All posts by MBusiness

Unions Take NAFTA Wage Fight to Mexican Senate

The head of Canada’s biggest private-sector union headed to Mexico’s Senate on Friday, promising to fight at the NAFTA trade pact talks for improved Mexican wages and free collective bargaining as a way of benefiting workers across North America.

The issue of tougher labor standards has emerged as a key sticking point in the talks to update the North American Free Trade Agreement, and has brought disparate groups of workers from across the region closer to U.S. populists.

“There will not be an agreement” until the Mexican team agrees to free collective bargaining, the elimination of so-called yellow unions that are dominated by employers, and fair wages for Mexican workers, Unifor President Jerry Dias said.

The event held in a side chamber of the Senate was organized by the umbrella organization Better Without Free Trade Agreements, which represents dozens of social organizations and unions.

Dias argued that low wages have not only hurt Mexican workers but have also prompted manufacturing jobs in Canada and the United States to leave for Mexico.

By including much tougher labor standards in an updated NAFTA, the issue could be dealt with head on, he said. “When you start talking about low wages, we can deal with that under the dispute mechanism as an unfair subsidy.”

The fifth round of talks NAFTA is being held in the upscale Camino Real hotel in Mexico City.

“What Mexico offers in this negotiation and to the rest of the world is cheap labor. That’s what Mexico puts on the table and how it presents itself as an attractive place for investments,” Senator Mario Delgado of the leftist Party of the Democratic Revolution told Reuters.

“It is a shame and it is unsustainable for Mexico. … Our salary policy is putting at risk the existence of the treaty,” said Delgado.

Mexican business leaders argue that integrating Mexico into North American supply chains has made the entire region more competitive. Recent studies have shown, however, that wages in Mexico have experienced significant downward pressure.

Given Mexico’s higher inflation rates, wages are now lower there in real terms than when NAFTA took effect, according to a report published in August by credit rating agency Moody’s.

While formally employed workers earn significantly more, the statutory minimum wage is a mere 80 pesos ($4.23) a day.

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How Much Is a Life Worth, Ask Activists Fighting Slavery?

From $7 for a Rohingya refugee to $750 for a North Korean “slave wife,” human rights activists have voiced concerns that it is becoming increasingly easy to enslave another human being as the cost plummets.

The average modern-day slave is sold for $90-100 compared to the equivalent of $40,000 some 200 years ago, said Kevin Bales, Professor of Contemporary Slavery at Britain’s University of Nottingham.

“There has been a collapse in the price of slaves over the last 50 years,” he told the Thomson Reuters Foundation’s annual Trust Conference in London, which focuses on women’s empowerment and modern slavery.

‘Beasts of burden’

Pointing to a photo of boys hauling rocks in Nepal “like beasts of burden,” he said their parents would have sold them for $5-$10. Children are so cheap that if they get injured or fall in a ravine their slave master abandons them, Bales said.

“They understand it’s less expensive to acquire a new child than to call a doctor,” he added.

Bales attributed the fall in price to the population explosion which had “glutted the world with potentially enslavable people.”

40 million people trapped

Worldwide, about 40 million people were estimated to be trapped as slaves in 2016, mostly women and girls, in forced labor, sexual exploitation and forced marriages, with global trafficking estimated to raise $150 billion in profits a year.

North Korean defector Jihyun Park told how she was trafficked to China where she was sold for 5000 yuan ($750) to an alcoholic, violent farmer.

“He said I’ve paid for you so you must work. I spent six years as his slave,” Park said.

Thousands of North Korean women are believed to have been trafficked as wives and sex workers inside China where the one-child policy has skewed the gender ratio.

Natural disasters force issue

 In Bangladesh, Asif Saleh, of development agency BRAC, said Rohingya refugee women fleeing Myanmar and arriving in Bangladesh were being sold for as little as 5 pounds ($6.60).

Aid agencies say traffickers often exploit crises to prey on vulnerable people separated from their families and communities.

Nepalese nun and kung fu teacher Jigme Wangchuk Lhamo, who helps families displaced by the country’s 2015 earthquake, told the conference that people were selling their daughters, sisters and mothers to traffickers after the disaster in order to rebuild their homes.

“Some men just see girls as a bunch of money,” she said.

In northern Kenya’s pastoralist region, lawyer Fatuma Abdulkadir Adan said child brides as young as nine were sold for eight cows or eight camels — worth about $800.

