Multinational Monitor

JAN/FEB 2004
VOL 25 No. 1


U’wa Overcome Oxy: How a Small Colombian Indigenous Group and Global Solidarity Movement Defeated an Oil Giant, and the Struggle Ahead
by Atossa Soltani and Kevin Koenig

Controlling Big Tobacco: The Winning Campaign for a Global Tobacco Treaty
by Anna White

Out of Burma: Grassroots Activism Forces Multinationals to End Ties with the Burmese Dictatorship
by Jeff Shaw

Dousing the Flames: Communities Unite Globally to Lock Out the Incinerator Industry
by Monica Wilson

Working to Keep Antibiotics Working: Can the Superbugs Be Stopped?
by Julie Light

Taming the Banking Predators
by Jake Lewis


Taking on Sprawl-Mart: Sprawl-Busting, Community by Community
an Interview with Al Norman

Running Over Citi: Banking Goliath Citigroup Agrees to Environmental Screens
an Interview with Ilyse Hogue


Behind the Lines

Lessons From Winning Campaigns

The Front
Canada Peddling Nuclear - The Sugar Fix

The Lawrence Summers Memorial Award

Book Notes

Names In the News


The Front

Canada's Nuclear Peddling

Ottawa - With few sales prospects at home and most foreign markets tapped out, Canada's nuclear industry is looking to the United States in the hopes of fostering a new "nuclear renaissance."

The government-owned industry trade promotion body, Atomic Energy of Canada Ltd. (AECL), has opened a new office just north of Washington, D.C., and is pumping millions of taxpayer dollars into a promotion effort for its "new and improved" reactor.

In recent years, former Canadian Prime Minister Jean Chretien made promoting Canadian-made reactors, known as CANDUs, a priority on trade missions abroad, and the government subsidizes the industry directly, with more than $75 million a year given to AECL. The industry has received an additional $110 million in public money to get its next generation of reactors, the ACR-700, to market.

Canada's new prime minister, Paul Martin, has been silent on whether nuclear subsidies will continue, but his new minister of natural resources, John Efford, has been effusive in his praise for the nuclear industry. "I am with you in every way possible," he told a February 2004 meeting of nuclear executives in Ottawa, "to [serve] the best interests of your industry, which is the best interests of Canadians and of the environment."

In December 2002, a new federal law shielded financiers and insurance companies from any potential liability that would result from a nuclear accident. The law extended the industry's already generous limited liability protection. With this, no matter how catastrophic a nuclear accident, victims could only seek a maximum of $56 million from the facility responsible for the accident. (In the United States, legislation known as the Price-Anderson Act limits nuclear liability to $200 million.)

Cost estimates of a major nuclear accident run at the upper end into the hundreds of billions of dollars. Without the taxpayer-provided limited liability, analysts readily concede private insurers wouldn't touch the nuclear industry, and current efforts to privatize nuclear facilities in the Canadian province of Ontario and elsewhere would be headed for a meltdown.

There has been little to show for these taxpayer bailouts. The results of Chretien's personal sales pitches to unload CANDUs on unsuspecting foreign governments have been underwhelming. Since a 1995 review by the Toronto-based Nesbitt Burns brokerage firm that said AECL would have to sell nine reactors in 10 years just to remain viable, the industry has managed only three sales, including one to China in 1996 that resulted in a court challenge by the Ottawa-based Sierra Club of Canada because the government failed to conduct an environmental assessment of the deal. All three AECL sales were made possible through massive loan subsidies from the publicly owned Export Development Corporation.

Back at home, the last reactor sale in Canada was in 1974, and none are on the horizon, despite a multi-million-dollar promotional push by AECL in recent years. Ontario, which relies most heavily on nuclear power, has spent more than $22 billion on CANDUs and since 1993 has written off more than $7 billion on its nuclear assets, a bill footed by Ontario residents, who pay nearly the highest electricity rates in the country as a result. And the federal Auditor General predicts that $7.5 billion will be required to deal with nuclear waste disposal from Canadian CANDUs in the coming decades.

"CANDUs produce reliably while they're young," explains Tom Adams, spokesperson for the Toronto-based Energy Probe. "But the reactors have troubled teenage years, and few make it through without major tantrums. As a result, nuclear is driving Canadian power utilities into the public-sector equivalent of insolvency."

None of this has deterred the Canadian industry from continuing to promote its product both at home and abroad, and it views the United States as its next potential customer. U.S. President George Bush is generally seen as pro-nuclear, as is his secretary of energy, Spencer Abrams, who in January 2004 told an audience of Japanese business executives, "You and I know that nuclear power is safe. It is reliable. It is efficient. It is affordable. Ö It is critical to dealing with global issues of climate change, the environment, and energy and economic security."

