Mexico’s Development Banks Fuel the Fossil Energy Trade

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Demonstrators demand clarification of the murder of land rights activist Samir Flores and the shutdown of a thermoelectric plant in the state of Morelos, in central Mexico, in a February 2019 protest on Mexico City's emblematic Paseo Reforma. CREDIT: Emilio Godoy/IPS

Demonstrators demand clarification of the murder of land rights activist Samir Flores and the shutdown of a thermoelectric plant in the state of Morelos, in central Mexico, in a February 2019 protest on Mexico City’s emblematic Paseo Reforma. CREDIT: Emilio Godoy/IPS

MEXICO CITY, May 20 2020 (IPS) – Since 2012, Teresa Castellanos has fought the construction of a gas-fired power plant in Huexca, in the central Mexican state of Morelos, adjacent to the country’s capital.


“We don’t want the power plant to operate, because it will cause irreparable damage, polluting the water and air. This project was imposed on us; we have to defend the water and the land. This is not an industrial zone,” the activist, coordinator of the Huexca Resistance Committee, told IPS.

During the tests, the constant noise of the turbines also altered the life of this small community of just over 1,000 people, mostly farmers, near the Cuautla River, within the rural municipality of Yecapixtla.

“Development banks must have safeguards and principles for sustainable investment. National regulations are needed, which define climate finance and green finance, what principles govern them, what are the climate risks. The trend should be to increasingly finance green projects and less and less hydrocarbons.” — Liliana Estrada

The Central Combined Cycle Plant, located in Huexca and with a capacity of 620 megawatts based on gas and steam, is part of the Morelos Integral Project (PIM), developed by the state Federal Electricity Commission (CFE). It also consists of an aqueduct and a gas pipeline that crosses the states of Morelos, Puebla and Tlaxcala.

The People’s Front in Defence of Land and Water of Morelos, Puebla and Tlaxcala and its ally, the Permanent Assembly of the People of Morelos, have managed to get several court orders that have blocked the operation of the plant, the 12-km aqueduct and the 171-km gas pipeline since 2015.

Castellanos, who has won an international and a national award for her activism, has been involved in the battle against the plant from the very start, which has earned her persecution and threats.

The opposition to the power plant by local communities that depend on planting corn, beans, squash and tomatoes and raising cattle and pigs, focuses on the lack of consultation, the threat to their agricultural activity, due to the extraction of water from the rivers, and the discharge of liquid waste.

In February 2019, a public consultation that did not meet international standards supported the completion of the project.

A few days earlier, activist Samir Flores had been murdered, a crime that remains unsolved – just one more instance of violence against environmentalists in Mexico. Despite Flores’ murder, the government of leftist President Andrés Manuel López Obrador went ahead with the referendum and upheld the result.

Public funds have fuelled the conflict, as the state-owned National Bank of Public Works and Services (Banobras) lent some 55 million dollars for the pipeline.

As in the case of other projects, development banks have become a financial pillar for the oil industry in Latin America’s second-largest nation, population 130 million.

The National Bank of Foreign Trade (Bancomext), Banobras and Nacional Financiera (Nafin) have funneled millions of dollars into building pipelines and oil and gas facilities in recent years, even though the climate change crisis makes it necessary to abandon such investments.

They have also financed renewable energy projects, but in much smaller amounts than fossil fuels.

The construction and operation of the Central Combined Cycle Plant, of the state Federal Electricity Commission, financed with public funds, unleashed a conflict with residents of Huexca, a small community in the central Mexican state of Morelos, which has brought the operation of the thermoelectric plant to a halt. CREDIT: Emilio Godoy/IPS

The construction and operation of the Central Combined Cycle Plant, of the state Federal Electricity Commission, financed with public funds, unleashed a conflict with residents of Huexca, a small community in the central Mexican state of Morelos, which has brought the operation of the thermoelectric plant to a halt. CREDIT: Emilio Godoy/IPS

Energy reform pillar

The energy reform that then conservative president Enrique Peña Nieto (2012-2018) enacted in 2013 opened the sector to private capital, broke the monopoly of the state-owned Petroleos Mexicanos (Pemex) oil giant and CFE, and made Mexico an attractive market for international investment in the sector.

To support this transformation, the state development banks also opened their coffers.´

Since 2012, Banobras, which finances infrastructure and public works and services, has lent at least 721 million dollars for the construction of gas pipelines, 10.2 billion dollars for oil and gas projects, 251 million dollars for electrical cogeneration, from steam generated in hydrocarbon plants, and eight million dollars for the construction of a thermoelectric plant that will burn fuel oil in the northwestern state of Baja California Sur.

