Photo Jonathan Blair

Monday, April 13, 2015

Harper in Panama: wrapping up

Overall, Steven Harper's Summit performance was eminently sensible. On Cuba, when talking about the need for a new approach that would engage Havana and avoid isolating Cuba, he mostly had the US in mind. Still, it could mean that Canada may not oppose the full reintegration of Cuba into inter-American institutions, in particular full OAS membership. That would be quite a change or hearth and it would imply that Ottawa would basically decide to ignore the Inter-American Democratic Charter, which makes it very clear that respect for human rights, periodic, free and fair elections as well as freedom of the press are necessary conditions for participation in regional institutions.

Now, in the face of a clear regional consensus on "engagement," or more precisely on an unconditional re-integration of Cuba in the system, a consensus that the US now appears willing to join, it would have made no sense for Canada to take a rigid stance. Keeping a hard line, aside from having little or no impact on Cuba, would also entail a degree of diplomatic risk, as Toronto prepares to host the region for the Pan-American Games, this coming August. Given the tone of Venezuela's Maduro, Ecuador's Correa and even Raul Castro at the Summit, the possibility of a boycott could very well have been raised.

On Cuba, moreover, Harper made it very clear that while Canada would be keen to build on what is already a significant relationship, especially around trade and tourism, strong concerns remained regarding human rights violations and the absence of a "democratic space" in the country. In other words, the PM will continue to call a cat a cat, unlike his fellow heads-of-state, who have decided to give Cuba, and obviously also Venezuela, a free pass on those issues.

It is tempting to see primarily economic motivations behind Harper's move, but that would be a mistake. Cuba is a small ($68bn), dysfunctional, poorly governed and vulnerable economy (because of its dependence on imported oil and gas, now provided at a discount by shaky Venezuela). On one side, this obviously implies that growth prospects are excellent: as my Carleton colleague Dane Rowlands put it, you don't get Chinese stratospheric growth rates without a disastrous Great Leap Forward and decades of economic repression and mismanagement. A case in point would be the island's agricultural sector, whose stunning under-development explains why Cuba, with plenty of arable land, is nonetheless a huge net food importer. On the other hand, it is far from clear that the current leadership is ready to make the kind of concessions, on secure property rights for the private sector in particular, that were central to China's remarkable bout of growth. In other words, while there is money to be made here and there, Cuba's importance for Canada will remain marginal. Now, and to insist, with a share of about 1/10th of 1% of Canada's trade, the potential for progress is huge.

Finally, as to Harper's announcements for the region as a whole, the government basically dug up everything it could, from its files including various programs worth about $40m that have been under way for a year, and another one that will be launched in 2016. Some of the initiatives are very interesting, e.g. on security, policing and justice for Central America and the Caribbean, but total commitments at about $200m over three, four or five years (depending on the program), while not negligible, are certainly no sign of a particularly strong new engagement when you consider that Canada's ODA envelope is worth more than $4.5bn...

Canada’s “War on Contraband Tobacco”

The security implications of contraband tobacco and the consequences of the changes to Canada’s Criminal Code introduced by Bill S-16.[1]

Contraband products represent about 15% of Canada’s tobacco market and hundreds of millions of dollars in illicit revenue, lost legal earnings and lost taxes. Existing measures have contained the potential security dangers that derive from contraband tobacco, and have kept smoking rates in Ontario and Quebec, where much of the illicit products are consumed, in tune with the declining trend in the rest of the country. In other words, things are not great, but they may well be as good as can be. As the saying goes, “if it ain’t broke, don’t fix it.”

Well, the Harper government appears keen on doing just that.

The measures contemplated by Bill S-16 flow directly from the kind of thinking that led to the disastrous War on Drugs: punish them all, from the smallest violator to the global drug kingpin. As you may know, the results have not been great, especially for impoverished users everywhere and especially for impoverished people in producing and transit countries. Now that a growing movement towards softening drug laws is developing, not just among potheads and academics but also among the American, Canadian and European public, as well as the US’ and Latin America’s political establishment, Canada’s government under Stephen Harper is moving backward with no solid evidence to support its stand. Following a hardening of the regime against drugs with Bill C-10, Bill S-16 now completes the turn of this country’s crime policy towards a hard line on law and order, when what evidence we have points exactly in the opposite direction: crime is declining.

