Disaster Capitalism, Other Worlds, Feb 2012

Disaster Capitalism in Post-Earthquake Haiti:
A Three-Part Series by Other Worlds
____________________________
February, 2012
Part 1:
“Best practices” and “exemplar communities”:
Ivory Tower Housing Solutions for Haiti
Weblink: http://www.otherworldsarepossible.org/another-haitipossible/“best-practices”-and-“exemplar-communities”-ivory-towerhousing-solutions-hai
Part 2:
“The Super Bowl of disasters”:
Profiting from Crisis in Post-Earthquake Haiti
Weblink:
http://www.otherworldsarepossible.org/another-haitipossible/%E2%80%9C-super-bowl-disasters%E2%80%9D-profiting-crisispost-earthquake-haiti
Part 3:
Business as Government:
Capitalizing on Disaster in Post-Earthquake Haiti
Weblink: http://www.otherworldsarepossible.org/another-haitipossible/business-government-capitalizing-disaster-post-earthquake-haiti
____________________________
You
can
access
all
of
Other
Worlds'
past
articles
regarding
post­
earthquake
Haiti
here:
http://www.otherworldsarepossible.org/haiti.
“Best practices” and “exemplar communities”:
Ivory Tower Housing Solutions for Haiti
Displaced Haitians march through a camp during a protest demanding better housing
policy. Photo by Ben Depp, www.bendepp.com.
Deepa Panchang
February 2, 2012
In a 2011 Forum on the Crisis of Housing in Haiti, a group of camp residents and
advocates asked “grassroots organizations and all other movements to mobilize with us
on the housing issue so that we can achieve this dream of justice and liberty.” Today,
with more than 500,000 people still living under sun-scorched tarps two years after the
earthquake of January, 2010, the Haitian housing rights movement continues to gain
urgency. Demanding comprehensive housing policy in the long term and decent, secure
housing in the short term, the groups that comprise the movement have created detailed
prescriptions for how to resolve the crisis. They are up against a lot, however, since most
entities in charge of housing have not sought to “mobilize with” the movement; rather,
they have come in with their own ideas.
The housing projects touted as the solutions to Haiti’s displacement crisis have foreign
corporations and academic institutions at the helm. The story of housing serves as a
revealing case study wherein foreigners with little understanding of Haitian needs are
designing the kinds of communities Haitians should live in. As the first in a series of
articles on disaster capitalism in Haiti, we go back to just months after the earthquake,
when the private sector was explicitly put in charge of developing some of Haiti’s only
formal housing plans. What transpired helps explain why so many earthquake victims
remain mired in desperation to this day.
^^^^^^
The Interim Haiti Reconstruction Commission, the group mandated with directing
reconstruction and co-led by Bill Clinton, failed to develop a plan for large-scale housing
provision before its mandate ran out this past October. Of the housing plans the group did
approve, the most prominent were turned over to a bevy of foreign, private entities. The
troubling flaw of this contracting and consulting scheme is that it is entirely
unaccountable to the Haitian people. The parties are not monitored by Haitians. Only
rarely do they involve Haitians in determining priorities, planning or implementing.
Foreigners decide what will be built or sold or given, and under what development
model. And in many cases, the crisis provides fodder for private entities, like universities,
to jump on a chance to engage academics in one country in designing essential elements
of life for another, while working hand-in-hand with the private sector.
One of the first proposals passed by the Interim Commission was a $2.4 million effort to
“Highlight Best Practices for Housing.” Public and private funding sources included the
Clinton Foundation, Inter-American Development Bank, the telephone company Digicel,
the large investment bank Deutsche Bank, and a Canadian NGO called OneX1.
The planners allocated the majority of the funding to the first of two project components,
a housing exposition for participants to “test and demonstrate innovative housing ideas.”
