Date: Tue, 13 Jan 1998 09:09:23 -0800 (PST)
From: Alice McCombs <amccombs@igc.apc.org>

Contents

1. Nader/Weissman Letter To Rubin
2. What's New on Corporate Watch
3. USFS Loses Millions Logging National Forests
4. Recent postings from Gil Friend's "New Bottom Line"
  a. NBL 6.25: Some Food for Thought. Please Chew Thoroughly
  b. New Bottom Line - 1997 Index

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1. Nader/Weissman Letter To Rubin

DEBRA                         hrnet.development            6:42 AM  Jan 11, 1998
(at OLN.comlink.apc.org)                                  (From News system)

Content-type: text/plain; charset=us-ascii

Edited/Distributed by HURINet - The Human Rights Information Network
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## author     : labornews@igc.apc.org
## date       : 10.01.98
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 Ralph Nader
 Robert Weissman
 P.O. Box 19312
 Washington, D.C. 20036

 December 31, 1997

 Secretary Robert Rubin
 Department of the Treasury
 1500 Pennsylvania Avenue, NW
 Washington, D.C.  20220

 Dear Secretary Rubin:

 One of the more disturbing traits of the architects of
 economic globalization is their penchant for secrecy and
 apparent disdain for democratic processes. This modus
 operandi is problematic on procedural grounds alone, but
 also because it tends to foster policies that serve narrow
 corporate interests over broader taxpayer, consumer,
 worker, environmental and other citizen interests.

 Your involvement and leadership in the ongoing South
 Korean/Citicorp bailout illustrates the perils of top
 government officials crafting policy with very little
 democratic influence and virtually no public debate. One
 result is that the "national interest" is typically
 confused with corporate interests -- here the particular
 financial corporate interests of Wall Street. This is a
 natural outgrowth of Wall Street's intimate involvement in
 the process leading up to the announcement of the various
 South Korea bailout packages and the effective avoidance of
 any public disclosure and debate over the bailout.

 To be clear, there is no doubt that the
 globalization-induced Asian financial crisis and the South
 Korean meltdown in particular were and are serious
 problems. And there is no doubt the problems are
 complicated by the fact that, in globalized financial
 markets, perception is reality, at least to some
 significant extent in the short term. However, as serious
 problems, they merit open debate and explanation of policy
 choices by government officials -- not stealth meetings,
 secret decisions, concealed information, intentionally
 obscure comments from you and other officials and sudden
 reversals of policy. The priorities of democracy must be
 elevated over those of "the market" -- and if that sounds
 like an impossibility to you, then you should say so, in
 order to dispel illusions about the legitimacy of the
 decisions being made.

 As you may recall, in the first weeks of the South Korean
 crisis, you and members of the Clinton administration
 repeatedly asserted that U.S. funds would be involved in
 the South Korea/Citicorp bailout only as "a second line of
 defense." On December 3, South Korea and the International
 Monetary Fund (IMF) agreed to a $55 billion loan package in
 which South Korea agreed to substantial economic
 conditions. Of that $55 billion, $20 billion was committed
 by the United States, Japan and several other nations. The
 U.S. contribution was $5 billion, drawn from the Exchange
 Stabilization Fund, a pool of money on which the president
 can draw without approval by Congress. That $20 billion,
 including the U.S. share, was specifically characterized as
 a "second line of defense" to be used only after the
 multilateral development bank money was exhausted. You
 continued to assure the American people that U.S. taxpayer
 money would not be put at risk.

 On December 24, in what may become known as the Great
 Christmas Eve Reversal, the Clinton administration agreed
 to lend South Korea $1.7 billion next month as part of a
 $10 billion emergency loan package. In exchange for the
 loan, you extracted a series of additional South Korean
 economic conditions which are of questionable benefit to
 the South Korean economy, though of certain advantage to
 big U.S. banks and other corporations which will now be
 able to acquire majority stakes in South Korean firms at
 firesale prices.

