Dodd-Frank and Unintended Consequences

While the  Dodd-Frank Wall Street reform act, passed in 2010, was mostly concerned about financial reform, it included a provision, Section 1502, chiefly through the efforts of Congressman Jim McDermott, aimed at increasing transparency about mining activities in the DRC by forcing US companies to disclose whether the sources of their mining activities were in certain areas of the DRC or unspecified neighbouring companies.

The result has been devastating to say the least. David Aronson’s op-ed in the NY Times last summer details some of the unforeseen damage on the mining industry in the eastern part of the country:

The law has brought about a de facto embargo on the minerals mined in the region, including tin, tungsten and the tantalum that is essential for making cellphones. The smelting companies that used to buy from eastern Congo have stopped. No one wants to be tarred with financing African warlords — especially the glamorous high-tech firms like Apple and Intel that are often the ultimate buyers of these minerals. It’s easier to sidestep Congo than to sort out the complexities of Congolese politics — especially when minerals are readily available from other, safer countries.

While a recent UN report acknowledges some successes of the legislation, it notes that the falling production due to the law has led to “”rising unemployment and worsened poverty among the tens of thousands…

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Economics v. Justice? International Nuclear Liability Regimes

After the recent earthquake in Japan, there has been a global outpouring of sympathy and support. Governments and individuals worldwide have been trying to help Japan recover from the tragedy. Likewise, the world has been on edge regarding the ongoing crisis at the Fukushima I (or Fukushima Daiichi) nuclear power station, as everyone hopes that an even more serious nuclear catastrophe can be avoided.

Yet what about those individuals devoid of empathy or, seemingly, any human emotion? Pseudo-humans so empty and craven that, seeing the Japanese nuclear crisis, they think first and foremost about what the impact will be on the stock market. Self-interested automatons from an economics textbook come to life, who focus only on things that matter – or rather, the thing that matters: money. Whose writing will cater to this audience? The Wall Street Journal? Fox Business News? Amateurs! Come with me, fellow homo economici, and let us cast off this veil of humanity.

Firstly, the crisis in Japan has been playing havoc with the stock market, and that can only mean one thing: investment opportunities! Here’s a great stock pick[1] to get the ball rolling: General Electric. GE built (wholly or in part) half of the reactors at the Fukushima I plant, and the crisis now unfolding has been partially attributed to a design flaw. In reaction to this news, GE’s stock price

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Healthy (or insignificant) minimum price-fixing differences in EU and North America

Unfortunately, this post merely adds to the voluminous commentary on different approaches to resale price maintenance (“RPM”)–minimum price-fixing in particular–between the EU and North America.  Since EU and US changes in RPM rules in 2010 and 2007 respectively, commentators have been clawing into the topic, before judges get the chance to hammer into these different approaches.  Some argue for similarity, but I argue that the difference is (1) healthy and (2) in practice unimportant.

Before addressing those arguments, a little background.

What is RPM? RPM is when a manufacturer controls the prices at which distributors sell goods.  Minimum price-fixing is where the manufacturer sets the lowest price at which distributors can resell goods.

Is minimum price-fixing anti-competitive? The lawyer’s response: “it depends.”  Minimum price-fixing has anti-competitive effects when manufacturers or distributors (a) collude to police cartels or (b) exclude competitors by eliminating their ability to compete by lowering prices.  Minimum price-fixing can however have pro-competitive effects when used to help introduce products, encourage distributor promotions, ensure uniform distribution, enhance experience-related products, and reduce free-riding.

How does EU law approach minimum price-fixing? EU law is not a friendly venue for minimum price-fixing.  Article 101(1)(a) of the Treaty on the Functioning of the European Union (“TFEU”) broadly forbids price-fixing.  The EU Block Exemption Regulation 330/2010 includes minimum price-fixing as…

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Climate Law Comes Home to Roost: South Africa Releases its Draft Integrated Resource Plan for 2010-2030

It is evident that climate law has begun to impact the scope of energy planning in South Africa. In particular, the second revision of the Draft Integrated Resource Plan 2010 (IRP2) released by the South African Department of Energy makes direct reference to the nation’s international carbon-mitigation commitments in planning for its electricity sector. While some parties might find the government’s foray into, for instance, renewable energy and low-carbon emitting energy sources as being timid, the planning process does reveal a lot about the changing energy ethics of Africa’s largest electricity producer and the world’s thirteenth largest carbon emitter.

