Monday, March 5, 2018

Pepsi cuts off Indonesian palm oil supplier over labor, sustainability concerns

PepsiCo has announced the suspension since January 2017 of its business ties with IndoAgri, one of Indonesia’s biggest palm oil producers, citing concerns over the company’s labor rights and sustainability practices.
IndoAgri has been criticized for alleged abuses of workers’ rights in some of its plantations in North Sumatra province.
PepsiCo has demanded that IndoAgri resolve these outstanding issues before its considers resuming their business partnership.

by Hans Nicholas Jong on 1 March 2018

JAKARTA — PepsiCo has suspended its business with Indofood Agri Resources (IndoAgri), one of the largest palm oil companies in Indonesia, citing sustainability and labor rights concerns.

PepsiCo, the U.S.-based company behind brands like Pepsi, Frito-Lay and Tropicana, primarily sources its palm oil from Indonesia, the world’s biggest producer of the commodity, where huge swaths of tropical forests and carbon-rich peatlands are being cleared to make way for palm plantations.

It has a joint venture with the parent company of IndoAgri, Indofood, to produce some products, such as Lays-branded snacks, in the Southeast Asian nation.

While IndoAgri is not a direct supplier to PepsiCo, it supplies palm oil to international traders which then sell to PepsiCo.

“PepsiCo is very concerned about the allegations that our policies and commitments on palm oil, forestry stewardship and human rights are not being met,” PepsiCo said in a statement.

It revealed that it had therefore decided to suspend procuring palm oil from IndoAgri for its joint venture with Indofood since January 2017.

IndoAgri has been subjected to various environmental and social concerns, particularly over alleged labor rights abuse in some of its plantations.

In 2016, the Rainforest Action Network (RAN), an international NGO; OPPUK, an Indonesian labor rights advocacy organization; and the International Labor Rights Forum (ILRF) published a report on alleged labor rights abuses on IndoAgri’s plantations in Indonesia’s North Sumatra province.

The report documents how workers in the plantations are routinely exposed to hazardous pesticides, paid less than the minimum wage, illegally kept in a temporary work status to fill core jobs, and deterred from forming independent labor unions, among other findings.

In 2017, a follow-up report was published, revealing that little progress has been made in addressing the labor rights issues, with IndoAgri only adopting cosmetic changes that fail to address the root causes of the abuse, such as putting up signs saying undocumented workers are banned, rather than formalizing these workers as employees or lowering harvest quotas.

IndoAgri has also been the subject of separate complaints relating to deforestation and social or land conflicts.

A 2017 report by Chain Reaction Research reveals that 42 percent of the land under Indofood Agri’s concessions is in dispute; some areas are the subject of community conflicts and labor controversies, some contain undeveloped peat and/or forest areas, some overlap with mining concessions, and others have no maps.

Furthermore, at least 36 percent of the crude palm oil (CPO) processed in Indofood Agri’s refineries comes from undisclosed sources, according to the report.

Robin Averbeck, the agribusiness campaign director at RAN, said that with the announcement, PepsiCo had admitted that its palm oil supply chain was tainted with high risks.

“After years of denial, PepsiCo has admitted to the high risks associated with its palm oil supply chain and business partner,” she said in a statement. “Its partnership with Indofood is marred by years of labor violations and other practices that have produced nothing but Conflict Palm Oil for PepsiCo-branded snack foods.”

Responding to the announcement and media coverage of it, IndoAgri confirmed that it had not been a supplier to PepsiCo since early 2017. The company also said it had complied with Indonesian labor laws and regulations.

“We do not have any dispute or outstanding issue with any of our Labor Unions (we have a total of 10 Labor Unions) or the Indonesian Ministry of Labor,” IndoAgri CEO and executive director Mark Wakeford said in a statement. “We have also recently received a good compliment and zero accident award from the Indonesian Ministry of Labor.”

The suspension, however, might be a temporary one; PepsiCo has left open the possibility of resuming its business relationship with IndoAgri if the palm oil firm can prove its commitment to sustainability.

Last year, IndoAgri announced a new sustainability policy to address the labor rights issues and environmental concerns, with the company promising to not develop on peatland for any new development and to protect the rights of its workers, among other things.

