CRIMINAL CAPITALI$M 

U.S. investigation report hits SEB, Swedbank and Danske Bank shares

By Simon Johnson and Colm Fulton
Tue, December 15, 2020


Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

By Simon Johnson and Colm Fulton

STOCKHOLM (Reuters) - The Department of Justice (DOJ) and FBI are investigating SEB, Swedbank and Danske Bank over possible breaches of U.S. anti-money laundering regulations and fraud, Swedish newspaper Dagens Industri reported on Tuesday, sending the banks' shares lower.

Sweden had received requests for help from U.S. authorities investigating a Baltic money-laundering scandal that has already led to local fines for Swedbank, Danske and SEB, the newspaper reported.

The banks were being investigated by the DOJ, the FBI and federal police and a federal prosecutor in New York over possible fraud and breaches of anti-money laundering regulations, it added.

Although the banks have admitted to probes by U.S authorities over the past year, the report is a reminder that the scandal could yield further - and potentially heftier - fines, after each lender was penalized by local regulators.

"We have previously communicated, for instance in connection with our latest quarterly report, that U.S authorities continue to investigate Swedbank's historic work against money-laundering and historic publication of information," Swedbank spokeswoman Unni Jerndal said in response to the report on Tuesday.

SEB said it had received inquiries from U.S authorities, but was not aware of any allegations against it.

Danske Bank spokesman Stefan Singh Kailay said: "It is known that we are being investigated by authorities in Denmark, the U.S., Estonia and France, and we continue to be in close dialogue with them all."

The U.S. Department of Justice - which can also speak for the FBI - declined to comment.

"While all three banks have previously disclosed ongoing AML investigations by 'U.S. authorities', (the) FBI's involvement and 'fraud' appear to be new," Credit Suisse said in a note.

Shares in all three banks were down, with Swedbank off 7.7%, SEB 5.6% lower and Danske Bank down 3.3%.

"I wouldn’t say we are in a very different position compared to before the news broke … I think it's more of a reminder of the potential costs of the scandal," said Robin Rane, an analyst at Kepler Cheuvreux.

While local fines for lax money laundering controls in the Baltics have been hefty, they could be dwarfed by any punishment meted out by U.S. authorities.

Deutsche Bank was fined $7.2 billion and Britain's Barclays $2 billion over the sale of toxic mortgage debt in the run up to the financial crisis of 2008-2009.

And this year, U.S. bank Wells Fargo agreed to pay $3 billion to resolve criminal and civil probes into fraudulent sales practices.

Rane said Kepler Cheuvreux estimates additional fines of$441.84 million for Swedbank and $3.27 billion for Danske.

BALTIC SCANDAL

The scandal first surfaced in 2018 when Danske admitted that suspicious payments totalling 200 billion euros ($243 billion)from Russia and elsewhere flowed through its branch in Estonia.

It spread to Sweden, where Swedbank was fined a record 4 billion Swedish crowns ($477 million) by the country's Financial Supervisory Authority over flaws in its anti-money-laundering work and for withholding information from authorities.

Swedbank lost a third of its market value in 2019.

SEB was fined 1 billion crowns for failures in compliance and governance in relation to anti-money laundering controls in the Baltics.

Swedbank and SEB have both said previously that U.S. authorities were looking at their activities in the Baltic, but not given further details.

Danske Bank said in its 2019 report that it was under investigation by the U.S. DOJ and the U.S. Securities and Exchange Commission.

($1 = 0.8240 euros)

($1 = 8.3740 Swedish crowns)

($1 = 6.1207 Danish crowns)

(Reporting by Colm Fulton, Simon Johnson Supantha Mukherjee, Johannes Hellstrom and Helena Soderpalm in Stockholm, Jacob Gronholt-Pedersen in Copenhagen and Michelle Price in Washington; Editing by Johan Ahlander, Alexander Smith and Bernadette Baum)

CRIMINAL CAPITALI$M

Uber Fined $59M In California Over Refusal To Share Information On Sexual Assaults

Aditya Raghunath
Mon, December 14, 2020,


Ride-hailing company Uber Technologies Inc (NYSE: UBER) was fined $59 million in California on Monday for failure to comply with administrative laws regarding sexual assault and sexual harassment claims.

What Happened: The California Public Utilities Commission (CPUC) found the company’s response to questions about a U.S. Safety Report it released in 2019 unsatisfactory. The regulator also mandated that the company will still have to answer certain outstanding questions about passenger safety and earlier incidents of assaults.

Failure to comply with the regulatory instructions could lead to the cancelation of Uber's operating license in the state of California.


The ride-hailing company had earlier dodged many of the regulator’s questions, citing a privacy risk for the individuals directly connected to any incidents.

In January, the judge declined to accept Uber’s defense and suggested that the company could submit the response under a seal to maintain confidentiality. Uber continued to hold its stand, which ultimately resulted in the hefty penalty on Monday.

Why Does It Matter: Considering the confidentiality factor, the Judge presiding over the case suggested the use of unique identifiers instead of the name in order to protect the identity of the victims.

The $59 million penalty was affixed based on a $7,500 fine for each time the company failed to answer questions.

"Uber is a billion-dollar business that can easily afford to pay the $59,085,000.00 penalty," the judge remarked.