 It is not surprising that to you globalization has certain
 imperatives, including taxpayer-guaranteed bailouts for
 overextended foreign conglomerates and financial
 institutions when they start collapsing, as well as their
 private U.S. corporate creditors.

 But the manner in which the loan packages have been crafted
 do not build public confidence for the administration's
 efforts. The packages have been drafted in secret. There
 was no genuine possibility for critical discussion, since
 up to the Christmas Eve Reversal, you had expressly
 disavowed the very policies you proceeded to adopt in what
 the New York Times called an "about face." The U.S. monies
 put at risk were drawn from a fund over which Congress does
 not exercise appropriation powers, denying the legislative
 branch its power of the purse and effective oversight.

 The loan packages impose an array of austerity measures on
 the South Korean economy which many economists have argued
 compellingly are exactly the opposite of what is justified
 by the underlying fundamentals of the South Korean economy.
 The financial markets, at least temporarily, did indeed
 respond positively to these measures -- but you could have
 shaped market perceptions significantly so that the herd
 mentality of financial traders did not lead to demands for
 counterproductive recessionary policies. The recessionary
 policies pushed by the IMF and the Treasury Department will
 throw tens of thousands of South Korean workers out of
 their jobs and depress the wages of those who hold on to
 their jobs, even though there appeared to be effective
 alternative policies (such as increased transparency and
 financial sector restructuring, with no macroeconomic
 dictates) available. Devaluation and other contractionary
 policies will also further the problem of cheap foreign
 labor undermining the jobs and negotiating leverage of U.S.
 workers.

 Meanwhile, the international banks who made loans to South
 Korean enterprises and are complicit in whatever imprudent
 loans were made will apparently be bailed out by the IMF
 and Christmas Eve Reversal packages -- suffering no more
 than deferred payments. Knowing the financial industry from
 whence you came, how can you justify crafting bailout
 packages that inflict enormous pain on innocent South
 Korean workers, while letting reckless U.S. banks escape
 without a bruise?

 Furthering the inequity, the IMF and Christmas Eve Reversal
 packages require South Korea to open its economy to foreign
 mergers and acquisitions -- meaning that Citicorp, J.P.
 Morgan, Bankers Trust, BankAmerica, the Bank of New York,
 Chase Manhattan and others are not only bailed out, but
 then given the opportunity to buy up lucrative sectors of
 the South Korean economy -- a double windfall.

 How does the man who preached of the risk of "moral hazard"
 justify such a generous package for lenders and such a
 harsh package for the borrower? Given the precedent of the
 Mexican bailout, what limit is there on future bailouts?
 Why should investors not believe that bailouts will
 inevitably follow large-scale financial collapses through
 an obligatory new form of profit-propping foreign aid?
 Moreover, you should not underestimate the unintended
 consequences leading to widespread Korean resentment
 against a surge of absentee corporate ownership moving in
 on their local economy.

 Given Mexico and South Korea, you have a clear obligation
 to the American people to establish explicit standards for
 boundaries that reveal how far you and the administration
 are prepared to apply taxpayer resources towards additional
 bailouts of the foreign loans and investments of U.S.
 multinationals and the respective economies which receive
 the loans and investments. This is the minimum that should
 be expected to prevent future seat-of-the-pants policy
 decisions and sudden reversals of assurances to the public.
 The future will assuredly bring more crises; now is the
 time to establish a policy framework to assure that the
 "emergency" rationale is not endlessly invoked to justify
 frantic and flailing closed-door decisionmaking and bailout
 after bailout.

 Your handling of the South Korean/Citicorp bailout is a
 textbook study of the dark side of globalization. It is
 time for you to remember that you are employed by the
 people of the United States, not by the banks and financial
 houses on Wall Street.

 The first step in demonstrating your respect for the
 American people is to disclose the list of the big banks
 that are the ultimate recipients of the bailout. A second
 step would be to cease to make large-scale use of the
 Exchange Stabilization Fund without prior congressional
 approval, as proposed in legislation introduced by Senator
 Lauch Faircloth. Third, there should no administration
 request this spring for more funding for the IMF, which has
 demonstrated that is too secretive and too enchanted with
 pull-down austerity measures (which hurt working people in
 Third World countries and ultimately boomerang to hurt
 working people in the United States) to merit support. The
 administration should use its considerable influence to
 reform the IMF before asking Congress and the taxpayers to
 support greater funding.

