and that are
right for the local conditions is essential.
Technical and financial support for ways of managing water, such as
underground reservoirs for conserving water longer, is needed.
Avoiding poor
choices
Hydroelectric dams are an
obstacle to the flow of streams, the deposit of alluvium, agriculture around
the rivers, fishing and the availability of domestic water (which represents
10% of the water consumed worldwide). What is more, the planners have not
integrated the climate change factor in their calculations of the capacity of
these barrages and the water needed. Energy policies need to promote local
solutions that use technology appropriate for the area, e.g. solar cooking
ovens.
Senegal and some other African
states are stepping back from the privatisation of the distribution of water
following bad experiences with multinationals.
The latter had boasted of their management capacity to governments that
were having difficulty providing drinking water for their people. The
fast-growing urban population requires more water, so there is a need to look
further afield for it and this increases the costs of transport, storage,
treatment and distribution. However, the
multinationals are more interested in profits than providing a service for the
people or long-term water management. So, taking account of this, States cannot
delegate their responsibility to the citizens. Instead, they must include in
their legislation the right of access to safe water and sanitation recognized
by the UN in July 2010 and then take steps to ensure implementation of this
right.
2. The impact on farm land
Both the quality and the quantity
of farmland are under threat from the consequences of global warming, certain
political choices and some investments that are depriving Africans of their
land and the resources it holds – and this at a time when a high proportion of
the African population depends on farming. Agriculture contributes to the income
of African states.
Climate change threatens much
farmland in Africa. Harvests could drop
by 50% between now and 2020 in certain countries and agricultural production
would have to be abandoned in some large regions where farming is marginal. By 2080, the area of arid or semi-arid land
in Africa will probably have increased from 5% to 8%. The forests, grasslands
and other natural ecosystems are already changing, especially in eastern Africa[7].
Agricultural Policy
The
priority support to small-scale agriculture is crucial. This affects almost ¾
of Africans. Several economists have shown that this support contribute
positively to the development of other sectors of the rural economy too. Large
plantations marginalize small producers. They make pressure on land and water.
Many, led by the multinationals, product for exportation at the expense of food
sovereignty and regardless of their socio-economic and environmental impacts.
Worse, they contribute to global warming and waste water by their mode of production.
Unfortunately,
most African governments have welcomed investors in crops for biofuels, without
having first put in place a policy framework to protect the occupants and users
of the land, to conserve natural resources, to guarantee a value-added factor
for the country (sharing the production and profits), to strengthen workers’
rights or to oblige companies to accept responsibility for the negative impacts
they cause.
Moreover,
many corrupt policy-makers grant the land to foreign investors and speculators
to the detriment of the local people and the common good. They allow them to have vast areas of quality
farm or forest land and the water found there, even if they are already being
used. They even go as far as granting
these newcomers priority rights to water usage.
They allow them to divert the rivers with no regard for current
users. There are no sanctions for
polluting the rivers or lakes, or for the collateral damage. They exploit the legal vagueness that has
resulted from the coexistence of traditional and constitutional laws. They take advantage of the villagers’ lack of
information about the purposes of the contract, the citizens’ rights and the
duties of the legal authorities. Most of
the profits are pocketed by the foreign buyer.
As for the speculator, his investment is not reinvested in the economy.
Together, this results in the displacement of whole communities and the
destruction of the environment. Serious socio-economic impacts ensue in a
context where food sovereignty is already threatened by the harmful effects of
the climate on natural resources.
Initiatives
In
the face of such abuse of power and the magnitude of the phenomenon, civil
society and international organisations are making a stand, each with its own
objectives.
African civil
society has made
its voice heard in the FAO consultations to develop guidelines on responsible governance of tenure of land, fisheries and forestry[8].
These are different from other initiatives as they are based on the Right to Food and consultation on all continents of all stakeholders (civil, private, government, experts). Two draft
versions
were
subject
to public
criticism.
The final text of the voluntary directives will be examined by the FAO
Committee on World Food Security (CFS) at the end of 2011. In the CFS reformed
in 2009, civil society is a full participant with the right to intervene in
debate on the same footing as governments.
In the code of conduct for land policy
in Africa[9]
published in 2010, the African Union notes
the culture and spiritual value of land for Africans.
3. The impact on agricultural crops
Experts
of IAASTD[10]
and of several other studies indicate that the key to food sovereignty lies in
the diversity of plants and seeds. The
more different species that exist in the same region, the better the potential
for adaptation to climate change (temperature, rainfall, length of season) and
for resistance to insects and diseases. These in turn improve agricultural
production, a necessity as populations grow.