“Girls become commodities and they have no voice, no one asks what the girl wants,” said Adan, who uses football to help tackle child marriage and female genital mutilation.

But it is not just rich countries where girls are sold off.

Sarah, forced into prostitution as a child in Britain, said the gang who groomed her said she would have to have sex every day until she had paid off a “debt” of 75,000 pounds.

“They told me I belonged to them and until my debt was cleared I had to work for them,” she said.

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Experts: Puerto Rico May Struggle for More Than a Decade

Puerto Rico could face more than a decade of further economic stagnation and a steep drop in population as a result of Hurricane Maria, experts say.

The stark estimates were presented this wee to members of a federal control board overseeing finances of a U.S. territory that is already in the 11th year of a recession.

“The situation is dire to say the least, with destroyed infrastructure, lack of power and water, and an accelerated pace of migration,” economist Heidie Calero said.

She estimated that the hurricane caused $115 billion in damage, even without counting business losses.

“We believe that is very conservative,” she said.

The administration of Governor Ricardo Rossello said earlier in the week that it was seeking $94 billion in federal aid for an island where power generation remains at 40 percent and where nearly 10 percent of people are still without water almost two months after the storm. More than 20 of Puerto Rico’s 78 municipalities remain completely without power.

So far, Congress has approved nearly $5 billion in aid for Puerto Rico.

Twin shocks

Economist Juan Lara told board members that the local economy could contract anywhere between 8 percent and 15 percent in fiscal 2018, depending on the restoration of power, with overall revenues falling by 30 percent.

“We are undergoing both a demand and supply shock,” he said, saying that 5,000 businesses could close permanently, representing 10 percent of membership of the island’s National Retail Federation.

Businesses that have reopened have been forced to reduce their hours or depend on costly generators.

“We need electric power to be back and to be reliable,” Lara said. “We need roads to be cleared. We need supermarkets to be able to replenish their inventories. … We need to restore basic operating infrastructure.”

Lack of power remains the biggest obstacle, with the island’s electric company struggling to maintain the 50 percent power generation it had reached Wednesday just as a major blackout occurred for the second time in a week.

Rossello has said the company will reach 80 percent generation by end of November and 95 percent by mid-December, goals that many have called ambitious. In contrast, the U.S. Corps of Engineers has said it expects 75 percent generation by end of January.

More migration

Before Hurricane Maria hit, Puerto Rico was trying to restructure a portion of its $73 billion public debt load amid a deep economic crisis that has prompted an exodus of nearly half a million people in the past decade. That migration will only accelerate because of post-hurricane conditions, with an estimated population of 2.8 million people by 2030, compared with the current 3.4 million, said economist Jose Villamil.

“What Maria has done in some ways is to exacerbate that situation, made it more intense,” he said.

The drop in population, coupled with a majority of young, talented people leaving, will hit Puerto Rico’s economy even harder, experts said.

Two more meetings remain as the board continues to gather information to revise a fiscal plan to adjust for the hurricane’s impact. It is unclear how much money, if any, will be set aside in the plan to pay off the island’s debt load.

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Probe Finds Ongoing Radioactive Leaks at Illinois Nuclear Plants

Radioactive waste continues to pour from Exelon’s Illinois nuclear power plants more than a decade after the discovery of chronic leaks led to national outrage, a $1.2 million government settlement and a company vow to guard against future accidents, an investigation by a government watchdog group found.

Since 2007, there have been at least 35 reported leaks, spills or other accidental releases in Illinois of water contaminated with radioactive tritium, a byproduct of nuclear power production and a carcinogen at high levels, a Better Government Association review of federal and state records shows.

No fines were issued for the accidents, all of which were self-reported by the company.

The most recent leak of 35,000 gallons (132,000 liters) occurred over two weeks in May and June at Exelon’s Braidwood plant, southwest of Chicago. The same facility was the focus of a community panic in the mid-2000s after a series of accidents stirred debate over the safety of aging nuclear plants.

A 2014 incident at Exelon’s Dresden facility in Grundy County involved the release of about 500,000 gallons (1,900,000 liters) of highly radioactive water. Contamination was later found in the plant’s sewer lines and miles away in the Morris, Illinois, sewage treatment plant.

Another leak was discovered in 2007 at the Quad Cities plant in Cordova. It took eight months to plug and led to groundwater radiation readings up to 375 times of that allowed under federal safe drinking water standards.