However, some green groups have identified weaknesses and loopholes in the new sustainability policy, especially those pertaining to labor issues.

Eric Gottwald, the senior legal and policy director at the ILRF, said IndoAgri had failed to adopt a credible mechanism, in line with international standards set out in the U.N. Guiding Principle on Business and Human Rights, to address concerns from workers, communities and civil society organizations.

“Instead, IndoAgri has made only a vague commitment that will allow it to pick and choose [which] grievances it will address,” Gottwald said in a statement.

Chain Reaction Research, meanwhile, pointed out that IndoAgri had not adopted sector-specific labor standards. As such, improving its internal grievance mechanism with respect to management of human rights and environmental risks and impacts is among the issues that PepsiCo is demanding IndoAgri resolve.

PepsiCo has also called on IndoAgri to provide more public information on the steps it has taken to address grievances; to take further necessary action to fully resolve the issues; and to join other stakeholders in discussing the systemic issues that exist in some oil palm plantations in Indonesia.

“These steps are necessary for the potential re-establishment of palm oil supply from IndoAgri to the joint venture,” PepsiCo said. “We will also continue over the course of 2018 to review on a quarterly basis IndoAgri’s progress against the requested actions outlined above, and in that context we will continue the dialogue with our direct suppliers around IndoAgri-sourced palm oil in our supply chain, including the possibility of change of source.”

Banner image: Clusters of fruit from oil palm trees are cut from trees and collected in an ox-drawn cart. Photo by Bram Ebus for Mongabay.

Syria lets aid reach Ghouta but blocks medical supplies, presses assault

United Nations convoy is seen crossing into eastern Ghouta near Wafideen camp in Damascus, Syria March 5, 2018. REUTERS/Omar Sanadiki

Angus McDowall, Stephanie Nebehay-MARCH 5, 2018

BEIRUT/GENEVA (Reuters) - Aid trucks reached Syria’s eastern Ghouta region on Monday for the first time since the start of one of the war’s deadliest assaults, but the government stripped some medical supplies from the convoy and pressed on with its air and ground assault.

The Russian-backed Syrian army has captured more than a third of the eastern Ghouta in recent days, threatening to slice the last major rebel-held area near the capital in two, despite Western accusations of violating a ceasefire.

The United Nations says 400,000 people are trapped inside the besieged enclave, and were already running out of food and medical supplies before the assault began with intense air strikes two weeks ago.

A senior U.N. official accompanying the convoy said he was“not happy” to hear loud shelling near the crossing point into eastern Ghouta despite an agreement that the aid would be delivered in safety.

“We need to be assured that we will be able to deliver the humanitarian assistance under good conditions,” Ali al-Za’tari told Reuters at the crossing point.

A World Health Organization official said the government had ordered 70 percent of medical supplies to be stripped out of the convoy, preventing trauma kits, surgical kits, insulin and other vital material from reaching the area. The International Committee of the Red Cross confirmed some medical equipment had been blocked but gave no details.

The Britain-based Syrian Observatory for Human Rights said strikes targeted front lines near the town of Harasta and the villages of Beit Sawa and Hosh al-Ashari. The Observatory said 45 people were killed and 190 injured on Monday.

A military media unit run by the government’s ally Hezbollah reported that the Syrian army had taken the village of al-Mohammadiyeh, located on the southeastern corner of the enclave.

President Bashar al-Assad vowed on Sunday to continue the military push into eastern Ghouta, a densely populated area of farmland and towns just outside Damascus which government forces have encircled since 2013.

Many civilian residents have fled from the frontlines into the town of Douma, a resident said on Sunday.

Assad and his allies regard the rebel groups that hold eastern Ghouta as terrorists, and say a U.N. Security Council resolution demanding a country-wide ceasefire does not apply to operations against them.

A week ago Russia unilaterally announced five-hour daily pauses in the fighting, but clashes have continued during those hours and Western countries dismissed it as inadequate.

PATTERN

The fighting in eastern Ghouta follows a pattern used in other areas recaptured by the government since Russia entered the war on Assad’s side in 2015, with sieges, bombardment and ground offensives combined with an offer to let civilians and fighters who surrender escape through“humanitarian corridors”.

