Day: November 28, 2017

The fashion industry urgently needs to reform its wasteful, polluting ways, British designer Stella McCartney and record-breaking sailor Ellen MacArthur said Tuesday.

With global clothing sales doubling since 2000, people now wear each item far fewer times, the Ellen MacArthur Foundation said, calling for items ranging from T-shirts to jeans to be designed differently and reused more.

The charity, established in 2010, has pioneered the shift toward a “circular economy” in which raw materials and products are repeatedly reused to reduce waste and pollution.

“In a new textiles economy, clothes would be designed to last longer, be worn more and be easily rented or resold and recycled, and would not release toxins or pollution,” it said.

The fashion industry is worth about $2.4 trillion a year, according to the global consultancy McKinsey.

The equivalent of one garbage truck of textiles is wasted every second, and less than 1 percent of clothing is recycled into new clothes, MacArthur’s foundation said in a report.

If nothing changes, the fashion industry will consume a quarter of the world’s annual carbon budget by 2050, it said, referring to the emissions the world can make while keeping the global temperature rise at no more than 1.5 degrees Celsius.

‘Take-make-dispose’

Fashion must abandon its “take-make-dispose” model, where unwanted clothes are sent to landfill sites or incinerated, and start using nonpolluting materials that are designed to last and could save the industry $500 billion, it said.

“The report presents a road map for us to create better businesses and a better environment,” McCartney, a longtime vegetarian who does not use leather or fur, and daughter of the Beatle musician Paul McCartney, said in a statement.

“It provides solutions to an industry that is incredibly wasteful and harmful to the environment.”

Textile production emits 1.2 billion tons of greenhouse gases annually, more than all international flights and maritime shipping combined, the report said.

Clothes also release half a million tons of plastic microfibers into the ocean every year, equivalent to more than 50 billion plastic bottles, it said.

Several major brands said they support the initiative, including Swedish fashion retailer H&M and sports giant Nike.

“[It] is aligned with our efforts in making sure that economic and social development can happen in a way that the planet can afford,” H&M Chief Executive Karl-Johan Persson said in a statement.
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Sensing change in his native Uzbekistan, Hikmat Abdurahmonov plans to build a 10-story office block and open a consultancy firm oriented towards foreign trade. In neighboring Kazakhstan, banker Umut Shayakhmetova is considering an Uzbek subsidiary.

“There is hope in the air,” she says.

Their plans, commonplace in many countries, are striking because Uzbekistan, as Shayakhmetova puts it, is “starting from zero.”

Until the death last year of former president Islam Karimov, it was one of the world’s most isolated states. Karimov, who came to power in communist times, kept an iron grip on the economy and politics and mistrusted both Russia and the West.

Since then, foreign delegations have been beating a path to the capital Tashkent, drawn by the potential of the Central Asian country’s oil and gas and vast cotton crop as well as areas such as car and food production, machinery and chemicals.

They also have political concerns: Uzbeks from a long-oppressed Muslim population have been arrested for attacks on civilians in New York, Istanbul, Stockholm and St. Petersburg this year that killed at least 65 people and wounded many more.

Top-down political system

Karimov’s successor, his longtime prime minister Shavkat Mirziyoyev, has maintained the top-down political system while starting tentative reforms to an economy that had failed to create jobs, fueling discontent.

In August, the country said it would abolish, in 2019, the exit visa system that prevented Uzbeks leaving without official permission, easing the path of millions of migrant workers whose remittances, mostly from Russia, are a vital source of income.

A month later it stopped sending students, teachers and medical workers to harvest cotton after a global boycott campaign, and scrapped most of the capital controls that had bolstered state reserves but stifled trade and investment.

For Abdurahmonov, 36, who has run property, trade, finance and other businesses and lived in the United States, Britain, China and Singapore, the currency reform means he can focus on making money instead of tracking it down in an opaque system.

“I think you can feel it in the air how the atmosphere is really changing,” he said in an interview at his three-story, loft-style office building on the eastern outskirts of Tashkent.

