Trudeau Cabinet to Meet as More Canadians Blame Government for Inflation

 22% blame businesses for increasing their prices

Laura Dhillon Kane

Bloomberg
Mon, August 21, 2023



(Bloomberg) -- Prime Minister Justin Trudeau is set to huddle with his new cabinet on how to address the soaring cost of living, a growing vulnerability for his government as more Canadians blame it for their rising bills.

Trudeau overhauled his front bench last month to focus on affordability, especially housing. A three-day retreat in the eastern province of Prince Edward Island will be the first opportunity for the new cast to hammer out potential solutions and messaging together.

Pressure is mounting. Three in 10 Canadians blame government spending over other factors for the rise in consumer prices, according to a Nanos Research poll for Bloomberg News. Another 22% blame businesses for increasing their prices, while 10% point the finger at the Bank of Canada.

“For the average person, it is like an inflationary spiral one cannot escape,” pollster Nik Nanos said by email. “Government spending increases inflation, the Bank of Canada increases rates and businesses then increase prices to cover rising inputs into goods and services.”

While headline inflation was 3.3% in July, food prices were up 7.8% and the central bank’s aggressive hikes mean mortgage interest costs have spiked 30.6%. Record levels of immigration have exacerbated a housing supply shortage, helping boost the benchmark home price to C$754,800 (about $558,000).

Meanwhile, federal spending is still above pre-pandemic levels, with the government projecting a C$40.1-billion deficit this year. Last week, Trudeau’s former finance minister, Bill Morneau, blamed the government’s extension of Covid-19 financial relief programs into late 2021 for helping juice inflation.

Trudeau has begun to send a message of belt-tightening. Treasury Board President Anita Anand, the former defense minister, recently sent a letter to cabinet colleagues giving them an October deadline to find areas to cut C$14.1 billion in spending by 2028 and C$4.1 billion in the years that follow.

Speaking in Alberta last week, Finance Minister Chrystia Freeland said the savings are essential to maintain a fiscally responsible position so her government can deliver programs such as a temporary tax rebate and clean-energy tax credits for businesses. The cuts were first promised in her March budget.

“We understood then, and we understand now, that inflation has been really challenging for Canadians. And we understood that the federal government had a responsibility not to pour fuel on the flames of inflation,” Freeland said.

At the retreat, the cabinet will have to wrestle with two competing priorities: boosting affordability and exercising fiscal restraint, said Marci Surkes, who formerly worked as Trudeau’s policy director and is now an adviser to Ottawa-based consultancy Compass Rose Group.

“I expect that Freeland is going to have a very tough message to ministers,” she said. “It’ll be interesting to see if this comes out of the room, but I would anticipate that she is going to deliver a message around restraint and prudence.” At the same time, the government must signal that it has a plan to address cost-of-living, she said.

In an interview, Industry Minister Francois-Philippe Champagne said ministers will spend the retreat examining how they can support Canadians with their short-term challenges, but also keeping an eye on the longer term. He pointed to recent investments by automakers including Volkswagen AG, Stellantis NV and Ford Motor Co. — all subsidized by governments — as key to its economic vision.

“Canadians elected us to make a difference, to help them. We have demonstrated time and time again that we have their back,” Champagne said. “This time is going to be no different.”

The Nanos poll suggests government messaging hasn’t been effective so far. The 30% share of Canadians who blame federal spending for the cost of living has increased since July 2022, when it was 26%. The numbers blaming the central bank and businesses have also risen, while a decreasing number say pandemic supply chains are at fault, down to 17% from 31% last year.

The survey of 1,081 people was conducted by phone and online between July 30 and Aug. 3. It’s considered accurate within 3 percentage points, 19 times out of 20.

HIP HOP CAPITALI$M
How hip-hop spurred the growth in Black businesses and financial empowerment

REVOLT COMMODIFIED

Ronda Lee
Sun, August 20, 2023

The 50th anniversary of hip-hop coincides with the national Black business month in August, and the former has been a driver of growth and empowerment for the latter, according to leaders in the music genre’s industry.

Hip-hop is an industry with an economic impact of $16 billion and has launched Black-owned businesses in music, film, fashion, and advertising for creatives that curated the culture.

Rappers have turned into entrepreneurs, spurring growth for other Black-owned businesses, building generational wealth, and investing in the communities that nurtured them.

"Hip-hop went from being a fad to commercialized and monetized in technology, fashion, sports and business," Detavio Samuels, CEO of REVOLT, told Yahoo Finance. "In the beginning, we weren’t owners, just brand ambassadors, not accumulating wealth from a genre and culture that we created. We’ve gone from making others rich to wealth accumulators."

Rashad Bilal and Troy Millings of Earn Your Leisure, host REVOLT's Assets Over Liabilities, with the premiere episode featuring entrepreneur, producer, and artist Swizz Beatz.

Overall, there are around 3 million Black-owned businesses in America now, generating about $206 billion in annual revenue with 36% of those led by Black women. But the road to these successes was far from easy.

The history of Black businesses in the US is rife with violence and racism.

In what was known as the Red Summers of 1917-1919, many Black-owned businesses in Washington, D.C., Chicago, St. Louis, Houston, Tulsa, and Omaha were decimated during mob violence and racial terrorism.