For the rebels fighting to oust Assad, the loss of eastern Ghouta would mark their heaviest defeat since the battle of Aleppo in late 2016 and end their ability to target the capital. Rebel shelling on Damascus has killed dozens of people during the last two weeks, state-run media has said.

The Observatory said government forces had captured a third of the area in their advance from the east. Syrian state television on Monday said the army had made major advances, seizing 40 percent of the area previously held by the rebels.

It broadcast live from several captured villages, showing collapsed concrete buildings, rubble-strewn streets, bullet-pocked walls and smoke rising above fields in the distance.

Late on Sunday, a rebel official said factions in eastern Ghouta were working together to prepare to retake lost ground.

Slideshow (4 Images)

The Observatory said the death toll from the offensive had exceeded 740 people in two weeks of intense bombardment.

Monday’s convoy of more than 40 trucks carrying aid was the first to reach the besieged area since Feb. 14 and only the second since the start of 2018.

Za’tari said the shipment had been scaled back from providing food for 70,000 people to providing for 27,500. The United Nations says Syria has agreed to allow in the rest of the food for the full 70,000 in a second convoy in three days.

“The convoy is not sufficient,” Za’tari said. It would take many hours to offload the aid and it might be well after nightfall before it could return, he added.

Marwa Awad, spokeswoman for the World Food Programme, said it had started to deliver supplies from the trucks after meeting local councils, and that the entire convoy would leave together afterwards. The aid included food and nutritional assistance.

The two-week assault has brought footage of children being carried out of rubble and hospitals being bombed to viewers around the world once again. Since the fall of Aleppo more than a year ago, Syrian government forces had focussed their efforts mainly on Islamic State-held territory in the more remote east of the country, but they have now renewed their campaign to crush anti-Assad rebels in the heavily-populated west.

Moscow and Damascus deny they are killing large numbers of civilians. In comments broadcast by state television on Sunday, Assad dismissed Western statements about the humanitarian situation in eastern Ghouta as“a ridiculous lie”.

At the U.N. Human Rights Council in Geneva, Russian diplomat Alexei Goltyaev said:“The media atmosphere is saturated with lies.... As a result we see debates and votes that are entirely removed from the actual situation on the ground.”

Russia’s military said the rebels who control eastern Ghouta had agreed to let civilians leave in return for aid.

Assad and Russia have both repeatedly accused the rebels of stopping civilians fleeing eastern Ghouta to use them as human shields. The insurgents deny this and say people there fear arrest, torture or forcible conscription by the government if they leave.

Scientists Discover a Self-Replicating Protein Structure, And It Could Have Built The First Life on Earth

The discovery could overthrow our current understanding of how life on Earth began.

MIKE MCRAE-4 MAR 2018

Roughly 4 billion years ago an assortment of complex organic compounds went from being mere carbon soup to replicating biochemistry – the first steps to life on Earth.

The order of these steps has been a source of debate for decades. Now, a recent discovery about a common protein structure could help tip the balance, bringing us closer to understanding just how we came to be here.

Researchers from Eidgenössische Technische Hochschule (ETH) in Zürich have demonstrated that short strands of amyloid protein structures can direct the selection of amino acids to build even more amyloids.

If the word amyloid doesn't sound familiar, they're a protein structure that's increasingly being found all over the place in nature.

Part of the reason it's so common is that the amyloid has a special kink in it called a cross-β fold - this allows it to stick together into long, thin structures called fibrils.

You might have come across them in relation to Alzheimer's disease – that 'stickiness' can sometimes cause clumps of amyloid beta to aggregate in the brain and lead to the degeneration of neural tissues.

In fact it's this tendency to clump and cause disease that for a long time led scientists to consider amyloids to be a biological aberration.

But now it looks like its talents may have actually contributed to kick-starting life itself billions of years ago.

Just two years ago the ETH team found that peptides, which are chains of amino acids shorter than a typical protein - in this case just 5 to 14 units long - could spontaneously form amyloid structures in the presence of carbonyl sulphide.

Fibres made up of amyloids had already been shown to act as enzyme-like catalysts, prompting the scientists to wonder if their possible formation on ancient Earth played a role in helping other organic compounds come together in the days before cells.