Exelon had threatened to close the Quad Cities plant, but relented last year after Gov. Bruce Rauner signed bailout legislation authorizing big rate hikes.

Representatives of Exelon and its government overseers — the U.S. Nuclear Regulatory Commission, the Illinois Emergency Management Agency and the Illinois Environmental Protection Agency — say the leaks posed no public danger and did not contaminate drinking water. Exelon said to prevent leaks it has spent $100 million over the last decade on upgrades at all of its U.S. plants.

Michael Pacilio, chief operating officer of the power generating arm of Exelon, said no one in or around the plants was harmed by radioactivity from the leaks, which he described as minor compared with everyday exposures.

“We live in a radioactive world,” Pacilio said.

Critics say that’s little cause for relief.

“Best that we can tell, that’s more luck than skill,” said David Lochbaum, an analyst with the nonprofit Union of Concerned Scientists. “Leaks aren’t supposed to happen. Workers and the public could be harmed. There is a hazard there.”

Among the 61 nuclear power plants operating in the U.S., more than half have reactors that are at or near the end of their originally expected lifespans — including the Dresden and Quad Cities plants.

Industry watchdogs and government whistleblowers contend oversight is compromised by a cozy relationship between companies and the NRC.

Government regulators concede they must balance the safety needs of aging plants, which require more maintenance, versus ordering cost-prohibitive upgrades at facilities that inherently are just a slip-up away from catastrophe.

No player in the nuclear industry is bigger than Exelon, the Chicago-based energy company that last year reported $31 billion in revenue and operates 14 nuclear plants in Illinois, New York, New Jersey, Pennsylvania and Maryland.

Five of the six Illinois plants reported leaks over the last decade, records show. Clinton, in DeWitt County, had no leaks and Byron, in Ogle County, reported only one that contained low levels of radioactivity.

The accidents included in the BGA analysis are separate from government-approved releases into large bodies of water. The state allows Exelon to discharge controlled amounts of tritium into rivers and lakes, where radioactive material gets diluted.

Other releases of tritium, however, can be illegal and subject to fines and government lawsuits — though no accidents from the past decade resulted in either. Government officials say small amounts of tritium — a radioactive form of hydrogen and a potential marker for more dangerous nuclear contaminants — are not harmful to humans but exposure to higher levels may increase the risk of cancer.

At least seven of the 35 documented accidents since 2007 involved contamination of groundwater. Other contamination was found in sewers and other water systems where it isn’t supposed to be.

The recent leaks echo the controversy in 2006 when it was revealed that leaks at Braidwood over many years spilled 6 million gallons (23 million liters) of radioactive water, some of which found its way onto private properties and at least one private drinking well.

At the time, Exelon and state regulators assured the public radioactivity levels in the private well were far below limits deemed a danger. Neighbors of the Braidwood plant were skeptical then and remain so.

“The NRC gets all its numbers from the nuclear plant. How can NRC trust the numbers?” asked Monica Mack, who lives in Braceville near the Braidwood plant.

The BGA investigation also found:

  • Of the 35 documented incidents, 27 occurred at Dresden. Following the big 2014 leak, which emanated from an aboveground storage tank, Exelon asked a state inspector whether the public would have access to the incident report under open records laws, a state report showed.

  • An NRC report on the 2007 Quad Cities leak noted radiation levels went “well beyond that seen anywhere else in the industry” and that plant staff estimated the leak had been active for years before it was discovered.

  • In 2010, Exelon’s Marseilles generating plant in LaSalle County reported a spill from a storage tank, initially estimated at more than 150 gallons (570 liters) but later classified as “unknown.” Groundwater tritium tests later showed levels 59 times the EPA’s drinking water limit. Exelon said no tritium left the plant’s boundaries, but records show plant workers continued to monitor a body of highly contaminated groundwater sitting on plant property at least five years after the accident.

  • In 2009, Dresden reported another hole in a storage tank led to a leak of as much as 272,000 gallons (1 million liters) of radioactive water. Onsite groundwater testing showed levels of tritium 160 times higher than allowed under federal standards for drinking water.

