The G8 Communique on Climate: Regression, not a Forward Movement

Statement of organizations affiliated with the G8 Action Network, Sapporo, Hokkaido, Japan, July 9, 2006 The G 8’s communiqué regarding their action on climate is actually inaction being masked as movement.  It is a great fraud being perpetrated on the global community that would significantly reduce its capacity to contain climate change.  We fully agree with the statement of the Government of South Africa that “[W]hile the Statement may appear as a movement forward, we are concerned that it may, in effect, be a regression from what is required to make a meaningful contribution to meeting the challenges of climate change.” Retreat from Bali  The announcement of the agreement among the G8 to reduce greenhouse gas emissions globally by 50 per cent by 2050 is actually a step back from the minimum action that was demanded by the global community during the United Nations Summit on Climate Change in Bali last December.  In Bali, opposition from the US, Japan, and Canada almost killed a developing consensus that should commit industrialized (Annex 1) countries to cut greenhouse gas emissions by 25-40 per cent from 1990 levels by 2020.  That developing consensus also projected the minimum cut needed by 2050 to be in the range of 80 to 90 per cent if the rise in global temperature was to be kept below 2 degrees centigrade in the 21st century.  The G8’s 50 per cent formula is objectionable on several counts: First, the G8 formula is a global cut, not one undertaken by the industrialized or Annex One countries, so big polluters like the US can actually free-ride on the rest of the world.  Second, the cut has no clear baseline.  It was revealing that in announcing it, Japanese Prime Minister Yasuo Fukuda initially said it was from 1990 levels, then had to take back that statement and subsequently mentioned a 2000 baseline. Third, this declaration of intent is not binding and there is no indication that the G8 want to bring their “commitment” fully under the United Nations climate negotiations framework that would bind its signatories.  Indeed, the G8 announcement reinforces the G8 as a site for climate action that rivals the UN process and effectively subverts it.  Not surprisingly, the G8 declaration emerged as part of a parallel process known as the “Major Economies Meeting.”  The Major Economies Meeting is a US initiative to wrest decision-making on climate from the United Nations framework and process.  All in all, the G8 announcement is one giant step away from meaningful mandatory reductions and significantly increases the chances of the planet slipping into uncontrolled climate change.   Supporting the Wrong Agency Another setback to the cause of effective climate action was the G8’s endorsement of the World Bank’s Climate Investment Funds, to which the communiqué said certain countries had already pledged $6 billion.  Civil society groups monitoring the Bank’s environment program had already warned the G8 that there are very serious concerns that the funds would be heavily oriented toward funding large-scale coal plants.  Without a clear definition of clean technology, the funds may be used to finance projects that do not clearly mitigate climate change or may take up resources that bring only minor or incremental change at a time that fundamental change is needed.   Just as the G8 undermines the UN as the site for climate action, so does the World Bank subvert an already established UN mechanism.  An Adaptation Fund under the United Nations Framework Convention on Climate Change (UNFCCC) was established in Bali by the Conference of Parties in December 2007 precisely to provide technological assistance to developing countries.  Instead of funding this mechanism, the G8 countries may now divert their contributions to the World Bank Climate Investment Funds to maintain control of the process of technology transfer.  Not surprisingly, the developing countries have criticized the World Bank mechanism as a threat to serious efforts to assist the global South to deal with climate change.   After failing as a development bank, the World Bank is now trying to create the image that it is the “climate bank.”  This is indeed the height of hypocrisy.  With  $2 billion already spent on coal, oil and gas projects over the last year, the World Bank has broken its own record as the world’s largest multilateral financier of greenhouse-emitting energy initiatives.  Even as it pretends to deal with climate change with its Climate Investment Funds, the Bank is actually exacerbating it with its massive fossil fuel extraction lending. We must call a spade a spade.  The G8 declaration does not constitute an advance but a step backward in the global community’s ability to deal with climate change.  Saying that it is better than nothing or that it is realistic given the Bush administration’s opposition to significant action is to lend legitimacy to a dangerous charade.  The G8 has once again lived up to its reputation of being an obstacle to the global community’s efforts to come to grips with the challenges of our times.  We repeat our call to disband this unelected body of rich country governments that acts as if it were the government of the world. Partial List of Endorsers Attac Japan  CADTM ESK-Basque Country Focus on the Global South Freedom from Debt Coalition Friends of the Earth International FSU-France Institute for Policy Studies, US Sustainable Energy and Economy Network Via Campesina