Here the researchers take their hypothesis one step further by investigating whether amyloid sequences might also catalyse the construction of other peptides.

The team designed sequences of amyloids to act as the equivalent of DNA primer strands, and mixed them in with select quantities of other amino acids and a few helper chemicals.

By comparing the peptide sequences that resulted in these mixtures with ones that lacked designed 'primer' amyloid structures, the researchers found there was a huge advantage to having the amyloids in there.

"This ability also potentially applies to the amyloid itself – meaning the molecules can self-replicate," says chemist Roland Riek.

When it all boils down to it, life is special thanks to its ability to make imperfect copies of itself. Make enough copies, and some will do an even better job at replicating next time.

If we rewind the clock, we eventually get to a tricky question; was the simplest form of life based on replicating strands of nucleic acid as it is today, or replicating protein fragments?

Both benefit from catalysts - compounds that help speed the whole process up.

Proponents of the 'RNA world' hypothesis point to the physical properties of RNA to act as the original catalyst, building better and better nucleotide sequences using RNA machines until amino acids could be recruited later down the track.

We know RNA-like bases were around 4 billion years ago. But there have been questions over the availability of key elements needed to build the molecules, leading others to wonder if we should be looking down other paths.

Self-replicating protein fragments would pave the way for nucleotide chemistry, if only somebody could show how amino acids could form and help generate new peptides - and amyloids could be an answer.

"Additionally, amyloids are much more stable than early nucleic acid polymers, and they have a much simpler abiotic synthesis route compared to the complexity of known catalytic RNAs," says researcher Jason Greenwald.

To be fair, these were highly controlled laboratory conditions. It's a leap to go from tweaking proteins to generating life.

But the principle stands - short peptide sequences shaped like amyloids have what it takes to speed up the generation of similar amino acid sequences.

As with most things in biology, the origins of living chemistry are unlikely to be simple. Metabolic processes, RNA generation, and amyloid replication all could have been competing, clashing, and blending to form the first life in a primitive biochemical tango.

"We will never be able to prove which is true – to do so, we would have to turn back the last 4 to 4.5 billion years of evolution," says Riek.

"However, we suspect that it was not one, but multiple molecular processes with various predecessor molecules that were involved in the creation of life."

This research was published in Nature Communications.

Lassa fever: The killer disease with no vaccine

By Dr Charlie Weller-5 March 2018

Since the beginning of the year, Nigeria has been gripped by an outbreak of a deadly disease. Lassa fever is one of a number of illnesses which can cause dangerous epidemics, but for which no vaccine currently exists.

Lassa fever is not a new disease, but the current outbreak is unprecedented, spreading faster and further than ever before.

Health workers are overstretched, and a number have themselves become infected and died.

The potentially fatal disease is a so-called "viral haemorrhagic fever", which can affect many organs, and damage the body's blood vessels.

But it is difficult to treat.

Most people who catch Lassa will have only mild symptoms such as fever, headache and general weakness. They may have none at all.

However, in severe cases, it can mimic another deadly haemorrhagic fever, Ebola, causing bleeding through the nose, mouth and other parts of the body.

Lassa fever normally has a fatality rate of about one per cent. But in the Nigerian outbreak it is thought to be more than 20% among confirmed and probable cases, according to the country's Centre for Disease Control.

Lassa fever outbreak in Nigeria

22%

fatality rate

1081 suspected cases (1 January - 25 February)
317 confirmed cases
14 health care workers affected in six states

Nigeria Centre for Disease Control

Getty

About 90 people are thought to have died so far, but the true number may be much higher, because Lassa is so hard to diagnose.

Women who contract the disease late in pregnancy face an 80% chance of losing their child, or dying themselves.

In the early stages it's almost impossible to distinguish from other common diseases like malaria and dengue.

With no readily available test, the only way to confirm a diagnosis is to analyse a blood or tissue sample in one of small number of specialised laboratories.

The disease was first identified in the Nigerian town of Lassa in 1969, after an outbreak in a mission hospital.

It has since been seen in many West African countries including Ghana, Mali and Sierra Leone.