"Even during a pandemic where ridership has undoubtedly declined, Uber’s audited and certified revenues are substantial enough that the penalty amount imposed by this decision does not run afoul of the constitutional limitation against excessive fines."

The U.S. Safety report released in 2019 highlighted over a thousand instances of sexual assaults involving its customers and Uber drivers.

CRIMINAL CAPITALI$M

Singapore’s Lim Family, BP Sued for $313 Million on Oil Deals

Alfred Cang, Sun, December 13, 2020


(Bloomberg) -- Bank of China Ltd. has sued BP Plc in Singapore over its alleged role in fabricating oil deals with collapsed trader Hin Leong, in the latest effort by a creditor to recover losses after one of the biggest trading scandals in decades.

The Chinese bank requested that BP repay $125.7 million that it withdrew from the lender earlier this year based on sales of gasoil cargoes to Hin Leong, according to documents provided by the Supreme Court of Singapore. The deals were part of “fictitious purchase scheme conspiracy” to maintain Hin Leong’s liquidity since no real transactions took place, the bank said.

The lender also demanded $187.2 million from Hin Leong Trading Pte’s founder, Lim Oon Kuin, and his two children, the documents showed. The total sum includes the deals linked to BP and some other overdue payments on short-term loans, or letters of credit.

BP strongly refutes the allegations by Bank of China and will defend its position, the company said in a statement, without elaborating. Bank of China and the Lim family haven’t replied to emails seeking comments. Lim has earlier denied forging documents in a case brought by HSBC Holdings Plc, saying they were “mistakenly” issued.

Singapore, a major-oil trading hub, was shook by defaults and alleged fraud this year, roiling lenders who finance the opaque world of commodities trading in the city state. While the main protagonists were medium-sized trading firms such as Hin Leong, some leading global firms have also been ensnared in the debacle.

It’s not the only hit Bank of China has taken this year on oil. Earlier this year it agreed to repay some investors after one of its oil-linked trading products collapsed amid a plunge crude prices.

Hin Leong’s creditors, which also include HSBC and Singapore’s DBS Group Holdings Ltd., are fighting to recover funds from the insolvent firm, which has $3.5 billion in outstanding debt. Bank of China’s case, filed in late November, came after HSBC and the trader’s court-appointed managers PricewaterhouseCoopers started taking legal action against the Lim family.

Simultaneous Sale

The disputed gasoil deals took place in the first two months of this year. BP withdrew a total of $125.7 million on three letters of credit in early February from Bank of China, the court document showed. Hin Leong purchased a combined 1.5 million barrels of gasoil from BP in the deals and the oil major was able to present documents to prove the authenticity of the trades.

The bank was later informed by Hin Leong’s judicial managers that these trades were fabrications backed by non-existent cargoes financed by at least 27 letters of credit, including the three from Bank of China. The suit alleges that Hin Leong was able to maintain a semblance of financial stability and liquidity by selling and repurchasing forged cargoes backed by letters of credit worth $624 million.

“HLT fabricated documents on a massive scale,” Bank of China said in its suit. “The forged documents enabled HLT to mislead banks into extending financing to it and also acted as supporting documentation for fictitious gains or profits.”

Bank of China cited the court-appointed manager as saying that the trading firm sold gasoil to BP, which the oil major then sold back to Hin Leong at a higher price. Given the gap between the sales price and purchase prices and the short time period between the deals, it appears that the transactions were intended solely to provide liquidity for Hin Leong, the bank said, citing the appointed managers.

Bank of China claimed that it wasn’t aware of the “simultaneous sale” and buy-back transactions, alleging that documents were forged to “induce” the bank to make payments. It wouldn’t have made payments if it had known that the representations were false, it said.

CRIMINAL CAPITALI$M

Australia trial of Citi, others due in 2022, seven years after capital raising

SYDNEY, Dec 15 (Reuters) - Citigroup Inc and other finance companies and executives will likely face trial in Australia in 2022, people familiar with the matter said on Tuesday, seven years after a share sale they are accused of colluding on.

Citi, Deutsche Bank AG, the Australia and New Zealand Banking Group Ltd and six of their current and former staff are fighting charges of colluding as a cartel during a 2015 ANZ stock issue to withhold unwanted shares and prevent a price decline.

The legal proceedings, which could bring hefty fines and prison terms for the charged individuals, have drawn the attention of financial market participants around the world because of the implications for the way capital raisings are run.

All of the parties entered not guilty pleas last week.

The case has crawled through a Sydney court since the charges were brought in mid-2018, as lawyers for each defendant cross-examined prosecution witnesses and questioned whether regulators followed due process as they gathered evidence.

After the parties entered their pleas, the matter went before a Federal Court judge on Tuesday who said he hoped the trial would start in 2022, people familiar with the matter said. They declined to be identified.

A Federal Court spokesman was not immediately available for comment.

The matter is next due in Federal Court for an administrative hearing in February. (Reporting by Byron Kaye Editing by Robert Birsel)

CRIMINAL CAPITALI$M
German auditors supervisory boss leaves over Wirecard share deals

Mon, December 14, 2020

The logo of Wirecard AG is pictured at its headquarters in Aschheim


FRANKFURT (Reuters) - Germany's Federal Office of Economics and Export Control Bafa said on Monday that the head of the agency that regulates auditors in Germany had been relieved of his duties over personal dealings in Wirecard shares weeks before its collapse.