In the decades that followed, many Black-owned businesses closed due to racially biased eminent domain proceedings, with the government taking land in Black business districts like Bruce’s Beach in Los Angeles and Beale Street in Memphis.

Hip-hop itself was its own economic battleground. When the genre was born, recording studios — more often owned by white executives — controlled the process from radio air time, marketing, ownership interests, and rights.

But they did not control the culture, which spawned more and more businesses.

For instance, Dapper Dan and 5001 FLAVORS were favorite designers for hip-hop artists that disrupted the fashion industry. Some of 5001 FLAVORS clients include Salt-n-Pepa, Heavy D, Sean P. Diddy Combs, Dr. Dre, DMX, Tupac, The Notorious BIG, Jay-Z, Beyonce, and Blue Ivy.

"Hip-hop allowed Black creatives and artists to create brands that wouldn’t have existed without hip-hop and allowed us to engage in collective economics, supporting other Black businesses," Sharene Wood, president and CEO of 5001 FLAVORS and Harlem Haberdashery, told Yahoo Finance. "Hip-hop opened the door to a lot of Black brands, like 5001 FLAVORS."

August 5, 2023. Ashlee Muhammad, Guy Wood Sr., Sharene Wood, Kells Barnett, and Guy Wood Jr. are featured at New York Public Library's "The Rap-Up" celebrating 50 years of hip-hop featuring Harlem Haberdashery and 5001 FLAVORS.

What started with $600 in Wood’s college dorm room has expanded 30 years later into a family business with a retail store (Harlem Haberdashery), a bespoke spirits line (HH Bespoke Spirits), and a 501(c)(3) that gives back to the community that raised them — #TakeCareofHarlem.

Designs by 5001 FLAVORS are archived at the Smithsonian, Grammy museum, and the Rock-n-Roll Hall of Fame museum honoring hip-hop.

"People wanted to build their own economy, and Biggie said it best: 'Never thought hip-hop would take us this far,'" Wood said. "Hip-hop creatives and the businesses that sprung from them didn’t have corporate grooming or business degrees when we started, but now Queen Latifah, LL COOL J, and Diddy are multi-hyphenates — rappers, actors, and entrepreneurs."

Sean "Diddy" Combs went from rapper-producer to CEO of Bad Boy Entertainment, owning a fashion line, and founder and chairman of REVOLT. This year is Bad Boy Entertainment’s 35th anniversary and the 10th anniversary of REVOLT.

REVOLT originally started as music video television in response to MTV’s embrace of reality television over music videos. However, when none of the genres outside of hip-hop showed up for the platform, REVOLT decided to embrace hip-hop culture as the storytelling agent.

"The narrative others tell about hip-hop is sex, love, drugs, and materialism," Samuels said. "REVOLT isn’t a media company, but an engine for transformative change for Black people to build generational wealth with culturally relevant information to turn financial whispers into shouts as to how Black billionaires have done it."

This resonates with the Black community. A Pew Research study found that 58% of Black adults say supporting Black businesses, or "buying Black" is an effective strategy for moving Black people toward equality in the United States.

"Social justice and empowerment has always been part of the DNA of hip-hop culture," Samuels said.

Financial empowerment

In another effort to empower the Black community and businesses, REVOLT partnered with Rashad Bilal and Troy Millings, founders of the viral platform Earn Your Leisure (EYL) that turned into a TV network on financial literacy, to host Assets Over Liabilities, a television series that bridges the gap between the world of finance and the hip-hop community, making financial literacy a focal point.

This season’s premiere episode is a sit-down with producer Swizz Beatz discussing his investment in Black artwork, selling his company Verzuz for $28 million, and his investment strategy for building generational wealth.

"Partnering with REVOLT to integrate hip-hop into the conversation removes stigmas and increases accessibility to financial literacy," Rashad Bilal and Troy Millings, co-hosts and co-founders of Earn Your Leisure, said. "We're empowering the community to break down financial walls and master their money with knowledge."

REVOLT is using its platform to highlight Black businesses and marketplace disruptors like Assets over Liabilities and Bet on Black.

Hip-hop’s influence on Black businesses and the idea of collective economics is rooted in empowering Black communities.

"Collective economics is not just about money, it’s a social responsibility to invest in the community because you can’t just consume from the community, you need to nurture it in order for business to thrive," Wood said. "Companies like the Fearless Fund exist because we’ve been historically underrepresented, underfunded, and systematically shut out of opportunities."

Ronda is a personal finance senior reporter for Yahoo Finance and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda

Russian soldiers are fighting Ukraine high on amphetamines, a report claims. The Nazis did it first.

Erin Snodgrass
Fri, August 18, 2023 

Adolf Hitler arrived at Kroll Opera in Berlin, April 28, 1939 to address the Reichstag.

AP Photo

Ukrainian soldiers have speculated that Russian troops are fighting while high on amphetamines.


Militaries throughout history have drugged soldiers to enhance their performance on the battlefield.


Nazi troops were given methamphetamines during World War II to decrease fear and increase aggression.

The Russian military may be taking a page from the Third Reich's playbook as the brutal war in Ukraine drags on.

A May report from the Royal United Service Institute cited Ukrainian military personnel who said Russian soldiers they encounter often appear to be "under the influence of amphetamines or other narcotic substances," an observation various Ukrainian soldiers have made several times over the last year.