 Finally, next time you dine in solitude at your hotel, you
 may wish to ponder the inadequacies of the administration's
 public indicators that prevented a higher quality of
 economic intelligence and advanced warning that might have
 alerted the administration much earlier to the turbulent
 undercurrents that erupted a few months ago into what is
 now called the Asian financial crisis. A broader array of
 empirical indicators, however unsettling they may be to
 narrow interests, are a reflection of a more anticipatory
 and therefore democratic process of decision making.

 Sincerely,

 Ralph Nader                                   Robert Weissman,
                                               Co-director,
                                               Essential Action

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2. What's New on Corporate Watch

Date: Mon, 12 Jan 1998 16:58:15 -0800
From: Corporate Watch <corpwatch@igc.org>

What's New on Corporate Watch <http://www.corpwatch.org>

as of January 12, 1998 <http://www.corpwatch.org/trac/corner/hotnews.html>

IMAGE GALLERY: HEADWATERS FOREST VS. MAXXAM
<http://www.corpwatch.org/gallery/gallery.html>

The ancient redwoods of Headwaters Forest are but remnants of a vast
temperate rainforest that covered the northern California coastal region --
some 2 million acres -- from the Oregon border to Monterey Bay.  In less
than 200 years, clear cut logging has destroyed 96% of California's redwood
forests. Headwaters Forest contains the largest remaining old-growth stands
on private property. The forest is owned by Pacific Lumber Company, which,
after a hostile takeover in 1985 by the Maxxam Group engineered by Charles
Hurwitz, has amped up its harvest to generate quick cash for its takeover
debt.

This Image Gallery focuses on the danger that Maxxam's logging practices
pose to the communities and environment of Humboldt County, and the long,
harsh struggle by dedicated activists to ensure a sustainable solution.

NEWS <http://www.corpwatch.org/trac/corner/worldnews/other/>

* OLD TRICKS- Is the New England Journal of Medicine up to some old and
long discredited tricks and is it up to these tricks with a long
discredited company such as W.R. Grace?

* ASIA:  IMF Bailouts: Familiar, Failed Medicine for Asian "Tigers"

* S. KOREA: The IMF Korea Bailout

* INDONESIA: Indonesia's Budget Problems Spell Trouble

THE CORPORATE PLANET IS NOW AVAILABLE IN U.S. BOOKSTORES....if you can't
find it, just ask for it, or order it from us at
<https://swww.igc.apc.org/trac/cporder.html>

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+++++++++++++++++++++++++++++++++++++++++++++++++++++

3. USFS Loses Millions Logging National Forests

Date: Fri, 9 Jan 98 13:30:22 CST
From: Mark Graffis <ab758@virgin.usvi.net>

   Posted to the web: Thu Jan 8 20:08:03 EST 1998

   WASHINGTON, DC, January 8, 1998 (ENS) - American taxpayers lost $204
   million in 1996 on commercial logging sales in the national forests,
   according to a report issued today by The Wilderness Society.
   Eighty-six of 104 National Forests had red ink below the bottom line
   in 1996, according to the new report.

   Using data from the U.S. Forest Service, which manages the national
   forests, the Wilderness Socity found that the Tongass, a rain forest
   in southeastern Alaska, ran up the biggest loss - $30,592,000. All of
   the other forests among the top 20 money-losers were in one of five
   western states. Oregon had eight; Washington, four; California, three;
   Montana and Idaho two each.

   The Forest Service concedes that its logging program lost money in
   1996 but came up with a lesser figure. The agency, however, failed to
   include complete costs of building access roads, payments to states,
   and program office administration, the Wilderness Society charges.

   "The average American has to wonder why the government is paying
   timber corporations to mine our forests," said Wilderness Society
   president William Meadows. "These losses have been going on year after
   year. At a time when the forests' recreational value is soaring and
   their timber value is declining, we should be eliminating boondoggles
   like this one.