Bafa said the departure of Ralf Bose was intended to ensure the integrity of the regulator, Apas, until the facts of the case have been clarified.

There is no evidence that Bose broke any rules in trading shares of the payment processor while the federal agency was investigating the role of Wirecard auditor Ernst & Young (EY).


Bose told a parliamentary committee last week that he had dealt in Wirecard shares shortly before its collapse, buying them on Apr. 28 and selling them on May 20.

Reuters was not immediately able to contact Bose.

EY audited Wirecard's accounts for years until the company imploded following the discovery of a 1.9 billion euro ($2.3 billion) hole in its accounts.

The Wirecard case has become an embarrassment for German officials and authorities, who have been accused of failing to sufficiently monitor the company, which was once worth $28 billion and was widely praised as a rare German tech champion.

(Reporting by Hans Seidenstücker and Christian Krämer; Writing by Arno Schuetze; Editing by Alexander Smith)

CRIMINAL CAPITALI$M

Irish watchdog fines Twitter in landmark for EU data privacy regime

Tue, December 15, 2020

DUBLIN, Dec 15 (Reuters) - Ireland's data regulator has fined Twitter 450,000 euros for a bug that made some private tweets public, the regulator said on Tuesday, in the first sanction against a U.S. firm under a new European Union data privacy system.

The EU's General Data Protection Regulation’s (GDPR) "One Stop Shop" regime makes Ireland's Data Protection Commission lead regulator of Twitter, Facebook, Apple and Google in the bloc, due to the location of their EU headquarters.

GDPR has been in force since 2018, but the Twitter case is the first using a new dispute resolution system under which one lead national regulator makes a decision before consulting with the other EU national regulators.


Some European Union regulators objected to Ireland's preliminary Twitter ruling when it was issued in May, triggering a referral to the dispute resolution body, the European Data Protection Board to secure a two-thirds majority among member states.

The Twitter fine relates to a 2019 probe into a bug in its Android app, where some users' protected tweets were made public.

In particular it was levied due to Twitter's "failure to notify the breach on time to the DPC and a failure to adequately document the breach," the Data Protection Commission said in a statement.

The Irish regulator, which has more than 20 major inquiries into U.S technology firms open, has the power to impose fines for violations of up to 4% of a company's global revenue or 20 million euros ($22 million), whichever is higher.

CRIMINAL CAPITALI$M

China Fines Alibaba, Tencent Unit Under

Anti-Monopoly Laws

STATE MONOPOLY CAPITALISM NOT COMMUNISM

Coco Liu and Shiyin Chen
Mon, December 14, 2020, 


(Bloomberg) -- China’s antitrust watchdog fined Alibaba Group Holding Ltd. and a Tencent Holdings Ltd. unit over a pair of years-old acquisitions and said it’s reviewing an impending Tencent-led merger, signaling Beijing’s intention to tighten oversight of internet sector deals.

The State Administration for Market Regulation said Monday it’s reviewing the combination of DouYu International Holdings Ltd. with Huya Inc., which could create a Chinese game streaming leader akin to Amazon’s Twitch. It fined Alibaba 500,000 yuan ($76,500) for failing to seek approval before increasing its stake in department store chain Intime Retail Group Co. to 73.79% in 2017, while China Literature Ltd., the e-books business spun off by Tencent, was also censured over a previous deal, according to a statement.

The penalties come after regulators last month declared their intention to increase scrutiny of China’s largest tech corporations with new anti-monopoly rules. Beijing in November unveiled draft regulations that establish a framework for curbing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors. Shares in Alibaba and Tencent extended losses and closed down more than 2.5%.

“Investment and takeovers are important means for development and growth of internet companies,” the regulator said in the statement. “The above-mentioned companies have a large influence in the industry, carry out many investments and takeovers, have specialized legal teams and should be familiar with the regulations governing M&A. Their failure to actively declare has a relatively severe impact.”

Beijing’s heightened scrutiny is spurring fears of a broader crackdown on the country’s largest firms. On Monday, shares in No. 3 internet company Meituan plunged 3.8% after the People’s Daily wrote an editorial slamming the industry’s preoccupation with growing traffic and volumes in areas such as grocery delivery, at the expense of real scientific innovation.

China’s two largest corporations are also its most acquisitive, using scores of deals to expand into adjacent fields and groom some of the country’s most promising startups.Alibaba had led a $2.6 billion buyout of Intime as part of efforts to develop new business models that combine e-commerce with brick-and-mortar retailing. China Literature agreed in 2018 to buy New Classics Media for as much as 15.5 billion yuan to expand in filmed content.

The companies had failed to seek approval for the deals, which aren’t deemed anti-competitive, the antitrust regulator said Monday. China Literature said in a statement that it has been actively working with regulators on compliance, while Alibaba representatives didn’t immediately respond to requests for comment.

What Bloomberg Intelligence Says:

Alibaba’s ability to strengthen its domestic e-commerce ecosystem through M&A may be significantly weakened on rising anti-monopoly scrutiny, underlined by a 500,000 yuan fine by the State Administration for Market Regulation on Monday for failing to seek approval for its stake acquisitions of Intime Retail in 2014-18. While the amount is immaterial to Alibaba, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in future.