Conflict of interests
However,
the multinationals are pressing governments to restrict the freedom to
exchange, stockpile and multiply seeds and tubers. They are currently asking
for a reform of European legislation that will affect the way Africans can
trade and draw up trade agreements. They are very active at government level,
in universities and centres for research and outreach in Africa. From laws to research and training
guidelines, they are promoting the implanting of farming products and practices
that bring them profit but do not meet the food sovereignty needs of African
people. Nor do they take into account
the protection of the environment and ecosystems, biological diversity or the
need to reduce greenhouse gas emissions.
To
counter the impacts of the climate and to guarantee food sovereignty for their
citizens, African governments need to take legal measures to protect and
promote the farmers’ right to conserve, use, exchange and sell agricultural
seed[11].
It is incumbent upon them, too, to protect and spread traditional knowledge.
Any
protection of food sovereignty and adaptation to climate that is taking place
is thanks to small-scale agriculture that integrates the various elements of
the ecosystem. This is called
agro-ecology. Many Africans practise it
already without being recognised, let alone encouraged. On the contrary, it causes them to be
threatened.
4. The impact on fishing
Aquatic
flora and fauna are under threat. Corals, at the base of the food chain of
ocean creatures, are being destroyed by the rise in temperature and by the
increasing scarcity of certain fish. African governments would do well to enact
policies that favour local fishing communities that adapt their practices
according to the fish available and do not despoil the oceans’ reserves. Above all, they contribute to the
socio-economic development of coastal communities. By contrast, foreign companies with huge
boats fish in response to the demand of foreign consumers and exhaust the
reserves of the sea and destroy the food chain of the fish.
Vital political choices
There
are many other political choices that have a direct or indirect impact on the
social and economic life of Africans, and that give right or wrong answers to
the challenge of climate. Everything is linked – according to the GIEC[12]
report on the climate and the IAASTD8 report on agriculture. Climate
is a crosscutting theme, both cause and consequence of various political
challenges.
Ultimately,
African governments need to put the right to food and other socio-economic
rights to which they have subscribed at the heart of their policies, their
investment choices and their agreements with according to the European Union
and other partners. Better still, they should ensure that these policies are
put into practice. To do this, they must
assess the possible impact of multiple options of policies. They also need to
strengthen democracy so that citizens can participate in the governance of
their country. Finally, African states must demand that industrial countries
reduce their greenhouse gas emissions. They should reject false solution and
pitfalls, such as the ‘carbon credits’ that only benefit those who know how to
sell them or play with them on the stock exchange and that authorise the
polluters to continue to raise the climate temperature.
At
the origin of some climate disasters, there are choices poorly lit and people
who have no interest at all in the common good.
Christine Fouarge
In March the Union
économique et monétaire ouest africaine (UEMOA) presented its cotton
initiative in Brussels. Many least developed countries are dependent on cotton
for rural livelihoods and export revenue. But few places rely on it to the
extent of UEMOA members Mali, Benin, Burkina Faso and Chad (known as the
Cotton-4 or C-4) where it accounts for 5%-10% of the Gross Domestic Product
(GDP). With an average GDP per capita of $637 and among the least developed
countries on earth, the C-4 rely on cotton more than any other commodity for
their export revenues. In these countries cotton provides the livelihood for 10
million of the world’s poorest people.
These countries produce cotton more cheaply than
anywhere else – a competitive advantage that logically should place the C-4 in
an excellent position to benefit from the world’s ever increasing desire for
cotton products. However, the subsidies paid to their producers by the US and
the EU, as well as China and India, have fatally undermined the C-4’s ability
to trade their way out of poverty. The cotton initiative offensive aims to put
the demands of the C-4 group of West African cotton-producing countries for
cotton sector reform back at the top of the World Trade Organization's (WTO)
agenda.
The
harmful impact of subsidies on cotton farmers in Africa
In the last nine years $47 billion have been handed
out by the United States, the
European Union, China and India to their cotton growers. Over $24bn of this
$47bn have gone to US farmers. China subsidised its cotton growers with more
than 15bn and the EU gave almost 7bn to its farmers. The United States is the
world’s biggest exporter of cotton. In the most recent figures, it accounts for
34% of global exports. West
Africa today produces about 4% of global production. The C-4 nations export
virtually all of their cotton, mostly to China.
It is American growers and, to a lesser extent
Europeans, who enjoy the benefits of subsidies, so creating a global price
dampening effect. Even in spite of a recent cotton price spike, cotton has lost
more than half of its value compared with 1975. For the C-4, it is a situation
that spells economic ruination. With no subsidies to bail them out, African
farmers struggle against insuperable odds to compete. In turn the lack of
revenue generated by the cotton sector means C-4 governments cannot afford to
build roads, ports and other infrastructure to catalyse a garment industry that
could employ millions of people and create greater value in an underdeveloped
sector.