“People are planning new businesses, you can see a lot of start-ups coming (to us).”

‘Serious’

While Abdurahmonov’s company leases out office space, arranges foreign trade deals and provides other services for local entrepreneurs, Shayakhmetova is chief executive of Halyk Bank, Kazakhstan’s biggest lender by assets.

“I have had meetings with high-level officials and I have the impression they are serious (about reforms),” she said in Almaty, Kazakhstan’s financial center. “We are studying the market and talking to the regulator to see what their plans are.”

Shayakhmetova said the bank, which has assets of $26 billion and units in Russia, Georgia and Kyrgyzstan, could set up a subsidiary in Tashkent in a year and a half.

The World Bank named Uzbekistan one of its top 10 improvers this year for ease of doing business, citing reforms in starting a business, construction permits, protection for minority investors, tax payments and electricity supplies.

Ranked 74 out of 190 countries, it was slightly ahead of China and Ukraine but well below Russia, which is 35th.

“Our next target is quite ambitious — we want to be in the top 20 by 2025,” Azim Akhmedkhodjaev, head of the state investments committee, said, citing a draft “Investment Code” to replace more than a hundred separate laws and regulations.

The country has not tackled the more complex and potentially painful restructuring of large state enterprises, however, or joined the World Trade Organization, and is among states perceived as most corrupt, according to watchdog Transparency International, which ranks it 156 of 176.

Ordinary Uzbeks have yet to feel the full benefits of the foreign exchange liberalization, still unable to buy foreign currency in cash except on the illegal black market.

Global outreach, Russian focus

So far this decade, Russia, China and South Korea accounted for around two-thirds of investment, with most, last year, going into oil and gas, followed by chemicals and logistics.

Akhmedkhodjaev said the country had attracted $4.2 billion so far this year, including $3.7 billion in direct investment or FDI, compared with $1.9 billion in FDI in the whole of 2016.

According to World Bank data issued before Akhmedkhodjaev spoke to reporters this month, FDI inflows fell to $67 million in 2016. He did not comment on the discrepancy.

The drop followed high-profile disputes with investors such as Britain’s Oxus Gold and Russian mobile phone operator MTS and a drop off in Chinese investment once a gas pipeline was built.

This year, France’s Peugeot announced a joint venture and Turkish firm Gentes Yapi ve Endustry Tesisleri Ltd. Sti signed a deal to build a large logistics facility.

That marked an easing of ties strained by Turkey granting asylum to a leading Uzbek opposition figure, although he and others have yet to return because, while some critics have been freed from jail, others have been detained.

Akhmedkhodjaev listed United States, Germany and Japan among investors this year, a reflection of the president’s global outreach, while the main inflow, almost a billion dollars, was expected to come from Russian energy giant LUKOIL.

Mirziyoyev has described Russia as a strategic partner, and Russian central bank data shows $2.7 billion in money transfers from Russia to Uzbekistan last year.
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Serbia began work on a China-funded railway line on Tuesday to try to improve the Balkan country’s infrastructure, an effort also expected to strengthen Beijing’s influence in Europe.

In May Serbia borrowed $297.6 million from China’s Exim Bank to modernize a stretch of the railway line between Belgrade and the Hungarian capital of Budapest.

Beijing sees Serbia, an EU membership candidate and Hungary, an EU member, as part of its One Belt, One Road initiative, intended to open new foreign trade links for Chinese firms.

The high-speed rail link between Belgrade and Budapest is expected to cost 3.2 billion euros ($3.80 billion) and is slated to become the main transport route for Chinese goods that arrive by sea at the Greek port of Piraeus to other parts of Europe.

At the construction site in Belgrade’s Zemun neighborhood, Prime Minister Ana Brnabic said that the 30km-long (18.6 miles) stretch of the railway line from Belgrade to the northern town of Stara Pazova is a key step forward.

“This project … is the first cross-border project within the 16+1 framework, … it is the first project between China and EU, involving Serbia,” she said.

