The Naked Truth

Stopping the world’s spin.

Making a Killing

Companies that operate internationally may say that peace is conducive to prosperity, that people don’t go shopping in a war zone. But, according to journalist Thomas Friedman, “McDonald’s cannot flourish without McDonnell Douglas, the designer of the U.S. Air Force F-15.’s” While Iraq waits for fighter jets to make way for fast food chains, private armies police a fortified ‘green zone’ where corporations meet to seal the lucrative deals made possible because of the war. Transport, health, education and other services central to building a solid sustainable democracy are up for grabs to the highest bidder, predominantly businesses from countries who took part in the war.


Most of the contract awarded to international companies operating within Iraq have been given on a ‘cost-plus’ basis, in its simplest form this means profits are calculated as a percentage of expenses. The more money a contractor spends on the contract, the more profit they make, leaving the contracts open to massive abuse.

The company that has profited most from the invasion of Iraq is U.S. vice president Dick Cheney’s former firm, Halliburton, now with contracts worth over $10 billion. The company is currently the subject of multiple criminal investigations into overcharging and kickbacks, much of which is related to their abuse of cost-plus contracts. Overcharging by the company has run from ordering specially embroidered towels to charging extortionate prices for petrol.

The demand for security services to protect foreign corporations operating in Iraq, and the growing trend for outsourcing of military services to private contractors, has provided a bonanza for private military companies, this has seen UK private security companies annual revenue increasefrom £200 million before the war to over £1.8 billion now. Unlike military personnel, civilian contractors are not subject to military justice. Yet one of the most controversial measures introduced by the occupying forces in Iraq was Order 17, which granted all foreign contractors immunity from Iraqi law. This is now been challenged by the Iraqi parliament following the Blackwater scandal .


A US government review of operations in Iraq concluded that approximately 35% of the interrogation personnel provided by private contractors were not properly trained, and that a lack of sufficient oversight resulted in contractors believing that the techniques used in the Abu Ghraib prison scandal were acceptable. While the US soldiers involved in the Abu Ghraib abuse were quickly court marshalled, civilian contractors implicated in the abuse have not yet been subject to any government prosecution.

Iraq is only the beginning of a worldwide corporate carve-up. Whether it’s diamonds in Sierra Leone, oil in Angola, copper in Papua New Guinea, gold, coltan and diamonds in the Democratic Republic of the Congo, or timber in Liberia, natural resources from conflict zones are being fed into international supply chains dominated by multinational corporations. The money the corporations spend is in turn fuelling the conflicts.

Multinationals operate in conflict zones alongside enormous poverty and suffering and do very nicely from it. Issues of human rights are largely ignored.

In Colombia, BP p.l.c. operates the country’s largest oil reserves in the war-torn region of Casanare. Media reports in the 1990s highlighted BP’s involvement with Colombian military units accused of human rights violations. More recently, human rights groups from around the world have interviewed hundreds of Colombians that had been involved in protests against BP and found many too scared to leave their homes.

In Palestine, Israel’s military forces use specially armoured bulldozers made by Caterpillar to demolish Palestinian homes and to build the Separation Wall declared illegal by the International Court of Justice. Jim Owens, Caterpillar’s CEO, reckons that his firm are “doing well by ‘doing good’ all around the world”. UN Special Rapporteur Jean Zeigler has called Caterpillar to account over the role played by their machines in the violation of Palestinians’ rights.

source: Jason Brown,


British firms have also been operating in Iraq. After courting controversy in the Nineties, Tim Spicer – whose previous company, Sandline International, was accused of breaking a United Nations embargo by selling arms to Sierra Leone – has re-emerged as a powerful player with his latest venture, Aegis Defence Services. Aegis won a $293m Pentagon contract in 2004, which has since been extended, and employs more than 1,000 contractors in the country. Another British company, Global Strategies, which calls itself a “political and security risk-management company”, employs cheaper Fijian contractors for its Iraq operations. And another firm, ArmorGroup, chaired by the former British foreign secretary Sir Malcolm Rifkind, was getting half its revenues from Iraq. It carried out convoy protection at rates estimated at between $8,000 and $12,000 a day, and helped to guard polling stations during the country’s elections.

The connections between Halliburton and the Bush administration helped to generate $16 billion in contracts in Iraq and Afghanistan in the three years from the start of 2004 – nine times as much as any other company. Halliburton decided last year to spin off the division operating in Iraq. That business, KBR, has generated half its revenues there each year since the invasion, providing private security to the military and infrastructure projects and advising on the rebuilding of the country’s oil industry.



March 17, 2008 Posted by | Profits | , , , , , , , , , , , , , | Leave a comment

US drops China from worst human rights list

The United States has dropped China from its list of the world’s worst human rights violators, offering the communist giant a propaganda coup ahead of the Beijing Olympics. The US State Department’s Human Rights Report for 2007 removed China from the same category as countries such as North Korea, Iran and Burma.


No reason was given, but China has been a partner in talks with Washington to remove nuclear plant from North Korea. Beijing’s staging of this summer’s Games has raised hopes that it will improve its human rights record.