The decline in real terms of cotton prices has
disproportionately disadvantaged African farmers as they are so heavily reliant
on cotton exports for their livelihoods. This partly explains why cotton
production in the 12 main African cotton producers fell by almost 50% between
2005 and 2009. Increases in cotton prices on world markets between the end of
2007 and 2008 passed West African farmers by because the dollar was weak
against the CFA franc.
Global cotton prices are not only dependent on the
supply and demand of cotton. They also depend on the level of subsidies
available to producers and exporters in other nations. A subsidy is given to
cotton producers based on the difference between the world price and a set
support price. In addition to output subsidies, EU cotton producers also receive
subsidies on inputs such as credit to invest in machinery, insurance and
publicly financed irrigation. US farmers receive a guaranteed price whatever
happens to cotton prices in the future. Therefore, they are encouraged to
continue to produce cotton.
A guaranteed price causes production decisions not
to be entirely market driven. Subsidies lead to higher levels of production
that demand and supply would naturally determine in a free market. The world
price slumps when the supply of cotton is artificially increased in this way.
If subsidies were eliminated, production would decline in countries that
subsidise cotton, but would rapidly expand in other countries in response to
higher prices. As a result production would shift toward lower-cost producing
countries like the C-4.
The International Cotton Advisory Committee (ICAC)
says subsidies reduce prices by 10%; the World Bank says by 12.9%, amounting to
an annual revenue loss to African producers of $147m. Oxfam calculates that
removing US cotton subsidies alone would increase world prices by 6-14%,
producer prices in West Africa by 5-12%, and average household income in West
Africa by 2-9% – enough to support food expenditure for a million people.
According to the ICAC, the US is not only the world’s
leading exporter but also the country with some of the highest costs of
production: whilst the average cost of production is $0.80 per pound in the US,
the cost of production is $0.35 per pound in Benin. The US therefore subsidises
its exports to be competitive with the world’s poorest countries who also hold
a natural competitive advantage in cotton.
The US may have the overall highest amount of
subsidies but the EU hands out the largest amount of subsidies per pound of
cotton. The 2009/10 average assistance per pound produced in the EU was $2.51
compared to $0.14 in the US. Cotton subsidies in the EU began as part of the
Common Agricultural Policy (CAP) in 1981 when Greece was the first cotton
producing country to join the then European Community. Spain shortly followed
into the EC, and today, cotton subsidies are distributed to around 100,000
producers in Europe: 10,000 in Spain and 90,000 in Greece.
The European Commission is aware of the harmful
impact of its cotton subsidies on African cotton farmers. The 2007 Policy
Coherence for Development Report recognises that "the EU continues to
spend €800-€900 million per year related to cotton farming, while the same
product is grown in Africa at a lower cost supporting the livelihood of over 15
million people. The EU is not an important cotton producer globally. But by
further reducing its cotton production, the EU would take a step that is likely
to assist African producers."[14]
At the same time no concrete step was taken by the EU to react to the findings of
the report.
The
cotton issue at WTO level
In 2005, the WTO attempted to create a cotton trade
framework that would see the phase-out and elimination of US and EU trade
distorting cotton subsidies. However, pledges made have not been implemented.
Trade ministers from every WTO member state, including those of the EU and the
US, solemnly agreed in the WTO Hong Kong declaration that cotton had to be
treated ‘ambitiously, expeditiously and specifically’. However, the declaration
was not followed by concrete action.
Chances for the C-4 to obtain a meaningful success
in a legal case at the WTO are slim. In 2002, Brazil used the WTO dispute
settlement system to file a legal complaint against the US due to America's
cotton subsidies. Brazil argued that US cotton subsidies violated agreements
made during the previous global trade deal, the Uruguay Round and that US
cotton subsidies harmed Brazilian cotton growers. In a long drawn-out legal
battle at the WTO, Brazil in 2009 won the right to retaliate against the US.
The WTO condemned the US for using
prohibited export subsidies and exceeding the cap on the amount of trade
distorting subsidies. In early 2010 an interim agreement between the two
nations resulted in Brazil suspending retaliation until the US passes a new
cotton support regime in the framework of the next Farm Bill expected in 2012.
During the case the US proved ability in pushing
the WTO system to the limit. It used procedures and appeals to prolong and
postpone final rulings. Eventually, settlement with Brazil does not seek to
eliminate subsidies – only to cap them.
The C-4 has the same legal case as Brazil and could
also launch a dispute case against the US. However, for the C-4, introducing
their own dispute settlement could only give them a moral victory. In practice,
retaliatory measures are applied to imports. Brazil has many ways to retaliate
against the US, but C-4 countries do not import much from the US. Sanctions on
this small amount would not hit the US economy hard. Moreover, the dispute
settlement has as its objective compliance with existing laws and commitments.