John Polcyn, a former vice-president of Bechtel, is now the president of AECL Technologies Inc., which was formed by AECL in June 2003 to market the new ACR-700 reactor in the United States. "The current administration has made nuclear power part of the energy mix," he says with a thick southern drawl. "In the long- and mid-term, the U.S. holds the best prospects for nuclear."

AECL argues its new reactor will be cheaper and quicker to build than its predecessors. It has teamed up with construction partner Bechtel, and turbine manufacturer Hitachi.

When asked about the CANDUs' seemingly chronic problems with cost overruns, Polcyn argues, "It's not the technology; it's the management. If you drive your car and you don't take it in for service, you're going to have problems."

Polcyn's sales pitch is aggressive, saying he will come to the site of the client's choice and build a light-water, 731-megawatt reactor for roughly $700 million. Moreover, he is willing to guarantee this price. "We're willing to offer a fixed price and a fixed schedule," he says. "If there are any cost overruns, he adds, "the risk is to us. We absorb the difference."

Such zeal enrages Canadian electricity watchdog groups. "The experience with CANDUs is that they are highly unreliable and have cost overruns," says Adams. "If AECL signs a contract that imposes these costs, they will be borne by Canadian taxpayers."

In the United States, electricity demand is growing by 2 to 3 percent per year, and much of the existing capacity is met with aging and polluting coal-fired plants. AECL is hoping to capitalize on the need for new electricity generation, and new environmental concerns about global warming.

But environmentalists point out that there are a host of other environmental problems associated with nuclear.

"Nuclear power was excluded from the Kyoto Protocol because it's foolish to trade one environmental problem for another," says Shawn-Patrick Stensil, who heads the Ottawa-based Campaign for Nuclear Phaseout. "At each step of the nuclear fuel chain from uranium mining to the production of nuclear waste, nuclear power leaves a heavy toxic footprint that impacts our health and the environment."

Beyond environmental concerns, the hurdles to selling nuclear reactors in the United States are significant. Due to public opposition, no new nuclear plant has been built in the country for 30 years. The ACR-700 is an untested new reactor that has not received approval from the Nuclear Regulatory Commission (NRC), which is expected to take three years, and there is reluctance to buy from a company wholly owned by a foreign government.

Nonetheless, Richmond, Virginia-based Dominion Power is considering including the ACR-700 in its application to build a nuclear reactor, and other companies are also considering the new reactor, including Illinois-based Exelon, and Entergy, which delivers power in Arkansas, Louisiana, Mississippi and Texas.

NRC approval may also help AECL promote its new reactor in other countries, as other regulatory agencies see U.S. regulatory approval as a good housekeeping seal.

"U.S. approval is helpful in some areas of the world, such as China," says AECL's Polcyn. "It helps our credibility, although it's not a requirement."

David Lochbaum, a nuclear safety engineer with the Cambridge, Massachusetts-based Union of Concerned Scientists, is worried about nuclear technology, but he says it is unlikely that new reactors are on the horizon in the United States.

"Economics is going to dictate whether we build nuclear, and the economics of nuclear is bad and getting worse," he says.

Lochbaum notes that before other reactor designs had applied to the NRC, their expenses appeared cheaper, but approval requirements raised the price tag significantly. "The ACR's cheaper price reflects where they are in the pipeline rather than where they'll be at the end of the pipeline."

He also points out that the NRC has not approved a reactor design since the events of 9-11, and that the anti-terrorism measures put in place since then will drive up security costs for new reactors further.

"Ten years ago, acid rain was a big issue, and the nuclear industry said they were the answer to that," says Lochbaum. "In that time, while the economics of nuclear has gotten worse, natural gas, solar and wind power costs have come down."

Nonetheless, fuelled by Canadian taxpayer dollars, AECL will continue its push to build U.S. reactors, hoping to gain a foothold to revive what environmentalists have characterized as a sunset industry.

- Aaron Freeman is an Ottawa-based writer and a columnist with the Hill Times, Canada's parliamentary newspaper.

The Sugar Fix

It has fuelled an international slave trade, ignited wars, and set generations of schoolchildren salivating.

Now, a new battle over sugar is brewing, this time between the United States and the World Health Organization (WHO), whose executive board met in Geneva in January to discuss proposed guidelines on diet and exercise intended to help national governments combat the global obesity epidemic.

The board meeting followed the issuance earlier in January by the United States of a detailed and controversial critique of the WHO guidelines. The U.S. criticisms were leaked to the public immediately in advance of the board meeting.

The executive board agreed with the U.S. request for more time to comment on the draft strategy and guidelines. The United States got some support from a few sugar-producing and exporting countries, like Mauritius, on the executive board. But some others (like the European Community, South Africa, Canada and New Zealand) opposed the U.S. position, and supported the draft strategy document and the guidelines.

