This week we have:
- The President in Germany is caught in a loan scandal…or is that a freedom of the media scandal?
- There’s a few people having to pay up serious money in Latin America due to oil company transactions, but is anyone going to pay?
- One fish in Japan is sold for $736,000. Yes, you did read that right.
- William Hague follows Hilary Clinton in visiting Burma (or Myanmar if you prefer to call it that)
- South Africa‘s ANC celebrate they centenary with a golf tournament which has raised a few eyebrows
- In the latest installment, looks like Hungary might barter their democracy for cash
GERMANY: German President in loan scandal
So the short version of this story is:
- President Christian Wulff, while Prime Minister of the Germany state of Lower Saxony, received a home loan of €500,000 from the wife of a wealthy businessman at an interest rate 4% lower than usual rates. This loan was not declared when he ran for the Presidency (though at the stage of this election, it had been moved from a private loan to a bank mortgage).
- The German tabloid paper Bild got the story and decided to publish it.
- The night before publication, President Wulff phones chief editor and leaves a stern voicemail threatening legal action if story is published. He phones back a few days later to apologise for the tone and content of the voicemail.
- It has also been revealed by Bild that the President of their publishing house also got a call from the Wulff urging him to put pressure on Bild editor to suppress the story – a request that was ignored.
Stephen Evans of the BBC captured it brilliantly when he said, “The old adage is that it’s not the deed itself which does for a politician – but the cover-up.” The story at the moment across all the major German media outlets (captured well here on Der Speigel’s website) is not about the details of the loan, but all about press freedom and how the President has handled the media itself, trying to supress news. Which, to note, is not the original story.
To add to this a little, this is not the first controversy that the role of the President has had in the last few years. Wulff’s predecessor, Horst Kohler had to resign in 2010 after commenting about when German troops should be deloyed – a resignation that was seen as both a bit of a surprise and a bit of an overreaction. Now the role of President is back in the media – so do folk in Germany fancy another Presidential election so soon, especially as the role is largely ceremonial? I doubt it somehow.
Wulff’s appearance on television during the week was labeled mediocre by many, though that seems to be the word that is associated with this President and his term in office – so perhaps that’s him “being on message”. It seems to have worked so far as 60% of Germans want him to stay on as President according to a recent poll. Though as Der Speigel have noted, this is not the view of German media outlets. Which will keep this as a front page story in Germany for a little while yet.
ECUADOR & VENEZUELA: Latin America is all about oil money but who is paying up?
So there’s been a few notable decisions in the last week regarding Latin America and international oil companies.
Firstly, to Ecuador where Chevron has been ordered to pay a whopping $18.2billion in damages to the country. Ouch. And what makes this doubly ouch was that this amount has been doubled in the last year because the company did not say sorry.
This story starts when Texaco was accused of dumping more than 18bn of toxic materials in the Ecuadorean Amazon between 1972 and 1992. And when Texaco and Chevron merged in 2001, Texaco’s problems became Chevron’s problems – notably this unresolved case. Texaco/Chevron state that they spent $40bn cleaning up the area in the 1990s and that both parties signed a contract in 1998, waiving the oil company of any further responsibility in this. There’s been a lot of court cases in this, so hopefully putting them in order is useful to keep your head straight about all this:
- Ecuador Court orders Chevron to pay $8.6bn in damages. (February 2011)
- Chevron appeal to a New York Court which blocks any payment being paid.
- US Appeals Court lifts this block that leaves Chevron liable for the bill again. Ecuador Amazon group says they won’t ask for payment of the fine until the appeal process was completed in Ecuador. (September 2011)
- Appeals Court comes back this week and says as Chevron failed to make a public apology, damages have more than doubled to $18.2 billion. (January 2012)
None of these cases are very cut-and-dry – it’s worth noting that right down the bottom of this BBC article on this case it’s noted that previously Ecuador has had to pay Chevron $96m after international arbitrators ruled that there were some serious delays in resolving commercial disputes involving their company.
(Oddly what struck me when reading about this story was just how fast international courts ruled in both the US and Ecuador both in original rulings and appeals. Imagine what we could learn from them if we handed them one of our tribunals to take care of….! Heaven forbid!)
On the flip side of this story is what is happening in Venezuela where President Chavez has stated his country will pay Exxon Mobil $255m of the $908m it has been ordered to pay them. Short version of the story again:
- Exxon invests in Venezuela for a heavy crude upgrading project in the Orinoco belt.
