In reference to latest developments: Australia stops joint projects with China. What signal effect does the government's move in Canberra have for the prestigious project of China's head of state Xi Jinping?
Even if it is only smaller projects of China's Silk Road Initiative (Belt and Road Initiative - BRI) in the state of Victoria that have now been stopped by the Australian central government - China's communist state and party leadership is raging and threatening consequences.
The planned cooperation, especially in infrastructure projects, had hardly gone beyond declarations of intent. But the thrust to "increase the participation of Chinese infrastructure companies in Victoria's infrastructure program" had been enough for Australia's central government to end Victorian Premier Daniel Andrews' flirtation with Beijing's communist leadership through federal legislation.
While the Chinese embassy called the decision "unreasonable and provocative", Australian Foreign Minister Marise Paine said the arrangements were incompatible with Australian foreign policy. The previous agreements under the BRI are not legally binding from Australia's point of view anyway. And so nothing will come of Beijing's plans to open branches of Chinese infrastructure companies in Victoria and to bid for contracts for large projects in the state. Nor will delegations of infrastructure companies from Victoria regularly travel to China in future to "better understand" cooperation opportunities in exchange with Chinese partners - this interpretation is left to the experts. Nor will the cooperation in industrial production, biotechnology and agriculture that Beijing had hoped for materialise.
What does this mean for the rest of the world?
For Beijing, the rejection from Canberra is not dramatic, at least in terms of values and money. First of all, this is a bilateral issue between Australia and the People's Republic of China. Australian-Chinese relations have been bad for some years now and they are not getting better month by month - on the contrary. But it is an extraordinarily heavy blow to China's image, as the world has taken note of the fact that increasing resistance to the Belt and Road Initiative is forming in Western countries.
Dampener for the New Silk Road
The pandemic comes at a very inopportune time for China. Many countries are experiencing great economic difficulties. This starts with the main partner country, Pakistan, which has once again found itself in difficult circumstances, and other, even poorer BRI partner countries are in the same situation. China must now consider how it will deal with the new situation as a donor country. China would either have to extend the terms of loans or generally put projects on the back burner for the time being, both of which cost China not only money but also reputation and growth. The latter is exactly what the Chinese Communist Party needs to maintain domestic stability and satisfy the population's desire for better living conditions.
Opaque contract details
But this runs counter to the BRI's original trademark of not waiting long, but implementing announcements relatively quickly. And this shows that even Beijing "cannot reinvent the wheel" and that Beijing has not invented an all-weather cooperation, as Xi Jinping once said about the cooperation with Pakistan, but rather cultivates and prefers a fair-weather cooperation. Because little information is known about the small print in the loan agreements of the BRI partner countries with the Chinese financiers, it is completely unclear what impact the economic crisis will have in the poor countries of Asia and Africa. Only recently, a group of researchers from the Kiel Institute for the World Economy (IfW) and Georgetown University in the USA evaluated 100 BRI loan contracts and published them in a study entitled "How China Lends". The core statements of the study confirm what critics of the BRI loan agreements have been complaining about for a long time: For one thing, Chinese contracts contain unusual confidentiality clauses that prohibit borrowers from disclosing the terms or even the existence of the debt, the study authors summarise. In addition, Chinese lenders secured an advantage over other creditors by excluding that BRI debt may be included in debt relief.
Danger of a chain reaction?
Beijing has great respect for more countries like Australia to act and stop cooperating with China's BRI. The Chinese concept would be severely affected if it had to be noted that not only Australia, which is comparatively small in terms of population, but also larger players are saying goodbye to the "Belt and Road Initiative - BRI" and thus to the prospect of closer cooperation with the People's Republic of China. The likelihood that Australia is only a forerunner here is, however, absolutely given. In Brussels, too, there are increasing signs that the EU is tightening its grip on China. Even countries such as Italy are increasingly counting on a closer alliance between Europe and the USA. This was most recently demonstrated by the decision of the EU-Parliament and the EU-Commission to halt further development of the reciprocal investment agreement between the People's Republic of China and the European Union to put activities on hold for the time being. Text / Red.