Earlier on Tuesday, at the 16+1 summit of Central and Eastern European countries and China, Brnabic met her Chinese and Hungarian counterparts Li Keqiang and Viktor Orban and discussed further cooperation.

Serbia has enjoyed good relations with China since the 1990s, when Belgrade was economically isolated for its role in the Yugoslav wars.

On Monday, Hungary also invited a procurement tender for a modernized railway link with Belgrade. The construction of the Hungarian stretch, worth around 550 billion forints ($2.1 billion), is expected to start in 2020, with China’s Exim Bank providing 85 percent credit coverage.

($1 = 261.4100 forints)

($1 = 0.8413 euros)

Reporting by Aleksandar Vasovic; Editing by William Maclean.
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After Hurricane Maria damaged tens of thousands of homes in Puerto Rico, a newly created Florida company with an unproven record won more than $30 million in contracts from the Federal Emergency Management Agency to provide emergency tarps and plastic sheeting for repairs.

Bronze Star LLC never delivered those urgently needed supplies, which even months later remain in demand by hurricane victims on the island.

FEMA eventually terminated the contracts, without paying any money, and re-started the process this month to supply more tarps for the island. The earlier effort took nearly four weeks from the day FEMA awarded the contracts to Bronze Star and the day it canceled them.

Thousands of Puerto Ricans remain homeless, and many complain that the federal government is taking too long to install tarps. The U.S. territory has been hit by severe rainstorms in recent weeks that have caused widespread flooding.

It is not clear how thoroughly FEMA investigated Bronze Star or its ability to fulfill the contracts. Formed by two brothers in August, Bronze Star had never before won a government contract or delivered tarps or plastic sheeting. The address listed for the business is a single-family home in a residential subdivision in St. Cloud, Florida.

One of the brothers, Kayon Jones, said manufacturers he contacted before bidding on the contracts assured him they could provide the tarps but later said they could not meet the government’s requirements. Jones said supplying the materials was problematic because most of the raw materials came out of Houston, which was hit hard by Hurricane Harvey. He said he sought a waiver from FEMA to allow him to order tarps from a Chinese manufacturer and for more time, but FEMA denied the request.

Contracts canceled

FEMA canceled the contracts Nov. 6, Jones said. The government notified his brother and him a few days later that it would seek $9.3 million in damages unless they signed a waiver releasing the U.S. from any liability. The brothers agreed.

“We were trying to help; it wasn’t about making money or anything like that,” Jones said.

FEMA awarded the company two contracts Oct. 10 to provide 500,000 tarps and 60,000 rolls of plastic sheeting. More than a half dozen others also bid, but FEMA said it could not provide details about their bids.

“The award of a government contract to a company with absolutely no experience in producing the materials sought obviously raises very bright red flags,” said Dan Feldman, professor of public management at the John Jay College of Criminal Justice at City University of New York. “I would hope and assume that the inspector general for the Department of Homeland Security would begin immediately to take a very hard look at this process.”

A FEMA spokesman, Ron Roth, said the agency’s review process was “somewhat expedited” after Hurricane Maria to respond as quickly as possible to the emergency. But he said the agency did perform its due diligence.

Highest-rated submission

“Submissions from potential contractors are objectively evaluated, and a contract is awarded based on the highest-rated submission,” Roth said.

Such “best value” competitive solicitations take into account past performance and a contractor’s ability to deliver as well as price, said Alan Miller, an attorney who spent 22-years advising federal contracting officials until retiring last year.

“In every circumstance, regardless of the award, whether it’s $400 to the local stationery company for envelopes, or it’s $400 million for a construction contract, the contracting officer is required to make a responsibility determination,” Miller said. “Does this company have the infrastructure; do they have the inventory processes, the production processes, the financial capability, for performing the work?”

Nine bids were received on the first contract for plastic sheeting and eight bids on the second contract for tarps. Roth said Star was determined to be the most qualified.

 “FEMA’s initial technical evaluation determined Bronze Star could do the jobs based on their proposals, which confirmed that they could meet the product specifications and delivery dates,” he said.