But supposedly drugged-up Russian troops in Ukraine are only the most recent installment in a long, global history of militaries seeking to boost their armies' performance on the battlefield by any chemical means necessary — a tactic most infamously deployed by Nazi Germany during World War II.

Norman Ohler, author of "Blitzed: Drugs in the Third Reich," studied rare archival documents and spoke to first-hand witnesses to argue the thesis of his 2015 book: That drugs — more specifically, a low-dose pharmaceutical pill akin to modern-day meth — fueled the Third Reich and played a major role in the German army's early-war blitzkrieg success across Europe.

"Drugs have often played a role," Ohler told Insider of wartime strategy. "But the Nazis took it to another level and really had successes because of the drug use, which they otherwise probably would not have had."

The Third Reich was fueled, in part, by methamphetamine

The "miracle" meth pill, as Nazi Germany touted it, was developed in the country in the late 1930s and hit the market as Pervitin, an over-the-counter pharmaceutical that quickly took the nation by storm. The small dosage, which is equivalent to about three milligrams of modern-day meth, according to Ohler, made people more alert and happier, he said.

Pervitin was already popular among civil society when Dr. Otto Ranke, the director of the Institute for General and Defense Physiology, who was tasked with improving the capabilities of the country's soldiers, began to envision what the drug might do for Germany's boys headed toward war.

The drug decreased fear, increased aggression, reduced the need for sleep, and improved performance of simple tasks, Ranke found. Many soldiers had even brought it with them when the war started, Ohler said.

"They said it makes it easier for them to do their job, killing people or invading a foreign country," Ohler told Insider.

Adolf Hitler at the Western Front on May 14, 1940

AP Photo/Hoffman

Soldiers were stocked with Pervitin as the drug stood its "first real military test" when Germany invaded Poland in 1939, according to a TIME report. The rapid overrun in Poland cemented Pervitin's success and introduced a new form of Nazi warfare known as blitzkrieg, which was characterized by quick, surprising, and mechanized attacks on unsuspecting enemy troops.

"It enabled the German army to do blitzkrieg in the West. They didn't need to sleep once they started attacking," Ohler said. "They were charging through France and Belgium and Holland, unafraid, not stopping, while the British and French troops were sleeping."

The German army cited Pervitin as a decisive factor in the winning campaign, Ohler said, and it supplied its troops with millions of pills ahead of the army's attack on the Soviet Union. Even the magic drug, however, could not win Germany that 1941 battle.

As the war dragged on for another four years, Pervitin continued to be deployed to soldiers, Ohler said, but the one-time miracle drug began to cause dependency issues and depression among users. Germany even organized a rehab program for "overflown" pilots, or those who were addicted to the drug, Ohler said.

After the Nazis were defeated, production of Pervitin continued in Germany, moving to the black market, according to Ohler. Decades later, the drug was used by East German border troops seeking to stay awake as they manned the Berlin Wall, he said. The drug wouldn't be made illegal until the 1980s, Ohler told Insider.

Rampant drug use flew in the face of Nazi ideology

The German army's dependence on methamphetamines during World War II stood in stark contrast to the Nazi's clean-cut, anti-drug image. The use of Pervitin among soldiers prompted resistance from high-ranking Nazi leaders, who were concerned with maintaining the party's ideals, Ohler said.

German military leaders, however, were focused first and foremost on trying to win a war.

"The army is the army. In the field, it has to fight. It doesn't care about ideology," Ohler said.

Ohler found evidence that Nazi leader Adolf Hitler was aware of the fact soldiers were using Pervitin, but never publicly acknowledged his feelings toward the drug. The dictator himself was abusing opioids near the end of his life, including an early form of OxyContin, according to medical records reviewed by Ohler.

Many other militaries have relied on chemical help amid wartime

As Insider reported earlier this year, several countries have a history of supplying their soldiers with performance-enhancing drugs. British stores used to sell syringes of heroin as gifts for troops during World War I; the British and American armies both relied on other amphetamines and stimulants during the Second World War after witnessing the drugs' success for the Germans, Ohler said, and the US military distributed painkillers and "pep pills" — also known as speed — to soldiers headed toward long-range reconnaissance missions during the Vietnam War.

Alcohol has also been a common battle bedfellow throughout history. The Russian military gave its soldiers vodka rations to get through World War II; France opted for red wine; and alcohol remained the "number one" drug for Germans during the war, Ohler said.

Amid the life-or-death stakes of war, performance-enhancing drugs, despite their numerous and notable downsides, maybe too enticing a boost to pass up.

"I would be surprised if drugs were not being used in the Ukrainian-Russian war," Ohler said. "It's too good for an army."

Putin's invasion of Ukraine was his 'greatest intelligence fiasco,' spy expert says


Nathan Rennolds

Business Insider
Sun, August 20, 2023 

Russiam President Vladimir Putin.LUDOVIC MARIN/AFP via Getty Images

Russia's invasion of Ukraine was an "intelligence fiasco," an intelligence expert wrote in The Times.

Calder Walton is a scholar at Harvard University's Kennedy School of Government.

He said that Russia's FSB had failed to adequately prepare for the invasion of Ukraine.