   Of the 104 national forests offering commercial logging sales in 1996,
   86 operated in the red, The Wilderness Society reported. There are
   actually 156 forests, but some do not sell timber, while a number have
   logging programs that are administered jointly with other forests.

   "The economic and scenic damage are bad enough," Meadows said. "On top
   of that, there is destruction of fisheries and wildlife habitat, as
   well as pollution of lakes, streams, and rivers. This seems like the
   sort of thing you'd expect from the old Soviet Union."

   Echoing Meadows' criticism was Martha Marks, president of Republicans
   for Environmental Protection. "We have a $5 trillion national debt,"
   said Marks, a Lake County Illinois Councilor. "What's the rationale
   for a program that hurts our economy and our environment at the same
   time? Both Republicans and Democrats in Congress should be able to
   agree that reform is long overdue."

   Last summer Congress had a chance to reduce the amount of money going
   toward forest roadbuilding. But the effort failed by razor-thin
   margins in both the House and Senate.

   Many of the timber sales are in roadless areas. To get to those trees,
   the Forest Service or the logging company itself builds roads. That
   causes extensive erosion, stream siltation, and other damage. Once an
   area has been roaded, it is no longer eligible to receive the highest
   form of protection, wilderness designation, from Congress. Later this
   month the Clinton Administration is expected to issue a new policy for
   roadless lands in all the national forests.

   Commercial sales, which were the focus of The Wilderness Society's
   analysis, are one of three types of timber sales run by the Forest
   Service. Another type consists of so-called "stewardship" sales, which
   theoretically serve certain ecological purposes, such as the creation
   of edge habitat for wildlife.

   Many ecologists are critical of this approach. In 1995 most such sales
   were the result of the controversial salvage rider enacted in July of
   that year and now expired. The third category - seven percent of total
   1996 volume - includes small-scale activities such as firewood
   collection and Christmas tree cutting.

   Founded in 1935, The Wilderness Society is a 250,000-member non-profit
   organization committed to the establishment of a nation-wide network
   of wilderness and the fostering of an American land ethic. The group
   specializes in issues involving the 623 million acres of national
   parks, forests and other lands belonging to all Americans. The
   Wilderness Society has offices in nine cities, mostly in the West.

   The full report is located at the wilderness Society's website
   [1]http://www.wilderness.org/own/tspirs.htm

   The Environment News Service is exclusively hosted by
   the [8]EnviroLink Network. Copyright   1997 ENS, Inc.

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+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

4. Recent postings from Gil Friend's "New Bottom Line"

a. NBL 6.25: Some Food for Thought. Please Chew Thoroughly.

Date: Tue, 30 Dec 1997 21:48:51 -0800 (PST)
From:  (New Bottom Line)gfriend@eco-ops.com

The New Bottom Line
Strategic perspectives on business and environment
v 6 n 25 December 30, 1997
-------------------------------------------------------------------------
Some Food for Thought. Please Chew Thoroughly.
-------------------------------------------------------------------------

Last week I shared the US Department of Energy Industrial Assessment
Centers' "Top Ten" list of low cost actions that would produce the greatest
immediate impact as cost cutting measures by industry. (See
<http://www.eco-ops.com/eco-ops/nbl.6.24.html>, in case you missed it.)

Readers seemed to like it, so I thought I'd rummage my list of lists for
other lists that are both useful individually and perhaps offer some
additional insight in juxtaposition. (As you will see, these tend to be
design criteria lists, rather than more implementation oriented lists like
the Business Charter for Sustainable Development <http://www.iccwbo.org>
and the CERES Principles <http://www.ceres.org>.)

So here they are, undigested food for thought, cryptic enough for plenty of
new year's musing. A do it yourself New Bottom Line. Please chew thoroughly
before swallowing.