Barclays sells shares in GCM Resources Plc

World Development Movement (WDM), July 7, 2008. London, UK

In June 2008 Barclays Bank sold its shares in GCM Resources Plc – a British company that is pushing through the building of a controversial mine in Bangladesh.  A mine that, if built, will displace 40,000 people and threatened the water supply of a further 100,000.  This move comes just two months after the Asian Development Bank removed financial banking from the controversial project, further placing the project in jeopardy.

WDM has spearheaded the UK campaign to stop the Phulbari mine project going ahead. Thousands of WDM supporters wrote to Barclays demanding that it sold its shares and WDM campaigners also attended Barclays AGM, demanding the same.

Tim Jones, policy officer at the World Development Movement said: “We are pleased to see that Barclays has sold its shares in GCM Resources Plc.  And we now want Barclays, and other UK banks to remove all financial involvement in the project both now in and in the future.  This is yet another blow for GCM and a victory for some of the poorest people in Bangladesh”.  

WDM will continue to campaign to prevent the mine from being built   more…

Take Action:www.wdm.org.uk/bangladeshmine 

Kate Blagojevic 
Press officer, World Development Movement 
0207 820 4900/4913, 07711 875 345, Email:kate.blagojevic@wdm.org.uk

NGOs demand better Safeguards Consultation from ADB

NGO Forum on ADB, Manila, The Philippines. 

Nothing less than an open and inclusive second Safeguards consultation is warranted for the Asian Development Bank to produce an effective policy that can protect affected communities and ecosystems according to ADB watchdog in Asia and the Pacific region, Europe and the United States.

Activists and advocacy groups belonging to the NGO Forum on ADB collectively petitioned the Bank on July 4 to put in place an over-all consultation process and agenda that would ensure meaningful dialogue with stakeholders, particularly civil society and affected peoples. 

In its letter to the ADB President, the Forum made strong recommendations on the proposed consultation agenda released by the Bank’s Safeguards Policy Team last June 19. The letter is reproduced in its entirety below. 

The Forum’s proposal covered and centered on the following issues: (1) translation requirements; (2) timing of the release of the second Safeguards Policy Statement (SPS) document and the start of the Manila consultation; (3) length of consultation with strong emphasis on a one-day consultation each for environment, involuntary resettlement and indigenous peoples sections; (4) ADB’s process in accepting external comments on the SPS document; and (5) the number and composition of participants. In addition, the Forum asked for a possible legal roundtable discussion with the ADB’s Office of the General Counsel right after the Manila consultation. 

The network reminded the Bank that there was considerable disappointment and concern from civil society on the first SPS draft and the process of the first round of Safeguards consultation. The situation led Forum members and partners to walk away from several regional consultations. 

The ADB, which began its Safeguards Policy Update (SPU) in December 2005, officially announced in the Madrid Annual Governors Meeting last May that there will be a second multi-stakeholders consultation for the Safeguards. This was in response to outrage expressed by NGOs and ADB governors alike over the mediocre draft that the ADB had released. 

The ADB said plans to hold the second multi-stakeholder consultation in Manila this third quarter.

Letter to ADB

July 4, 2008

MR. HARUHIKO KURODA

President

Asian Development Bank

Dear Mr. Kuroda,

The decision of the ADB to release a second Safeguards Policy Statement and hold a follow-up regional consultation is a step in the right direction. Opportunities for meaningful dialogue with stakeholders, particularly civil society and representatives of affected communities, are vital in reaching the collective aim of crafting a relevant and effective Safeguards Policy. 

We welcome the invitation extended to civil society by the ADB to help craft the proposed consultation plan which the ADB Safeguards Policy Update team sent to our network on June 19. We also recognize the efforts of the ADB’s SPU Team to reach out to the NGO Forum.