As previously mentioned by this author, South Africa will have a very tough time meeting its commitment to the UNFCCC process. The IRP2 process has brought together industry, government, the academe, civil society and industry – including independent power producers (IPPs) – as never before. The IRP2 hints at the changing nature of energy security ethics and legal approaches in Africa. While the IRP2 does not fully embrace this new brand of energy ethics, it will start South Africa on the road towards a reduced reliance on coal-fired electricity production. There is still hope for critics of the plan. Energy Minister Dipuo Peters has promised that the IRP2 was written with enough “flexibility” to, for example, embrace more renewable energy in the future should it be desired.[1]…

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The ANC’s Economic Identity Crisis: International Commitments, Local Problems and Politics

“Our history has been a bitter one dominated by colonialism, racism, apartheid, sexism and repressive labour policies. The result is that poverty and degradation exist side by side with modern cities and a developed mining, industrial and commercial infrastructure. Our income distribution is racially distorted and ranks as one of the most unequal in the world – lavish wealth and abject poverty characterise our society.”[1]

Since 1994 the African National Congress (ANC) has tried to ‘have its cake and eat it, too.’ The ANC has led a broad-based coalition that governs, more or less, from the centre of the South African political scene, but its current domestic economic policies do not seem to withstand the strong pull of its international commitments. Economically, ‘revolution’ in South Africa has been a tricky subject for policymakers within the ANC. The government has since 1994 been part of a tri-partite alliance with the Coalition of South African Trade Unions (COSATU) and the South African Communist Party (SACP) – these two parties giving a strong leftist tinge to the government’s composition and policymaking ability.

The country is outwardly open to investment, and President Jacob Zuma has boldly courted corporations to assure them his coalition will not create an “anti-business” atmosphere. However, committing to a neo-liberal trade agenda has not been easy for Zuma politically, and has been very tough on the nation. Economic…

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Realizing Layers of Security in Haiti: A Conceptual Re-Think is Needed if Haiti is to Find Post-Earthquake Peace

Articles in this week’s New York Times and Globe and Mail highlighted calls for a massive scaling-up of disaster relief and development efforts in Haiti. However, leaders should be much more critical about the shortfalls of such missions in the past, as Haiti is no stranger to international interventions, in particular at the hands of the United Nations and the US government, and to a lesser extent, Canada. As security is often held to underpin relief and development efforts, policymakers need to reform their view of the provision of physical security and international law needs to reflect this process. Time and time again, Western powers have failed to assist the Haitian people address the wrongs of the past and meet their overall social and economic development goals.[1]

Sadly, it has become commonplace for developed nations to make big pledges when tragedies occur, but seldom are all funds collected to drive development strategies. Only 10% of funds pledged to Haiti after the January 2010 earthquake have arrived in Port au Prince thus far. Core funding is often lumped into ‘security programs’, while so-called ‘soft development’ strategies languish. Soft development aid dollars are often tied up in the activities of foreign NGOs. The amount of NGOs in Haiti is staggering. The presence of so many foreign personnel, who are often unaccountable to the Haitian government or people as a…

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Anarchists Engage with G20 Issues

A great deal of attention has been paid recently to the preparation for the G20 summit next weekend in Toronto. But while the event has been a boon for the troubled artificial lake industry, not everyone will be so pleased with the assembled world leaders. From labour unions to environmentalists to indigenous rights groups, protestors are expected in the thousands. The greatest security concern however, remains the kind of anti-capitalism and anarchist groups which made the Seattle WTO summit of 1999 so memorable. The same kind will be in attendance during the Toronto summit; the Southern Ontario Anarchist Resistance (SOAR) and FFFC Ottawa, which was responsible for the firebombing of an Ottawa bank after hours on May 18^th, have both announced they’ll be at the event.