What the C-4 wants and needs is a new commitment to eliminate all
trade-distorting cotton subsidies. The only means available
for that are negotiations within a round such as the Doha Round. However, with
the Doha Round negotiations going nowhere at present, new opportunities need to
be found to address the issue. In this sense the UEMOA cotton initiative is an
important first step to attract attention and highlight the difficulties cotton
farmers in Africa face.
Thomas
Lazzeri
Prizes instead of patents
The Medical Innovation
Prizes are a creative proposal that offers an alternative to
patents for medicines. Prizes for innovation could encourage more efficient research
leading to better health outcomes by promoting the
development of cures for sickness that have been disregarded by
producers, leading to cheaper medicines, and eliminating some of the problems
associated with the current patent system. The main focus of this new prize
system is to see health as a public good, where effective treatment of people
should come before economic benefits.
1. The shortcomings of the current system of patents for medicines
The current system of financing
research and development (R&D) for new medicines through giving a patent to
the inventor has severe consequences on public health budgets and on research for new
medicines. The system does not solve current health challenges and needs.
Patents on
medical products provide a temporary monopoly (10 to 20 years)
on a product to the inventor or firm which comes up with the product. Patents
are supposed to be a return on the cost of research. The patent grants a
producer the possibility of fixing the price of the patented drug regardless of
the price of production. This hinders access to the patented medicines. During the life of the patent, generic versions of drugs cannot be produced
nor sold. The companies owning a patent seek to delay and deter
competition from the generic by extending the life of the patent with
innovations of hardly any therapeutic effect. The link
between the cost of R&D and the prices of medicines in the current system
yields medicines that are unaffordable, unavailable, or unsuitable for some
developing country contexts (i.e. heat stable, paediatric formulations). In fact, using industry assertions of Research
and Development (R&D) spending, pharmaceutical related R&D spending by
the private sector was less than 8% of global sales in 2010.
The granting of patents makes most
current health research profit-driven rather than needs-driven. Companies invest huge
amounts on R&D for medically unimportant products (slimming, hair loss, or impotence) within a large market but fail to invest in areas of public interest, such as neglected tropical
diseases, as these patients are poor and the market would bear small
benefit. According to Médecins Sans Frontières
(MSF), of the 1,393 total new drugs approved between 1975 and 1999, only 1% (13
drugs) were specifically indicated for a tropical disease (MSF). According to Prescrire
International, out of the 984 new medicines developed over the period of 2000 –
2009, only 2% represented a real therapeutic advancement for patients.
Another collateral aspect of patents
is the restriction of information to others in such a way that patents become a
barrier for researchers and further innovation of drugs.
Other factors added to those mentioned above such as the aging of the
population, the high price of medicines for certain diseases (cancer, heart),
and the impact of the economic crisis in health budgets show even more limits
of the patent system. Even in rich
countries, the growing burden of medicines prices on national healthcare
budgets becomes unbearable. For example,
Spain and Germany have already cut medicine expenditure.
Today it is clear that the monopoly
of patents, data exclusivity, and other intellectual property (IP) measures are
inefficient incentives in health innovation. The current model of granting
patents for biomedical innovation is unsustainable and inefficient for both
developing and developed countries. In rich countries, the most expensive
medicines are pushed through the medical system far beyond the benefit of the
drugs. In developing countries, many patients cannot be treated due to the high
costs of drugs from the health system often paid out of the pocket of the
patients. Despite growing acknowledgment of the failures of the IP-based
R&D model, the EU and other industrialised countries continue to export this
model to developing countries through bilateral and international trade
agreements.
In the last years a series of
factors regarding innovation have become evident: the need to delink the price
of medicine from the cost of research, to prioritize a needs-driven approach in
research priorities, and to consider access as an integral part of the R&D
process. The search for new models of medical innovation and research in the
area of medicines has become a priority.
2. The new models
Delinking the price of medicines
from the cost of research means finding new ways to pay for R&D on
medicines. Another need is to search for
models driven by societal needs and public health priorities. A condition for
this to become a reality is to make public the “knowledge” attached to the
research.
These last years a range of
proposals and initiatives on R&D on health products that promote access and
therapeutic benefits with real health impacts have been tried and proposed.
They vary from R&D models similar to the traditional IP rights (patents),
to those with no IP rights attached. We present some of the initiatives already
in use, an on-going process to move us towards new more sustainable models of
medical R&D that bring the access and innovation that the public needs.
A series of decisions have been
taken at international level (WHO[15], USA[16], EU[17]) in the effort to delink
the cost of R&D from the price of medicines. The World Health Organization
(WHO) has formed a new expert working group (EWG) on innovative R&D financing.
The EU has committed to explore de-linkage and set out some principles to
ensure affordability and accessibility such as third-party competition, R&D
grants to small companies (push funding)
, and prizes (pull funding) to stimulate research in priority areas and reward
results that meet the criteria for affordability, accessibility, and real
health impacts.