Served in Navy

Kayon Jones, the co-owner of Bronze Star, served in the U.S. Navy from 1997 to 2000, finishing his duty as a seaman storekeeper on the USS Gettysburg, a guided missile cruiser. The contract solicitation gave preference to veteran-owned companies. According to Navy records, Jones was never awarded a Bronze Star, a medal earned by service members who serve heroically in combat.

In an interview, Jones told The Associated Press he picked the name because he has another company with the word star in it. He said his brother, who is also listed on state incorporation documents for the business, served in the Army and is disabled. Army records show Jones’ brother also didn’t receive a Bronze Star, and it provided no evidence of a service-related injury. Richard Jones did not respond to multiple calls and requests through his brother for comment.

“My brother and I, we are both veterans, so we just came up with a name to do business,” Kayon Jones said. “We’re not saying we have a Bronze Star or anything.”

The day after FEMA canceled the Bronze Star contract, it awarded a contract to OSC Solutions Inc. for plastic sheeting for Hurricane Maria victims. The West Palm Beach, Florida-based company has roughly two decades of federal contracting experience and has produced such supplies multiple times.

The FEMA spokesman, Roth, acknowledged the contract problems delayed delivery of tarps to Puerto Rico but said anyone who needs a tarp should now be able to get one.

‘Blue Roof’ program

More than 93,000 tarps have been sent to distribution centers on the island and now are available to cover homes, Roth said. The Army Corps of Engineers’ “Blue Roof” program has provided 11,000 more reinforced tarps installed on homes by contractors.

To date, roughly $88 million in federal money has been awarded to four contractors, including Bronze Star, for tents and tarps, records show. The rescinded contracts with Bronze Star account for 35 percent of the total.

Michael Byrne, Puerto Rico’s FEMA coordination officer, estimated that at least 60,000 blue roofs are needed across the island. About 350 are installed each day, though he said that is expected to increase.

“One of the limiting factors is the availability of the material,” Byrne said.
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Women need to be given a greater role in industries in poorer nations to meet the global goal of cutting poverty by 2030, the head of the United Nations industrial development agency said on Monday after being voted in for a second term.

Li Yong said empowering women will be a priority in his second four-year stint as director general of the United Nations Industrial Development Organization (UNIDO), which oversees about 860 projects to boost economic growth and tackle poverty.

Data shows about half of the world’s women are in the labor force compared with about 75 percent of men, hold less senior roles and earn on average 60 to 75 percent of what men make.

But studies repeatedly show that more women working accelerates economic growth, while women also invest more of their income into families to educate children and end poverty.

“We need to look at how our projects help women’s empowerment and job creation,” Li, formerly of China’s Ministry of Finance, told the Thomson Reuters Foundation in an interview at UNIDO’s 17th General Conference in Vienna.

“Lots of projects like agro-industry are related to women’s empowerment … and one part of our evaluation is to look at women’s empowerment, at training, at jobs, all those things that are very concrete measures.”

Li was widely praised in his first term in office for re-establishing UNIDO as a key development organization in the U.N. system with a mission to promote industry as a driver to create jobs, boost prosperity, and reduce poverty.

Some countries had questioned the purpose and effectiveness of UNIDO, one of 15 specialized U.N. agencies, and some nations withdrew funding in the past decade including Britain, the United States, Australia, Canada and France.

Climate Change

Representatives of UNIDO’s 168 member states, however, said Li had changed the focus to support developing countries and find ways to build sustainable, environmentally friendly businesses using fewer resources, less energy and generating less waste.

He had also encouraged public and private, local and international partnerships such as setting up agro-industrial parks and introducing clean tanning technology to India’s leather industry.

One of the U.N.’s Sustainable Development Goals, an agenda to be reached by 2030, acknowledges industrialization as a key driver of sustained economic sustainability and prosperity.

Li said UNIDO’s core mission had never been more relevant.