Russian President Vladimir Putin's invasion of Ukraine was his "greatest intelligence fiasco," an intelligence expert has claimed.

Writing in The Sunday Times, Calder Walton, a scholar at Harvard University's Kennedy School of Government and author of "Spies: The Epic Intelligence War Between East and West," said that Russia's FSB intelligence agency had failed to prepare for the country's invasion of Ukraine.

Walton said that due to Putin's tendency to run his intelligence operations with "crippling sycophancy," he was likely not given accurate information as staff sought to confirm the president's views rather than risk going against him.

It likely played a role in the FSB's failure to establish well-placed recruits to act as saboteurs and help Russian forces during the invasion, Walton wrote.

Walton says the FSB, Russia's security service, is more criminal than professional.

"The FSB, which Putin ran in 1998, facilitates massive, systemic, state-run money laundering schemes for his personal enrichment and for Russian oligarchs," he wrote.

A man checks the turret of destroyed Russian tank near a village in Ukraine's Kherson province in November 2022.Celestino Arce/NurPhoto via Getty Images
Changing tactics

Putin's campaign to interfere in the 2016 US presidential election was a remarkable operation, wrote Walton, but the shortcomings of Moscow's espionage operations emerged over the last year, with seemingly ordinary people accused of being Russian spies in the UK, Slovenia, and Greece.

Before the invasion of Ukraine, Putin had relied heavily on undercover diplomats to carry out clandestine work overseas, but the expulsion of many of these forced the president into a change of plan.

During the first three months of the war, over 450 Russian diplomats were sent packing from Russian embassies, the Center for Strategic and International Studies estimated last year.

The Russian president has since had to employ far riskier tactics to gather foreign intelligence, using unofficial spies and sleeper cells to carry out the work, including the so-called "illegals" — sleeper agents in foreign countries.

But over the last year, at least seven of these agents have been uncovered in Brazil, Greece, Norway, the Netherlands, and Slovenia, The Guardian reported.

"The time after the war, with all the expulsions, was a fateful time for the Russian intelligence system," a European intelligence official told the outlet.
Putin was merely a KGB "errand boy"

Putin has made much of his KGB past stationed in Dresden, in 1980s East Germany, and it shaped his worldview, said Walton. But the Russian president's intelligence credentials are not what he might claim.

Putin was likely never the elite Soviet spy that the world has been led to believe, an investigation by the German news outlet Der Spiegel revealed.

Many stories have painted him as a heroic figure who, among other things, single-handedly defended the KGB's offices from looters and carried out top-secret secret missions such as meeting with members of the Red Army Faction, a terrorist group that wreaked havoc in West Germany and committed a series of kidnappings and assassinations.

But according to Der Spiegel's report, the majority of Putin's work was actually limited to "banal" administrative tasks.

Horst Jehmlich, a former Stasi officer who worked in Dresden, told Der Spiegel that Putin was nothing more than an "errand boy."

Thaksin Returns From Exile After Deal With Former Thai Enemies

Patpicha Tanakasempipat
Mon, August 21, 2023 



(Bloomberg) -- Back in 2008, the last time Thaksin Shinawatra stepped foot in Thailand, he was adored among the nation’s poorer masses and widely despised by the royalist elite who backed his removal in a coup two years earlier.

On Tuesday, the former prime minister returned to Thailand after his political allies cut a deal with the same military-backed establishment that spent years overturning his party’s election victories through coups and court decisions. He bowed before a portrait of Thai King Maha Vajiralongkorn and then waved to hundreds of supporters at Bangkok’s Don Mueang airport, with some chanting “We Love Thaksin!” and “Thaksin, Keep Fighting!”

Thaksin, who was found guilty in absentia in four corruption cases and still faces 10 years in prison, will be taken to the Supreme Court immediately after landing and then go to prison. It’s unclear at this point how much time he will serve.

Prior to taking off on a private jet from Singapore, Thaksin hugged his sister, Yingluck Shinawatra — a former prime minister ousted in a 2014 coup who is also living in exile.

“I hope the day you’ve been waiting for to be with your family comes fast,” she wrote on Twitter. “Good luck, brother. Always love you.”

Thaksin’s arrival coincides with a vote for prime minister later in the day, after his party officially joined forces with conservative groups previously aligned with former Prime Minister Prayuth Chan-Ocha, an ex-army chief who had led the coup against Yingluck and served as the nation’s leader ever since. The bloc’s candidate to become prime minister is Srettha Thavisin, a member of the Thaksin-backed Pheu Thai party who spent years in the real estate industry.

The awkward 11-party alliance emerged after both camps saw their interests align in the wake of a May election that produced a stunning win for Move Forward, a party that advocated changes to a law forbidding criticism of King Maha Vajiralongkorn and other top royals. The royalist parties wanted to keep Move Forward out of power, while Thaksin sought to strike a deal that would allow him to return to Thailand after 15 years of shuttling between Hong Kong, Singapore, Dubai and London.

“Pheu Thai is the most powerful party to battle the emergence of Move Forward, after the electoral defeat of the conservative parties,” said Yuttaporn Issarachai, a political scientist at Sukhothai Thammathirat Open University. “As the saying goes, the enemy of my enemy is my friend.”