The development of capital in an economic area is of course not only related to stock market and company data, but also to private households, their consumption behaviour and thus also their savings behaviour or, more precisely, their savings rate. The global pandemic has of course also brought about a very positive development of savings balances in the euro area due to closed shops or a change in consumption behaviour or rather due to a change in consumption needs.
In reference to an analysis, people in the euro area are richer than ever before - and by far the most people save in Germany. Based to calculations by ING Deutschland and Barkow Consulting, savers in the 19 countries invested more than one trillion euros in financial assets for the first time in one year during the Corona crisis in 2020. Adding value increases, financial assets at the European level rose by 4.7 percent to 27.3 trillion euros compared to the previous year. According to the evaluation, private households in Germany are the European savings champions for the eighth time in a row. They put aside 388.5 billion euros last year, 45 per cent more than in 2019, followed by people in France (260.7 billion euros), ahead of Italians (122.7 billion euros) and Spaniards (78.2 billion euros).
One reason for the overall strong increase in spending: because of the pandemic restrictions, many people were unable to spend their money as usual. Many trips were cancelled, the temporary closure of restaurants and shops slowed down consumption. In addition, many households held on to their money for fear of short-time work or unemployment. In reference to the analysis, on average, every European put 3121 euros aside last year. In Germany, the figure was 4671 euros. That was almost a third more than a year earlier and more than ever before. Shares were in particularly high demand in the Corona year, as various other studies have already shown. According to this study, investors in this country invested a record 49 billion euros in shares in 2020. Investments in funds also increased significantly.
/ Text Red. and Press-release ING Germany
75 years ago, the world community sought for the first time a common framework for the global economy. What about the multilateral institutions created at Bretton Woods - the World Bank, the IMF and the WTO - today?
July 1944: While Allied troops are fighting the German Wehrmacht in France after their landing in Normandy, the representatives of 44 states have gathered in the luxurious Mount Washington Hotel in Bretton Woods in the US state of New Hampshire. Their goal: to create the framework conditions for a post-war global economic order. Among them were the economists John Maynard Keynes from Great Britain and his US colleague Harry White. They and the delegates of the then still small United Nations succeed in laying the foundation stone for the Bretton Woods system, which sets the coordinates for the global economy of the post-war period.
Birth of the World Bank, IMF and Trade Organisation
Their ideas are finally adopted on 22 July 1944. At that time, the foundation was laid for the International Bank for Reconstruction and Development (IBRD), still a central part of the World Bank Group today, and the International Monetary Fund (IMF), which was to promote international cooperation in monetary policy. Keynes also wanted a third entity to provide for the promotion and regulation of trade and commodity markets. The General Agreement on Tariffs and Trade (GATT) was adopted on 30 October 1947 after the plan for an International Trade Organisation failed to materialise. The GATT came into force on 1 January 1948, but it would take until 1995 for the World Trade Organisation (WTO) to be established.
The IMF was officially launched on 27 December 1945 with the signing of a convention by 29 countries and became operational on 1 March 1947.
Crisis financier and global watchdog
According to the agreement of the founding members, the IMF was to facilitate the expansion and balanced growth of world trade, promote exchange rate stability and assist in the establishment of a multilateral payments system. In addition, the IMF was to help ailing member countries with financial injections from the jointly provided financial pot of the International Monetary Fund - but only "temporarily and with appropriate safeguards". This role of a lender of last resort, stepping in at the last second to prevent the financial collapse of a struggling state, has made the IMF hated in many countries, such as Greece.
Another task of the IMF means that export-oriented countries like Germany regularly have to be told off by the IMF: Since its foundation, one of the central tasks of the IMF has been to reduce the imbalances in the international balance of payments of its member states.
Balance sheet after 75 years
But where do the Bretton Woods institutions stand today, 75 years after their creation? For many experts from business, science and politics, however, these institutions are under considerable pressure - not only the conflicts of the USA with China and other trading partners have created a situation that is difficult, and in all three institutions there is no euphoria about the current situation. The World Bank has the least problems, and normal business is running pretty smoothly there.
