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The Labor Rights and Business Case for Factory Audits and Advising

by Guest Blogger for Shannon K. O'Neil
A worker holds part of a pair of trousers at PT Trisula Garmindo Manufacturing in Bandung, West Java province September 17, 2013. In PT Trisula International's hangar-sized factory outside the western Indonesian city of Bandung, hundreds of workers stitch together clothes for some of the world's top brands. Amid the clatter and hum of their machines are hopes for a renaissance that can restore Indonesia's place among Asia's big manufacturing economies, a status it lost in the mid-1990s. Picture taken September 17, 2013 (Reuters/Beawiharta). A worker holds part of a pair of trousers at PT Trisula Garmindo Manufacturing in Bandung, West Java province September 17, 2013. In PT Trisula International's hangar-sized factory outside the western Indonesian city of Bandung, hundreds of workers stitch together clothes for some of the world's top brands. Amid the clatter and hum of their machines are hopes for a renaissance that can restore Indonesia's place among Asia's big manufacturing economies, a status it lost in the mid-1990s. Picture taken September 17, 2013 (Reuters/Beawiharta).

Global trade and the supply chains that support it are undergoing a period of profound change. Supply chains face threats including a resurgence of protectionism, climate change, decaying infrastructure, and human rights abuses. The Development Channel’s series on global supply chains highlights experts’ analysis on emerging trends and challenges. This post is from Drusilla Brown, associate professor of economics at Tufts University and director of Tufts International Relations Program. 

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This Week in Markets and Democracy: Duterte Targets Critic, China’s Trade Ambitions, FCPA Uncertainty

by Shannon K. O'Neil
A police officer from the SWAT team stands guard during an anti-drugs operation in Mandaluyong, Metro Manila in the Philippines, November 12, 2016 (Reuters/Erik De Castro). A police officer from the SWAT team stands guard during an anti-drugs operation in Mandaluyong, Metro Manila in the Philippines, November 12, 2016 (Reuters/Erik De Castro).

Philippines’ Duterte Tries to Take Down Critic
Philippine President Rodrigo Duterte brooks no dissent. His latest backlash is against one of his most outspoken critics, Senator Leila de Lima. After she opened an inquiry into Duterte’s role in killings while he was a mayor, and urged the international community to investigate the over 1,500 alleged extrajudicial killings during his first four months in office, the president’s Senate allies ejected her as chair of the Justice Committee. The government is now accusing her of drug trafficking, bribery, and graft. If the case moves forward, De Lima could face up to thirty years in prison—effectively silencing Duterte’s opposition.

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This Week in Markets and Democracy: Zuma’s Corruption Woes, DRC Sanctions, Afrobarometer Report

by Shannon K. O'Neil
DATE IMPORTED:November 02, 2016Protestors call for the removal of President Jacob Zuma outside court in Pretoria, South Africa, November 2, 2016 (Reuters/Mike Hutchings). DATE IMPORTED:November 02, 2016Protestors call for the removal of President Jacob Zuma outside court in Pretoria, South Africa, November 2, 2016 (Reuters/Mike Hutchings).

Report May Bring Down South Africa’s President
New allegations may finally bring down teflon president Jacob Zuma. Despite his earlier legal protests, South Africa’s public protector’s office released a report suggesting that a wealthy family close to the president influenced government hires and used their ties to promote their private interests. It recommends opening a criminal investigation, a prelude to impeachment proceedings. While the African National Congress (ANC) party backed Zuma during a previous impeachment vote over the use of $16 million in state funds to renovate his private home, these new allegations are hurting him within his party. Already Zuma faces a no-confidence vote in parliament next week, and some ANC members are joining religious leaders, thousands of protestors, and forty South African CEOs in calling for his resignation.

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This Week in Markets and Democracy: Embraer Corruption Case, UK Anti-Slavery Law Neglected, Rule of Law Index

by Shannon K. O'Neil
Brazilian aircraft maker Embraer's CEO Frederico Curado (R) salutes workers next to an new Embraer E190-E2 during its unveil in Sao Jose dos Campos, Brazil, February 25, 2016. Brazilian planemaker Embraer SA is in early talks with Iran, with a focus on commercial aviation, following the end of international sanctions, Chief Executive Curado told journalists on Thursday (Reuters/Nacho Doce). Brazilian aircraft maker Embraer's CEO Frederico Curado (R) salutes workers next to an new Embraer E190-E2 during its unveil in Sao Jose dos Campos, Brazil, February 25, 2016. Brazilian planemaker Embraer SA is in early talks with Iran, with a focus on commercial aviation, following the end of international sanctions, Chief Executive Curado told journalists on Thursday (Reuters/Nacho Doce).

