Author Archives: markdowe1

Britain, Consumer Affairs, Economic, Energy, Government, Politics, Society

Addressing the massive public concern over rising energy bills…

ENERGY SUPPLY FIRMS

The Government has made known its intention to make it a lot easier for energy consumers to switch their supplier. Ed Davey, the Energy and climate change secretary, wants consumers to be able to do it within a day instead of the present arrangements which can take up to five weeks. Mr Davey’s suggestion certainly sounds like a positive move and one which will be embraced by all energy customers seeking better deals elsewhere in the market.

But is the real issue not more to do with consumer inertia and one that is caused by the belief that banal paperwork is tedious and that some cost may be involved, rather than the time taken to complete such a move? If so, then the additional competition which the Government is craving for – which should drive down prices – may not occur at all.

Of more significance, though, is Mr Davey’s plan to make the probing of the accounts of the ‘Big Six’ energy supply firms a lot easier. They have been accused and arraigned of utilising networks of subsidiary companies to purchase and sell fuel and services – effectively from and to themselves. This has allowed them to inflate prices and to boost profits while claiming that they are faced with soaring costs.

Whilst more transparent accounting practices could put a stop to this, a cautionary note would also be required to be issued. Based on recent experience of other big corporates’ activities, however clever state legislators and the tax authorities think they are, big company lawyers and accountants will always be one step ahead of them. That is pretty much a given.

But in a politically astute move, Mr Davey is also considering increasing the size and weight of the political baton he can wave at energy companies. This could lead to their executives being liable to face criminal prosecution if the evidence proves that they have been engaged in unfair and illegal price-fixing, as well as bill-inflating practices.

Most of the action that can be taken against companies to punish such activities is currently undertaken by regulators. This is done for the very good reason that regulators have a sophisticated understanding of the very complex methods that companies use. Because of that, the financial penalties and fines that OFGEM and other public regulators impose are rarely challenged.

Some commentators may argue that putting that material in front of a lay jury and expecting them to understand it, and following it through a trial which may last for several months, might be a sanction too far. Complex fraud trials are few and far between because of this very problem. However, if executives know that some underhand and deceitful practice might lead to such a trial with all the public ramifications and consequences that could follow – including imprisonment – it could also be a powerful deterrent.

In a game of fast moving politics, politicians are attempting to outbid each other in seeking to address the energy crisis problem. But action which brings results in the form of lower bills for consumers as opposed to instant popularity and votes should be the guiding principle.

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Britain, Business, Energy, Government, Politics, Society

Energy firms and the responsibilities they have…

UK ENERGY FIRMS

The decision by Britain’s biggest energy firms to send junior executives to face a grilling by MPs at this week’s select committee inquiry into soaring utility bills beggars belief.

The distinct absence of energy bosses, who are paid mega-buck salaries, goes to the heart of important issues of power, responsibility and accountability in this country. The nonappearance of chief executives also suggests that energy firms have learned little from recent history about the relationship between large consumer businesses and the customers they profess to serve.

It is not inconceivable to think that the absent bosses had in mind the cross-examinations endured by bank chiefs (including Fred Goodwin of RBS) by MPs in the wake of the government bailout of two of Britain’s major banks. Mr Goodwin – formerly Sir Fred, who has since been stripped of his knighthood – and his colleagues had to make humbling apologies for their actions as MPs held them to account.

If energy bosses had hoped to body-swerve a similar scenario as they are being held to account for inflation-busting price hikes, then they have fundamentally misunderstood their privileged position in British society, and their responsibilities in relation to regulations set out by Parliament.

Energy firms cannot take the view that their business is a private matter between them, their shareholders and their consumers. If that ever was the case – and the apparent powerlessness of the OFGEM regulator has often made it seem so – it is certainly not the case now.

Energy bills and the way they are being calculated now stand at the nexus between industry, politics and austerity. The ‘cost of living’ factor is a key voter concern and has become a major political issue in the run-up to the 2015 General Election. The main topic of political discourse was thrown open ever since Ed Miliband threw down the gauntlet at the Labour party conference, promising a price freeze and cutting electricity and gas bills if he made it into Downing Street. For the Conservatives, former prime minister Sir John Major floated the notion of a windfall tax on the energy firms, should a particularly harsh winter produce bumper profits. In Scotland, the Scottish Nationalist Party produced its own riposte, with a pledge that energy bills would be reduced by 5 per cent in an independent Scotland. The political battle over energy is heating up.

With the cost of living set to continue to be the most pressing political concern, Britain’s energy bosses need to accept they can run, but they cannot hide. They need to engage with this process – by listening, explaining and being open to market reform – or they will end up on the receiving end of both political and public indignation.