-- Vey-Sern Ling and Tiffany Tam, analysts

Huya in October agreed to buy DouYu in an all-share deal and Tencent, which currently owns stakes in both companies, was expected to hold about 68% of the merged business’s voting shares. That would have given the WeChat operator control over the leader in the live-streamed gaming market, estimated to generate 30 billion yuan in revenue this year, according to the latest numbers from iResearch.

An affiliate of SF Holding Co. was also fined for not declaring a takeover of a competitor, Monday’s statement showed.

“Despite its relative modest amount, the penalty announced today has a symbolic importance,” said Scott Yu, an antitrust lawyer with Beijing-based Zhong Lun Law Firm. “The announcement, together with the draft antitrust guidance unveiled in November, signals that Beijing will pay close attention to the monopolistic status of Chinese internet companies.”

The Era of State-Monopoly Capitalism - Tribune

Jun 7, 2020 — In the US, the average worker has been no better off than they were in 1979 and inequality has reached near-unprecedented levels. Throughout ...

Chapter 4: On the Concept of State-Monopoly Capitalism

libcom.org › library › economics-politics-and-the-age-...

Jul 28, 2005 — Capitalism is pleaded by monopolies and in large part determined by them. The state, whose function is to protect the social structure, is thus the state of monopoly capital. This is by no means a new phenomenon in capitalist society: it has always been a feature of capitalism, if not as pronounced in the past.

GREEN CAPITALI$M

Vegan Restaurant Chain By Chloe Files for Bankruptcy, Plans Sale

Claire Boston

Mon, December 14, 2020, 

(Bloomberg) -- By Chloe, the fast-casual chain known for its vegan burgers and salads, filed for Chapter 11 bankruptcy with plans to sell itself after the Covid-19 pandemic hampered liquidity.

Since February, By Chloe has seen its revenue drop 67%, and the chain was forced to lay off or furlough more than half its staff. Three of its locations, including its original restaurant in the West Village, remain closed while others are operating at reduced capacity.

A group of investors have agreed to provide By Chloe with a $3.25 million debtor-in-possession loan to help the company keep operating in bankruptcy, according to court filings. The chain is seeking to sell itself by mid-February.

Prior to the pandemic, the chain operated 14 restaurants in the U.S. and was planning to add two more. It also licensed its names to operators who opened locations in Toronto and London, according to court papers.

New York-based By Chloe was founded in 2015 by celebrity chef Chloe Coscarelli and Samantha Wasser with a single location in the West Village. The restaurant opened as vegan eating was transitioning from a health-food niche to the culinary mainstream and drew lines out the door.

Parent company BC Hospitality Group Inc. listed assets of $10 million to $50 million and liabilities of $1 million to $10 million in its petition.

Coscarelli gained fame for her vegan recipes after winning an episode of the Food Network’s “Cupcake Wars” a decade ago. She left the chain in 2017 after restaurant group ESquared Hospitality sought to have her removed and an arbitrator agreed.

The case is BC Hospitality Group Inc., 20-13103, United States Bankruptcy Court for the District of Delaware. To view the docket on Bloomberg Law, click here.

An alternate savanna

Animals are back at Gorongosa National Park after civil war, but the savanna community doesn't look quite look like how it used to

UNIVERSITY OF CALIFORNIA - SANTA BARBARA

Research News

 

When civil war broke out in Mozambique more than 40 years ago, it largely spelled doom for animals in Gorongosa National Park, a 1,500-square-mile reserve on the floor of the southern end of the Great African Rift Valley, in the heart of the country. As the decades-long fighting spilled over into the reserve, many of the creatures became casualties of the conflict.

Throughout the war and even for some time after, food insecurity drove people to kill the animals to feed themselves. The hunting and poaching were hardest on the large mammals.

"More than 90% of the large mammals in the park were wiped out," said UC Santa Barbara ecologist Kaitlyn Gaynor, a postdoctoral researcher at UCSB's National Center for Ecological Analysis and Synthesis (NCEAS). After the war, a massive recovery effort was launched to repair and restore the park in the hopes that the animals would make a comeback.

With the park now three decades post-war, it appears the animal populations have recovered. While some have been reintroduced, most have simply rebounded from remnant post-war populations thanks to ongoing conservation efforts.

But for all the growing abundance in animals in the park, questions about the ecological consequences of the war remained for Gaynor and her team, which included coauthor Josh Daskin (U.S. Fish and Wildlife Service), Lindsey Rich (California Department of Fish and Wildlife and senior author Justin Brashares (UC Berkeley).

"How similar is this new system to pre-war conditions, or to African savannas that haven't seen this major shock?" These were the questions the researchers sought to address, using an array of 60 camera traps to document the comings and goings of the animals of Gorongosa.

Their results are published in the journal Animal Conservation.

Animal Crossing

"There are few places in the world that have had such a dramatic reset, where animals have been pretty much wiped out and then have come back," Gaynor said. "It looks a lot like it did before the war, if you look at just the numbers of total animals, or the number of species present throughout the landscape."

The researchers identified 38 species during the three months of their survey, which puts Gorongosa's biodiversity on par with other African savannas, such as the Moremi Game Reserve in Botswana's Okavango Delta and Serengeti National Park in Tanzania.

But that's where the similarity ends.

"When you take a closer look at the distribution of species, it's a bit out of whack," Gaynor said. The large herbivores that were dominant before the war -- iconic African animals like zebra, wildebeest and hippopotamus -- were rare. Large carnivores were rarer still, with only lions remaining after the war. The savanna now belonged to baboons, warthogs, bushbuck and especially waterbuck, which dominated the survey.