After delays, the expo transpired in June 2011, when Haitians had already spent a year
and a half under tarps waiting for new homes or assistance in fixing their old homes or
even better temporary shelter. Actual shelter for homeless people would have come many
steps, and many months or years, down the line from the expo. In the end, it didn’t matter
anyway, because no houses were built. As of this writing, the units that were built for the
expo remain on the site, with no plan for their utilization.[i]
In fact, according to news reports and our interviews, there had been no plan for how
designs would be chosen from the model homes and provided on a large scale (or on any
scale) to destitute people. The default assumption was that families would purchase their
own housing, most probably with subsidized bank loans. In the country with the lowest
per capita income in the hemisphere, the homes were to sell for upward of $5,000, with
many ranging higher than $10,000 and a few even more than $20,000.[ii] A 12-foot-by12-foot blue plastic box, not unlike many of the shelters seen in some of the camps, sold
for $7,500.[iii] One of the Clinton Foundation officials bluntly said, “This is a private
sector exposition, you’re seeing people here who are hopeful to make some money.”[iv]
A government engineer estimated that fully half of the model homes at the expo were not
resistant to earthquakes and hurricanes. One of the company reps said they do not need to
be tested for resistance to strong winds.[v]
A second component of the “Highlight Best Practices for Housing” project was the
creation of a model “exemplar” community with 125 units and a community center in
Zoranje, on the outskirts of Port-au-Prince. Deutsche Bank, in addition to providing
funding for the project, assisted in developing “new mortgage instruments” for future
housing via “experts from the Bank’s residential mortgage backed securities group.”
Essentially, Deutsche Bank has been developing strategies that make it easier for Haitian
banks to offer loans to potential home-buyers. Even with low interest rates, requiring
Haitian families to take out loans to purchase homes is predatory and, for most, would
guarantee a life of debt. The prospect sounds eerily familiar to the predatory lending that
took place in the US in the lead-up to the subprime mortgage crisis of the late 2000s,
when low-income families were trapped by housing loans they could never pay back and
were essentially set up for foreclosure – a phenomenon in which Deutsche Bank was a
key player. In fact, the bank was popularly dubbed “America’s Foreclosure King,” given
its position as a major financier of corporations such as Countrywide pushing high-risk
mortgages. Deutsche Bank is currently being sued by the US Federal Housing Finance
Agency for selling mis-valued mortgage-backed securities which helped precipitate the
financial crisis in the US.[vi]
Deutsche Bank and the Clinton Foundation brought on board a joint team from Harvard
University and MIT to help design housing strategy for the ‘exemplar’ project. John
McAslan & Partners, a British architecture firm, was engaged to help design a
“comprehensive community development strategy.”[vii] Yet there was no community;
the Harvard-MIT design team was designing according to its own ideas, in a vacuum,
from Cambridge, Massachusetts. As of October 2011, the team had spent exactly one
afternoon meeting with existing residents in Zoranje. (Their project process document
contained multiple photographs of this same meeting – Americans and Haitians sitting
together in a circle – with speech bubbles extending from Haitians’ heads with tokenistic
phrases such as “We need running water!” and “We need a church!”) According to an
interview with a team member, one of the main insights they gained from this
conversation was that job creation was a necessary addition to the community planning.
One page in their planning document read, “If the new Zoranje community is not offered
jobs or job training, crime and violence are pre-programmed,” followed by a photograph
(with no source or caption) of black adolescent boys holding rifles.[viii] Viewers are not
told whether the photo was taken in Zoranje, or even in Haiti. While members of the
actual community had their ideas thus essentialized, the Haitians represented on the
“Exemplar Community Foundation” include the former Tourism Secretary for Haiti and
official at a major cruise line, a notorious landowner from one of Haiti’s most powerful
families, and a former CEO of a large Haitian bank.
To add to the “community-in-a-box” type solutions, the design team came up with an
idea called “community pairing,” by which neighborhoods in Port-au-Prince would be
selected to move to designated locations outside the city. The idea came not from local
residents, our interview revealed, but from research being done at the design team’s
respective American institutions on urban redevelopment and slum upgrading.