Keeping in mind Forum’s recent experience with the initial consultation phase, which fell short of the expectations of many stakeholders, not just civil society, we would like to stress the need for an over-all consultation agenda and process that would encourage open, sincere and active participation from Bank staff and other stakeholders. We therefore respectfully propose for your consideration the following recommendations that we feel can better shape the consultation plan:

1) Translation
As an international financial institution guided by its own Translation Framework, we believe nothing less than high quality translation of the (a) second SPS draft and (b) simultaneous translation during the Manila consultation proper is warranted and necessary. Similar to the first consultation phase, language translations should be accomplished in, though not necessarily limited to, Russian, Bahasa, Chinese and Vietnamese by professional translators who are familiar with and are guided by experts with a strong grasp of financial and safeguard terms that will be used in the new draft. We feel very strongly that the absence of translation effectively discriminates against participants who do not use English as a first language. The same is true for non-English-speaking individuals who are not attending the consultation but would still like to comment on the second SPS document via the website. We ask that translated documents be released at the exact same time as the English version to be fair to every relevant stakeholder.

2) Timing
Given that there would be three important documents released at the same time (second SPS document, Operations Manual, and the comment-response matrix), we request for a 60-day period between the release of the last translation of the SPS document and the start of the Manila consultation. Such a period will provide the time required for stakeholders – especially Indigenous and affected peoples – to fully understand and digest the information the drafts contain as well as to undertake the analysis necessary for informed comment. Further, we ask for an additional two weeks time for written submissions after the Manila consultation, to enable us to finalize and submit our written inputs that would be jointly based on the second SPS document and the discussions in the Manila consultation.

3) Length of Consultation and Number of Consultations
We believe that the length of any public consultation is dependent on the structure and focus contained in the consultation agenda. In view of the fact that three policies will eventually be consolidated into one, we suggest that a one-day consultation be held for each policy section, namely, environment, involuntary resettlement, and Indigenous Peoples. Discussion should also include, inter alia, over-arching issues and other Safeguards documents for which we recommend an additional half day. 

Having accepted the invitation extended by the ADB to help its SPU team craft a meaningful agenda and as our contribution to shaping an effective process, we are finalizing a proposal which outlines the structure/format that would best address the needs of the Safeguards consultation. We will submit this to the SPU Team in the coming days.

4) Process of ADB’s Response on Inputs on 2nd SPS Document
In view of the time and logistical constraints of the face-to-face consultation on the second SPS document, the Bank should allow for receiving written comments on the draft from the day of its release until after the Manila consultation. ADB should post written submissions on its website on the date of receipt of respective comments. As requested in section 2, the deadline for written submission should be extended two weeks after the Manila consultation.

5) Regarding Participants
While we appreciate that the consultation plan has mentioned the criteria for selecting participants, it did not provide the estimated number of attendees nor the preferences by which the SPU team will extend its invitation. This matter is of great importance because it allows us to gauge the number of possible participants from civil society and affected people. It also helps everyone determine if there will be equitable distribution of number of seats based on stakeholder orientation and role in the consultation process. 

It is also vital to recognize that subjects that will be covered by the consultations will require particular expertise, concerning for instance the multidimensional, project-induced impoverishment risks confronting the involuntarily displaced and indigenous communities. We thus strongly recommend the participation of your senior economists in the process, along with specialists and leaders of professional associations to ensure a more robust discussion.

6) Legal Roundtable to Follow Consultation
Given the significant legal issues at stake with any significant restructuring of the safeguard policies, and following international best practice on updating safeguard issues, we believe the consultation must be accompanied by an additional legal roundtable event over which a diversity of legal experts, to be mutually agreed, on the issues facing indigenous peoples, resettlement and environment can openly discuss with the ADB’s Office of General Counsel the legal framework within which these safeguards sit.

Thank you for inviting civil society to help shape the process. We hope to receive an official, written response from your office on this urgent matter.