Political Drama

Thaksin’s return will mark a full-circle moment in Thailand’s political drama, which has seen a cycle of coups and deadly street protests erodes the nation’s competitiveness as a Southeast Asian manufacturing destination since the turn of the century. Foreign investors have dumped about $3.8 billion of Thai stocks this year, triggering an almost 9% slump in the main stock index to rank it among Asia’s worst performers.

It’s unclear how much Thailand’s outlook will change after a new government is formed, assuming the coalition doesn’t fall apart at the last minute. On Monday, the group pledged a mix of cash handouts and fiscal measures to stimulate an economy that expanded 1.8% in the second quarter, well below a consensus forecast of 3% growth.

In May, he said he would go through the judicial process and also asked for permission to return, without providing more details on the request. King Maha Vajiralongkorn has the power to pardon any criminals.

“It’s all my own decision for the love and bond I have for my family, homeland, and our master,” Thaksin said at the time.

Thaksin, a former telecom billionaire, first rose to power in 2001 after pledging to revive Thai growth in the wake of the Asian financial crisis and help poorer citizens with cheap healthcare and debt relief measures. His party won 75% of seats up for grabs in a 2005 election, spooking a royalist establishment that had allowed only limited democracy since Thailand abolished absolute monarchy in 1932.

Change of Guard

Thaksin was ousted in a coup the following year, kicking off a power struggle lasting almost two decades in which his political allies would win elections only to see unelected generals, bureaucrats and judges overturn them, using a variety of methods.

This year’s election, however, saw Pheu Thai finish in second place despite being led by Thaksin’s youngest daughter Paetongtarn Shinawatra, who turned 37 on Monday. That marked a changing of the guard, as younger Thais become more disillusioned with an establishment that has restricted democracy.

Suddenly the most popular politician in Thailand wasn’t affiliated with Thaksin. Harvard-educated Pita Limjaroenrat, 42, proved both more democratic and ideological, willing to talk about sensitive issues related to the monarchy — something Thaksin had always resisted.

The establishment quickly moved to block Pita from taking power, with the military-appointed Senate — mandated by a constitution written after the 2014 coup — preventing him from becoming prime minister. That paved the way for Thaksin’s Pheu Thai to cut a deal with the military, cementing his return and helping conservatives defuse what they perceive to be the biggest threat to the monarchy.

“This election has been about Thaksin from the beginning,” said Titipol Phakdeewanich, dean of political science at Ubon Ratchathani University. “His return will strengthen the conservative establishment that was already weakened by the election process. This will delay the democratic process in Thailand.”

Russian oil still relies heavily on Western-backed ships despite breaching the price cap


Filip De Mott
Mon, August 21, 2023

papa1266/Getty Images

Russia's flagship crude breached the G7's $60 price cap in mid-July.


But there's been little decline in the amount of Western-backed vessels servicing Russia, Bloomberg reports.


That's as it's difficult for servicing firms to validate the price at which crude is purchased.

Western-backed vessels have largely remained involved in Russia's oil trade, even after the country's flagship crude breached the $60 price cap imposed on it by the G7.

In recent days, the Urals crude oil price has eased from a $73-per-barrel peak, but still remains significantly above the West's threshold. The measure, implemented in December, was meant to limit Moscow's energy revenue, without denting global oil supply.

Under the restriction, the Kremlin should not be able to rely on G7, EU, or US services when the price cap is surpassed. But despite a mid-July price breach, Western-owned and insured vessels continue to service Russia's energy trade, Bloomberg reported.

40% of oil tankers subject to the cap have continued to load Russian crude since the Urals price surpassed $60 on July 12. It's a small decline from 50% of vessels that operated in Russia ahead of the threshold's breach.

Meanwhile, the amount of ships covered by Western insurance dropped from 60% to 45% in the same timeframe. While a large dip, these insurers still account for a significant portion of vessels working in Russia.

Part of the issue stems from how the price cap is designed to work in practice, Bloomberg said. To comply with the G7's regulation, servicing firms involved with Russian cargo must receive an attestation, or a written pledge, which establishes that the commodity was purchased below the cap.

This leaves servicing firms to place full faith in a piece of paper, often with questionable validity. Though the G7 expects companies to also pursue their own due diligence, many don't, given difficulties in comparing long-term deals with immediate market prices.

Of course, the price cap only applies to firms within the G7, EU, and US coalition, and Russia is free to trade at higher prices with outside partners. And while the country's economy suffers from labor shortages and a crashing ruble, it could gain from the commodity's higher price.

The country may have also profited in other ways through the price cap. According to The Financial Times, that's as Russia could have taken advantage of a loophole that allowed it to inflate its shipping costs, bringing in $1.2 billion.

The ‘dark fleet’ of tankers shipping Russian oil in the shadows

Andrew Roth
Sat, 19 August 2023

Photograph: Sergei Karpukhin/Reuters

It has been called Russia’s “ghost”, “shadow”, or “dark” fleet. Nearly 500 ships, many of them old tankers with murky ownership and obscure insurers, could be playing an integral role in moving Russian crude to China and other ports in Asia, because of a G7 price cap meant to keep foreign-currency oil revenues out of the Kremlin’s hands.