(Furthermore, the “silver bullet” solution of moving neighborhoods out to the provinces
fails to recognize the larger economic forces at play, including the role of US foreign
policy in harming Haitian agriculture, which has driven thousands of Haitian peasants to
seek a better life in Port-au-Prince.) The same design team intended to provide
recommendations to the government on how its strategies can be incorporated into
national housing policies. Collaboration with the Haitian housing rights movement did
not feature in this process.
^^^^^^
The joint contract embodied a core problem of the foreign business-led redevelopment
model: the targets of the projects were objects, not subjects, in planning and design. In
this case, the proposal did not elaborate plans for how the Haitians who were to live in
the “model community” would determine what kind of houses they wanted, or what kind
of community center would serve their families, or what their vision of community
development was. An added problem is the inherent lack of accountability in giving
power to outside companies and institutions with no history in Haiti, no understanding of
the country, and no commitment to Haitians. Designing a product for people without any
consultation with them is unethical, especially when the product involves dangerously
subpar safety standards, inaccessible pricing, and cultural ignorance. And foreign groups
have gone about their work with blinders to the energetic Haitian movement that does
exist, that is struggling to promote its recommendations on topics ranging from eminent
domain to housing structures to evictions.
With the 60-some model units still remaining, uninhabited, at the site of the housing
expo, “Highlight best practices for housing” has done anything but that.
[i] Phone interview with team member of MIT/Harvard University design team for Exemplar Community
Pilot Project, October 28, 2011.
[ii] Phone interview with team member of MIT/Harvard University design team for Exemplar Community
Pilot Project, October 28, 2011.
[iii] Isabel Macdonald, “Disaster Capitalism in Haiti Leaves Displaced With Few Good Choices,”
Colorlines, June 20, 2011,
http://colorlines.com/archives/2011/06/disaster_capitalism_in_haiti_leaves_displaced_with_few_good_cho
ices.html.
[iv] “Housing / Haiti / 2011,” Al Jazeera, June 27, 2011, http://www.youtube.com/watch?v=kg5SFiX8e4&feature=player_embedded
[v] Isabel Macdonald, “Disaster Capitalism in Haiti Leaves Displaced With Few Good Choices.”
[vi] “News Release: FHFA Sues 17 Firms to Recover Losses to Fannie Mae and Freddie Mac,” Federal
Housing Finance Agency, September 2, 2011,
www.fhfa.gov/webfiles/22599/PLSLitigation_final_090211.pdf.
[vii] Interim Commission for Haiti’s Reconstruction, Highlight Best Practices for Housing, May 2011,
en.cirh.ht/reports/000035.pdf.
[viii] Designing Process: Exemplar Community Project, Zoranje, Port-au-Prince, Haiti (Harvard
University, MIT, July 2011),
http://www.gsd.harvard.edu/images/content/5/1/519286/proj_designing_process.pdf.
Copyleft Other Worlds. You may reprint this article in whole or in part. Please credit
any text or original research you use to Deepa Panchang, Other Worlds.
“The Super Bowl of disasters”:
Profiting from crisis in post-earthquake Haiti
US taxpayers are underwriting sweatshop expansion in Haiti. Here, textile workers
protest for better rights and working conditions. Photo: Ansel Herz.
February 16, 2012
by Deepa Panchang, Beverly Bell, and Tory Field
As Americans were gearing up for last week’s Super Bowl championship, Haiti’s
president Michel Martelly was on a plane to the World Economic Forum to recruit
players interested in what one businessman dubbed “the Super Bowl of Disasters” –
Haiti’s devastating 2010 earthquake.[1] The Irish-owned cell phone company Digicel
footed his trip there, and hosted a regional business tour complete with a gala ball before
his return to a country still reeling from crisis conditions in housing, jobs, and basic
rights.[2]
Haiti’s status as prime-time jostling space for prospective investors is not new. Many a
corporation, lobbyist, and consultant has seen Haiti’s losses as their gain, leveraging
humanitarianism for profit. Plenty of the $1.1 billion in disaster aid has gone not to
desperate Haitians but to inside-the-Beltway contractors. Often the very same
corporations have wrested financial and political gain from the wars in Iraq and
Afghanistan, the countries hit by the 2004 tsunami in the Indian Ocean, the Gulf Coast
after Hurricane Katrina, New Orleans after the ensuing flood of 2005, and lots of other
places. The same deals have been cut over Haiti in the past, too, particularly during
periods of political instability.