Very truly yours,

RENATO REDENTOR CONSTANTINO – NGO Forum on ADB
TITI SOENTORO – Nadi (Indonesia)
HELEN LEAKE – Forest Peoples Programme (UK)
RAMANANDA WANGKHEIRAKPAM – North East Peoples Alliance on Trade Finance and Development (Northeast India) 
DANA SADYKOVA – Ecomuseum of Karaganda (Kazakhstan)
ISAGANI SERRANO – Philippine Rural Reconstruction Movement
AHMED SWAPAN – VOICE (Bangladesh)
JESSICA ROSIEN – Oxfam Australia
PHILA POHTHMI – Greater Sylhet Indigenous Peoples Forum (Bangladesh)
JOANNA LEVITT – International Accountability Project (USA)
MISHKA ZAMAN – Bank Information Center (USA)
GURURAJA BUDHYA – Urban Research Centre (India)
THEODORE E. DOWNING – International Network on Displacement and Resettlement (USA)
SAODAT SAIDNAZAROVA – CSSC “Kalam” (Tajikistan)
DODARBEK SAIDALIEV – CSSC “Shahrvand” (Tajikistan)
SHYNAR IZTELEUOVA – NGO “TAN” (Kazakhstan)
PIETER JANSEN – Both ENDS (The Netherlands)
GALINA CHERNOVA – NGO “Globus” (Kazakhstan)
SERGEY VORSIN – Youth EcoCenter (Tajikistan)
KNUD VOCKING – Urgewald (Germany)
STEPHANIE FRIED – Environmental Defense (USA)
HEMANTHA WITHANAGE – Centre for Environmental Justice (Sri Lanka)
RUSTAM MURZAKHANOV – NGO Environmental Law Center “Armon” (Uzbekistan)
ULRIKE BEY – Asienhaus (Germany)
DILOROM ATABAEVA – CSSC Consortium of Initiatives (Tajikistan)
ZAKIR KIBRIA – BanglaPraxis (Bangladesh)
FABBY TUMIWA – Institute for Essential Services Reform (Indonesia)
POL VANDERVOORT – 11.11.11 (Belgium)
SOUPARNA LAHIRI – National Forum of Forest People & Forest Workers (India)

CC: 
Ursula Schaefer-Preuss, VP for Knowledge, Management and Sustainable Development
Xianbin Yao, Acting Director General, RSDD
Nessim Ahmad, Director, ESSD
Xiaoying Ma, SPU Team Head
Chantelle Duffy, SPU Administrative Manager
Bart Edes, NGO and Civil Society Center

Secret report an indictment of WB transparency, agenda

Editorial, NewAge, July 6, 2008. Dhaka, Bangladesh

In the wake of the global food crisis that has worsened beyond expectation, there has been a steadily growing din of expert opinions who suggest that the push for biofuels might have been a reason behind the soaring food prices on the back of consistently diminishing global food stocks. Neoliberal organisations and institutions typically aligned with US interests have, meanwhile echoed US president George Bush’s claims that the impact of biofuels on the global food crisis is negligible and it is growing demand for food in developing countries which is causing the shortage. That argument has now been dealt a deathblow by a report published in the UK-based Guardian newspaper on July 4, and reported across the world on Saturday, including in New Age.
   

According to the Guardian, a World Bank report completed in April this year and authored by Don Mitchell, one of its lead economists, had been hushed up because it concluded that biofuels had pushed up global food prices by 75 per cent. This damning report was allegedly kept under wraps by the World Bank to protect the US government from humiliation, particularly the US president, George W Bush.
   

In the last few years, the consumption of food-grains has risen dramatically outstripping the reasonable increase in demand for human or animal consumption. This excess demand could have been due to the marked rise of industrial demand for grains destined for the biofuel industry. Although such views were discarded on basis of some studies claiming that biofuels’ impact on food crisis was negligible, the recent report of a hushed-up study by the World Bank only confirms those apprehensions.
   

Furthermore, with a G8 meeting scheduled to be held in Japan in the coming week, it would surely cause further embarrassment for the US president who had previously said that one of the main reasons behind food crisis was the increasing demand for meat in the two emerging economies, namely China and India.
   

This exposes the fact that the World Bank, despite its claim for transparency and governance and the more recent position to stop corruption, is itself guilty of those things as it will evidently not even stop short of keeping its findings secret to protect the interests of certain countries that have long been accused of driving its often controversial agenda. It points out that the World Bank’s research, used to decide a number of lending programmes and economic policies could well have been subjected to similar screening which actually compromised the interests of poor countries like Bangladesh.
   