Often the ships use tactics designed to hide their location or the origin of the crude carried from Russian ports, which may later be refined in India and other countries and even re-exported to the western countries sanctioning the Kremlin.

The clandestine tactics include “AIS gaps”, created by switching off a vessel’s automatic identification system transponder; ship-to-ship transfers in international waters away from scrutiny; “flag hopping”, or altering a ship’s country of registration; and “complex ownership and management structures that change each month,” according to Michelle Wiese Bockmann, a senior analyst at Lloyd’s List Intelligence who has reported extensively on Russia’s dark fleet.

Some of the vessels are past their prime and considered unsafe, as in the case of the Pablo, a 27-year-old Gabon-registered tanker that suffered a large explosion off Malaysia in May. According to Le Monde, the ship allegedly has a record of carrying sanctioned Iranian crude, and had probably just delivered Russian oil to a Chinese port before the accident occurred.

Bockmann estimates nearly 12% of the world shipping market is now “dark” and able to exploit regulatory gaps. “If you want to hide in shipping, it’s very, very easy,” she said.

The role of dark ships will become more important after the value of Urals oil rose past a $60-a-barrel price cap. The cap, introduced last December, bars western companies from transporting, servicing or brokering cargoes of Russian crude worth more than that price.

Greek-flagged tankers insured by big companies might have accounted for 50% of port visits before the ban, Bockmann said. Now they make up just a fraction of them, probably because of fears about the cap and because Russia has reduced exports. Vessels less wary of regulation are expected to replace them.

There are regulatory gaps, and holes and shortcomings that prevent an embargo ever being enforced  

Michelle Wiese Bockmann, analyst

The shift toward dark shipping has been months in the making. “When it was quite obvious that sanctions were coming, the secondhand market for old, clapped-out tankers went bananas,” said Bockmann. “There were hundreds of transactions, and they all joined this dark fleet and started shipping Russian oil.”

The value of a 16- or 17-year-old medium-sized “Aframax” tanker doubled within six months, she said, even though most big oil companies refuse to charter tankers older than 15 years. Gatik Ship Management, a previously unknown firm, spent $1.5bn in about 12 months to acquire a fleet of old vessels that traded exclusively in Russian oil and products. “I’ve never seen it and I’ve looked at this industry for 25 years,” Bockmann said.

A Financial Times report indicated Gatik was likely to be connected to Rosneft, the Russian oil giant.

Last week, Bockmann reported that four successor companies to Gatik had been registered in Turkey.

The dark fleet shows just some of the difficulties in maintaining an energy embargo.

“There are regulatory gaps, and holes and shortcomings that prevent it ever being enforced,” Bockmann said.

“If your tanker is registered in Panama, your single-ship shell company is a brass-plate address in Liberia, your ship manager is in a shopping mall in India, you’ve got lowly paid crew from the Philippines, call at Russia and discharge at China, and use a dodgy P&I [insurance] company that’s based in the Seychelles, where does that bring you to any form of international regulation, despite all the rules and conventions out there?”

The Science Behind Japan's Plan to Empty Nuclear Wastewater Into Pacific

Shoko Oda
Mon, August 21, 2023 

(Bloomberg) -- Twisted sections of a reactor unit remain exposed at the Fukushima Dai-ichi nuclear plant and a crushed metal tank lies near the coastline, reminders of one of the world’s worst atomic disasters in 2011 and a response that’s already cost about 12 trillion yen ($83 billion).

Huge cranes are stationed across the site of Tokyo Electric Power Co.’s wrecked facility, while some areas have been covered with giant dome-like structures as work continues to manage the removal of dangerous fuel debris.

One of the most critical components of the current stage of decommissioning is much less obvious, a 10 centimeter (4 inch) wide pipe that funnels wastewater, in part generated as the stricken reactors are cooled, through a treatment process that will lead into the Pacific Ocean.

No element of Japan’s work to manage the risks from the disaster has been more contentious than its plan to start on Thursday discharging into the sea more than 1 million cubic meters of treated radioactive water — enough to fill 500 Olympic-size swimming pools — that’s currently stored in about 1,000 tanks.

Japan’s Prime Minister Fumio Kishida on Tuesday confirmed the process will start on Aug. 24 after a meeting of a cabinet panel. “If there are no issues with the weather and sea conditions, we expect the discharge to begin,” Kishida said. “The Japanese government will take responsibility to make sure the proposal is carried out safely, even if it takes decades until all of the treated water is discharged.”

China has vociferously opposed the plans and threatened to extend curbs on imports of seafood, while Japanese companies including cosmetics brands have faced consumer boycotts. Restaurants in Hong Kong are already hurriedly seeking alternatives for the supply of some ingredients previously sourced from parts of Japan.

The ocean is “not Japan’s private sewer,” Chinese Foreign Ministry spokesman Wang Wenbin said in June.

Public protests have taken place in South Korea, despite the government’s backing for Japan’s strategy. Any problems would have “an impact not just on our three countries, but all countries around the world,” President Yoon Suk Yeol said Friday at Camp David, after holding talks with Kishida and US President Joe Biden.

Releasing the vast volumes of water is necessary as storage tanks are forecast to hit capacity early next year, and because the full decommissioning of the site doesn’t allow for more giant vessels to be added. Discharges of cooling water from nuclear plants are also common practice across the industry.