"Waterbuck have been reproducing exponentially," Gaynor said, adding that it remained to be seen whether the unchecked population might crash and stabilize, or if their dominance signaled a "new normal" for the park.

Additionally, in the first systematic study to focus on smaller predators in the park, the researchers also found a high diversity in mesopredators -- housecat sized animals such as civets, mongoose and genets -- which were widespread throughout the park.

"There may have been a 'mesopredator release,' where in the absence of apex predators, the smaller predators' populations can grow because they're not facing competition, or they're not being preyed upon by the larger carnivores," Gaynor explained.

All of this is happening against a backdrop of a environmental change: Tree cover increased while the herbivores (especially elephants) were absent, but with their return and increased feeding pressure the landscape might shift again, potentially influencing which species may flourish. According to the researchers, a variety of tree cover is important for promoting the diversity of the animals.

Time will tell whether the distribution of species in this park will return to pre-war levels, or if they will level off at some other stable state. Since the study was conducted, African wild dogs and leopards were reintroduced in an effort to rebalance the ecosystem. The slow return of large carnivores is bound to shape the dynamics of Gorongosa's animal community, and the researchers are hoping to document those and other developments in future studies.

"Our study represents the first data point in what will hopefully be a long-term, ongoing camera trap monitoring effort," Gaynor said. "Gorongosa has been a really remarkable conservation success story, but I think it's also pretty interesting how the system has recovered asymmetrically. There remain questions about the causes and consequences of that asymmetry, and how the wildlife community is going to change in the future, given ongoing transformations to the landscape."

###

What happens when rain falls on desert soils? 

An updated model provides answers

DESERT RESEARCH INSTITUTE

Research News

 

IMAGE: DESERT RESEARCH INSTITUTE (DRI) SCIENTIST YUAN LUO STANDES NEAR A WEIGHING LYSIMETER AT DRI'S SEPHAS LYSIMETER FACILITY IN BOULDER CITY, NEV. NOVEMBER 2020. view more 

CREDIT: ALI SWALLOW/DRI

Las Vegas, Nev. (December 14, 2020) - Several years ago, while studying the environmental impacts of large-scale solar farms in the Nevada desert, Desert Research Institute (DRI) scientists Yuan Luo, Ph.D. and Markus Berli, Ph.D. became interested in one particular question: how does the presence of thousands of solar panels impact desert hydrology?

This question led to more questions. "How do solar panels change the way water hits the ground when it rains?" they asked. "Where does the water go? How much of the rain water stays in the soil? How deep does it go into the soil?"

"To understand how solar panels impact desert hydrology, we basically needed a better understanding of how desert soils function hydraulically," explained Luo, postdoctoral researcher with DRI's Division of Hydrologic Sciences and lead author of a new study in Vadose Zone Journal.

In the study, Luo, Berli, and colleagues Teamrat Ghezzehei, Ph.D. of the University of California, Merced, and Zhongbo Yu, Ph.D. of the University of Hohai, China, make important improvements to our understanding of how water moves through and gets stored in dry soils by refining an existing computer model.

The model, called HYDRUS-1D, simulates how water redistributes in a sandy desert soil based on precipitation and evaporation data. A first version of the model was developed by a previous DRI graduate student named Jelle Dijkema, but was not working well under conditions where soil moisture levels near the soil surface were very low.

To refine and expand the usefulness of Dijkema's model, Luo analyzed data from DRI's SEPHAS Lysimeter facility, located in Boulder City, Nev. Here, large, underground, soil-filled steel tanks have been installed over truck scales to allow researchers to study natural water gains and losses in a soil column under controlled conditions.

Using data from the lysimeters, Luo explored the use of several hydraulic equations to refine Dijkema's model. The end result, which is described in the new paper, was an improved understanding and model of how moisture moves through and is stored in the upper layers of dry desert soils.

"The first version of the model had some shortcomings," Luo explained. "It wasn't working well for very dry soils with volumetric water content lower than 10 percent. The SEPHAS lysimeters provided us with really good data to help understand the phenomenon of how water moves through dry soils as a result of rainfall and evaporation."

In desert environments, understanding the movement of water through soils is helpful for a variety of practical uses, including soil restoration, erosion and dust management, and flood risk mitigation. For example, this model will be useful for desert restoration projects, where project managers need to know how much water will be available in the soil for plants after a desert rainstorm, Berli said. It is also a key piece of the puzzle needed to help answer their original question about how solar farms impact desert hydrology.

"The model is very technical, but all of this technical stuff is just a mathematical way to describe how rainwater moves in the soil once the water hits the soil," Berli said. "In the bigger picture, this study was motivated by the very practical question of what happens to rainwater when falling on solar farms with thousands and thousands of solar panels in the desert - but to answer questions like that, sometimes you have to dig deep and answer more fundamental questions first."

CAPTION

Scientists Markus Berli (left) and Yuan Luo (right) from the Desert Research Institute (DRI) examine soils at DRI's weighing lysimeter facility in Boulder City, Nevada.

Additional information:

This study was funded by the DRI Foundation Innovation Research Program, the National Science Foundation, and the U.S. Army Corps of Engineers. Rose Shillito, Ph.D. (DRI/ACOE) and Nicole Damon (DRI) also contributed to the success of this project.