Whether beneficial for the people or not, the World Bank is heavily involved in development activities across the world and therefore this report and the decisions leading to its being hushed up should be investigated and its findings released to the public. The leading industrialised countries meeting in Japan for the G8 summit should also be asked to come away from their position of promoting the use of biofuels and contribute towards alleviating the prevailing food crisis.

 

Secret Report: Biofuel Caused Food Crisis

Internal World Bank Study Delivers Blow to Plant Energy Drive

By Aditya Chakrabortty, CommonDreams.Org

LONDON – Biofuels have forced global food prices up by 75% – far more than previously estimated – according to a confidential World Bank report obtained by the Guardian.

The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.

The figure emphatically contradicts the US government’s claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.

“It would put the World Bank in a political hot-spot with the White House,” said one yesterday.

The news comes at a critical point in the world’s negotiations on biofuels policy. Leaders of the G8 industrialised countries meet next week in Hokkaido, Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.

It will also put pressure on the British government, which is due to release its own report on the impact of biofuels, the Gallagher Report. The Guardian has previously reported that the British study will state that plant fuels have played a “significant” part in pushing up food prices to record levels. Although it was expected last week, the report has still not been released.

“Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises,” said Robert Bailey, policy adviser at Oxfam. “It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat.”

Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as “the first real economic crisis of globalisation”.

President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: “Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases.”

Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.

Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.

“Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate,” says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.

The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.

Supporters of biofuels argue that they are a greener alternative to relying on oil and other fossil fuels, but even that claim has been disputed by some experts, who argue that it does not apply to US production of ethanol from plants.

“It is clear that some biofuels have huge impacts on food prices,” said Dr David King, the government’s former chief scientific adviser, last night. “All we are doing by supporting these is subsidising higher food prices, while doing nothing to tackle climate change.”

Managing the Oil Crisis

Walden Bello, Focus on the Global South

Speech delivered during the Development RoundTable Series Forum on Oil and Electric Power held at the Sulo Hotel, Manila, The Philipines on 17 June 2008

Our dependency on oil has never been more excruciating than it is today. The price of fuel has reached unheard of heights.  The price of crude went above $139 a barrel over a week ago, before easing.  At the pump, the price of unleaded gasoline has gone beyond P56 and diesel above P49.  We are now consuming over 120 million barrels a year, and 90 per cent of that is sourced outside the country. 

What is causing this unprecedented rise in global oil prices?  The key factor seems to be that the demand for oil is rising much faster than its supply, and this is due fundamentally  to the fact that the few old oilfields on which the world relies for most of its oil are being depleted and no new fields have been discovered that can match their production and reserves. Peak oil, which was viewed just a few years ago as a outlandish theory, is now being treated as fact. The second factor pushing up prices is the rush to buy oil futures contracts, a development that is partly determined by the fear that available oil will increasingly become scarce, partly by the desire of investors to park their wealth in oil instead of the declining dollar.

We ought not to be completely helpless, however. What is so shocking about the current state of affairs is that our capacity to influence developments in oil has deteriorated from 25 years ago.  Then we had a proactive energy strategy, we had a government energy complex working to diversify our energy sources, and we had mechanisms to influence the domestic price of oil. Today, in the era of oil deregulation, we are 100 per cent at the mercy of Chevron-Caltex, Shell, and Aramco, which controls Petron.  The OPEC countries that dominate the production of crude are often cast as the villains of the piece, yet the last few years have been years of record profits for the oil majors.  In just the first three months of this year the five largest US oil companies made a record $36 billion in profits, prompting the Democrats in Congress to push a bill to impose a 25 per cent tax on “unreasonable profits.”   

In the Philippines, the subsidiaries of the majors have been doing very well.  In 2007, Shell’s net profit rose 54 per cent over 2006, from P4.12 billion to P6.36 billion.  Petron’s net profits rose 6.3 per cent, from P6.02 billion to P6.4 billion.  Mind you, these are reported, not necessarily real profits, which are most likely higher, what with transfer pricing and all that.  The majors act as a cartel and pretty much set whatever price they agree on, with no government intervention and little government monitoring. All our officials can do is to exercise what economists call “moral suasion,” but we still have to find an oil company that will allowed itself to be swayed by morality.

