News Archives » Economic Justice
World Bank Approves $3 Billion Loan for Controversial Coal Plant in South Africa April 12th, 2010
On April 8th 2010, the World Bank approved a controversial $ 3 billion loan for a coal-fired power station to ESKOM, the South Africa-based, state owned electricity utility, despite serious concerns from environmental organizations and the faith community. United States, Britain and Norway, Italy and the Netherlands abstained from voting for the coal loan due to unresolved environmental concerns and economic impacts on local communities.
More than 200 organizations across the world have endorsed a critique of the loan saying it will be a burden to poor people who will likely see their household bills increase, while international extractive corporations will continue to receive subsidized energy due to special pricing agreements with Eskom
Eskom is the world’s fourth-largest power company and Africa’s largest carbon emitter, and accounts for 40% of South Africa’s total emissions. The loan raised serious environmental concerns such as pollution and greenhouse gas emissions, and raised questions about the World Bank’s commitment to renewable energy sources.
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RiskMetrics and Proxy Governance Support ICCR Shareholder Proposal on Derivatives April 7th, 2010
RiskMetrics and Proxy Governance, respected proxy advisory services, in a significant move, have supported the Resolution on derivatives filed by religious investors, including the Oblates of Mary Immaculate. The Resolution filed by members of the Interfaith Center on Corporate Responsibility (ICCR) requests that the company provide greater disclosure regarding derivatives as a way to reduce systemic risk in the financial sector.
A lack of transparency in derivatives holdings was responsible in large part for destabilizing the financial system in 2008. Specifically, the shareholder proposal filed with Citibank requests the company to report to shareholders on the firm’s policy concerning the company’s derivative activities. The religious groups have expressed concerns for years about the risk inherent in derivatives trading, arguing that greater transparency is needed.
The full text of the shareholder proposal is available here…
Religious Proposal on Swaps Disclosure Gets Attention April 6th, 2010
Goldman Sachs Group Inc. and JPMorgan Chase & Co. aren’t doing “God’s work” when it comes to derivatives, according to investor groups of nuns and priests. The investors were referring to a remark made last November by Goldman Sachs Chief Executive Officer Lloyd Blankfein’s who said he was a banker doing “God’s work”
“The use of these instruments, if they’re not disclosed by the dealers and the information made available, by their very nature can contribute to systemic risk,” said Father Seamus Finn, a director with the Missionary Oblates of Mary Immaculate in Washington, D.C., one of the co-sponsors of the resolutions.
Shareholders will vote starting this month on proposals sponsored by the Sisters of Charity of Saint Elizabeth and 14 other religious organizations, asking Goldman Sachs, JPMorgan, Citigroup Inc. and Bank of America Corp. to give more information on the collateral used in their derivatives trading.
It’s the first time the four banks, among the largest U.S. swaps dealers, will put to a nonbinding vote a call to explain how collateral of derivatives customers is used and to keep it from other accounts. Congress is considering bills that would require more derivatives deals be processed through clearinghouses, privately owned third parties that guarantee transactions and keep track of collateral and margin.
The U.S. Securities and Exchange Commission, in February and March decisions, backed the religious groups’ bid to put the proposal up for a vote by shareholders of JPMorgan, Bank of America and Citigroup. New York-based Goldman Sachs, the most profitable firm in Wall Street history, agreed separately to add the resolution to its proxy statement.
Articles on this proposal appeared late last week in Bloomberg and Bloomberg Business Week. Read the full story here…
Reflections on a Central American Pilgrimage March 30th, 2010
Warren Brown, OMI visited Central America in January of 2010 on a Maryknoll-sponsored pilgrimage. His moving description of the trip can be found here in its entirety. A shorter version was published in the spring issue of JPIC News.
Reflections on a Pilgrimage/Retreat to Central America (download PDF)
Protection of Khasi Villages Overturned by Court Order March 19th, 2010
A January victory by the Khasi people in stopping logging on their lands has been overturned by a High Court decision issued in late February. Four indigenous villages in Bangladesh, with their 500 Khasi residents, will be destroyed if logging by a local tea estate owner is allowed to continue.
An Oblate priest, Fr. Joseph Gomes, OMI, along with other colleagues from the environmental community have been working with the Khasi people to protect the forest and their villages. We urge all parties in a position to do so, to raise serious concerns with the Government of Bangladesh regarding this situation.
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