Yet Mike Bakunin, who recently left SOAR to establish a sister branch in Rivière Ouest (Manitoba) with a more awesome acronym, claims that these groups don’t just advocate violence. “For those who think that anarchists are just about chaos and firebombing, that’s not the case. Groups like FFFC Ottawa give the rest of us a bad name – we can actually engage with the issues as well as anyone. Now obviously the summit will be focusing on economic and financial matters, so we think that we can best get our message across if we zero in on those issues as well. It’s hard to…

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Taxing Banks for Risky Investments

As governments around the world broke open their piggy banks to bail out most of major financial institutions, it comes as no surprise that these governments are feeling a bit strapped for cash. In looking for a way to recoup capital spent on these institutions because of their risky investment practices, a popular proposal is the taxing of banks for such risky investments.

Numbers that the Americans are debating include a levy at 0.15% for 10 years on all financial institutions with more than $50 billion in consolidated assets.

With Germany and England ready to take action and implement similar levies, and with Obama seeking to push the US to do the same, it’s unclear what kind of overall effect these levies would have on banking if they are carried out on a piecemeal, domestic basis. These financial institutions are international in character. Their activities transcend national borders, and thus any attempt at regulation will need to account for the cross-border transactions and international nature of the institutions. Will domestic regulation really solve the inherent problem of big banks making big investments without thinking about the potentially big (and devastating) consequences?  Probably not.  So then what’s the point?

Edwin M. Truman, Senior Fellow at the Peterson Institution for International Economics in Washington, proposes a different analysis. He says, “There are two dimensions — paying for the past and paying…

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The true nature of BITs (at least as I see it…)

On February 19-20 a conference which dealt with recent developments in the field of international investment law took place at Sydney University.[1] About sixty speakers from all around the world gathered for two intensive days of exchanging ideas, debating pressing issues and discussing what seems to be an emerging sub-field of international law. One important trend that was highly emphasised during this conference was the recognition that international investment law is far more public in nature than it was considered to be in the past. The effects of foreign investment on public interests such as the environment, human rights and labour standards are now obvious and the tension between the protection of investments on the one hand, and the governments’ interests in regulating these sensitive fields on the other, is often emphasised in academic writings and arbitration awards.

The conceptual change that international investment law seems to have gone  through has not however reached one very fundamental point. To my great surprise, speakers continually repeated the same old mantra concerning the main objective of investment treaties: the objective of investment treaties, so it was argued, is the protection of investors. This, I would argue, carries the same amount of logic as claiming that the objective of preparing a salad is cutting tomatoes. While it is true that Bilateral Investment Treaties (BITs) are designed to provide…

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Power, Politics, and the Adoption of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS)

Intellectual Property Watch (IP Watch) recently reported that discussions of the World Intellectual Property Organization’s (WIPO) Standing Committee on the Law of Patents (SCP) broke down due to disagreement between developed and developing countries.[i] This is but a current example of the ongoing conflict between developed and developing countries over international patent law. The recent origins of this conflict stem from adoption of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS) of the World Trade Organization (WTO) in 1994. Under TRIPs, the approximately 150 member states of the WTO committed to adopt, inter alia, global minimum standards for intellectual property (IP) laws.

TRIPS has been controversial from the start. Developing countries and advocates for the ‘intellectual commons’ are of the view that TRIPS jeopardizes developing country access to knowledge and essential medicines that are critical to their well-being and growth.[ii] In contrast, some developed countries, in particular the US, are of the view that TRIPS did not go far or fast enough in establishing a global IP regime: the US is pushing developing countries to accept standards that go further than TRIPS in the bilateral and regional free trade agreements that have flourished as WTO negotiations have stalled.[iii]

The developing countries have legitimate concerns. They are net technology importers and must thus establish and maintain IP systems which will be of little benefit to them…

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