A multimammate rodent — Multimammate rodents spread Lassa virus via their urine and droppings

However, this outbreak is causing particular concern because the number of cases is unusually high for the time of year.

Health officials are working to understand why.

Outbreaks can be influenced by seasonal weather conditions, which affect the numbers of the virus's natural host - the multimammate rat.

These small mammals are common across West Africa, where they easily find their way into homes.
Another possibility is that the high number of cases reflects heightened public awareness.

Or it's possible that something about the virus has changed.

Most people catch Lassa fever from anything contaminated with rat urine, faeces, blood or saliva - through eating, drinking or simply handling contaminated objects in the home.

A tray of garri on sale in Lagos, in January 2018. — Authorities have banned the consumption of raw garri, a popular Nigerian food, which it says can spread Lassa fever

It can also pass from person to person through bodily fluids, meaning healthcare workers and people taking care of sick relatives without protective equipment are particularly at risk.

The incubation period for Lassa is up to three weeks. Researchers are trying to work out whether - like Ebola - Lassa can stay in the body and be passed on through sexual contact even after illness subsides.

Nigeria has a strong public health system, and is used to dealing with epidemics like this.

The World Health Organization (WHO) is working with Nigerian authorities to help coordinate the response and the UK government has deployed a team of experts from its Public Health Rapid Support Team.

Those living in affected areas are being advised to take basic precautions: blocking holes that may allow rats to enter their homes, disposing of rubbish in covered dustbins, and storing food and water in sealed containers.

People are advised to wear protective gloves when caring for anyone who may have Lassa fever, and to carry out safe burial practices.

Despite these measures, the fight against Lassa - and other infectious diseases - is hampered by a lack of effective medical tools like diagnostic tests, treatments and vaccines.

It is likely that a vaccine could be found for Lassa - reducing the possibility of an outbreak becoming a global health emergency - but as with other epidemic diseases that mainly affect poorer countries, progress has stalled.

Vaccine development is a long, complex and costly process. This is especially true for emerging epidemic diseases, where a prototype vaccine can usually only be tested where there is an outbreak.

A new organisation called CEPI (Coalition for Epidemic Preparedness Innovations) - set up in 2017 with financial support from the Wellcome Trust, national governments and the Bill & Melinda Gates Foundation - hopes to accelerate vaccine production.

Lassa is one of the diseases on its hit list and it's hoped one or more promising vaccines will be ready for large-scale testing in the next five years.

Ebola burial — Image captionEbola claimed more than 11,000 lives across West Africa in the 2014-2015 outbreak

The WHO has drawn up a list of other serious, but often poorly understood diseases, with the potential for devastating outbreaks, including MERS, Nipah, Rift Valley Fever and, of course, Ebola.
It plans to highlight gaps in our knowledge of these diseases and to begin further research.
But research alone isn't enough.

Stronger health systems are needed in the countries where epidemics are most likely to arise.
This could mean building better healthcare facilities and training staff to recognise and respond to outbreaks.

It will also mean working with communities to understand how to identify outbreaks at an early stage and prevent their spread.

About this piece

This analysis piece was commissioned by the BBC from an expert working for an outside organisation.

Dr Charlie Weller is head of vaccines at the Wellcome Trust, which describes itself as a global charitable foundation working to improve health for everyone. Follow her at @DrCharlieWeller.

Sunday, March 4, 2018

Cannot trick us with the OMP - families of disappeared mark 1 year of protest in Trincomalee

04Mar 2018

Families of the disappeared who marked one year since their protest began in Trincomalee have denounced the Office for Missing Persons as a delusion introduced by the Sri Lankan government to pacify the international community while the UN Human Rights Council session takes place.

“The Sri Lankan government cannot trick us the way they trick the international community,” said Asha Nagendran during a press conference called by the families to mark day 365 of their protest on Saturday.

“We have no faith in this office,” Mrs Nagendran said, pointing out that the Sri Lankan President had failed to fulfil any of the pledges he had made to families of the disappeared when he met them personally last year.

“We have no faith in this government’s actions,” Mrs Nagendran concluded.

The Office for Missing Persons named its commissioners last week, drawing criticism for failing to meet the conditions set out be families of the disappeared, particularly by the inclusion of a military representative.