The UNITAID
& Medicines Patent Pool has established a patent pool for medicines to
provide patients with increased access to more appropriate and lower price
medicines. Patent
holders are encouraged to join the pool. The pool encourages the
development of adapted formulations, such as for paediatric use and allows
competitive generic manufacturing. It focuses on financing that supports
sustainable access to medicines. The initial focus would be exclusively on antiretrovirals
(ARVs).
The Open
Source Drug Discovery (OSDD) initiative is an open innovation model partnership
(4511 members across 130 countries) aiming at providing affordable healthcare to
the developing world.
It works on challenges in the drug discovery process based
on a system of attribution and rewards for solutions to interim challenges.
This is a way to overcome the constraints of the IP-based model. OSDD focuses
on diseases that are neglected by larger market-driven pharmaceutical
companies, currently tuberculosis and malaria.
3. Prize fund model for innovation and access
In the last years, the idea of
prizes instead of patents to be awarded in order to further advance pharmaceutical
solutions to global problems such as AIDS, TB, and many others, has kept
growing. Offering extremely attractive prizes for winners of open competitions
would encourage R&D on new medicines. This would delink
the prices of medicines from the incentive of offering a prize as opposed to a
patent, can be an incentive for R&D of new medicines in developing
countries, and
would provide products immediately affordable instead of pending on a patent
expiration. The prize will allow the final product to be available to all
people.
The ideal would be a global prize.
In waiting for that global prize to come into being, other partial models are
already being tried upon. In the US, two new bills seek to introduce prizes in
order to eliminate all legal barriers of manufacturing and selling the of generic versions of drugs and vaccines.
The more ambitious bill is the Medical Innovation Prize Fund Act (MIPF), which
would apply to all prescription drugs. It would create a prize fund equal of
0.55% of US GDP, which is more than $80 billion per year at current levels of
U.S. GDP. The narrower proposal is the Prize Fund for HIV/AIDS Act, which would
only apply to treatments for HIV/AIDS. It would be funded at 0.02 % of U.S.
GDP, which is about $3 billion per year at current levels of U.S. GDP.
The Medical
Innovation Prize Fund (MIPF) proposes a reward for reimbursing R&D investments
for new medicines. This would allow eliminating patent and other IP barriers to
research and access to medicines. The prize system seeks to reconcile both
supporting innovation and access to new treatments. It will be oriented towards
drugs for illnesses where the market fails and will allow for generic
competition in order to lower
the price of medicines.
In the Donor Prize Fund for HIV/AIDS
treatment, a certain amount of money would go into a fund. To receive the
reward, companies would have to license to the UNITAID patent pool. The fund
would also have an innovation dividend. This would allow donors to buy the
medicines at marginal cost. Both
prizes will make available the “knowledge” of the winning medicines for anyone
to manufacture it as a generic, at very low cost, being then accessible to the
needy. The prizes could be funded by public money, foreign aid assistance
funds, foundations, global organizations, and insurance companies that will
benefit from lower medicine prices.
Another
proposal is the Cancer prize fund,
which would pay out to companies based on the therapeutic and health impact
value of their medicines. Generic production would reduce restrictions on
access giving every patient access to the most effective cancer treatments. The
reward could include provisions for researchers that published through open
access fora, shared data, or contributed to the development of the medicine in
question.
The
prizes system will support increased sharing and access to knowledge; more
efficient incentives to innovation; rewards based on improvements to health
outcomes; reduced incentives for marketing and promotion; elimination of high
prices for medicines and a market based on affordable (generic) manufacture of
medicines. This means that the
result of the research would be “open source”, made public and available
to others who want to use it with certain conditions to improve
the product or to make a new product. The conditions to use the open source are
that the end-product, source-material, blueprints, and documentation is in turn
available to the public at no cost. This contrasts with the current business
model which is more centralized and where the documentation is kept secret.
What's interesting about the prize
idea is that it rewards companies for innovation directly, not by granting them
intellectual monopolies, which are then inevitably used to deny people
life-saving medicines because there is no profit in making them available at
affordable prices. By decoupling the rewards for
successful R&D investment from the sales of products, the new model will
permit governments to create more efficient and useful incentives for R&D
that focus on inventions that improve health outcomes. Patents would
still be available for medicine related inventions, but they would not block
generic competition. Research funded by public money would also be eligible to
receive rewards from the Prize Fund.
Please visit http://www.greenmediabox.eu/archive/2011/05/31/innovation/
to see the video of the event at the European Parliament on Prizes and
innovation in Medicines.
Begoña Iñarra
and the concerns of the local residents[18]
During
his visit in Cameroon in May, the author of this article visited the Ndogpassi
district in Douala. This is where the Logbaba on-shore gas field is situated.