1- Diagnosis

In theory, contraband tobacco could have significant security implications. We have identified six channels through which it may affect Canada’s public and national security.

1) The protection of the production, smuggling and sale of contraband tobacco products and the enforcement of the many contracts involved cannot rely on the law enforcement and judicial institutions that guarantee a degree of security to normal economic activities. Protection and contract enforcement must instead rely on informal mechanisms and ultimately on the use or threat of violence.

2) The smuggling of illegal tobacco into Canada, from the United States, Eastern Europe or China, involves a whole chain of people and organizations, which may be best thought of as a pipeline. That pipeline can be used to transport tobacco, but also other goods, like weapons, drugs and other controlled substances, as well as illegal migrants.

3) Assessing the value of illicit activities is a hazardous entreprise. Nonetheless, on the basis of what information is available, my team has calculated that the gross revenue generated in Canada by illicit tobacco could represent as much as $350-400 million, with perhaps $75-80 million in profit. Part of this money needs to be reinvested and other illegal activities represent an appealing option, as money laundering through important investments into the legal economy could be detected by law enforcement.

4) Some of the profits from illicit tobacco sales could be diverted to the financing of terrorist organizations.

5) A significant proportion of the smuggling, production and sales of contraband tobacco takes place on First Nations Reserves where these activities, though not their criminal ripple effects, enjoy broad legitimacy. Aggressive enforcement of the law risks provoking confrontations and effective loss of control by government authorities over these territories.

6) Much of the traffic in illicit tobacco takes place over and around the Canada-US border, particularly along the so-called 401 corridor, between Brantford, East of Hamilton, and Montreal. US authorities perceptions of the risks involved for their country’s security can lead to an intensification of border controls, with a negative effect on the flow of people and merchandise through the border, on which Canada depends more than the United States.

We found evidence suggesting that all of those channels except the one regarding terrorism apply here. However, we found the scale of the problem not to be very significant.

Violence related to collateral crime directly linked to contraband tobacco (protection, contract enforcement) has been limited.

We also found limited evidence of “mixed smuggling” or of significant involvement of large criminal organizations, at least since September 2001.

As mentioned, we found no evidence of linkages between contraband tobacco and the financing of terrorist organizations.

Finally, while some US local authorities and senior US public officials have argued that drug trafficking on a large scale is taking place along contraband tobacco in Mohawk reserves around Cornwall, we found little credible evidence that this was the case. Moreover, general risk assessments done by the US government do not consider this area a major source of insecurity.

In other words, the current regime appears to have effectively contained most of the potential security dangers related to contraband tobacco.

2- Implications of S-16

The proposed amendment to the Criminal Code involves the introduction of compulsory sentences for repeat violations of the prohibition of the sale, transport, delivery, distribution or possession for the purpose of sale of illicit tobacco products. As described in the proposed amendment, the minimum sentences (3 months, 6 months, 1 year and 2 years minus one day) would apply in succession from the second infraction involving 10,000 cigarettes or more. This amount corresponds to 50 of the 200 cigarette bags that represent much of the trade, or a single typical case of such bags. Several such cases can fit in the trunk or back seat of a typical passenger car.

It is not clear that the imposition of such minimum sentences would lower the overall level of insecurity stemming from illicit tobacco, for four main reasons.

1) Reducing the differential between the sentences imposed on tobacco and on other illegal goods increases the incentives to use the smuggling  “pipeline” for other things. As things stands, the choice is between something that pays handsomely and involves mild sanctions (tobacco), and a number of other things that might pay much more but also involve severe sanctions, especially given the changes introduced recently to the Criminal Code for drug offenses (Bill C10). In our view, this is possibly what explained the low level of violence and “mixed smuggling” and the limited use of the “pipeline” for other “goods.” Under the new provisions, the relative appeal of higher value smuggling is likely to increase.

The other risks of the changes derive from the fact that, if enforced, the law would mostly affect the First Nations communities of the 401 corridor where much of the contraband tobacco industry is concentrated. That enforcement will be seen as a direct affront because, to repeat, producing, transporting and selling any type of tobacco or tobacco products without charging taxes is broadly considered as legitimate in those communities.