Bancomext, which provides financing to exporters, importers and nine strategic sectors, has delivered some 500,000 dollars to oil companies in the eastern state of Tamaulipas and another 446 million dollars in Mexico City. It has also provided 65.4 million dollars to gas initiatives in the northern state of Nuevo Leon and 626.7 million dollars in Mexico City.

In addition, it has contributed 1.5 billion dollars for the supply of gas through pipelines to the final consumer; 324 million dollars for the extraction of oil and gas; 216 million dollars for the construction of public works for oil and gas; 126 million dollars for the manufacture of products derived from oil and coal; nearly seven million dollars for oil refining; 0.65 million dollars for the commercialisation of fuels; 0.25 million dollars for the drilling and maintenance of hydrocarbon wells; as well as 0.25 million dollars for oil platform maintenance and services.

In February, Bancomext granted a loan of 7.1 million dollars to Grupo Diarqco, in what it presented as the first credit to a private Mexican company in the industry, to exploit an oil field in the southeastern state of Tabasco.

Nafin, which grants credits and guarantees to public and private projects, created in 2014 the Energy Impulse Programme for these initiatives, endowed with more than a billion dollars.

It also manages, along with the economy ministry, the Public Trust to Promote the Development of Energy Industry National Suppliers and Contractors, designed for the industrial promotion of local production chains and direct investment in the energy industry, which this year has a fund of some 41 million dollars.

Missing: social and environmental safeguards

As in the case of the Morelos Integral Project, the gas pipelines have been a source of conflict with local communities, arising from the lack of socio-environmental safeguards and standards to guarantee that a project and its financing will respect the human rights of potentially affected communities.

Nafin and Banobras lack such safeguards, while Bacomext has had an “Environmental and Social Risk Management System Guide” since 2017, with no evidence of whether and how it has been applied to energy projects financed since then.

Since 2003, three platforms of international standards have emerged, to which Mexico’s development banks have not adhered, on human rights; social and environmental assessments and impacts; the application of safeguards; stakeholder participation; complaint resolution; and transparency.

The planet needs 80 percent of the global hydrocarbon reserves to stay underground in order for the temperature increase to remain at 1.5 degrees Celsius, as set out in the Paris Agreement on climate change.

The treaty, signed by 196 countries and territories in 2015, will enter into force at year-end and is considered indispensable to avoid irreversible climate disasters and human catastrophes.

Liliana Estrada, a researcher with the Climate Finance Group of Latin America and the Caribbean, told IPS that most investment in energy still goes to fossil fuels.

“After the reform, they have to enter into strategic projects and follow the guidelines of the government; they cannot go against these strategic lines. The gas and gas pipelines became strategic,” with the boost to the megaprojects of the López Obrador administration, said the representative of this coalition of non-governmental organisations and academics.

These credits are part of the fossil fuel subsidies that Mexico has pledged, to several international bodies, to eliminate.

The Mexican energy industry has also attracted international private banks, which have lent 55.95 billion dollars to 12 corporations, according to “Banking on Climate Change: Fossil Fuel Finance Report 2020”, released in March by six international environmental organisations.

The CFE received some 5.4 billion dollars from 12 banks between 2016 and 2019, and Pemex received 48.3 billion dollars from 20 foreign banks.

Based on Huexca’s experience, Castellanos demanded that these investments be stopped.

“If it’s our company, as the government says, then we can close it down. We have to defend the space in which we live, because we only have one planet and it belongs to all of us, it belongs to every living being, and it is our obligation to contribute something to this planet, because we are only here for a short while, we are guests of the earth”, she said.

Estrada called for sustainable financing regulations and questioned the lack of government leadership in this regard.

“Development banks must have safeguards and principles for sustainable investment,” she said. “National regulations are needed, which define climate finance and green finance, what principles govern them, what are the climate risks. The trend should be to increasingly finance green projects and less and less hydrocarbons.”

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‘The most potent weapon in the hands of the oppressor is the mind of the oppressed’

By: Andrew Ngozo

It is about mind slavery. Once you make a person hate themselves and who they are, (referring to their ‘cultural history’) you don’t need to kill or put them in prison because you’ve made them their own worst enemy.

The oppression of the mind is the most powerful tool you can use to break a person.

In the late 19th Century, Europeans flooded into Africa with the sole intention of ‘bringing light into the dark continent’. Be that as it may have been, it did not mean that Africa then was a backward landmass for we had advanced socio-political and socio-economic systems that had been in place and sustained society since time immemorial. Concerning the Europeans’ arrival and escapades in Africa,  John Henrik Clarke, an African-American historian, professor, and a pioneer in the creation of Pan-African and Africana studies, said: “They laughed at your clothes; and made you change your clothes, they laughed at your names; and made you change your name; but more importantly they laughed at your God; and made you change your God.” From an African point of view, Africa never was, is, or will be a laughing stock despite all the challenges and the shortcomings we face.