Brazil’s Plane Maker Fined in Bribery Case Spanning Five Continents
Brazilian aircraft manufacturer Embraer will pay $205 million to U.S. authorities, including $20 million for Brazil, for bribing officials in Saudi Arabia, Mozambique, and the Dominican Republic. U.S. prosecutors worked with their law enforcement counterparts around the world—including Brazil, Switzerland, Uruguay, France, and Spain—to bring the Foreign Corrupt Practices Act case (Embraer is a U.S.-listed company). The legal cooperation has gone both ways, as U.S.-gathered evidence has spurred additional investigations by Brazilian and Saudi authorities; thirteen employees were charged with bribery. Now India is looking into kickbacks from Embraer’s air force contracts. Expect more cross-border cooperation in global corruption cases.

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This Week in Markets and Democracy: BRICS Fund Infrastructure, France’s Corruption Trial, UK Takes on Kleptocrats

by Shannon K. O'Neil
Brazil's President Michel Temer, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping and South African President Jacob Zuma pose for a group picture during BRICS (Brazil, Russia, India, China and South Africa) Summit in Benaulim, in the western state of Goa, India, October 16, 2016 (Reuters/Danish Siddiqui). Brazil's President Michel Temer, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping and South African President Jacob Zuma pose for a group picture during BRICS (Brazil, Russia, India, China and South Africa) Summit in Benaulim, in the western state of Goa, India, October 16, 2016 (Reuters/Danish Siddiqui).

BRICS Fund Infrastructure
As commodity prices have plunged, global growth slowed, and geopolitical competition risen, the BRICS’ interests have diverged, making annual meetings of the five emerging economies more complicated. Last weekend’s get-together in Goa, India focused mostly on counterterrorism and the New Development Bank (NBD), a two-year old alternative to the World Bank and other Western-dominated institutions. Its focus is green and sustainable infrastructure, seeded with $100 billion in capital. At the BRICS Summit, leaders celebrated the NBD’s first $900 million in loans for renewable energy projects in Brazil, China, India, and South Africa, and promised to expand the banks portfolio tenfold by 2020. The NBD joins the new Beijing-led Asian Infrastructure Investment Bank (AIIB), which promises a similar capital base for a more traditional infrastructure-based projects. Together they could rival the World Bank’s lending power.

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This Week in Markets and Democracy: Study on Factory Labor, Thai Anticorruption Court, Afghanistan Aid

by Shannon K. O'Neil
A woman stitches leather gloves at the Pittards world class leather manufacturing company in Ethiopia's capital Addis Ababa, March 22, 2016. Picture taken March 22, 2016 (Reuters/Tiksa Negeri). A woman stitches leather gloves at the Pittards world class leather manufacturing company in Ethiopia's capital Addis Ababa, March 22, 2016. Picture taken March 22, 2016 (Reuters/Tiksa Negeri).

Why Trade Deals Matter for Workers Everywhere
The shift of low-skilled manufacturing jobs from industrialized to emerging economies helped lift millions out of poverty over the past few decades (even as it displaced Western workers). But a new study of Ethiopia’s growing manufacturing sector shows that while factory jobs raise wages throughout the economy, the benefits for workers are mixed. Compared to a control group of self-employed and informal sector workers, those employed in the new factories did not earn more and faced significantly higher health and safety risks—exposed to chemicals and injuries from unsafe working conditions. These findings show why trade agreements matter. By incorporating labor and environmental standards and mechanisms to enforce these rules, they can improve the livelihood of workers in all places.

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This Week in Markets and Democracy: Brazil’s Lula Charged, Thai Labor Case, Corporate Tax Battles

by Shannon K. O'Neil
Brazil's former president Luiz Inacio Lula da Silva attends an event with workers' unions leaders against the privatization of Brazilian state companies and against Brazil's interim President Michel Temer, in Rio de Janeiro, Brazil, June 6, 2016 (Reuters/Ricardo Moraes). Brazil's former president Luiz Inacio Lula da Silva attends an event with workers' unions leaders against the privatization of Brazilian state companies and against Brazil's interim President Michel Temer, in Rio de Janeiro, Brazil, June 6, 2016 (Reuters/Ricardo Moraes).