2) Most of the people likely to be arrested under the new rules are young men, many of them aboriginal, further contributing to the over-representation of these demographics in Canada’s prisons.

3) Controlling alternative uses of the pipeline for drugs, weapons or people is likely to become much more difficult to the extent that law enforcement will not enjoy the goodwill of the community, something it currently has. The position of the Mohawk police, in particular, will become extremely uncomfortable.

4) Direct confrontation with the communities cannot be excluded, in which case effective control of a strategic border area will be severely complicated and could be compromised.

3 – Conclusion

Dialogue with the Mohawk communities about the fuller legalization of First Nations tobacco production and trade, shared taxation and economic development in and around the reserves, along with the kind of careful enforcement of the law that currently prevails, represent a much better path to controlling the damages of contraband tobacco than hardening sanctions against small-time smugglers.

Jean Daudelin

[1] This commentary expands on my background notes for a testimony on Bill S-16 before the Senate Committee on Legal and Constitutional Affairs, in Ottawa on May 8, 2013, which was based on a study commissioned by the Macdonald-Laurier Institute that I have done with Stephanie Soiffer and Jeff Willows, two graduate students from NPSIA. “Border Integrity, Illicit Tobacco and Canada’s Security,” Ottawa, Macdonald-Laurier Institute, National Security Strategy for Canada Series #4. March 2013, 41p.

Thursday, April 9, 2015

“The Handshake Summit” and the breakdown of the Americas’ democratic rights regime

In Panama this week, Raul Castro and Barack Obama will meet and shake hands. Their symbolic encounter will add a superfluous nail on the rotting coffin of the Cold War. This pointless gesture will likely be the climax of the Seventh Summit of the Americas. Sound and perhaps even fury won’t be lacking, but real action, on anything, is most unlikely.

Since 1994, the “Summit Process” has progressively lost its relevance. Originally, it embodied regional efforts around two big endeavours: the economic integration of the Western Hemisphere, and the consolidation of the democracies that were emerging from decades of military rule. By the turn of the century, a lack of will in Washington along with Argentina and Brazil’s opposition to free trade had combined to kill the Free Trade Area of the Americas. All economic issues were pushed off the Summit Process agenda. This week’s meeting in Panama now buries the political and human rights component of the project. By next week, nothing of substance should be left.

Signs of the time, the main reasons for such a development have little to do with United States. The rise of Hugo Chavez in Venezuela implied the emergence of a left-wing authoritarian model led by a charismatic and ambitious leader keen on using his country’s massive oil wealth to promote himself and his “model” in the region. Chavez’ template directly challenged the liberal consensus embodied in the OAS Democracy Charter, the only really significant achievement of the Summit Process. “Substantive” and “popular” democracy now mattered more than electoral technicalities or “abstract” press freedom, and Chavez Venezuela showed the way, with the systematic and sometimes violent harassment of the opposition and increasingly strict constraints on independent media.

This should not have doomed the regime. Indeed, its moment of glory had precisely taken place in Venezuela where, in 2002, a military coup against Chavez had been roundly condemned by the region’s governments. In the face of hesitations from Canada and the United States and invoking the Charter, Brazil under Fernando Henrique Cardoso took the lead as the whole region made it clear to the conspirators that no recognition would be forthcoming, which helped cut their wings and bring Chavez back. A few months later, however, Cardoso was out and Lula and his Workers’ Party in, with a much more flexible attitude towards challenges to liberal democracy, as long as they came from the Left. Strong stands were taken against conservative coups or quasi-coups—in Paraguay and Honduras—but nothing was heard about democratic rights violations in Cuba or Venezuela.

The Panama Summit closes the loop as Cuba is re-admitted, with US acquiescence, into the big Inter-American family, in spite of its utter lack of democratic credentials. Venezuela, where the repression of non-violent political opposition has long been bad and is now getting worse, similarly won’t see its human rights record questioned by fellow Latin American governments. In fact, it will present itself as a victim of US destabilization attempts, a line of argument broadly accepted in the region. The freezing of the US-based assets of seven (!) Venezuelan officials has already been roundly condemned by the various groupings of Latin American governments. The colossal ineptitude of the US move is undeniable. Not only was the manoeuver hopeless in the face of a regime whose survival is at stake, but the freezing of foreign officials' assets can only be legally justified when their government represents a threat to the national security of the United States, an argument that is beyond preposterous. The move’s manipulation by the Maduro government, in the last few weeks and now, no doubt, during the Summit, was also utterly predicable. Yet, the willingness of the region’s heads of state to play along is as lamentable as their reluctance to question his record.