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Foreign Affairs, Government, Intelligence, Military, United States

Drones and the unproven efficacy of these weapons…

U.S. DRONE POLICY

The unedifying and continued use of drones has once again brought the issue to the door of the United States.

Nabila Rehman and her brother Zubair, aged 9 and 13 respectively, were picking okra in their garden. They posed no threat to the U.S. or anyone else, but their innocence did not keep them safe. The pair were injured by shrapnel from a drone-missile that killed their grandmother and wounded five other children at the family home in North Waziristan, in Pakistan’s north-western border zone.

Earlier this week, they confronted the U.S. Congress with the ugly and devastating reality of the drone attacks. Under President Obama, use of drones has become an increasingly important weapon in response to dealing with terrorism.

Attack from the air is always terrifying, but unmanned aerial vehicles – controlled and guided by faceless operatives thousands of miles away – are in a definite league of their own. The ethical objections to their use, however, not as battlefield weapons but as tools of assassination with inevitable collateral death and injury to the innocent, have been swept aside by their ostensible military effectiveness.

For both the U.S. and the Pakistani government, which have secretly colluded in the drone strategy, drones may have seemed the perfect answer to liquidating dangerous militants and extremists in Pakistan’s treacherous no-man’s land. North Waziristan is a notoriously difficult region for western intelligence services and monitoring the movements and activities of insurgents always risks others being unwittingly caught up in the crossfire.

But the fury and anger drones provoke, as Nabila and Zubair’s testimony bears out, can make them counter-productive. As President Obama and other western leaders know, far from helping to secure peace in the West, drones frequently embolden its enemies. Indeed, those flocking to Al-Qaeda in the Arabian Peninsula (AQAP) in their droves were done so in seeking refuge and protection from the continued onslaught of U.S. drone attacks.

A RESPONSE TO THE ECONOMIST

On 8th February, 2013, MD responded to an article on The Economist, ‘The debate over drones’. That response is reproduced:

“The Fifth Amendment to the US constitution protects “any person” (not just US citizens) from being “deprived of life . . . without due process of law.”

Until the 9/11 attacks, the legal position was unambiguous: in war, active combatants could kill and be killed, subject to rules governing surrender and the use of banned weapons. But the ‘law of war’ applied only to conflicts between armed forces of opposing states, invoking the right of self-defence. Confrontations with insurgents and terrorists were strictly governed by human rights law, which requires state use of force to be reasonable in the circumstances. This ‘reasonable force’ requirement invokes a necessary and human restraint over soldiers’ actions and, as a direct extension, must surely apply to drone targeters. The rule of war is not being adhered to in places where drones are operating as “suspects” are being killed without much compunction.

The states that deploy drones argue that they are operating under war law, where human rights are less relevant. The US argues that it is in an ‘armed conflict with al-Qaeda . . . and may use force consistent with its inherent right to self-defence . . . including by targeting persons such as high-level al-Qaeda leaders who are planning to attack us.’ However, this statement prompts many questions. For instance, how can you have an ‘armed conflict’ without an enemy state? Or, what criteria is being used for putting names on the secret death list or what is the required degree of proof before suspects are targeted and killed?

There are no accountability mechanisms for the use of drones – no inquests, and often not even a casualty list which is a direct contravention of the normal rules of war and engagement. The US does, though, announce and celebrate when it hits a ‘high-value target’.

In aerial drone warfare, there is no fairness or due process to enable potential victims, their relatives or any outside body to challenge the accuracy of the information on which the targeting decisions have been made.

Some analysts may suggest that drone strikes are an exercise in self-defence under Article 51 of the UN Charter. But Article 51 applies only to attacks by other states, not by terrorist groups. Yet, what is becoming increasingly of concern is that the record of drone attacks demonstrates that very often individuals are targeted when they constitute no clear or present danger.

Drone killings in tribal areas of Pakistan and Yemen have taken the lives of targets who are armed and who presented a clear danger, but others have merely been attending weddings or funerals or emerging from hospitals or mosques. ‘Decapitation strikes’ in Pakistan have resulted in families being killed by mistake and which have severely damaged US relations with a politically tense and nuclear-armed nation that is not at war with the US.

American officials also say that the Fifth Amendment could not avail a US citizen who joined an enemy force. This is correct as far as it goes, but the Fifth Amendment must entitle a citizen or his family to know whether he is on a death list and to apply to have himself taken off it.

Those who press the Hellfire buttons in Nevada do not pause to consider whether their targets are engaged in combatant missions or not. The criteria for drone use are covert CIA prerogatives, beyond the jurisdiction of the courts or the provisions of the Freedom of Information Act.”

© MarkDowe2013: all rights reserved

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