The continent has to reject the notion that being modern and civilized means imitating the west. It is the 21st Century and while most African nations have adopted the language, political ideology, socio-economic structures, education and everything that makes up a nation, even down to popular culture, from the west, we still have a total dependency on our own traditional political philosophies and ideas and their shifts and movements.

However, it is sad to note that this is largely evident in rural communities and in the poorer countries of the continent and not in metropolises and richer countries.

Africa Has Above-Standard Intellectual Theories

That Africa has taken to western norms and cultures, makes John Henrik Clarke’s statement about the West laughing at us ever so true today.

Whatever the West normalises eventually trickles down to Africa and is adopted as a norm. essentially, this means that, slowly, Africa continues to be slowly emptied of its essence, and becoming a relic, no different in substance from a statue or a museum.

As Africans, we should strongly desist from persuading the rest of the world to believe that anything from our continent is inferior.

For instance, celebrations of Africa on the international scene mostly involve dancing, music, traditional fashion, and other cultural artifacts.

Africans hardly ever showcase African-originated economic ideas, social ideologies, or intellectual theories.

It is not that these do not exist, but the world has successfully convinced everyone that everything African is substandard.

Echoes of 19th Century Colonists  

It is the age of the Fourth Industrial Revolution and we are told that its either you adapt or you die. African leaders are telling us that the way of the west is ‘modern and civilised’.

They echo the 19th Century colonialists who dismissed African civilisations as backward, barbaric and uncivilised. Sadly, this is becoming Africa’s reality.

Westerners, aided by our very own, tell us that our institutions are corrupt, that our societies are patriarchal, and that the African traditional religions are heathen.

To echo John Henrik Clarke’s remarks, they are, indeed, laughing at us.

However, this is of little concern to Africa’s elites.

For them, what matters is to find what the political currency is in the US or Europe, and to uncritically follow it.

Whereas people in the west are de-emphasising patriotism and nationalism, Africans need these to build sustainable nations.

Ultimately, we need to look into traditional African systems and extract coherent policies that can help form workable and uniquely African social and systems.

This is the only viable path to preventing the continent from fully becoming western Africa – and the only way to ending the continent’s long-term political decay.

Let Africa not be like them. As we celebrate Africa Month in May, let Mother Africa rise up to become the powerhouse that it is destined to be with all its sons and daughter.

Let Africa be the one to have the last laugh for they have been laughing at us for centuries but we shall serve them no longer.

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Checkmate! China’s Coronavirus Connection

Asia-Pacific, Civil Society, Development & Aid, Featured, Global, Headlines, Health, TerraViva United Nations

Opinion

Dr Simi Mehta is the CEO and Editorial Director of Impact and Policy Research Institute (IMPRI), New Delhi. She can be reached at simi@impriindia.org.

Handover ceremony at UN compound in Beijing for donation of critical medical supplies to the Chinese government. Credit: UNDP China

NEW DELHI, May 20 2020 (IPS) – Coronavirus outbreaks in China and later across the globe have been unprecedented in both its scale and impacts. In the era of changing world order, this pandemic has drawn the global attention towards the threats posed by the non-traditional security challenges.


All military prowess and records of economic progress have been rendered impotent vis-à-vis the coronavirus disease. With a total of around 5 million cases worldwide (and only about 83,000 in China), the wheels of power display of major powers like the US, China, Russia, Spain, France, Germany, Italy have come to a grinding halt.

The objectives of national health policy, health security of the countries, including the concept of collective health security of the World Health Organization (WHO), and the United Nations have raised questions on their seriousness, claimed efficacy and efficiency.

Regarding the origins of the virus, there have been different narratives. This article analyses the discourse claiming that research and development programmes for medicine, vaccines, and treatment for health risks and planning and investment for intensive research on bioweapons by major powers led to the creation of the dangerous strand of contagion called the novel coronavirus.

Allegations on China

There is no denying that the place where it all originated was in Wuhan, China. Thousands of people began to suffer with a respiratory illness that could not be cured. The WHO has described coronavirus as part of the family of viruses, which ranges from the common cold to Middle East Respiratory Syndromes (MERS) and SARS.

It has the capability to transmit between animals and humans. Very soon, a school of thought contrary to the claims of the Chinese government that it was in the wet market selling exotic and wild animals- including bats, that was the cause of this pandemic, began to emerge.