“Controlled, gradual discharges of the treated water” into the Pacific Ocean “would have a negligible radiological impact on people and the environment,” the International Atomic Energy Agency said last month, offering approval for Japan’s proposal after a two-year safety review.

Radiation levels at Fukushima have fallen over the past decade to the point that regular visitors are no longer required to wear full-body protective suits. Guests must still carry a dosimeter, and cover up with long sleeves, goggles, masks and gloves. Tepco also asks those accessing the site to undergo scans to check bodily radiation before and after their visit.

A tour of the facility held last month was part of Tepco’s efforts to respond to concerns about the planned releases by presenting evidence, according to Junichi Matsumoto, the company’s chief officer for the advanced liquid processing system water management. “We are aware that there are people with a variety of opinions about this plan,” he told reporters at the site.

The process that’ll be used over about the next 30 years to release batches of the treated water about 1 kilometer (0.62 miles) off the coast breaks down into four basic steps: measurement and confirmation, transfer, dilution and discharge.

Water is pumped into the facility and used to cool the damaged reactors. About 130 cubic meters of liquid — which also includes rain and groundwater — becomes contaminated each day after contact with nuclear fuel debris. It’s pumped out and processed through the advanced liquid processing system, or ALPS, which uses a series of chemical reactions to lower concentrations of 62 radionuclides.

That process can’t remove tritium, a weakly radioactive form of hydrogen. Though it can be carcinogenic at high levels, a human would need to ingest billions of units of becquerels — a measure for radioactivity — before seeing any health effects. Water released by Tepco will have a concentration of less than 1,500 becquerels per liter.

After the initial treatment, a first series of measurements of radionuclide levels are taken before the water is moved on to vessels where it’s mixed and circulated for 144 hours. Independent analysis company Kaken Co. and the Japan Atomic Energy Agency then begin a further testing process that can last about two months.

China has complained the IAEA didn’t evaluate the long-term effectiveness of Japan’s purification equipment, and has argued that waste from a nuclear accident — rather than from the usual operation of a power plant — hasn’t previously been handled in this manner.

“We hope that the public can be reassured by the fact that it takes a long time” for the treated water to clear protocols, Kenichi Takahara, a Fukushima-based risk communicator for Tepco, told reporters during last month’s visit. The process is also deliberately slow, because Tepco is capable of releasing at most about 500 cubic meters of treated water a day — a fraction of the 510,000 cubic meters of seawater brought into the facility every 24 hours.

At the dilution sector of the facility, three large pumps pull in seawater that’s combined with the treated liquid to ensure the tritium concentration is “well below” guidelines set by Japan’s government and the World Health Organization, according to Tepco. By the time the process is completed, the treated water will have been diluted more than 350 times, Tepco calculates.

That diluted liquid then moves into a partially underground tank for further sampling. In the next steps, water flows through a deeper vessel and then along the discharge tunnel — which runs for a kilometer under the seabed. A spout built roughly 12 meters below the sea surface will flush the water out into the Pacific.

Read more: Nuclear Power’s Revival Reaches the Home of the Last Meltdown

For Kishida, who is already struggling with waning popularity, placating both domestic and international concerns about the process is crucial, and particularly as Japan also seeks to bolster energy security by reviving the nation’s nuclear sector.

“The Japanese government, including myself, will continue to provide highly transparent explanations and information,” he said Sunday during a visit to Fukushima. His aim is to use “every opportunity to promote understanding, not only in China but also in the international community.”

 Bloomberg Businessweek

Japan to start releasing Fukushima plant's treated radioactive water to sea as early as Thursday

Mon, August 21, 2023


TOKYO (AP) — Japan will start releasing treated and diluted radioactive wastewater from the Fukushima Daiichi nuclear plant into the Pacific Ocean as early as Thursday — a controversial but essential early step in the decades of work to shut down the facility 12 years after its meltdown disaster.

Prime Minister Fumio Kishida gave the final go-ahead Tuesday at a meeting of Cabinet ministers involved in the plan and instructed the operator, Tokyo Electric Power Company Holdings, to be ready to start the coastal release Thursday if weather and sea conditions permit.

Kishida said at the meeting that the release of the water is essential for the progress of the plant decommissioning and Fukushima prefecture’s recovery from the March 11, 2011, disaster.

He said the government has done everything for now to ensure the safety, combat the reputational damage for the fisheries and to provide transparent and scientific explanation to gain understanding in and outside the country. He pledged that the government will continue the effort until the end of the release and decommissioning, which will take decades.

A massive earthquake and tsunami destroyed the Fukushima Daiichi plant’s cooling systems, causing three of its reactors to melt and contaminating their cooling water. The water is collected, filtered and stored in about 1,000 tanks, which fill much of the plant's grounds and will reach their capacity in early 2024.

The release of the treated wastewater has faced strong opposition from Japanese fishing organizations, which worry about further damage to the reputation of their seafood as they struggle to recover from the nuclear disaster. Groups in South Korea and China have also raised concerns, turning it into a political and diplomatic issue.

The government and the plant operator, Tokyo Electric Power Company Holdings, say the water must be removed to make room for the plant’s decommissioning and to prevent accidental leaks from the tanks.