The full text of the paper "Modeling near-surface water redistribution in a desert soil", is available from Vadose Zone Journal: https://acsess.onlinelibrary.wiley.com/doi/10.1002/vzj2.20081

To learn more about DRI's SEPHAS Lysimeter facility, please visit: https://www.dri.edu/sephas/lysimeters/

The Desert Research Institute (DRI) is a recognized world leader in basic and applied interdisciplinary research. Committed to scientific excellence and integrity, DRI faculty, students, and staff have developed scientific knowledge and innovative technologies in research projects around the globe. Since 1959, DRI's research has advanced scientific knowledge, supported Nevada's diversifying economy, provided science-based educational opportunities, and informed policy makers, business leaders, and community members. With campuses in Reno and Las Vegas, DRI serves as the non-profit research arm of the Nevada System of Higher Education. For more information, please visit ?http://www.dri.edu.

CAPTION

DRI scientists Yuan Luo (left) and Markus Berli (right) conducting research at DRI's SEPHAS Lysimeter facility in Boulder City, Nev. November 2020.

Success in the Amazon

A unique public-private initiative has reduced deforestation in the Amazon for soy farming, highlighting opportunities for similar efforts across the tropics

UNIVERSITY OF CALIFORNIA - SANTA BARBARA

Research News

 

In 2006, Greenpeace launched a campaign exposing deforestation caused by soy production in the Brazilian Amazon. In the previous year, soy farming expanded into more than 1,600 square kilometers of recently cleared forests. The destruction, they said, had to stop.

In response, major soy companies in the region reached a landmark agreement as signatories to the Amazon Soy Moratorium (ASM), pledging not to purchase crops grown on recently cleared land. Deforestation fell in the following years, but no one had measured the moratorium's aggregate impact.

Now, assistant professor Robert Heilmayr and his colleagues at the University of Wisconsin Madison have quantified the ASM's effects and documented how it achieved its success. The researchers found that the agreement prevented thousands of square kilometers of deforestation over its first decade. What's more, the policy did not appear to hamper agricultural growth or push deforestation to other sectors or regions. The study, funded by the Gordon and Betty Moore Foundation and the Norwegian International Climate and Forest Initiative, appears in Nature Food.

"Over one decade the ASM saved 18,000 square kilometers of forest," said Heilmayr, an environmental economist in the Environmental Studies Program and at the Bren School of Environmental Science & Management. "This is an area bigger than the state of Connecticut."

Around the same time the Amazon Soy Moratorium was adopted, the Brazilian government was expanding its regulations against deforestation. The policies covered the legal Amazon, a larger administrative area that includes the Amazon biome and parts of the Cerrado biome - a vast region of tropical forest and savannah southwest of the rainforest.

Fortunately, the moratorium had three key features the team could use to distinguish its effects from these government actions: It went into effect in May 2006; it was restricted to the Amazon biome; and it applied specifically to land cleared for soy production. Heilmayr broke down how these factors directed the team's analysis. "We compared deforestation across ecological biomes after the adoption of the ASM, and across locations with different suitability for soy production, to isolate the impact of the ASM," he explained.

The authors found a reduction in deforestation above and beyond what they could attribute to government policies alone. They estimate that between 2006 and 2016, deforestation in soy-suitable portions of the Amazon was 35% lower than what would have occurred without the ASM.

"Our study is important because, for the first time, we were able to control for other policies and factors outside the ASM to quantify its unique contribution to forest conservation," explained coauthor Holly Gibbs, associate professor at UW Madison.

Scientists and conservationists were concerned the ASM might prompt soy farmers to begin planting in pastures, thereby pushing ranchers to clear more forest, essentially passing the buck to a different sector. However, the study suggests this did not happen. Gibbs explained it's likely due, at least in part, to similar campaigns aiming to stem deforestation in the cattle sector. These efforts began in 2008 and resulted in similar zero-deforestation agreements in the cattle industry. The team also saw little evidence that the ASM was pushing deforestation into the nearby Cerrado biome, though this risk continues to be a concern.

Although some Brazilian policymakers worry that strict environmental commitments may weaken economic growth, soy production in the Amazon has continued to expand since adoption of the ASM. It increased from 4.9 million tonnes of production in 2006 to 17.2 million tonnes in 2019. Ultimately, the moratorium has demonstrated that soy expansion is possible without deforestation, Gibbs explained.

To better understand how this type of conservation policy could be applied elsewhere, the team sought to pinpoint exactly what contributed to the moratorium's effectiveness. "One of the strengths of the Amazon Soy Moratorium is that it was a nearly unanimous decision among all the soy buyers in that sector," said Heilmayr. The signatories account for about 90% of all soy purchases in the region, and this high market share ensured that the agreement would transform agricultural practice. If farmers wanted to sell their soy, they'd have to abide by the policies it set out.

Another factor that contributed to the ASM's success was the cooperation of private companies, non-profit NGOs and government agencies. Corporate participation adds a direct market penalty that discourages deforestation, Heilmayr explained. Meanwhile, the involvement of environmental organizations like Greenpeace, The Nature Conservancy and World Wildlife Fund boosts confidence that the agreement isn't merely a form of greenwashing. Finally, public investments in satellite monitoring systems and local property registries provide the backbone for monitoring and enforcing the moratorium. Heilmayr believes the interplay between businesses, NGOs and government actors has lent greater credibility to the initiative in the eyes of the global community.