One certainty faced by business (not to mention government, and just folks)
is uncertainty. Another is change. So these criteria for _resilience_ --
the ability of a system to response to change and maintain its integrity --
offered by noted ecologist C. S. Hollings seem a good place to start:

        Dispersion
        Numerical redundancy
        Functional redundancy
        Optional interconnection
        Flexibility
        Modularity
        Internal buffering
        Technical simplicity and forgivingness
        Easily reproducible

Hardin Tibbs, in his seminal paper "Industrial Ecology - An Agenda for
Environmental Management," identified key ecosystem characteristics that
could guide potential industrial ecosystems. Tibbs' "Core Principles for
Industrial Ecosystems" include:

        No waste (the output of one process becomes the input for another);
        Concentrated toxins are not stored, but synthesized as needed;
        "Elegant" cycles of materials and energy weave among the companies;
        Systems are dynamic, and information driven;
        Independent participants in coordinated action.

Tibbs went on to suggest a program of transition for industrial society
that focused on:

        Creation of industrial ecosystems;
        Balancing industrial output to natural ecosystem capacity;
        Dematerialization;
        Improving metabolic pathways;
        Systemic patterns of energy use;
        Policy alignment w long-term perspective of industrial system
        evolution.

Living Machine� inventor Dr. John Todd and industrial engineer Dr. Douglas
Holmes took their own look at industrial ecosystem design criteria in 1995:

        Diverse, modular production units;
        Renewable energy sources;
        Variety of raw materials, from multiple sources;
        Leverage of aggregate efficiencies;
        Optimal flow and exchange rates;
        Synergism and symbiosis.

The Natural Step program's four "system conditions" (which we've written
about often in NBL) suggest that for there to be a sustainable
society+ecosphere:

        Substances from the earth's crust must not systematically
        increase in the ecosphere.
        Substances produced by society must not systematically
        increase in the ecosphere.
        The physical basis for the productivity and diversity of Nature
        must not be systematically deteriorated.
        There must be fair and efficient use of resources with respect to
        meeting human needs.

(I'm inclined to add a fifth: Any ecologically sustainable solutions had
better be economically viable, or they're not likely to be widely adopted.)

In a recent design seminar with University of California engineering
students, we identified yet another collection of "Industrial Ecology
Design Principles" that clustered under three main themes:

        Close and shorten material loops
        More service, less product, long lasting product
        Minimize
                throughput
                extraction
                virgin materials
                non-renewable energy
                adverse environment impacts
                human health effects

William McDonough, designer and Dean of Architecture at the University of
Virginia reduces it all to a simple and elegant formulation:

        Income energy
        Waste equals food
        Honor diversity

(In recent talks McDonough has added one more extremely powerful criterion:
        Love _all_ the children.)

Finally, here are a simple few that seem to keep showing up on my personal
radar:

        Reduce inputs:
                don't buy resources you don't need
        Reduce "non-product output" (NPO):
                don't make product you can't sell
        Track metabolism:
                make invisible flows visible
        Succeed both short term _and_ long term
        Eschew suboptimization
        Innovate, don't compromise

And what continues to resonate as the central business proposition for the
21st century:
        More value. Less stuff.

_Your_ challenge for 1998: put these lists to work.

                         #       #       #

   (c) 1997 Gil Friend and Associates. All rights reserved. [971230]
   Archived on the World Wide Web at http://www.eco-ops.com/eco-ops
   For subscription information, send email to: nbl-info@eco-ops.com

         May be cross-posted intact--including this notice--
              via email as long as no fees are charged.
           Publishing--whether on a Web site or in print--
              and commercial distribution in any form
             require our advance permission. Thank you.

Gil Friend, systems ecologist and business strategist, is president of Gil
Friend and Associates. GFA helps companies and communities prosper by
embedding the laws of nature at the heart of enterprise.