Junichi Matsumoto, TEPCO executive in charge of the water release, said in an interview with the Associated Press last month that the water release marks “a milestone,” but is still only an initial step in a daunting decommissioning process that is expected to take decades.

The easing of opposition from the fishing industry was key to the release because the government promised in 2015 not to start without “understanding” from fishing groups, after past accidental and unapproved discharges.

Masanobu Sakamoto, head of the National Federation of Fisheries Cooperatives, who met with Kishida on Monday, reiterated his organization’s opposition to the release, but acknowledged that members of the fishing community have gained some confidence about the safety of the move. They still fear damage to their industry, he said, and welcomed the government pledge for support.

The government has offered funding totaling 80 billion yen ($550 million) for sales promotion and other steps, and for sustainable fishing operations.

The government and TEPCO say the water will be treated and then diluted with massive seawater to levels way safer than international standards, its environmental and health impact negligibly small.

The International Atomic Energy Agency in a final report in July concluded that the release, if conducted as designed, will cause negligible impact on the environment and human health.

Scientists generally support the IAEA view, but some say long-term impact of the low-dose radioactivity that remains in the water needs attention.

Kishida’s government has stepped up outreach efforts to explain the plan to neighboring countries, especially South Korea, to keep the issue from interfering with their relationship.

Kishida said the effort has made progress and the international society is largely responding calmly to the plan. Still, Hong Kong said it would suspend exports from Fukushima and nine other prefectures if Japan went ahead with the plan, while China has stepped up radiation testing on Japanese fisheries products, delaying customs clearance.

Mari Yamaguchi, The Associated Press

Japan's Kishida visits Fukushima plant to highlight safety before start of treated water release

WHY IS THE OCEAN GLOWING GREEN?!

Sun, August 20, 2023


TOKYO (AP) — Japanese Prime Minister Fumio Kishida visited the tsunami-wrecked Fukushima nuclear plant Sunday and said an impending release of treated radioactive wastewater into the Pacific Ocean cannot be postponed.

He said the move is safe but his government will do its utmost to support fishing communities from the potential impact of damaging rumors during the decades-long project.

Kishida made his trip hours after returning from a summit with U.S. and South Korean leaders at the American presidential retreat of Camp David. Before leaving Washington on Friday, Kishida said it is time to make a decision on the treated water's release date, which has not been set due to the controversy surrounding the plan.

Kishida on Sunday saw wastewater filtering and dilution facilities and met with the plant and company executives. He told reporters that he confirmed their commitment to safely carrying out the upcoming water discharge. To make room for new facilities needed for the progress of the decommissioning, the treated water needs to be disposed of and tanks removed to make room.

The treated water discharge “by no means can be postponed for the decomissioning and Fukushima's recovery,” Kishida said.

He said he hoped to meet with representatives of fisheries organizations on Monday before his ministers decide the start date at a meeting next week. It is widely expected to be the end of August.

Kishida said the water release is a long-term project and that he is aware of the importance of recognizing the concerns and needs of local fishing groups. “I hope to convey the government position directly to the fisheries representatives,” he said.

Since the government announced the release plan two years ago, it has faced strong opposition from Japanese fishing organizations, which worry about further damage to the reputation of their seafood as they struggle to recover from the accident. Groups in South Korea and China have also raised concerns, turning it into a political and diplomatic issue.

The government and the plant operator, Tokyo Electric Power Co., or TEPCO, say the water must be removed to make room for the plant’s decommissioning and to prevent accidental leaks from the tanks because much of the water is still contaminated and needs further treatment.

Japan has obtained support from the International Atomic Energy Agency to improve transparency and credibility and to ensure the plan by TEPCO meets international safety standards. The government has also stepped up a campaign promoting the plan’s safety at home and through diplomatic channels.

The IAEA, in a final report in July, concluded that the TEPCO plan, if conducted strictly as designed, will cause negligible impact on the environment and human health, encouraging Japan to proceed.

While seeking understanding from the fishing community, the government has also worked to explain the plan to neighboring countries, especially South Korea, to keep the issue from interfering with their relationship-building. Japan, South Korea and the U.S. are working to bolster trilateral ties in the face of growing Chinese and North Korean threats.

South Korean President Yoon Suk Yeol's government recently showed support for the Japanese plan, but he faces criticism at home. During a joint news conference at Camp David, Yoon said he backs the IAEA's safety evaluation of the plan but stressed the need for transparent inspection by the international community.

Kishida said Sunday that the outreach efforts have made progress, and that the decision will factor in safety preparations and measures for possible reputational damage to the fisheries. He said the government has provided scientific explanation to counter unscientific criticism, including from China.

A massive March 11, 2011, earthquake and tsunami destroyed the Fukushima Daiichi plant’s cooling systems, causing three reactors to melt and contaminating their cooling water. The water is collected, filtered and stored in around 1,000 tanks, which will reach their capacity in early 2024.

The water is being treated with what’s called an Advanced Liquid Processing System, which can reduce the amounts of more than 60 selected radionuclides to government-set releasable levels, except for tritium, which the government and TEPCO say is safe for humans if consumed in small amounts.

Scientists generally agree that the environmental impact of the treated wastewater would be negligible, but some call for more attention to dozens of low-dose radionuclides that remain in it.

Mari Yamaguchi, The Associated Press