In 2016, the parties involved chose to renew the ASM indefinitely. While this represents a major victory for sustainable agriculture, the agreement's continuing success still faces obstacles. Some farmer representatives have raised objections to the ASM, saying that requirements that go beyond the country's forest laws amount to a violation of Brazil's sovereignty. However, the researchers note that the ASM also ensures that the Amazon soy sector maintains access to valuable international markets, according to industry trade groups, and at low cost to Amazon soy farmers.

Thanks to the ASM, almost no soy coming from the Amazon currently contributes to deforestation. Research suggests that 98.6% of all soy grown in the region complies with the moratorium.

Photo Credit: LISA RAUSCH

"Very few Amazon soy farmers have land suitable for soy that they could clear in compliance with Brazil's Forest Code," said coauthor Lisa Rausch, a researcher at UW Madison. "The ASM really serves to reduce the incentives to clear land on non-soy farms and in unregistered areas for future soy production."

The current political, economic and environmental zeitgeist highlights the benefits of the ASM's unique mix of public and private policymaking. Deforestation rates are now double what they were at their low point in 2012, though they're still dramatically lower than what they were back in 2003 and 2004. This uptick may reflect efforts by the Bolsonaro government to weaken the country's environmental protections.

Heilmayr hopes "the interplay between private and public policymaking can make environmental gains more resilient - consistent global demand for zero-deforestation soy will continue to discourage new deforestation despite the weakening of public policies."

As a growing number of major companies pledge to reduce their environmental impacts around the world, the question arises of how to translate these lofty goals into concrete actions. "The ASM is a nice example of what is possible when companies take aggressive, transparent steps towards supply chain sustainability," Heilmayr said. "It provides hope that private actors can trigger meaningful improvements in the way society interacts with our environment."

Study: Oregon's Western Cascades watershed to experience larger, more frequent fires

PORTLAND STATE UNIVERSITY

Research News

 

IMAGE: A VIEW OF THE RIVERSIDE FIRE FROM LA DEE FLATS ON THE MT. HOOD NATIONAL FOREST ON SEPT. 9, 2020. THE FIRE ENCOMPASSED OVER 138,000 ACRES, LARGELY ON THE MT.... view more 

CREDIT: U.S. FOREST SERVICE - PACIFIC NORTHWEST REGION

The Clackamas Basin rarely experiences the intense fire activity that burned in the watershed during the Labor Day fires, but new research out of Portland State University shows that wildfires like the Riverside Fire, which grew to 138,000 acres within days, could become more common under a warming climate, even under non-extreme wind conditions.

The study found that wildfire hazard in the Clackamas Basin, which is the second largest source of drinking water for the Portland metro area, will likely increase by mid-century. Projected changes in temperature and relative humidity are expected to lead to longer fire seasons and more severe fire weather in Oregon's Western Cascade mountains, which in turn will result in larger, more frequent fires.

"Because of shifts in climate, the scenarios that would create extreme fire events all become a little more plausible," said Andy McEvoy, the study's lead author and a graduate student in environmental science and management. "There will be that many more days under which those components of a fire -- ignition, weather and fuel -- can align in a terrible way."

The group of researchers simulated four climate scenarios from 2040-2069, representing a range of plausible changes in temperature and humidity.

The simulations showed that the fire season increased from as little as eight days to as much as 32 days. The projected annual average area burned increased significantly by 50% under the least impactful scenario (the coolest and wettest of the four) and as much as 540% under the most extreme scenario (the hottest and driest of the four).

"We don't make the case that one future is more likely than the other, but it helps bracket the plausible outcomes for planning purposes," said McEvoy, who works as a research fellow in the U.S. Forest Service's Pacific Northwest Research Station. "The future is very uncertain and if land and resource managers plan just for the average case, their plans are not going to be robust in the face of those worst-case scenarios."

The researchers, who worked closely with the Clackamas River Water Providers and the Clackamas County Water and Environment Services, said the findings provide regional managers and planners with a tool to develop climate adaptation and risk mitigation strategies. Given the wide range of plausible future wildfire hazards, robust adaptation plans will be ones that maintain essential ecosystem services across the broadest range of scenarios by balancing land use management, fire suppression, and community preparedness strategies.

These efforts could range from designing and testing the effectiveness of fuel breaks -- breaks in vegetation that can help firefighters control the spread of fire and protect homes and resources -- to identifying susceptible communities and planning evacuations in the event of future extreme wildfires. In those cases, like the Riverside Fire, fuel breaks would not be successful and the only sensible strategy would be timely, safe evacuations.

"They're planning for an uncertain future," McEvoy said. "They have to plan using all available tools and adapt to events as they occur."

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The study's findings are published in the journal Fire. Co-authors include Max Nielsen-Pincus, associate professor of environmental science and management; Andrés Holz, associate professor of geography; Arielle Catalano, a former postdoctoral scholar in PSU's geography department; and Kelly Gleason, assistant professor of environmental science and management.