The government is concerned that the event will be used by activists, and athletes, to criticise China over its treatment of Tibet, its support for the Sudan regime and other areas of concern.

However, the report acknowledged that China’s “overall human rights record remained poor”. It described alleged torture, including the use of electric shocks and beatings. There is an account of a prisoner strapped to a “tiger bench”, which forces the legs to bend, sometimes until they break. It also notes claims that people were forced from their homes to make way for Olympic projects in Beijing.

Syria, Uzbekistan and Sudan have been added to the list, with Zimbabwe, Cuba, Belarus and Eritrea completing the top 10.

March 17, 2008 Posted by | china | , , , , , | Leave a comment

China Supplying Arms in the Darfur Conflict

Chinese sales of assault rifles and other weapons to Sudan have grown rapidly during the conflict in the Darfur region despite a UN arms embargo, according to a US-based rights group.

Human Rights First said on Thursday that a study of Sudanese and UN trade data showed that China was virtually the only supplier of small arms to Sudan.

Khartoum pays for the weapons it buys from Beijing with its growing oil revenues, the rights group said.

“The people of Sudan’s Darfur region will endure more death, disease and dislocation, and this will be due in no small part to China’s callousness,” the report said.

The group called on Beijing to stop all arms sales to Sudan and urged the world to link that campaign to the Beijing Olympics.

“We believe that China is particularly vulnerable in the lead up to the Olympics, Betsy Apple, a spokeswoman for Human Rights First, said.

“We want to see China’s concrete action that matches its rhetoric.”

The report came as Britain’s Channel 4 television’s Unreported World programme interviewed Mohammed Hamdan, a commander of the Arab Janjiwid militia accused of carrying out attacks on Darfur’s black African population.

Hamdan said that his men had received orders and weapons from the Khartoum government, including heavy artillery which appeared to have Chinese markings.

The Human Rights First report said that Chinese-made AK-47 assault rifles, grenade launchers and ammunition for rifles and heavy machine guns have all flowed into Darfur.

China sold Sudan $55 million worth of small arms from 2003-2006 and has provided 90 per cent of Sudan’s small arms since 2004 when a UN arms embargo took effect, according to the report.

China’s embassy in Washington said, in a response to the Channel 4 programme, that China, “in line with relevant UN resolutions and China’s own policies regarding arms sales, requires normal defensive usage by the buyer country”.

Khartoum has previously denied any connection to the Janjiwid groups who are accused of abuses and crimes across the region.

Peacekeeping mission

Meanwhile, the commander of the international peacekeeping force in Darfur has admitted they may have to stay in the region for up to 10 years before they will see a resolution to the conflict.

“There are so many factors that have to come into play. We have to have a peace deal. We have to go through a period of disarmament,” General Martin Luther Agwai, a Nigerian army officer, said.

“If all these things happen quickly and everyone is committed to it, it could be a matter of two or three years. But if people don’t want a peace deal and people are not committed, we could be here for many years.”

Officials with the joint United Nations-African Union mission on Thursday said that there had been two confrontations with Darfur’s warring parties in the past week.

On Saturday, Sudanese soldiers opened fire for more than 15 minutes when a Unamid vehicle approached a government checkpoint close to South Darfur’s capital Nyala, Adrian Edwards, a Unamid official, told the Reuters news agency in Khartoum.

“It was dark so it was unclear whether they were firing into the air or targeting anyone,” he added.

“No one was injured and we received an apology from the local authorities.”

A day later, Unamid officers had to cut short a meeting with rebels in the Jabel Moun area of west Darfur, when they received reports of nearby fighting.

March 16, 2008 Posted by | Africa, china | , , , , , , , , , , | Leave a comment

Dueling Human Rights Reports

Every year, the U.S.-China exchange of human rights reports is one of my favorite events to observe. Not only does it invariably produce some amusing bureaucratic sniping, but of late, it’s also become one of the best front seats from which to witness the increasingly awkward dance that ensues when the U.S. tries to take on the role of human rights cop abroad.

This week, the countries traded their usual flurry of barbs: the United States censured at China for being repressive, while China, indignant, hammered back against the U.S.’s own record with gusto. While the exchanges are always testy, in recent years, with the persistence of secret prisons and Guantanamo, as well as wars in Iraq and Afghanistan, China’s had an especially rich vein of cases to mine. (It didn’t help that the White House formally endorsed torture as a form of official U.S. policy just days before releasing its China report.)

I’m no apologist for the Chinese regime, but whatever moral currency the U.S. could once claim on human rights has long since been squandered. (Or as the French foreign minister put it yesterday: “The magic is over.”) When a PRC bureaucrat looks at America and sees a country that incarcerates 1 out of 100 people and accounts for two-thirds of child executions worldwide, it’s no wonder the force of U.S. scrutiny seems somewhat misplaced.


March 15, 2008 Posted by | Human Rights | , , , , , , | Leave a comment

Combating Blood Diamonds – The Diamond Industry’s Failure

Wars need money.  Natural resources such as timber, diamonds and minerals play an increasingly prominent role in providing this money, which is often used to fund armies and militias who murder, rape and commit other human rights abuses against civilians. 