*****************************************************************
*  Gil Friend                *  Tel: 1-510-548-7904             *
*  Gil Friend & Associates   *  Fax: 1-510-849-2341             *
*  48 Shattuck Square #103   *  Net: gfriend@eco-ops.com        *
*  Berkeley CA 94704         *  http://www.eco-ops.com/eco-ops  *
*****************************************************************
*            Helping companies and communities prosper          *
*  by embedding the laws of nature at the heart of enterprise   *
*****************************************************************
* "Nature's ecosystems have 3.8 billion years of experience     *
*  in evolving efficient, complex, adaptive, resilient systems. *
*  Why should companies reinvent the wheel, when the R&D has    *
*  already been done?"                                          *
*****************************************************************

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--------------------------

b. New Bottom Line - 1997 Index

Date: Tue, 30 Dec 1997 21:53:50 -0800 (PST)
From:  (New Bottom Line)gfriend@eco-ops.com

The New Bottom Line
Strategic perspectives on business and environment
December 1997
--------------------------------------------------------------
New Bottom Line - 1997 Index
--------------------------------------------------------------

For your convenience, here's a summary of New Bottom Line pieces
distributed this year.

And a request: if you know anyone who might enjoy a free subscription to
New Bottom Line, suggest that they send an email to nbl-info@eco-ops.com
for subscription information.

Til next year...thanks for reading!

Volume 6
--------
1: Pick Your Progress: Regulatory "Reform"? Or Regululatory Insulation?
2: "Strategic Sustainability" (1):
   Dragged kicking and Screaming to Where We Really Want to Go
3: From Sources to Sinks: The Myth of Resource Depletion
4: "Green Scissors": Cutting the Fat From Left and Right
5: The demise of diversity? DNA, Supersheep and the Patterns of Life
6: Strategic Sustainability (2): It's in the way that you move it
7: "Nature's Services": Our invisible bank account comes into focus
8: Strategic Sustainability (3): WASA To Ya?
9: An Economic Approach to Slowing Global Climate Change
10: Income Energy and Local Economies: The White Lightning Solution
11: Globalization and the Tragedy of the All Too Common
12: The Parable of the Trades: Anthropology, Cell Biology and the WTO
13: Strategic Sustainability (4): Less is more in Swedish forest
14: On a Clear Day You Can Deja Vu All Over Again
15: What's New? Nothing
16: Everything I Ever Needed to Know About Management
17: Stranded Assets: Why Can't You Ever Find a Capitalist Around
    When You Need One?
18: Affluenza: Might As Well Face It...
19: Regional Metabolism Analysis:
    A Tool for "Reality-Based" Economic Development
20: Strategic Sustainability (5): Facing the Facts at Interface
21: The Bioneers: Plant Wisdom and Corporate Futures -
    Together Again for the First Time
22: Biomimicry: Secrets Hiding in Plain Sight
23: Compromise or Breakthrough? Kyoto, Climate Change and Factor Four
24: The Business of Climate Change: From Kyoto Treaty to Money in the Bank
25: Some Food for Thought. Please Chew Thoroughly.

                         #       #       #

If you've missed any, you'll find them all on our Web site, with a complete
chronological listing at
<http://www.eco-ops.com/eco-ops/nbl/index.date.html>, and a complete
listing by subject/keyword at
<http://www.eco-ops.com/eco-ops/nbl/index.subject.html>.

Please feel free to share this message with colleagues and friends, and
invite them to subscribe. Subscriptions are free; information is always
available by sending email to: nbl-info@eco-ops.com

And thanks for your readership.

                         #       #       #

      (c) 1997 Gil Friend and Associates. All rights reserved.

    Archived on the World Wide Web at http://www.eco-ops.com/eco-ops
   For subscription information, send email to: nbl-info@eco-ops.com

*****************************************************************
*  Gil Friend                *  Tel: 1-510-548-7904             *
*  Gil Friend & Associates   *  Fax: 1-510-849-2341             *
*  48 Shattuck Square #103   *  Net: gfriend@eco-ops.com        *
*  Berkeley CA 94704         *  http://www.eco-ops.com/eco-ops  *
*****************************************************************
* "Nature's ecosystems have 3.5 billion years experience of     *
*  in evolving efficient, complex, adaptive, resilient systems. *
*  Why should companies reinvent the wheel, when the R&D has    *
*  already been done?"                                          *
*****************************************************************

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