These will take effect if adopted at the World Health Assembly in May.

The WHO secretariat is expected to finalize the draft before it is presented to the Health Assembly, in the light of further comments it may receive.

Some observers fear that the WHO secretariat might try to accommodate the United States in some way.

Sugar is not the only factor in obesity - high fat intake and lack of exercise also play central roles.

But some WHO scientists and consumer groups say the U.S. objections - notably to recommendations to limit sugar consumption and re-think food advertising aimed at young children - are based more on industry lobbying efforts than a desire to protect public health.

"It is significant that resistance from business interests, which included the sugar industry and soft drinks manufacturers with U.S. government support, was also demonstrated when a previous WHO expert report, based on a scientific consultation in 1990, made similar recommendations intended to prevent diet-related chronic diseases," wrote Kaare Norum, chair of the WHO working group that issued the guidelines, in a January letter to U.S. Secretary of Health and Human Services Tommy Thompson.

The letter expresses "grave concern that the United States government has delivered a submission which appears, in effect, to seek to stall the development of a global strategy on diet, activity and health."

No one disputes that obesity has become a serious problem.

In the United States, the world's fattest country after Samoa, there are almost twice as many overweight children and three times as many overweight teenagers as two decades ago. In the United Kingdom, one in five schoolchildren is overweight and one in 20 is obese.

About 300,000 U.S. deaths a year are associated with obesity.

But the problem is not limited to industrialized societies. According to the WHO, the number of obese adults has grown to 300 million people worldwide, with more than 115 million of them living in developing countries.

The UN Food and Agriculture Organization warns that some of the same nutritional deficiencies in the underfed also afflict the overfed - two of the most common being anemia and vitamin A deficiency, which causes widespread blindness in children under five years old.

The ill effects of excess fat range from heart disease and stroke to arthritis, cancer and female infertility.

In a critique of the proposed WHO strategy, William Steiger, the top official at the U.S. Department of Health and Human Services for international issues, contested the scientific validity of some key dietary recommendations, and called for greater "personal responsibility" in battling obesity.

"There is also an unsubstantiated focus on ëgood' and ëbad' foods, and a conclusion that specific foods are linked to non-communicable diseases," wrote Steiger.

"The assertion that the heavy marketing of energy-dense foods or fast food outlets increases the risk of obesity is supported by almost no data."

This view is not shared by the American Academy of Pediatrics, which recently published a study finding that "eating fast food negatively impacts the diets of American children in ways that could increase their risk for obesity." The Academy recommends that sweetened soft drink vending machines be taken out of schools, a measure that several U.S. states are now actively considering.

Steiger also took exception to the report's concerns about food and beverage advertising directed at young children.

"In children, there is a consistent relationship between television viewing and obesity," he wrote. "However, it is not at all clear that this association is mediated by the advertising on television."

According to the Worldwatch Institute, children in the United States are bombarded with 40,000 television ads per year - one-half of which promote unhealthy food and drinks.

WHO spokesperson David Porter noted that the agency's report does not advocate a ban on junk food advertising; it suggests that governments work with consumer groups and industry to develop "appropriate approaches" to marketing food to children.

"The expert report offered the best evidence available, and no one in the international scientific community has challenged the proposed population nutrient intake goals," Porter adds.

Global production of sugar has doubled in the last half century and is rising steadily, particularly in the South. World consumption of sucrose now exceeds 40 pounds per person each year.

Although the International Sugar Research Organization, a vocal opponent of the WHO guidelines, says on its website that "sugar can make it easier to follow a low fat diet" and "high sugar eaters are more likely to be thin," public health experts say excessive sugar intake can lead to diabetes and other problems.

Specifically, the industry objects to a recommendation that sugar amount to no more than 10 percent of food and drink consumed per day, preferring a 25 percent cap.

"The Bush Administration is putting the interests of the junk food industry ahead of the health of people - including children - on a global scale," says Gary Ruskin, executive director of Commercial Alert, a nonprofit advocacy organization. "The Bush administration is putting the interests of the junk food industry ahead of the health of people - including children - on a global scale."

- Katherine Stapp, Third World Network Features/Inter Press Service


The January/February Lawrence Summers Memorial Award* goes to N. Gregory Mankiw.

At a news conference releasing the Economic Report of the President, Mankiw, chair of the White House Council of Economic Advisers, stated: Shipping jobs to low-cost countries is the "latest manifestation of the gains from trade that economists have talked about" for centuries.

Source: Jonathan Weisman, "Bush Report Offers Positive Outlook on Jobs," Washington Post, February 10, 2004.

*In a 1991 internal memorandum, then-World Bank economist Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?" wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration. "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I've always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City." Summers later said the memo was meant to be ironic.


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