Set clear timetable to implement commitments: Canada to SL

2018-03-04

The Government of Canada called on the Sri Lankan Government to set a clear timetable and strategy for the implementation of commitments made to Sri Lankans and to ensure their human rights are protected.

Addressing the High-level Segment of the 37th UNHRC Session in Geneva this week, Canadian Foreign Affairs Minister Chrystia Freeland said Sri Lanka should ensure that the commitments made to its people are fulfilled and that the human rights of the people are protected and respected.

She said the end of Sri Lanka’s war was an important moment but it was only a first step.

“Frustrations persist among those seeking to heal the wounds of all those who suffered and wish to achieve real reconciliation. Canada is disappointed by the slow progress in implementing commitments to advance peace and reconciliation, political stability, human rights and government accountability,” she said.

She reiterated Canada’s desire for the Sri Lankan Government to ensure that a process of accountability is established which will have the trust and confidence of the war victims, including the families of the disappeared. (Lahiru Pothmulla)

P.M. makes 7 requests to entrust law and order ministry to Fonseka : Sirisena has secret talks with Mahinda instead !

(Lanka-e-News - 04.March.2018, 11.45PM) It is President Maithripala Sirisena now begging on a 4 % but has never stopped his bragging who loudly and proudly declared prior to the last local government elections that he would send all the crooks and culprits to hell after the 10 th of February , has once again refused to entrust the ministry of law and order to Field Marshal Sarath Fonseka.

Ranil Wickremesinghe P.M. has addressed five letters to the president requesting to allocate the ministry of law and order to Fonseka while specially mentioning it is ‘the expectation of my party , mine and the people that Fonseka is given that portfolio.’ The P.M. has even made two requests to the president when he personally met him. Yet the president has not responded in that favor , based on reports reaching Lanka e news.

After his return from his tour of Indonesia , Fonseka had met with the president and discussed this subject . The president however has said, several high rung officers of the police are against Fonseka’s appointment. The Field Marshal had at once replied , such opposition is understandable since there are several police chiefs who are engaged in extortion and heroin business who would certainly not like him (Fonseka) being appointed as law and order minister. Fonseka has told the president , personally he is prepared to accept any portfolio but because his aim is to do a thorough and clean job, he desired the law and order ministry . The president who had no valid grounds to defend himself any more had kept quiet.

Meanwhile Susil Premajayantha the minister who is there out of mercy and not on merits addressing a media briefing said , if Fonseka is to be given the law and order ministry the SLFP would sit in the opposition. It is very evident from his announcement, what amount of fear he and his brigand are harboring at the mere suggestion of Fonseka’s name , and who the crooks are .

Maithri , S.B., and Dudley had phoned Basil , but the latter snubs them - has not answered !

President Sirisena who is now begging on a 4 % , has phoned Basil Rajapakse several times without avail ; latter had not responded. Thereafter, S.B. Dissanayake and Dudley Sirisena have also tried to contact Basil, but he had not answered any of their calls too. It is the stance of Basil , there should be no truck with a betrayer like Maithri . (A serpent that gobbles eggs is safer than a village politico who gobbles hoppers).

The last victorious election campaign was led by Basil Rajapakse . Namal Rajapakse too lent support. It was on condition that Gotabaya is kept out of the campaign , that Basil undertook the election campaign. He had asserted he cannot conduct the election campaign together with Gotabaya’s racist group , and therefore made a request that Gota should be in America until the elections are over. So Gotabaya was packed off to America until the elections were over.

Maithri – Mahinda secret discussion

Be that as it may , Sunday Times newspaper reported on the 4 th , that Maithri and Mahinda had met at a secret venue and had discussed for over two hours , though what was discussed is unknown. Based on reports reaching Lanka e news , it is Gotabaya and Dudley Sirisena who have acted as mediators for the meeting of the duo- Maithri -Mahinda best known for worst betrayals and double crossings . Between them double crossing each other is one thing , but double crossing those who trusted in them is another, and much easier. Gota of course maintains a close relationship with the Sirisena family . We shall reveal details of this relationship and why , in a later report .