- Venezuela nationalizes state assets in 2007 including this venture as part of a bit to increase state revenue from oil reserves (I guess this is one way of doing it).
- Exxon seeks $10bn in compensation for this, go to arbitration.
- After four years of arbitration, the International Chamber of Commerce (ICC) rules that PDVSA (Venezuela’s state oil company – An Bord Oil Venezuela) has to compensate Exxon $908m (bit of a difference from $10bn). This is a binding decision.
- PDVSA said that other debts owed by Exxon and the costs of the court action meant the amount it would actually pay would be much less, hence the $255m figure
Let’s see if they can get away with this – it’s a hell of a bold decision not to pay a binding decision of an international arbitration decision, but hey I guess nationalizing the private investment shows even greater cajones.
The people of Venezuela heard all about this case during their weekly Presidential broadcast which restarted after a seven-month hiatus while Chavez was undergoing treatment for cancer, the main details of which has been undisclosed. These broadcasts, which originally started as radio phone-ins, now can run up to eight hours. They have been denied as election broadcasts by Chavez, who says this is part of his duty to inform his country.
Imagine if Enda did the same….
JAPAN: A single fish sold for $736,000 at auction
A Bluefin Tuna has smashed the record set last year for most expensive fish sold at auction. This fish, renowned for making the best sushi ever, went for $736,000 (56.49yen) at the fishmarket auction this week. That’s $2,737 per kilo. The winning bidder was Kiyoshi Kimura, owner of a sushi restaurant chain who wanted the fish to stay in the country.
Don’t know about you, but I feel a bit cheated by The Simpsons who led us to believe that it was the blowfish that was the most prized of all sushi cuts due to its danger. Who knew it was the Bluefin Tuna.
BURMA(MYANMAR): first visit by a British Foreign Minister in 55 years
William Hague is the latest in a list of high-profile politicians to re-acquaint themselves with Burma, otherwise known as Myanmar. If you want to know what’s with the name confusion, here’s something that might tickle your brain about that.
This visit is only a matter of months after that iconic photo of Hilary Clinton and Aung San Suu Kyi was taken after the US Secretary of State visited the country. Though the imagery for the UK visit may be slightly less memorable, the impact of the visit is not – with Hague confirming that more political prisoners are set to be released (though his Foreign Minister counterpart made sure not to call them anything but ‘criminals’ – another example of the joys of diplomatic language).
There is now a general acceptance that change is under way in Burma, ever since some form of election was held in November 2010 and the release of Suu Kyi from house arrest. It will be slow, but there is progress nonetheless – so much so that the New York Times has Myanmar down as one of the top 45 places to visit in 2012. First Foreign Ministers, then tourists….
SOUTH AFRICA: The ANC celebrate 100 years….with a golf tournament?
A golf tournament has kicked off the centenary celebrations of the ruling ANC in South Africa, with more than 100,000 expected to attend all the celebrations over the weekend for Africa’s oldest political movement. According to the BBC, “Andrew Mlangeni, who joined the party in 1951 and spent years in prison on Robben Island with Mr Mandela, took the opening shot in the golf tournament that teed off the festivities.”
Main celebrations are all based around the city of Bloemfontein. Other events included:
- A traditional ceremony on Saturday morning when cows will be slaughtered
- A candle-lit vigil at the church where the ANC was formed in 1912, led by Archbiship Desmond Tutu.
- A major political rally on Sunday, the 100th anniversary.
Though integral to the ANC, Nelson Mandela will not be attending the celebrations. “He is not coming and we are not expecting him to come,” ANC Party Secretary General Mr Gwede told public radio SABC. “He is in good spirits but very, very old.” In fact, he has not made any public engagements since the start of the 2010 World Cup.
The opposition has criticised the amount being spent on the year-long ANC centenary celebrations which currently totals $12m while others have raised eyebrows over the central role golf is playing in the celebrations.
While critics say this is a very elitist sport and shows the changes in the ruling party, ANC spokesman Jackson Mthembu has reacted by saying that golf “might have been elite before, during apartheid when it was a whites-only sport that we weren’t allowed to play. Now the ANC is embracing all sporting codes.”
Maybe the Irish Open should incorporate a cow slaughter ritual into their weekend. You never know….
HUNGARY: Will re-democratise for money
The latest installment in this story – it looks like the Hungarian Government might consider re-introducing democracy in exchange for good interest rates with the IMF. Now why did we not think of that. This is a story that we’ve been tracking for a few weeks now, if you want to read more about this, do check out this and this.