 

This story was provided to The Associated Press by the nonprofit, nonpartisan Better Government Association of Chicago: www.bettergov.org

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Analysts: Resolving Farm Issue Could Help Zimbabwe’s Battered Economy

Zimbabwe’s economy has been hammered by political unrest, soaring inflation, a shortage of foreign cash, a trade deficit and many other problems. Residents say the economic turbulence has driven thousands of people out of the country and makes daily life challenging. But an economic analyst says Zimbabwe has an educated workforce and a battered-but-functional infrastructure that could boost agricultural production and manufacturing, and eventually bring recovery. VOA’s Jim Randle reports.

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Airbus to Sell 430 Planes to Indigo for $49.5 Billion

Airbus announced on Wednesday that it will sell 430 airplanes to U.S. firm Indigo Partners for $49.5 billion in the European firm’s biggest deal ever.

The announcement came at the Dubai Air Show and the deal includes 273 A320neos and 157 A321neos. The airlines that use the aircraft will include Frontier Airlines, JetSMART of Chile, Volaris of Mexico and Wizz Air of Hungary.

A320neos list for $108.4 million apiece and A321neos at $127 million. Airlines and manufacturers often negotiate lower prices for big deals like these.

Indigo Partners is a Phoenix-based private equity firm. It owns Denver-based Frontier Airlines and owns part of Mexico’s Volaris. It’s managed by William Franke, a pioneer of the cheap tickets and high fees airline business that has spread overseas and is growing in the United States.

Airbus’ previous biggest-ever sale came in August 2015, when it sold 250 A320neos to Indian budget airline IndiGo, a deal estimated to be worth $26 billion at list prices. IndiGo and Indigo Partners are separate firms with separate management.

Until Wednesday, the only major deal announced at the Dubai Air Show came on Sunday, when long-haul carrier Emirates purchased 40 Boeing 787-10 Dreamliners in a $15.1 billion deal.

Airbus, which is based in Toulouse, France, has pinned hopes of continuing production of its A380 double-decker jumbo jet on Emirates, the world’s largest operator of the aircraft. Reports circulated before the air show that a major A380 sale would be coming.

Airbus employees even filled a news conference on Sunday, expecting the A380 sale, instead to find state-owned Emirates making the deal with Boeing in front of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum.

Emirates now relies solely on the Airbus 380 and the Boeing 777 for its flights, making it the largest operator of both. It has 165 Boeing 777s in its fleet today and took possession of its 100th A380 earlier this month.

The Emirates’ snub even came up at the news conference Wednesday, when a reporter asked Airbus if another deal could be coming.

“I think you’ve got to walk over to the chalet with Emirates on the door and ask them,” said John Leahy, Airbus’ chief operating officer.

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Employers Hire Sexual Harassment Trainers

Recent accusations of sexual misconduct by Hollywood movie mogul Harvey Weinstein is impacting the upper echelons of the business world. The “Weinstein Effect” has men in powerful positions facing similar accusations. It is also increasing awareness about where the line is between friendly banter to more uncomfortable, and sometimes criminal motives. VOA’s Carolyn Presutti takes us to a class that teaches how to intervene when witnessing sexual harassment.

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Papa John’s Apologizes for Criticizing NFL Anthem Protests

Papa John’s apologized Tuesday night for comments made by CEO John Schnatter blaming sluggish pizza sales on NFL players kneeling during the national anthem.

The company is a major NFL sponsor and advertiser, and Schnatter said on an earnings call Nov. 1 that “NFL leadership has hurt Papa John’s shareholders” and that the protests “should have been nipped in the bud a year and a half ago.”

The company tweeted a statement offering to “work with the players and league to find a positive way forward.”

“The statements made on our earnings call were describing the factors that impact our business and we sincerely apologize to anyone that thought they were divisive,” it said. “That definitely was not our intention.

“We believe in the right to protest inequality and support the players’ movement to create a new platform for change. We also believe, as Americans, we should honor our anthem. There is a way to do both.”

The movement was started last year by former San Francisco 49ers quarterback Colin Kaepernick, who kneeled to protest what he said was police mistreatment of blacks. More players began kneeling after President Donald Trump said at an Alabama rally last month that team owners should get rid of players who protest during the anthem.

Papa John’s added that it is “open to ideas from all. Except neo-nazis.” It has previously tried to distance itself from white supremacists who praised Schnatter’s comments, saying it does not want those groups to buy its pizza.

The company’s stock has fallen by nearly 13 percent since Schnatter’s comments.

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Flirting With Default, Venezuela Vows Debt Payment

Venezuela’s cash-strapped government on Tuesday vowed it was making debt payments responsibly, even as two ratings agencies declared partial default on a crippling debt load that has fueled hunger and disease.