Rodeo Development Limited, a subsidiary entirely owned by the British Victoria
Oil and Gas, has held the exploration permit since 2001 and started carrying
out exploratory drillings together with RSM Production Cooperation and with its
Cameroonian partner Societé Nationale des Hydrocarbures (SNH) in 2009.
Around
155,000 people live in Ndogpassi. A high proportion of the residents lack
access to drinking water and functioning telephone connections are virtually
nonexistent. The garbage collection does not function either and about one
third of the households have no access to electricity. Gas had been discovered
in Ndogpassi for the first time in the 1950s when Cameroon was still a French
colony.
The
French company ELF, carried out exploratory drillings but the project was then
abandoned because ELF was interested in discovering oil, not natural gas, which
at the time was not considered commercially relevant. Now the project is back
on track and Rodeo’s exploratory drillings apparently showed that the gas of is
of high quality. The exploratory phase has in the meantime ended and in April
2011 a presidential decree authorized the beginning of the commercial
exploitation of the gas. The official inauguration ceremony took place a few
weeks ago.
The lack of information
I
met a concerned local resident in his house together with AEFJN's local
Cameroonian antenna and with the Cameroonian NGO FOCARFE. In the short time we
spent there to listen to his concerns, about 20 other residents arrived to tell
us of theirs. The first serious concern they expressed was that they had been
given little to no information about the project. Neither the Cameroonian state
nor Rodeo fulfilled their obligation towards the local community to provide
accessible information in a timely manner. This happened in spite of Cameroon’s
Environmental Framework Law of 1996 which foresees clearly the principle of participation according to
which each citizen shall have access to information on the environment,
including information on dangerous substances and activities.
Rodeo
did not hold its few information sessions until August 2010, several months
after the beginning of the exploratory drillings. The information documents
made available by Rodeo were in English, a language not spoken by most
residents who speak French. Notably, the Environmental and Social Impact
Assessment study was also carried out in English. The practice of giving
documents in English to locals who do not speak the language is apparently relatively
widespread among international companies operating in Cameroon. The companies
use the formerly bilingual status of Cameroon (French and English) as an excuse
to provide locals in the French speaking areas - which are the majority - with
documents that are in English and therefore often incomprehensible for them.
The issue of landownership and compensation
According
to the information available, a large part of the land used for the
exploitation of gas is state-owned National Domain and classified as Public
Property of the State. Public Property of the State is inalienable. However,
the right to occupy such a property may be granted under a permit or a contract
of occupation. Initially the exploratory drillings had taken place on a surface
of 16 hectares; now exploitation has been authorized on a surface of 20 square
kilometres.
The
areas affected by the activities of Rodeo were declared “un-constructible” by
the local municipality in 1998, rendering all successive construction in the
zone illegal. However, most local residents were unaware of this and being more
familiar with customary aspects of landownership than with legal details have
continued to build in this area. Some even claim to have received building
permits after 1998, a claim we have been unable to verify ourselves. The
Environmental and Social Impact study recognizes that an “extremely sensitive
approach” to the expropriations needs to be adopted by Rodeo entailing
“intensive consultation” with the community through their leadership and
administrative structures and covering issues such as timing and modus operandi of the expropriations.
The study also mentions the necessity of Rodeo developing a Resettlement Plan.
During
one of the very few information sessions held in Douala in August 2010, Rodeo
in fact stated that it was looking for land for the relocation of the
inhabitants of the area affected by the extraction of gas. According to the
local residents we spoke to, none of this has happened and most of them are
still waiting both for information and for the actual compensation. The lucky
few who were compensated were compensated in cash and were not relocated. Cash compensation
is risky as it gives sudden wealth to the recipients who are in most cases not
used to manage such sums and risk squandering it, rather than investing it in
the purchase of land elsewhere. Written requests by AEFJN to provide us with
information regarding the relocation plans have not been answered by Rodeo.
Locals
had tried to organize themselves in a civil committee when the exploration
phase began, but the effort soon collapsed. The largest landowner of the area
received his compensation and moved elsewhere, abandoning the committee. Other
committee members backed down after receiving threats. The political situation
is generally tense in Cameroon. Long-time president Paul Biya, in power since
1982, intends to run for yet another mandate at the elections scheduled for
this autumn and the revolts in the Arab world as well as the crisis in the
Ivory Coast have set off alarm bells and prompted the government to tighten the
screws.
Thomas
Lazzeri
in South Saharan Africa
The Access
to Water is a Human Right
The provision of water is of the
utmost importance as it is needed for drinking, food, sanitation, religion,
etc. In fact, in September, 2010, the United Nations Human Rights Council
adopted a resolution recognizing the right of access to water and sanitation as
part of the right to an adequate standard of living with states as the guardian
of that right.