Even if the World Bank has meanwhile got a lot of competition from the Chinese initiatives of the Asian Infrastructure Development Bank (AIIB) and the New Silk Road project. Things are much more difficult at the International Monetary Fund and the World Trade Organisation. The World Trade Organisation is marked by great tensions. The Americans in particular point out that even 18 years after joining the World Trade Organisation, China still does not feel committed to the spirit of the WTO. In particular, China's behaviour in protecting intellectual property and covert state subsidies by Beijing are repeatedly used as a motive for criticism of Beijing.
China as a "game changer"
But even if the International Monetary Fund does not currently have to deal with financial crises, economic experts agree that the IMF would be overstretched to save China or Italy from a financial collapse. Reforms are therefore urgently needed at the IMF. For years, China has been competing with the World Bank as a traditional donor for development and infrastructure projects with large-scale projects. The "Asian Infrastructure Investment Bank" and the New Silk Road, also known as the "One Belt, One Road Initiative", are open competition for the World Bank. However, one has to distinguish between the Road Initiative and the Infrastructure Investment Bank.
The AIIB is relatively transparent, non-Chinese actors are also involved. It is a multilateral bank, which of course competes with the established banks, but that is less problematic because transparency mechanisms can be observed. With the AIIB, he says, the Chinese side does not insist on controlling the lending process. Chinese assessment of the Road Initiative, which provides for bilateral agreements between borrowing countries and China, is quite different. Here, the last 12 to 18 months have seen some problematic developments. Overpriced, high-interest loans have been granted to countries such as Kenya or Sri Lanka and then very controversial compensation has been demanded from the countries out of claims that could not be serviced. This is extremely difficult and leads to enormous dependencies of these countries without sustainably improving the credit misery.
Rethinking in Africa has begun
Many projects were promising at the beginning, for example in Kenya. If you look at the railway line from Mombasa to Nairobi, it is reminiscent of poorly managed development aid projects of the 1960s. There, China has delivered less than it promised and it has also proved to be less altruistic than the Chinese always want the rest of the world to believe. There are a number of signs that a reassessment of China's role and motives is now taking place in Southeast Asia and in Africa. The railway line and the Chinese-projected cargo port in Kenya, which were celebrated with great commitment and pomp, have become considerably more expensive and uneconomical than transport by trucks. In Sierra Leone, West Africa, the government has cancelled the planned construction of an airport by China. The government's argumentation had been very direct: We don't need this airport, it will be built by Chinese workers, by Chinese companies with Chinese capital. What we are left with is an airport, but also a hefty bill for it.
Chinese loans at record levels
IMF researchers and observers are in the dark about China's Silk Road loans. A recent study by the Kiel Institute for the World Economy has found that China is lending much more abroad than previously known. Between 2000 and 2017, foreign debtors' obligations to China increased tenfold from less than 500 billion to more than 5 trillion US dollars - or put another way: from less than one per cent of global economic output to more than six per cent. The worrying thing is that around 50 percent of China's international loans to developing and emerging countries do not appear in official statistics. They are neither recorded by multilateral surveillance institutions such as the IMF or the Paris Club, an informal body of state creditors, nor by rating agencies or private data providers. It is true that many of the projects financed by China are of great benefit to the recipient countries, especially in the area of infrastructure. However, the large volume of debt and its lack of transparency also pose risks to financial stability. Private investors or the IMF can hardly assess the debt sustainability and crisis probability of countries if a considerable part of the external debt to China is simply unknown, it concludes, adding that it is impossible to gain insight into dark connections when analysing country risks.
Tasks for the EU Commission
Experts do not believe, however, that the European Union will lose out in the trade poker between the USA and China. The Americans and the Chinese often dominate the headlines, but as a trading power Europe is still in the lead and there is no need to worry about the competitiveness of European companies. In trade policy, the European Union speaks with one voice and is still on a par with the Americans and the Chinese. Nevertheless, the EU would have to show its colours at some point in the ongoing conflict with the Chinese, which could perhaps become visible in the now suspended procedure for evaluating an investment agreement between the EU and China. Text / Red. / Photos by Unsplash
Photo Collage based on photos of talented photographs by Unsplash
News reports about major investments by Warren Buffett or hedge funds, whether in Europe, Asia or America, are always at the top of the business pages. Regardless of this, however, the businesswoman or businessman or the average citizen who does not just quickly dispose of a few million for investment is wondering how 2021 can best be mastered financially.