President Nicolas Maduro’s government left investors scratching their heads on Monday after a debt negotiation meeting that offered no specifics on plans to avoid default or execute an unlikely restructuring plan.

Despite optimism that payment will continue in the short-term, investors believe the country will at some point be unable to service some $60 billion in junk bonds — potentially triggering messy lawsuits and worsening an already difficult economic situation.

“Today we have initiated payment of interest on Venezuela’s foreign debt,” said Information Minister Jorge Rodriguez in a televised speech, apparently referring to delayed payment of $200 million on several Venezuelan bonds.

Debt renegotiation

Government officials describe Monday’s meeting as the start of a debt renegotiation process that Maduro announced earlier this month.

Venezuela’s Constituent Assembly, an all-powerful legislature created in August despite condemnation by the opposition and the international community, on Tuesday approved a resolution “to support and accompany the refinancing process.”

But investors say that no such process in fact exists. They say Maduro’s government has presented no coherent financial plan, and that any such plan would likely be made impossible by U.S. sanctions.

Bonds downgraded

Ratings agency Fitch on Tuesday downgraded Venezuelan bonds to “selective default,” citing delays in paying interest on bonds maturing in 2019 and 2024. The decision followed a similar one by S&P on Monday and by Fitch on debt from state oil company PDVSA.

“Selective default” means that a ratings agency believe that a borrower has defaulted on some of its obligations but will likely continue to make timely payments on others.

In response, Venezuela and PDVSA bonds tumbled on Tuesday, wiping out most of a rally from last week that had been driven by investor confidence that payment would continue.

In a sign it may be gearing up for a legal dispute, Venezuela has appointed lawyer David Syed to advise it, working alongside a team at global law firm Dentons, according to IFR, a Thomson Reuters news service.

Routine delays

Investors nonetheless appear to remain broadly comfortable with a wait-and-see approach, with no clear signs of creditors preparing to file legal claims in response to payment delays.

That approach is encouraged by the staggering investment return on Venezuelan bonds, which Tuesday were paying an average of 50 percentage points more than comparable U.S. securities.

Delays have become routine since October, when Venezuela and PDVSA starting using 30-day grace periods to stretch out limited cash-flow. Investors broadly shrug them off, and some take advantage of associated market jitters to buy them on the cheap.

U.S. citizens blocked

Sanctions by the government of U.S. President Donald Trump, in response to accusations that Maduro’s government has undermined democracy and systematically violated human rights, block U.S. citizens from buying newly issued Venezuelan debt.

That makes it effectively impossible for the country to refinance, because such operations rely on swaps in which investors exchange outstanding bonds for new ones.

The measures also bar any dealings with dozens of blacklisted officials, including Vice President Tareck El Aissami and Economy Minister Simon Zerpa — the two main leaders of the debt negotiation commission.

Venezuela has dismissed U.S. accusations of drug-dealing and corruption by its officials as politically motivated fabrications by Washington to tarnish the country’s reputation, and describes the sanctions as a colonial exercise by the Trump government.

Venezuelans hit hard

Four years of recession in the South American nation, fueled by failing socialist economics and a plunge in global oil prices, have hit Venezuelans hard. Many skip meals or suffer from malnutrition and preventable diseases.

With some $9 billion in payments looming for 2018, a default would be a short-term relief for the government, enabling Maduro to spend on desperately-needed food and medicine imports ahead of next year’s presidential election.

But that strategy could also backfire if it sparks aggressive legal challenges from abroad, including moves to seize assets of PDVSA.

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Alaska Airlines Discontinues Los Angeles-Havana Daily Flight

U.S. airline Alaska Airlines on Tuesday said it would discontinue a daily flight between Los Angeles and Havana, Cuba, after Jan. 22, due to the recent changes in Cuba travel policies by the U.S. government.

The U.S. government made it tougher last week for Americans to visit Cuba and do business in the country, making good on a pledge by President Donald Trump to roll back his Democratic predecessor’s move toward warmer ties with Havana.

The regulations include a ban on Americans doing business with some 180 Cuban government entities, holding companies, and tourism companies.

The airline which started the Los Angeles-Havana flight in January this year, said it will redeploy the aircraft to other markets with stronger demand.

Passengers who have tickets booked to Havana after January 22 will be rebooked on another airline at no additional cost or a full refund, the company said.

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