The number of people living in
cities in Africa with no access to tap water at home or in the immediate area
increased by 43 percent (from 137 million to 195 million) between 2000 and
2008, and half the world's hospital beds are occupied by people with
preventable water-related diseases. Climate change and the rapid use of water
as a non-renewable resource will only make these dire situations worse. The increase in the last two decades of
privatisation of water services in sub-Saharan Africa (SSA) has come under
serious controversy as profit driven companies now have control over the
provision of necessities. Even with this added power, private companies have
proven unable to provide better service than the public sector.
A
History of Water Privatisation in Sub-Saharan Africa (SSA)
Privatisation of public services in
developing countries was encouraged and financed by international financial
institutions such as the International Monetary Fund and the World Bank in the
late 1980s and early 1990s which resulted in an increase in privatisation of
water services in SSA in late 1990s and early 2000s. Privatisation was assumed
to be better able to provide water services than the public sector as some SSA
governments were struggling with corruption and inefficiency. International financial institutions also
pushed privatisation as a way of attracting foreign direct investment into SSA
countries to improve their economies.
Donor countries also wielded their
aid budgets and free trade treaties to win business for their national
companies. Management contracts were commonly used as a way of giving
multinationals risk-free business in water, while smoothing the way for
eventual lease or concession privatisation.
Ownership was often initially shared with a local company with financing
provided by a local bank. Public-private
partnerships were also encouraged, though these were often simply governments
granting concessions to private companies.
However, even with government
concessions, private companies were only interested in investing when the GDP[19] of a country was high
enough for the population to pay in the hopes of the company earning a
profit. This often resulted in the rural
population paying more for their water since access is more expensive for
companies to provide. Being motivated by profit, those who could not pay for water were simply
cut out of the scheme by the company.
Privatisation was initially
dominated by French multinational companies (MNCs), but soon followed by other
European and American companies, many coming from the UK. In SSA, Saur lead the way in Conakry (1989),
Central African Republic (1993), Mali (1994), Senegal (1995), South Africa
(1999), and Mozambique (1999). Veolia (former Vivendi) and Suez-Lyonnaise des Eaux
followed: South Africa (1992), Guinea-Bissau (1995), and Cameroon (2000); for
Suez: Gabon (1997), Kenya (1999), Chad (2000), Burkina Faso (2001), and Niger
(2001) for Vivendi. UK companies
followed including Biwater and Thames Water in South Africa (1999), Sudan
(2000), Nigeria (2003), and Ghana (2005).
The privatisation of water services
in SSA has had an overall net negative impact. Privatisation has involved
laying off local government workers without increasing efficiency of provision
or access to quality water. Efficiency
gains expected from competition between providers has not materialized as
companies have often been given a monopoly through concessions by the
governments. The high prices charged by private companies and lack of
alternative supply have forced many poor Africans to use contaminated water.
Furthermore, without state
regulation of water supply, private companies are not required to provide safe
usable water to the population it services. Poor countries are not able to
offer this type of regulation or infrastructure, so MNCs have no incentive to
provide safe water even to the customers who can pay high prices.
While privatisation in other
countries has increased the access to quality water, most developed countries
rely on a public water provision.
Privatisation of water in the US is only about 10% as compared to SSA at
over 30%. Even Europe, the former
champion of water privatisation, has been slowly passing ownership back to the
public sector. Additionally, European member states heavily subsidize water
prices to the public. In fact, an AfroBarometer survey of 12 African countries
undertaking economic reforms between 1999 and 2001 revealed that only 35
percent of the population preferred private ownership to state ownership.
Advancements
toward Greater Access to Water
Several advances have been made in
the battle to end privatisation of water services at both the regional and political level within SSA states.
Civil
society groups and angry users have formed coalitions to force the government
to cancel the contracts. Veolia had to get out of Mali, Gabon, Chad, Niger, and
Nairobi, while Saur left Guinea. Most
water privatisation has occurred in South Africa as the state can offer the
most stable economic environment for FDI in SSA. However, organized democratic
groups have been successful in opposition there as well, extending into nearby
Mozambique. In Uruguay, a civil society initiated referendum banning water
privatisation was passed in October 2004.
Movements from about forty other countries joined together in Nairobi in
the African Water Network (2006). A push for public control of water is
spreading in Europe as well. In September 2004 the Netherlands passed a law
banning the privatisation of the public water supply in with broad cross-party
support.
The EU
has recently established the ACP-EU Water Facility with a budget of €500
million for the African, Caribbean and Pacific (ACP) signatories of the Cotonou
Agreement. The ACP-EU Water Facility has been created to help improve access to
drinking water and sanitation for the disadvantaged population in those
countries by actively addressing the financing gap issue. The fund will aim to
support public–public partnerships in the field of water where one public
utility helps another to reform and improve its performance and the quality of
its management with solidarity being the motivation rather than profit.