Brazil’s Lula Charged with Corruption
After months of speculation, Brazilian judge Sérgio Moro allowed bribery charges against former president Luiz Inácio Lula da Silva (Lula) to move forward. He is accused of accepting $1.1 million in improvements for his beachfront apartment from OAS, one of Brazil’s largest construction companies, in exchange for Petrobras contracts. Lula is the latest and most prominent figure to be charged in the Lava Jato investigations, joining dozens of other political and business leaders, including former lower house speaker Eduardo Cunha, former Worker’s Party (PT) treasurer João Vaccari Neto, and construction magnate Marcelo Odebrecht. Next up may be President Michel Temer, already named in Odebrecht’s plea bargain for soliciting illegal campaign contributions during the 2014 presidential election.

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This Week in Markets and Democracy: FIFA Investigations, Corruption in Romania and the Maldives, New South Sudan Report

by Shannon K. O'Neil
British comedian known as Lee Nelson (unseen) throws banknotes at FIFA President Sepp Blatter as he arrives for a news conference after the Extraordinary FIFA Executive Committee Meeting at the FIFA headquarters in Zurich, Switzerland July 20, 2015. World football's troubled governing body FIFA will vote for a new president, to replace Sepp Blatter, at a special congress to be held on February 26 in Zurich, the organisation said on Monday (Reuters/Arnd Wiegmann). British comedian known as Lee Nelson (unseen) throws banknotes at FIFA President Sepp Blatter as he arrives for a news conference after the Extraordinary FIFA Executive Committee Meeting at the FIFA headquarters in Zurich, Switzerland July 20, 2015. World football's troubled governing body FIFA will vote for a new president, to replace Sepp Blatter, at a special congress to be held on February 26 in Zurich, the organisation said on Monday (Reuters/Arnd Wiegmann).

FIFA Investigates Its Own Corruption
A year after the United States and Switzerland went after top FIFA officials on fraud, money laundering, and racketeering charges tied to a $150 million corruption scheme, soccer’s international governing body is taking actions itself. The federation fined former vice president Jeffrey Webb $1 million for accepting bribes and banned him for life from the sport. It also opened an investigation on former President Sepp Blatter and two top associates for bribery, corruption, and conflicts of interest, including adding several illegal provisions to their contracts—boosting their combined salaries to over $80 million, and guaranteeing them eight years of pay even if fired for just cause. FIFA’s new dynamism may begin to restore its tarnished reputation, and the information it uncovers could help U.S. and Swiss prosecutors with their own ongoing criminal cases.

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Managing the Unpredictable Risks in Supply Chains

by Guest Blogger for Shannon K. O'Neil
Firefighters extinguish a fire at a food and cigarette packaging factory outside of Dhaka, Bangladesh, September 10, 2016 (Reuters/Mohammad Ponir Hossain). Firefighters extinguish a fire at a food and cigarette packaging factory outside of Dhaka, Bangladesh (Reuters/Mohammad Ponir Hossain).

Global trade and the supply chains that support it are undergoing a period of profound change. Supply chains face threats including a resurgence of protectionism, climate change, decaying infrastructure, and human rights abuses. The Development Channel’s series on global supply chains will highlight experts’ analysis on emerging trends and challenges. This post is from Sang Kim, Associate Professor at Yale School of Management. 

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This Week in Markets and Democracy: Central America Takes on Corruption, Venezuela’s Protests, G20 Summit

by Shannon K. O'Neil
Venezuelans living in Mexico take part in a protest to demand a referendum to remove Venezuela's President Nicolas Maduro at Angel de la Independencia monument in Mexico City, Mexico, September 4, 2016 (Reuters/Edgard Garrido). Venezuelans living in Mexico take part in a protest to demand a referendum to remove Venezuela's President Nicolas Maduro at Angel de la Independencia monument in Mexico City, Mexico, September 4, 2016 (Reuters/Edgard Garrido).

Central America Takes on Corruption 
Central American judiciaries have been stepping up to fight corruption. Last year Guatemala’s attorney general’s office, working closely with UN-backed International Commission against Impunity in Guatemala (CICIG), took down then-President Otto Pérez Molina for stealing tens of millions of dollars in customs duties. Pressured by civil society, the Honduran government agreed to a similar Organization for American States (OAS)-backed body, the Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH), to investigate graft after $200 million disappeared from the country’s social security system. And El Salvador’s new Attorney General Douglas Meléndez, sworn in at the start of the year, is prosecuting several high-level officials and former officials with unexplained millions in their bank accounts. While this week’s asylum in Nicaragua for former Salvadorian President Mauricio Funes and his family is a potential setback, the cases themselves represent a sea change in justice for Central America’s Northern Triangle.

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