However, counter-claims posit that The Wuhan Institute of Virology National Biosafety Laboratory in the vicinity of the wet market had deliberately created this virus. What raises arguments in favour of the counter-claims include: China did not raise an alarm globally about the existence, leave aside spread of the virus until major outbreaks were reported from late January 2020 onwards.

Various conspiracy theories have been circulating that this virus was made to escape the laboratory as bio-weapons either by accident or design. Some reports have also claimed that this virus was originally stolen by Chinese agents from Canadian laboratory in July 2019, which has level 4 of biosafety- dealing with the most dangerous pathogens for which there are few available vaccines or treatments, similar to that possessed by the Wuhan laboratory.

Further, it has rejected international fact-finding mission into its country. Newspapers like the Wall Street Journal and The New York Times and the Washington Post have suffered collateral damage and some of their employees have been asked to wind up their operations in the country.

Even academic research papers on coronavirus has borne the brunt by the gag-order of the Chinese authorities to intervene in the independence of the scientific process. Those research articles focusing on the COVID-19 have to now undergo extra vetting before they are submitted for publication.

As a result, the initial global empathy for the Chinese suffering from the wrath of this virus steadily turned into suspicion and panic. This culminated into pent up anger seeking reparations from China for being culpable for the origin and spread of COVID-19.

Unfazed by Chinese criticism, US President Donald Trump eloquently named the coronavirus as the Chinese virus. He has also accused the WHO of siding with China in hiding the facts and suspended its contribution to the multi-lateral body and said that the WHO “should be ashamed of themselves because they are like the public-relations agency for China.”.

Calls for an international investigation to know the ‘truth’ behind the origin and spread of the virus have become intense. With its one-party authoritarian system, China was initially on the defensive and flagrantly refused all such calls; which, in effect added to the case in point that there is ‘something’ that it wanted to hide from the rest of the world.

However, with growing international pressures and the most recent draft resolution led by Australia and the EU and supported by 122 countries at the World Health Assembly of WHO, China finally relented and agreed to the call for a “comprehensive review” of COVID-19 pandemic in an “objective and impartial manner”.

It is even pointing to the proactive help it is providing to several countries, in terms of sending protective gears, face masks, gloves, etc. However, complaints have been raised as several of these have malfunctioned and/or were defective.

Conclusion

In 1919 George A. Soper1 wrote that the deadly Spanish Flu pandemic that swept around the earth was without any precedents, and that there had been no such catastrophe ‘so sudden, so devastating and so universal’. He remarked that, “The most astonishing thing about the pandemic was the complete mystery which surrounded it. Nobody seemed to know what the disease was, where it came from or how to stop it. Anxious minds are inquiring today whether another wave of it will come again”.

With close to 3 million positive cases and around 0.2 million deaths worldwide, the coronavirus has compelled people to draw parallels with the history of lethal viruses like the 1918 Spanish flu.

This great human tragedy created by COVID-19 is compounded because of the absence of a definitive cure and/or a vaccine. Experts opine that it would be possible only by the first quarter of 2021. The prevailing obscurity in China with respect to the causes of origin and global spread of the virus has led to conspiracy theories to emanate from various parts of the international community. Demands have begun to be made to hold China accountable for the health crisis and that it should pay the countries of the world for their health and economic hardships.

Trump has indicated that the US has begun its investigations to claim ‘substantial’ damages from China as the ‘whole situation could have been stopped at the source’. The champion of having China included in the world system- Henry Kissinger warned that COVID-19 was a danger to the liberal international order.

Even a veteran Cabinet Minister of Government of India, Nitin Gadkari stated in an interview to a private news channel that the coronavirus is ‘not a natural virus, rather it emerged from a lab’.

This, perhaps explains India’s cautious next steps of charging its northern neighbour China as the country responsible for the manufacture of the virus that has brought incredible and unprecedented mayhem in the lives, livelihoods and economies around the world.

Therefore, it would be in the best interests of China to ensure transparency and allow international investigations into the disease, as it is totally unbecoming of permanent member of the UN Security Council wielding veto powers.

The worldwide panic created by the prevailing health insecurity would redefine the meaning, definition and practical implications for programmes and policy of all countries of the world. Putting it into perspective, the global health management body- the WHO needs to be reformed, and so should the UN Security Council.

It remains to be seen how the world navigates through the crisis and whether comprehensive public health would figure in their national security agendas in the post-COVID-19 world order. Nonetheless, it is time that the multilateral agencies take suo moto cognizance of the havoc created by China and act as per the norms of international law for ensuring collective security.

1 Major George A. Soper was Sanitation Engineer with Department of Health, USA. His area of specialty included study of typhoid fever epidemics. He was also the managing director of American Cancer Society from 1923 to 1928.

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