In 2004, the Transnational Institute
began the Water Justice Project
which has compiled examples of how communities in different parts of the world
are moving from failed privatized water management to successful publicly
managed water and wastewater services. These examples are presented in the Water Remunicipalisation Tracker. Moreover,
in May 2007, Friends of the Earth International presented a letter signed by
138 groups from 48 countries asking donor countries to withdraw support from
the World Bank's Public Private Infrastructure Advisory Facility, an agency
that funds consultants to advise governments on how to privatize key sectors of
their economies such as water. The 2011
International World Water Day, organized by the United Nations and held annually on 22 March as a means of
focusing attention on water and sanitation issues, was entitled “Reclaiming
Public Water for Our Cities” and held in Cape Town, South Africa.
Finally,
as previously mentioned, the UN General Assembly in July 2010 formally
acknowledged water and sanitation as a human right. A September 2010 resolution
by the UNHRC[20] clarified the foundation
for recognition of this right and the related legal standards, demonstrating
that it is legally‐binding and equal to all other human rights. The UNHRC resolution also reaffirmed that the
primary responsibility to protect and fulfil the human right to water and
sanitation resides with the State, even in cases where States delegate water
service delivery to private entities. Though the resolution outlines States’
obligations with respect to private water
service providers, it does not explore the responsibilities of private large‐scale water users in realizing
the human right to water and sanitation.
What
Should Be Done Now
While the recent efforts to increase
access to quality water and the move away from privatisation are commendable,
more must be done to ensure that 1/6 of the world’s population is not without
access to quality water. Some recent suggestions have included using sea water
to carry away waste from cities rather than using fresh water needed for
drinking and bathing. Also, there has been some discussion of investing in
women and girls in water projects because they are often the most involved in
the provision of water in homes, and tend to offer high returns on
investment. The EU and other developing
countries have looked at creating export regulations on water as SSA countries
are not able to regulate their water imports as developed countries do. Many
organizations and universities have a plethora of information and
recommendations on water provisions which governments and the EU should use to
their advantage.
The broadest solution is to move
towards a system of public management with reforms in transparency,
accountability, and participation of citizens and civil society. Access to
financial, technical, and organizational support is necessary for SSA governments
to be able to use new technology and create the infrastructure needed to supply
all its’ people with quality water.
Information and education to the population are also important so that
they can push their governments to make better water policies and investment
decisions.
[1] Rare Earth Minerals are a suite of 17 elements
used in products from high-powered magnets, and fuel refining to
energy-efficient light bulbs, mobile phones, screens and modern military
equipment. This critical natural resource is relatively plentiful but dispersed
and not often found in concentrated and economically exploitable forms. The
West was happy to allow China to do its extraction as it is very polluting.
[2] Madsen testimony before the US Congress in 2001
[3] DynCorp and Pacific Architects and Engineers,
which is now run by defense-contractor giant Lockheed Martin.
[5] Nicholas Stern wrote an economic
report on the financial consequences of global warming and argued the need to
review policies in order to reduce this warming.
[6] If rainfall decreases by 10%, there
can be a reduction of 50 à 70 % in river flow (50% in North Africa and 70% in
South Africa), according to Maarten de Wit, a climatologist at Cape Univesity.
[7] Source: FAO - Climate change: major impacts on water for farming http://www.fao.org/news/story/en/item/79964/icode/
[8] For more information, see: http://www.fao.org/nr/tenure/voluntary-guidelines/en/
[10] IAASTD: Report of world experts on knowledge,
science and agricultural technologies that can feed the world in a fair and sustainable way http://www.agassessment.org/docs/Global_SDM_050508_FINAL.pdf
[11] ITPGRFA (International Treaty on Plant Genetic Resources for Food and
Agriculture)
[12] GIEC: International Group of
Experts on the Climate
[13] Data in this article are taken from Fairtrade,
2010, The Great Cotton Stitch Up.
[14] European Commission, 2007, EU Report on Policy Coherence for
Development, p. 138
[15] The World Health organization (WHO) WHO’s Global
Strategy and Plan of Action (GSPA) on Public health, Innovation and
Intellectual property,
[16] USA, the Medical Innovation Prize Fund Act of 2007 would provide a profound change in the way we finance new
drugs. A link to the text of the bill and a detailed description of how it
works is available.
[17] European Union (EU) The Council
Conclusions on Global Health (May 2010) calls for a coordinated global
framework for R&D. The EU Communication
on the Innovation Union (June 2010), proposes a more efficient system with
more value for money on R&D, cooperation between researchers and
innovators, and recognition of the importance of competition.
[18] This article is based on interviews with locals,
Victoria Oil & Gas' May 2011 Chariman Letter to the Shareholders and on the
Environmental and Social Impact Assessment study of the project.
[19]GDP Gross Domestic
Product. Value of all final
goods and services produced within a country in a given period.
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