With a pandemic and an economic recession still looming ahead, try to make sure you have enough emergency cash to survive. Even though Warren Buffett always stated as his first investment recommendation that cash (a collective term for readily available funds) is not a good Investment, he does the same thing, except that his emergency fund, or war chest, is in the billions.
A few months after the COVID-19 pandemic began, the US National Bureau of Economic Research (NBER) announced that the US economy was officially in recession. We are still there and while parts of the economy have started to recover, many are still lagging behind. For example, unemployment has fallen dramatically since it hit a record high in April 2020. Yet, almost a year later, the US economy has still lost 10 million jobs. The recovery has also been very uneven, with some Americans escaping virtually unscathed and others still feeling the financial impact of the pandemic.
If you're struggling with job or income losses, you're not alone. This year is best spent getting back on your feet, whether that means paying off debt or focusing on making ends meet. However, if you're lucky enough to be in a position to save money - meaning you can pay the bills and don't have high-interest debt - 2021 is a good year to boost your savings even more than you normally would. Here's why. Keep extra money in the bank during times of economic uncertainty. If you ask pretty much any financial expert what you should do with your money during an economic recession, increasing your cash reserves is probably at the top of the list for several reasons.
For one, it's a good idea to boost your emergency fund whenever you're suffering from financial uncertainty. Whether it's an insecure job, an ongoing medical problem or a recession, having extra cash on hand in case an emergency expense arises will keep you financially secure and help you avoid getting into debt or at least cash shortages.
Loss of job and income are some of the biggest threats during a recession, especially when paired with a global pandemic. If you find yourself in this situation, you don't want to have to deplete your retirement account or resort to credit cards and loans to cover your living expenses while you look for work, new clients or projects. You want to keep a healthy amount of liquidity so that you can access extra money quickly if needed. Also, there is always a high risk that the stock market will fall during a recession. If you don't have enough cash reserves, you might be forced to sell while the stock market is falling.
HOW MUCH CASH YOU SHOULD KEEP ON HAND
A typical, healthy emergency fund is about six months' worth of basic living expenses. However, some experts suggest that you should have a larger emergency fund - more like nine months or a year's cash. This could be particularly useful if your financial situation is unstable - for example, if you're a freelancer, your industry is suffering or you're in the middle of a recession. This rule of thumb needs to be adapted to your own situation. If you're paying off debt, especially high-interest credit card debt, it's wise to put extra money into repayment now, even if it means your savings account gets smaller. If you have investments that you can liquidate fairly easily if needed, and you're fairly risk-tolerant, three to six months of living expenses might be fine for you.
INCREASING SAVINGS EVEN WHEN MONEY IS TIGHT
To increase your savings, you need to make a habit of putting money aside regularly, whether it's €25 or €250. The best way to do this is to automate your savings so you don't even have to think about it. The best online savings accounts offer higher interest rates than you'd get at a traditional bank, and they have features that let you automate your savings with a few clicks. You can have money transferred from your bank account to your savings account once a week or month - ideally right after you get your salary so you don't have a chance to spend it. Even if you set it up so that you only transfer 25 euros a week, you'll have saved 1,300 euros in a year, and that's without interest.
Saving more can be enhanced by using additional savings features. Some of them round up purchases and transfer the difference to your savings account, while others analyse your spending and identify extra money that can be saved every now and then. Once you have done this, you can start to identify areas in your budget where you can reduce your spending to save even more. There are many different budgeting methods you can try. You'll even find some great budgeting apps that do the hard work for you. Once you've categorised your spending and noticed areas where you can save, commit to budgeting a certain amount each month and set up an alarm in your budgeting or banking app to notify you when you hit your limit. If you really make it a habit to save more and spend less, you can do it. Putting more money aside this year will not only help you when you run into problems - it will also give you more peace of mind at all times. By the way, cryptocurrencies are not a real alternative for safe cushioning in times of crisis.
Text / Guest Writer Wolfgang Schratter
"One of the most memorable values that we preserve and remember when we travel is the star of hospitality, that unconditional human contact that we receive unselfishly with kindness and deep respect when we find ourselves on the stage of a journey.