One's trash, another's treasure: fertilizer made from urine could enable space agriculture

Researchers at Tokyo University of Science devise a new electrochemical technology to manufacture ammonia-based fertilizer from urea

TOKYO UNIVERSITY OF SCIENCE

Research News

 

IMAGE: MANURING WITH MAN URINE: RESEARCHERS FROM JAPAN ELECTROCHEMICALLY CREATE AMMONIA FROM URINE TO GROW PLANTS IN SPACE view more 

CREDIT: FREEPIK

In extreme environments, even the most ordinary tasks can seem like unsurmountable challenges. Because of such difficulties, humanity has, for the most part, settled on grounds that were favorable for harvesting crops, herding cattle, and building shelters. But as we seek to expand the limits of human exploration, both on earth and in space, the people pioneering this search will undoubtedly face conditions that, for all intents and purposes, are not conducive to human habitation.

One of the foremost challenges facing any intended long-term settlement, be it in the Antarctic or on Mars (perhaps in the near future), is achieving some degree of autonomy, to enable isolated colonies to survive even in the event of a catastrophic failure in provisioning. And the key to achieving this autonomy is ensuring food sufficiency and self-sustenance. Unsurprisingly, therefore, space agricultural technology is one of the research topics currently being undertaken by the Research Center for Space Colony at Tokyo University of Science. The researchers here hope to spearhead the technological development for safe and sustainable space agriculture--with the aim of sustaining humans for a long time in an extremely closed environment such as a space station.

To this end, an innovative study was conducted by a team of Japanese researchers led by Junior Associate Professor Norihiro Suzuki from Tokyo University of Science--this study, published as a "Letter," made the front cover of the prestigious New Journal of Chemistry of the Royal Society of Chemistry. In this study, Dr. Suzuki and his team aimed to address the problem of food production in closed environments, such as those in a space station.

Realizing that farmers have used animal waste as fertilizer for thousands of years, as a rich source of nitrogen, Dr. Suzuki and his team have been investigating the possibility of manufacturing it from urea (the main component of urine), to make a liquid fertilizer. This would also simultaneously address the problem of human waste treatment or management in space! As Dr. Suzuki explains, "This process is of interest from the perspective of making a useful product, i.e., ammonia, from a waste product, i.e., urine, using common equipment at atmospheric pressure and room temperature."

The research team--which also includes Akihiro Okazaki, Kai Takagi, and Izumi Serizawa from ORC Manufacturing Co. Ltd., Japan--devised an "electrochemical" process to derive ammonium ions (commonly found in standard fertilizers) from an artificial urine sample. Their experimental setup was simple: on one side, there was a "reaction" cell, with a "boron-doped diamond" (BDD) electrode and a light-inducible catalyst or "photocatalyst" material made of titanium dioxide. On the other, there was a "counter" cell with a simple platinum electrode. As current is passed into the reaction cell, urea is oxidized, forming ammonium ions. Dr. Suzuki describes this breakthrough as follows, "I joined the 'Space Agriteam' involved in food production, and my research specialization is in physical chemistry; therefore, I came up with the idea of 'electrochemically' making a liquid fertilizer."

The research team then examined whether the cell would be more efficient in the presence of the photocatalyst, by comparing the reaction of the cell with and without it. They found that while the initial depletion of urea was more or less the same, the nitrogen-based ions produced varied both in time and distribution when the photocatalyst was introduced. Notably, the concentration of nitrite and nitrate ions was not as elevated in the presence of the photocatalyst. This suggests that the presence of the photocatalyst promoted ammonium ion formation.

Dr. Suzuki states, "We are planning to perform the experiment with actual urine samples, because it contains not only primary elements (phosphorus, nitrogen, potassium) but also secondary elements (sulfur, calcium, magnesium) that are vital for plant nutrition! Therefore, Dr. Suzuki and his team are optimistic that this method provides a solid basis for the manufacture of liquid fertilizer in enclosed spaces, and, as. Dr. Suzuki observes, "It will turn out to be useful for sustaining long-term stay in extremely closed spaces such as space stations."

Humans inhabiting Mars might still be quite a distant reality, but this study surely seems to suggest that we could be on a path to ensuring sustainability--in space--even before we actually get there!

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About The Tokyo University of Science

Tokyo University of Science (TUS) is a well-known and respected university, and the largest science-specialized private research university in Japan, with four campuses in central Tokyo and its suburbs and in Hokkaido. Established in 1881, the university has continually contributed to Japan's development in science through inculcating the love for science in researchers, technicians, and educators. With a mission of "Creating science and technology for the harmonious development of nature, human beings, and society", TUS has undertaken a wide range of research from basic to applied science. TUS has embraced a multidisciplinary approach to research and undertaken intensive study in some of today's most vital fields. TUS is a meritocracy where the best in science is recognized and nurtured. It is the only private university in Japan that has produced a Nobel Prize winner and the only private university in Asia to produce Nobel Prize winners within the natural sciences field.
Website: https://www.tus.ac.jp/en/mediarelations/

About Dr. Norihiro Suzuki from Tokyo University of Science

Dr. Norihiro Suzuki is a Junior Associate Professor at the Organization for Research Advancement, Research Institute for Science and Technology at Tokyo University of Science. He completed his undergraduate and postgraduate degree in chemistry at the University of Tokyo, eventually earning a doctorate degree. His research focuses on functional inorganic materials and their application to real-life problems. He also belongs to the Research Center for Space Colony, as well as the Photocatalysis International Research Center at Tokyo University of Science.