In the US, it takes 4 to 6 weeks before a rise in the price of crude is reflected in the pump price.  Here in the Philippines, with the rapid succession of pump price rises, the truth is we no longer know how prices are being determined.  We don’t know if prices are being determined in response to actual past rises in crude prices or in anticipation of future price rises.  Non-transparency is the rule in the oil industry.

Marcos was guilty of many crimes, but, as they say, we must give the devil his due. His regime did have a proactive energy strategy and an effective energy bureaucracy.  The fact that it blundered big-time in the case of the Bataan nuclear plant should not blind us to the positive aspects of the regime’s approach to energy. Instead of building on these positive aspects, the succeeding regimes, in the name of the free market, committed three major blunders: Cory dismantled the state energy complex, she deregulated oil, and Ramos sold a controlling bloc of Petron shares to foreign interests. In this regard, Petron was not just a very profitable enterprise, the crown jewel of the state corporate sector.  Being involved in nearly all phases of the oil business, Petron knew what a reasonable price and what reasonable profits were.  Controlling 40 per cent of the market, Petron set its price and the oil majors tended to follow.  Today what power government has was summed up by Energy Secretary Angelo Reyes: “It has to be the market that dictates the price. [But] we can’t be helpless and not act when there’s unreasonable pricing.  That’s our job, monitoring prices and dialoguing with them,” meaning the oil majors.  I guess this is what is called moral suasion.

So given this self-inflicted, grim scenario, what should we do?  Whatever it is, we can’t let it be a piecemeal and largely reactive response, like passing out a one-time P500 to poor families. It must be comprehensive, with short-term and long-term components.

Let me share some suggestions with you, and here I take no credit for originality, having lifted these recommendations from different people.  Also, let me say here that these suggestions do not constitute official FDC recommendations but are my own thoughts on the matter..   

First the short term.  There are several important proposals that are worth considering.  One popular one is that the value added tax be abolished on fuel.  This would certainly result in significantly lower prices and thus benefit the consumer, but only if pricing is being done in a transparent manner.  The problem is that with a cartel that is extremely non-transparent in fixing prices, we have no way of checking if the removal of VAT is being reflected in the pump price.

Thus the removal of VAT should be accompanied by a measure of reregulation. The oil companies must obtain government’s permission to raise prices.  To determine whether the proposed price increase is fair and reasonable, the government must have access to the oil companies’ costing data..  The objective is not to control prices but to correct the current situation of windfall profits and make the oil majors share the burden of the rise in the price of crude with the consumer rather passing this all to the latter.

There are other short-term measures, among them the designation of service stations where public transport vehicles can purchase oil at subsidized prices, with the subsidy being financed by money rechanneled from debt servicing.  There are said to be over 1000 designated stations at present. They should be increased.

Among the more strategic moves we can undertake is to undo one of our biggest mistakes. The government, which currently owns 40 per cent of Petron, must regain controlling interest and management control of that firm. This will mean a quantum leap forward in bringing price rises under control since it will mean state influence on some 35-40 per cent of the market. Petron can again be the price leader. There are fears that this will invite retaliation from Saudi Arabia, but I think these are overblown. The Saudis will talk if the price is right, and repurchasing Petron can be financed from rechanneled debt service payments.  A re-Filipinized Petron will, in fact, be able to diversify our oil sourcing and make preferential deals with governments such as that of Venezuela, which is now selling oil to certain counties at 40 per cent off the world market price.

Another strategic move is to begin to radically shift from oil to electric power in transportation.  Here priority must be placed on enlarging the electricity- run train and bus transportation system, with the necessary investments coming from resources that would otherwise go to debt service payments. This expansion could be coordinated with the popularization of the use of bicycles for relatively short distances from stations to residence or the office. Where the shift from oil to power is not yet feasible, we must move to convert a significant part of the bus and jeepney fleet from gasoline and diesel to cheaper CNG and LPG.  Incentives should also be put in place to convert private vehicles into CNG and LPG. 

Finally, we should reconstitute the Department of Energy, one with real power in comparison to the monitoring agency now headed by Angelo Reyes. A re-Filipinized Petron, the parts of the old PNOC still under state control, and Napocor would form the core of this new reconstituted agency that would be tasked with comprehensive planning to bring down energy prices, diversify our energy sources, and link manage our energy consumption to mitigate climate change.

I thank you.