Omotenashi in Japan is not a mask or a simple paraphrase learned as a modal or fickle standard during the moment of serving a guest, customer, diner or visitor in a city. Omotenashi is much more, it is a millenary tradition, which is learned and recognised as an impeccable value offered to a person from the perspective that the customer is a God.
Keigo is an important part of Omotenashi, it is formal language with a high degree of politeness and has the spirit of valuing the actions of the interlocutor and giving supreme importance to the welfare of others. In Japan you will always feel like a special guest, no matter if you visit a majestic restaurant or a simple little handicraft shop in a traditional neighborhood, you will always be welcomed in the wonderful manifestation of the deep respect and techniques of "Omotenashi".
Omotenashi has the spirit of creating a pleasant, respectful, cordial and memorable atmosphere for the guest or customer, offering selfless benevolence and anticipating their wishes, leaving our guest with an indelible memory of care and high value in the hospitality of their journey. Immersing oneself in the constellation of Omotenashi techniques and adapting them to the culture and traditions of hospitality establishments and services in tourism is one of the trends that make a difference in the experience of travellers. Text / Red.
The ship, operated by Evergreen Marine, was en route from China to the Netherlands when she ran aground after a strong gust of wind blew her off course. Upon running aground, Ever Given turned sideways, completely blocking the canal. Although there is an older section of the canal which could have helped bypass obstructions, this particular incident happened in a section of the canal with only one channel. Refloating the Ever Given is thought to take some days to complete.
At the dawn of the incident, many economists and trade experts have commented on the effects of the blockade if not resolved quickly, citing how important the Suez is to global trade, and the incident is likely to drastically effect the global economy because of the trapped goods scheduled to go through the canal following the incident. Among the products, oil shipments are the most affected in the immediate aftermath, due to a significant amount of them remaining blocked with no way to reach their destination. Referring to the European and American market, a few maritime experts have disputed the prediction of a drastic effect on trade, saying this "really isn’t a substantial transit route for crude", noting that traffic has only slowed down and that this might only impact sectors with existing shortages such as the semiconductor industry. But whats about the Suez Canal, when was it built? How was the Canal-Project financed an where were the men behind this global story of success in sea-transport. See the following articles to get more insights. Text / Red.
Photos: Public Commons / By Unsplash
The Suez Canal is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea to the Red Sea through the Isthmus of Suezand dividing Africa and Asia. Constructed by the Suez Canal Company between 1859 and 1869, it officially opened on 17 November 1869. The canal offers watercraft a more direct route between the North Atlantic and northern Indian oceans via the Mediterranean and Red seas, thus avoiding the South Atlantic and southern Indian oceans and reducing the journey distance from the Arabian Sea to London, for example, by approximately 8,900 km (5,500 mi).
It extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez. Its length is 193.30 km (120.11 mi) including its northern and southern access-channels. In 2019, 17,225 vessels traversed the canal (an average of 47 per day).In 2019, the last year before the COVID 19 pandemic, there were 18,800 ships. The Egyptian state-owned Suez Canal Authority took in over US$5 billion, an average of more than US$300.000 per transit.
The original canal featured a single-lane waterway with passing locations in the Ballah Bypass and the Great Bitter Lake. It contained, according to Alois Negrelli's plans, no lock systems, with seawater flowing freely through it. In general, the water in the canal north of the Bitter Lakes flows north in winter and south in summer. South of the lakes, the current changes with the tide at Suez.
While the canal as such was the property of the Egyptian government, European shareholders, mostly French and British, owned the concessionary company which operated it until July 1956, when President Gamal Abdel Nasser nationalized it—an event which led to the Suez Crisis of October–November 1956. The canal is operated and maintained by the state-owned Suez Canal Authority(SCA) of Egypt. Under the Convention of Constantinople, it may be used "in time of war as in time of peace, by every vessel of commerce or of war, without distinction of flag." Nevertheless, the canal has played an important military strategic role as a naval short-cut and choke-point. Navies with coastlines and bases on both the Mediterranean and Red Seas (Egypt and Israel) have a particular interest in the Suez Canal.