In that context, paradoxically, the Canadian government finds itself in a comfortable position. Having signed free trade agreements with all the functional economies of the region and with the ability, on its own, to straighten relations with Colombia and Mexico by liberalizing its visa policy, it has very little at stake at the Summit. Canada has never cut off relations with Cuba and as a result, doesn’t have to “undo” counterproductive policies and in the same movement legitimate the Cubans’ return to the Inter-American family, as Obama will be doing. At the same time, it can also legitimately criticize both Cuba and Venezuela for their rights record and thus stand as the sole principled defender of the Inter-American democratic Charter. This is unlikely to have much impact in the region, but it may flatter the Harper government and also many Canadians’ sense of principled duty. Cheap thrill, but thrill nonetheless.

[First published on]

The West’s war with ISIS, or how to dress an open fracture

So you broke your arm while mountain biking. The bones jut out from the torn skin. Blood and dirt muddy the wound. And gosh, it hurts. You are rushed to the hospital where kind nurses and doctors check you out. They stem the bleeding, disinfect the gash, put a dressing on top and seat you in a hallway. But they don’t touch the bone or close the wound. From time to time, they lift the gauze — ouch — look sadly at the purplish flesh and shards sticking out, and put some more alcohol on top of the mess – ouch again. Then they give you a pathetic smile, tap your shoulder – the other one – and promise to come back to check again in a few hours.

Welcome to the West's fight against ISIS in Syria and Iraq. Welcome to the dressing of open fractures.

A multiple open fracture is an apt metaphor for today's Middle East. The conflict within Islam between Shias and Sunnis dominates the mess, but tensions exist within those camps — mostly between Arabs and Persians among Shias, and between Turks and Arabs among Sunnis.  Add to this mix Israel, the Palestinians, the Kurds, Syria’s and Lebanon's Christians (among many others) and you can't wonder why the wound is infected.

The West is lost in this game. Right now, explicitly or not, the U.S. is siding with Saudi Arabia's Sunnis in their fight against Iran-supported Houthis in Yemen, and with Iraqi Kurds but also Iran-supported Assad and Iraqi Shia militias against Sunni ISIS. Canada only looks less confused because one can't take as many sides with just six planes and 60 some odd commandos.

Things need not be that way. Solely dressing the open fracture is a recipe for never-ending and pointless suffering. A badly broken arm doesn't heal itself. The region's bone structure, its borders and state makeup, needs to change. In Libya, Syria and Iraq, the Franco-British political contraptions of yore only survived "thanks" to the cruel rule of barbarous dictators. It is above all the breakdown of that system that underlies the murderous mess that we are now witnessing, not the messianic concoctions of ISIS' half-baked theologians.

The shape of what needs to emerge is unclear, but a fully sovereign Kurdish state must be part of it, as must a Sunni homeland in Western Iraq and Eastern Syria. The West must put these changes on the table. Only then, for instance, could one hope to fully stabilize (a smaller) Iraq and stem popular Sunni support for ISIS or its successors.

Obviously, turning civil into international conflicts may not look like a great path to peace, but ever since the Second World War the world has actually proven much more adept at managing inter-state conflicts than civil wars. Conversely, the shared obsession with keeping together even the most absurd countries has fed civil war upon civil war.

In the Middle East — as in Somalia and Africa's Great Lake region, and arguably in Eastern Ukraine too — the long-held taboo over meddling with frontiers must be jettisoned, as it was in the former Soviet Union, the Balkans, Central Asia and, 60 years ago, throughout Europe. In the most troubled parts of the world, the frontiers are not right and people are dying in droves because of it. Peace, democracy, the rule of law and human rights are only as sound and stable as the fundamental political arrangements that underlie them. When those arrangements are not consistent with political realities, they must be changed.

Orthopaedists have blunter tools than plastic surgeons. But when your bike ride down the mountain turns ugly, you want the blunt guys to work on you first.