He said poverty, employment and hunger remain major challenges, exacerbated by climate change, resource depletion, environmental degradation and the potential impact of new technology which will cut jobs, with women to be worst hit.

Africa remained a priority, but climate change meant thinking differently about manufacturing, particularly in low-lying small island nations with limited resources, he said.

Such nations import expensive crude oil to generate power, he said.

“I said to them ‘Open your eyes. Expand your vision.'” said Li. “If they could use renewable power, like solar or maybe tidal … they can manage their fishing industry, or tourism, and expand job creation.”

He said the Pacific island nations of Kiribati and the Marshall Islands had joined UNIDO in the past two years and others were keen to follow suit.

“Our work is very relevant to their economic development,” he said.
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Diplomats are searching for ways to prevent the global trade dispute resolution system from freezing up, after the Trump administration blocked appointments to the body that acts as the supreme court for global trade.

U.S. President Donald Trump has vetoed the appointment of judges to fill vacancies on the seven-member Apellate Body of the World Trade Organization, which provides final decisions in arguments between countries over trade.

“Members are already having a conversation about what to do with this situation,” WTO Director General Roberto Azevedo told reporters. “They are floating ideas, they are discussing. We have to see how that evolves.”

The WTO normally has seven judges and needs three to sign off on every appeal ruling. But two have left and another goes in December, leaving only four — just one above the minimum — to deal with a growing backlog of trade disputes.

Azevedo said he did not think the situation was a threat to the WTO’s survival but it was already having an impact, and the longer it went on the more acutely it would be felt.

In a confidential note sent to all WTO members on Monday, a copy of which was reviewed by Reuters, the Appellate Body said departing judges would continue working after they left on appeals filed before their terms ended. The United States has objected to that practice in the past.

Appointments to the Appellate Body are meant to be unanimously agreed by all 164 members, like all decisions at the WTO. The fine print says the WTO can switch to majority voting if necessary, but diplomats are reluctant to do that for fear of unravelling a system that relies on consensus as a bulwark to protectionism.

Azevedo said the Trump administration had made clear it had misgivings about the way the world trade system has functioned, although it had not linked any specific demands for reform with the decision to halt appointments to the appeals panel.

The Trump administration has not publicly explained why it is blocking the appointment of judges to the trade panel. The U.S. mission to the WTO in Geneva declined to comment.

‘True emergency’

Several trade experts said the move seemed to fit Trump’s ideology of favoring bilateral trade deals over the multi-lateral system embodied by the WTO.

Pieter Jan Kuijper, professor of law at the University of Amsterdam, said Trump’s trade representative, Robert Lighthizer, preferred the pre-WTO practice of negotiating the outcome of trade disputes rather than being bound by WTO rulings.

Although Trump regularly says Washington has been hurt by trade disputes, WTO experts mainly say the United States has actually been a big winner at the WTO. But negotiating the outcome of trade disputes rather than leaving them to judges might tip the balance further in Washington’s favor.

Kuijper compared Trump’s stance to that of Zimbabwe’s former president Robert Mugabe killing off the court of the Southern African Development Community by blocking new judges when the court became too troublesome.

“That example doesn’t make one optimistic,” he said. “We are in a true emergency where we should take into account that the end of the Appellate Body may come, either by design or by accident.”

Possible solutions

At a panel discussion Monday for trade officials and diplomats, Kuijper and other trade experts discussed possible ways to avert a crisis if more vacancies come open.

One solution would be to switch to majority voting for appointing judges. Another would be for the judges to change their own working procedures, refusing to take any more appeals until there are more judges.

Nicolas Lockhart, a trade lawyer at Sidley Austin LLP, suggested the WTO could use its arbitration process more to resolve disputes and rely less on appeals.

All three approaches have drawbacks, including the risk of further alienating the United States.

“A process that could lead to a situation where the United States leaves the WTO in a huff is actually a situation where everyone loses, and the last thing we should be aiming for,” said Alice Tipping, a former New Zealand trade diplomat now at the International Center for Trade and Sustainable Development.
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