In August 2014, the Egyptian government launched construction to expand and widen the Ballah Bypass for 35 km (22 mi) to speed the canal's transit-time. The expansion intended to nearly double the capacity of the Suez Canal, from 49 to 97 ships per day.At a cost of 59.4 billion Egyptian pounds (US$9bn), this project was funded with interest-bearing investment certificates issued exclusively to Egyptian entities and individuals. The "New Suez Canal," as the expansion was dubbed, was opened with great fanfare in a ceremony on 6 August 2015.
On 24 February 2016, the Suez Canal Authority officially opened the new side channel. This side channel, located at the northern side of the east extension of the Suez Canal, serves the East Terminal for berthing and unberthing vessels from the terminal. As the East Container Terminal is located on the Canal itself, before the construction of the new side channel it was not possible to berth or unberth vessels at the terminal while a convoy was running. Text / Red.
Economically, after its completion, the Suez Canal benefited primarily the sea trading powers of the Mediterranean countries, which now had much faster connections to the Near and Far East than the North and West European sea trading nations such as Great Britain or Germany. The main Austrian-Hungarian trading port of Trieste with its direct connections to Central Europe experienced a meteoric rise at that time.
The time saved in the 19th century for an assumed steamship trip to Bombay from Brindisi and Trieste was 37 days, from Genoa 32, from Marseille 31, from Bordeaux, Liverpool, London, Amsterdam and Hamburg 24 days. At that time, it was also necessary to consider whether the goods to be transported could bear the costly canal tariff. This led to a rapid growth of Mediterranean ports with their land routes to Central and Eastern Europe. According to today's information from the shipping companies, the route from Singapore to Rotterdam through the Suez Canal will be shortened by 6000 kilometers and thus by nine days compared to the route around Africa. As a result, liner services between Asia and Europe save 44 percent CO2 (carbon dioxide) thanks to this shorter route. The Suez Canal has a correspondingly important role in the connection between East Africa and the Mediterranean region. In the 20th century, trade through the Suez Canal came to a standstill several times, due to the two world wars and the Suez crisis. Many trade flows were also shifted away from the Mediterranean ports towards Northern European terminals, such as Hamburg and Rotterdam. Only after the end of the Cold War, the growth in European economic integration, the consideration of CO2 emission and the Chinese Silk Road Initiative, are Mediterranean ports such as Piraeus and Trieste again at the focus of growth and investment. Text / Red.
The opening of the canal created the first salt-water passage between the Mediterranean Sea and the Red Sea. Although the Red Sea is about 1.2 m (4 ft) higher than the eastern Mediterranean, the current between the Mediterranean and the middle of the canal at the Bitter Lakes flows north in winter and south in summer.
The current south of the Bitter Lakes is tidal, varying with the tide at Suez. The Bitter Lakes, which were hypersaline natural lakes, blocked the migration of Red Sea species into the Mediterranean for many decades, but as the salinity of the lakes gradually equalised with that of the Red Sea the barrier to migration was removed, and plants and animals from the Red Sea have begun to colonise the eastern Mediterranean.
The Red Sea is generally saltier and more nutrient-poorer than the Atlantic, so the Red Sea species have advantages over Atlantic species in the less salty and nutrient-rich eastern Mediterranean. Accordingly, most Red Sea species invade the Mediterranean biota, and only few do the opposite. This migratory phenomenon is called Lessepsian migration (after Ferdinand de Lesseps) or "Erythrean invasion". Also impacting the eastern Mediterranean, starting in 1968, was the operation of Aswan High Dam across the Nile. While providing for increased human development, the project reduced the inflow of freshwater and ended all-natural nutrient-rich silt entering the eastern Mediterranean at the Nile Delta. This provided less natural dilution of Mediterranean salinity and ended the higher levels of natural turbidity, additionally making conditions more like those in the Red Sea.
Invasive species originating from the Red Sea and introduced into the Mediterranean by the canal have become a major component of the Mediterranean ecosystem and have serious impacts on the ecology, endangering many local and endemic species. About 300 species from the Red Sea have been identified in the Mediterranean, and there are probably others yet unidentified. The Egyptian government's intent to enlarge the canal raised concerns from marine biologists, who feared that it would worsen the invasion of Red Sea species. Text / Red.