Going by all these murky and clandestine activities of the president , what is deducible is , 4 % begging president is not giving the law and order ministry to Fonseka , in order to curry favor over with the Rajapakse camp.

Of what earthly use is a consensual govt. ?

It is time the UNP leader gave careful thought to the factual situation : When his party has the majority of the seats in parliament ; and he is the P.M. and UNP is his party , of what purpose is a consensual government if a minister of his own party cannot be appointed ? Besides, what purpose is it going to serve him by swallowing silently all the indignities he is subjected to already , and the foul mouthed utterances of his party members, thereby allowing his popularity to be undermined .

Hence , it is high time he asked himself why he should carry on a consensual government with Sirisena the villainous , vicious, double crosser ? Is it to incur the wrath for the sins and vices others are committing abusing their political power and position?

It is a well and widely known fact , Sirisena is now embattled, devastated , and hopeless after transforming into an enemy of the people by making all the false promises before presidential elections to the masses solely and wholly to secure the post of president.

It is also crystal clear , Sirisena rightly dubbed Sillysena, who is now in his political death throes because of his own imbecility , idiocy and insanity fits is in his utter desperation seeking to ingratiate himself into the favor of the Rajapakses ( confirmed crooks and culprits) in order that at the next presidential election he can contest as an SLFP/ UPFA /Flower bud common candidate along with their support.

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by (2018-03-04 22:17:59)

‘Money Laundering’ Label Disastrous For Country; CBSL Wake-Up!

By Amrit Muttukumaru –MARCH 4, 2018

Amrit Muttukumaru

I dare say Sri Lanka has earned the dubious distinction to be listed by the European Union as a ‘high risk country for money laundering’ subsequent to the ‘Financial Action Task Force’ (FATF) placing the country on its ‘grey list’ reportedly from November 2017. Dr. Indrajit Coomaraswamy who assumed office as CBSL Governor from 3 JULY 2016 must bear SOME responsibility. The checkered response of the CBSL particularly in recent times to its regulatory obligations has no doubt aided this outcome.

Discerning visitors to Sri Lanka have commented on the mismatch on the one hand of a country with a weak economy and infrastructure bending over backwards for FDIs and financial assistance from multi-lateral agencies and on the other the swanky high-rise apartments and fancy restaurants dotting the city of Colombo with high-end vehicles which would do even a first world country in Europe proud.

Image courtesy – Know Your Customer (KYC)

Crucial issues of governance incidental to the egregious bond scam thrown up by witnesses at the Presidential Commission of Inquiry (PCoI) probing the issuance of Treasury Bonds by the CBSL which include possible tax evasion, money laundering and bank malpractice are not even on the radar of the CBSL. The only exception is the ‘suspension’ of Pan Asia Bank (PABC) in relation to its ‘primary dealer’ activities.

Money Laundering / Tax Evasion?

What action has CBSL taken in relation to:

1) Kaushitha Rathnaveera, a Senior Dealer of PTL (Perpetual Treasuries Limited) disclosing to the PCoI that “millions” encashed by him were “several times” left on “PTL CEO Kasun Palisena’s chair”.

Nuwan Salgado, Chief Dealer of PTL disclosing to the PCoI that on the “instructions of PTL CEO Kasun Palisena” he maintained a record of payments to “informants” code named as ‘Charlie’, ‘Tango’ and others.

2) B.R. Sinniah, Chief Financial Officer of GTLPL (Global Transportation and Logistics Pvt Ltd) said to be controlled by former Finance Minister Ravi Karunanayake’s family in his testimony to the PCoI disclosing:

“Chairman ‘Lakshmi Kanthan’ who resides in Britain had arrived at the Company on two occasions in February 2016 and 2017 and dumped cash amounting to Rs.145 million in the Chairman’s safe”

“it had not been supported by any documentation or receipt issued to Mr. Kanthan neither were there any entries in the GTLPL accounts books regarding these two cash inflows”

3) B.R. Sinniah also telling the PCoI:

“The Rs.145 million used in making the initial payment of Rs.16.5 million and thereafter to pay the monthly loan installment of Rs.11 million” for the purchase of the ‘Monarch’ Penthouse in Colombo by a company owned by then Minister Ravi Karunanayake’s family “has no origin nor has it been accounted for”.