Conflict diamonds, also known as blood diamonds, have contributed to wars in Africa that have killed millions of people, destroying lives and wrecking countries. Since 2000, the diamond industry has not done enough to fulfil the pledges it has made to eradicate blood diamonds from international trade. In response to pressure from Global Witness, Partnership Africa Canada, and other civil society groups, the key trade bodies representing the global diamond industry agreed to a voluntary system of self-regulation aimed at helping to prevent the trade in blood diamonds and in supporting the government-run Kimberley Process Certification Scheme. The polished and retail sectors of the diamond industry opposed stringent government regulation when the Kimberley Process was being negotiated, and the industry was left to police itself.

Six years after the blood diamond issue came to international attention, the industry has failed to change its practices. International diamond trade bodies have issued countless press releases and statements claiming that the problem has been solved, but have provided little information on what they have actually done to fix it and fulfil their promises. Despite vast profits made by many in the diamond industry – in 2005 diamond jewellery sales were over US$60 billion – little has been invested to ensure that blood diamonds will not be able to enter the legitimate trade.


How the diamond industry has fallen short:

The diamond industry has failed to create an auditable tracking system to ensure that diamonds are conflict free. As a key part of the self-regulation, the diamond industry agreed to track diamonds from where they are mined to where they are sold through buying diamonds only from suppliers that provide a written guarantee on invoices that diamonds are conflict-free. The industry also committed to keep records of these invoices and have them audited every year. But the industry did not clarify how this tracking system would work or how it would be audited. A written guarantee simply stating that diamonds are not from conflict sources is meaningless unless it is backed up by actions and policies to monitor that the statement is true. However, there are no clear standards detailing how records are to be kept and other elements that should be examined. It is clearly not an auditable chain of warranties as there is very little for auditors to verify. A Global Witness investigation and a joint survey with Amnesty International showed that many in the industry do not meet even the basic measures of the self-regulation and that there is confusion throughout the industry about what the measures actually mean in practice. Research carried out by the Diamond Trading Company demonstrated that these findings are very largely correct. The World Diamond Council’s misleading public relations campaign is not matched with meaningful action. A new website provides education packs for consumers and retailers, but provides no information about how adoption of the self-regulation will be monitored and reviewed. This system of warranties is unable to prevent blood diamonds from entering the legitimate trade and to give consumers adequate assurances that diamonds are conflict-free. In response to pressure from Global Witness and other NGOs, major diamond mining companies and jewellery retailers have created the Council for Responsible Jewellery Practices (CRJP) to develop a chain of custody backed by independent, third-party auditing measures. While participants include a cross section from the diamond and jewellery supply chain, many in the diamond industry have not yet signed up, especially small and medium sized companies, and implementation will not begin until 2008. We welcome the initiative of the CRJP, but it is too early to say how effective it will be and what impact it will have in improving practices within all sectors of the diamond trade.

The diamond industry has failed to implement a code of conduct adequately to stop the trade in blood diamonds. Although there are fewer blood diamonds now than there were during the 1990s, this is largely due to the fact that wars in Angola and Sierra Leone have ended. However, diamonds are playing a role in the conflict in the Ivory Coast and the Democratic Republic of the Congo. The illicit trade in smuggled diamonds is also flourishing which shows where there are weaknesses in control systems that can be used by those trading in blood diamonds. Global Witness’ field investigations in November 2005 found that diamonds mined in West Africa are regularly smuggled and given Kimberley Process certificates by countries other than their country of origin. Some of these are blood diamonds, and they are being certified as conflict-free.
Given this current situation and the destructive role diamonds have played in the past, diamond companies should be making every effort to carry out due diligence when selecting suppliers to make sure that the diamonds they purchase only come from legitimate sources. The Kimberley Process scheme and industry compliance with this must be robust so that consumers can buy diamonds originating in any country, confident that they are conflict-free. However, members of the industry continue to trade in conflict and illicit diamonds and diamonds are still being used by organised crime, for money laundering and for other illicit purposes. In Belgium, an ongoing investigation into illicit trading may involve up to half of the diamond trade there and millions of dollars in fraudulent activity.

The diamond industry has failed to clean up its membership and to operate in a more transparent manner. Major international trade bodies such as the International Diamond Manufacturers Association (IDMA) and the World Federation of Diamond Bourses (WFDB) agreed to expel members that do not meet the selfregulation requirements or comply with the Kimberley Process. They agreed to publicise names of the expelled members. However, these trade bodies have not provided any information to the public or to civil society about any members who have been expelled. Nor have they shown what measures are being taken to ensure that the self regulation is being adhered to. There has not been adequate monitoring to assess whether members are meeting these commitments. While many in the legitimate industry know who is trading in blood diamonds and using diamonds to fund criminal and other illegal activities, the trade is still secretive and unwilling to tackle this problem head on.

source:, also see the consumer’s guide on conflict diamonds.

March 12, 2008 Posted by | Human Rights | , , , , , , , , | 1 Comment