Photos Collage by Unsplash
Indigenous people from Colombia and Brazil sue french supermarket chain for deforesting the Amazon. Representatives of several communities accuse the French group of buying meat from suppliers suspected of involvement in forest destruction and slave labour.
Representatives of several Amazonian indigenous communities filed a lawsuit with a lawsuit on Wednesday in Saint-Étienne, in southern France, against French supermarket and retail giant, the Casino Group, which they accuse of failing to prevent, through its subsidiaries in Brazil and Colombia, the deforestation of their lands and violations of human rights. The lawsuit, backed by several international NGOs, is based on the "due diligence" law passed in France in 2017. The norm used now for the first time against a supermarket chain obliges companies with more than 5,000 employees to ensure that "both their subsidiaries and subcontractors" do not cause "serious violations against human rights and fundamental freedoms, against people's health and safety, as well as against the environment throughout their sphere of influence".
According to the plaintiffs, the Casino Group, whose South American subsidiaries Pão de Açúcar in Brazil and Grupo Éxito in Colombia account for 47% of its annual revenue, "failed to review its surveillance and action policies to ensure that throughout its supply chain there are no human rights or environmental violations." One of the main reasons, they say, is that Casino continues to buy products from global meat giant JBS, accused by several NGOs of sourcing its products from involved in deforestation practices and even slave labour.
Among the documentation compiled by the Center for Climate Crime Analysis (CCCA) for the lawsuit, it is argued that the Casino Group "regularly purchased meat from three slaughterhouses owned by JBS, whose meat came from 592 suppliers responsible for deforesting at least 50,000 hectares between 2008 and 2020, five times the area of Paris." In addition, the plaintiffs claim to present evidence of "rights violations" of indigenous people. Among others, they point out, "lands ancestrally owned by the Uru-Eu-Wau-Wau community, located in the State of Rondônia, were invaded and exploited by cattle ranches that supply beef to the Pão de Açúcar supermarket, a subsidiary of the Casino Group in Brazil".
"The demand for beef by Casino and Pão de Açúcar brings deforestation and land grabs, violence and murder of indigenous leaders when they decide to resist," explained Luis Eloy Terena, of the Brazilian Terena people and legal advisor to the Coordination of Indigenous Organizations of the Brazilian Amazon (COIAB), one of the plaintiffs. "Indigenous people are being orphaned in their own territories," he denounced in an online press conference.
By email, a spokesperson for the Casino group declined to comment on "an ongoing procedure" but said its Brazilian subsidiary "develops a systematic and rigorous policy to control the origin of beef supplied by its suppliers". In the face of accusations from NGOs such as the French Envol Vert, which on Wednesday said that in 2020 alone it was able to identify "54 products sold at Pão de Açúcar related to deforestation", the Casino Group says it "has been actively fighting, and for years, against deforestation related to cattle ranching in Brazil and Colombia".
If the lawsuit is accepted by the court in Saint-Étienne, where the Casino group is based, the case could go to trial in at least a year. As explained by Sébastien Mabile, a lawyer with Seattle Avocats, what the lawsuit seeks is for the company to "adopt a new plan with appropriate measures to curb deforestation in the supply of beef in the Amazon". In addition, the plaintiffs request "compensation for damages suffered" of more than three million euros (about 20.34 million reais) for the indigenous communities represented and 10,000 euros for each plaintiff association by way of "moral damages".
Coinciding with the coming to power in Brazil of Jair Bolsonaro, a president who has nothing concerned with environmental issues, with a heightened awareness of climate change as a global climate change as a global threat, international scrutiny of the deforestation of the Amazon and the production chains of the companies that feed on this region. This attention is focused on the Amazon, which covers nine countries, mainly Brazil. The largest tropical forest in the world lost 11,088 km2 in Brazilian territory, 9.5% more than in the previous year, according to the last annual report released in November. Bolsonaro's systematic weakening of environmental enforcement structures has turned Brazil into a villain in the eyes of much of the world and the target of direct criticism from French President Emmanuel Macron. Text/Red.
Photos Collage by Unsplash