Should these not concern the CBSL and the Inland Revenue Department?

PEPs as Bank Directors

Politically Exposed Persons (PEPs) are at the centre of the worldwide efforts for the prevention of money laundering.

The CBSL consistent with international best practice defines PEPs as:

“PEPs are defined as “individuals in Sri Lanka or abroad who are, or have been, entrusted with prominent public functions” e.g. Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of State owned corporations, important political party officials. Business relationships with family members or close associates of PEPs involve reputational risks similar to those with PEPs themselves.”

1) Based on this definition it is not difficult to discern there are prominent PEPs in Sri Lanka who are currently ‘directors’ of banks. One such person is a ‘man for all seasons’ under successive administrations who is a frequent writer on governance. Others include a banking sector regulator and a senior member of the judiciary who became bank directors soon after retirement.

2) When even the mere “Opening of accounts” in banks by PEPs is under scrutiny in Sri Lanka, how could the Director of Bank Supervision advise me there is “no restriction for appointments of PEPs as Board members of licensed banks”?

The Central Bank labored for almost a month to give me this untenable response subsequent to my e-mail of 5 July 2017 to Dr. Coomaraswamy.

It must be flagged that although all PEPs are not involved in money laundering or unlawful activities, the high risk they pose cannot be ignored. Laws and guidelines are there for a purpose and must be adhered to.

3) It was revealed at the Bond Commission that B.R. Sinniah was “appointed to the Board of Directors of the BoC in 2015 by the then Finance Minister Ravi Karunanayake for a period of one year”.

This demonstrates the hopeless situation in Sri Lanka when the Finance Minister himself appoints the Chief Financial Officer of his family controlled company to the Board of Directors of the Bank of Ceylon.

Ravi Karunanayake being a PEP is a no-brainer. B.R. Sinniah too is clearly a PEP as per the CBSL definition which is consistent with international best practice. Under no circumstances is it suggested that Ravi Karunanayake, B.R. Sinniah or all PEPs are engaged in unlawful activities. Nevertheless, the high risk PEPs pose cannot be ignored.

Although B.R. Sinniah had ceased being a bank director when Dr. Coomaraswamy assumed the position of CBSL governor, the fact of the matter is that under his watch too there are PEPs who are bank directors.

4) During the tenure of former CBSL Governor – Nivard Cabraal, his sister Siromi Wickramasinghe – clearly a PEP was a bank ‘director’ which included being Chairman of ‘State owned’ entity HDFC Bank (Housing Development Finance Corporation).

The CBSL is continuing to turn a blind eye to its own guidelines and laws.

Bank Malpractice?

1) A gaping hole in the PCoI report is the ‘pussyfooting’ on the Bank of Ceylon giving PTL access to Billions of Rupees almost instantly which enabled PTL with the aid of “inside information” to make a ‘killing’ in the secondary Bond market at the further expense of state institutions which include the hard earned savings of workers in the EPF.

2) The PCoI report states that at a meeting “convened” on 28 March 2016 by Ravi Karunanayake then Minister of Finance “three State Banks had been instructed to place Bids within a specified range of Yield Rates at the Treasury Bond Auction to be held on 29th March 2016 and that, the three State Banks had been given an assurance that, Bids at higher Yield Rates would not be accepted at this Auction.”

The state banks concerned – Bank of Ceylon, People’s Bank and National Savings Bank

adhering to these ‘instructions’ had significantly benefited PTL financially and resulted in an ‘opportunity loss’ to the state banks.

3) It was also revealed at the PCoI that Saman Kumara, the then dealer for the EPF at the CBSL had allegedly received a personal loan of Rs. 25 million from PABC when Nimal Perera was Chairman. It is relevant to ascertain whether this loan and its settlement (if any) took place in the ordinary course of banking practice or whether any special privileges were afforded.

4) Although it was the EPF that by far suffered the major loss due to purchases of Treasury Bonds in the secondary market from PTL, another non-bank financial institution that reportedly took a substantial hit was the Sri Lanka Insurance Corporation (SLIC).

Should these not be of interest to CBSL’s ‘Bank Supervision’ and ‘Non-Bank Supervision’ Departments?