The earthquake has provided a fresh wave of opportunity. In the first year after the
earthquake, the US government awarded more than 1,500 contracts worth $267 million.
All went to US firms except 20, worth $4.3 million, which went to Haitian businesses.[3]
Among the American corporations that received contracts, we’ve seen everything: many
millions going to companies that had had previous contracts cancelled for bad practices,
that had paid out as much as eight-figure settlements for violence happening under their
watch, that had been investigated by Congress for gaming the system, or that had been
the subject of federal reports accusing wastage of funds.[4] We’ve seen corporate
executives and members of Congress going through a revolving door and leveraging both
sides for contracts. We’ve seen public funds given without any competition or
transparency, quite a few to friends of the Clintons and other well-placed insiders.
Local labor and production, which are critical elements in economic recovery, have been
trumped for American business profits. According to federal procurement data, among
contracts which provide products (as opposed to services), 77% were for products
manufactured in the US. They don’t list which, if any, of the remaining 23% involve any
Haitian materials or labor.[5]
Two months after the earthquake, companies gathered in a luxury hotel in Miami for a
“Haiti Summit” to discuss post-earthquake contracting possibilities. The meeting was
sponsored by the International Peace Operations Association (IPOA), but these were no
peaceniks. Their members are predominantly private mercenary companies that enforce
'security' in war and disaster zones for the US government because, unlike elected
entities, they can completely avoid public scrutiny and accountability. They included
such companies as Triple Canopy, which took over Blackwater’s contract in Iraq.[6] One
of the corporate representatives at the Summit described the outlook: "Their
infrastructure is pretty much destroyed, communications are destroyed, there’s a lot of
opportunities there for companies, particularly US countries [sic] because of the close
proximity.”[7] The Summit was apparently worthwhile, as US government paid out more
than $10 million to the industry for “guard services,” and almost $20,000 for riot shields
and suits.[8]
Below are a few examples of post-earthquake contracts and grants, selected to show just
some of the problems at play. They offer a small glimpse into a much larger, secretive
world of disaster deals. We’re grateful to our investigative journalist colleagues who,
alongside us, have kept heavy on the scent of these corporations and brought buried
information to light.
^^^^^^
“American corporations and their stakeholders must understand how helping Haiti over
the long term also helps them," said the non-profit CHF International in its March 2010
board report. "By contributing to Haiti's reconstruction in a lasting, meaningful way,
companies will be helping to build a new, more vibrant Caribbean market for their own
goods and services.”[9]
CHF’s involvement demonstrates how even non-profits can drive development that props
up American business interests on the backs of poor Haitians. What CHF refers to as
“helping Haiti” has meant using US tax dollars to underwrite textile sweatshops, making
it easier and more profitable to score the cheapest source of labor in the hemisphere. In
2006, USAID gave CHF a $104 million, 4-year contract to help “existing industries to
increase their capacity, efficiency and reach new markets,” primarily through the export
textile industry. The money subsidized CHF’s creation of infrastructure such as roads
around industrial areas and training of factory workers on skills such as “how to work in
a formal work environment.”[10] Bolstered by additional USAID funding, this project
continued after the earthquake.
CHF’s post-earthquake USAID contract, for $20.9 million, went to clean-up projects,
including cash-for-work.[11] Cash-for-work meant camp residents engaging in hiredhand projects such as digging drainage ditches and clearing debris, for a period of a few
weeks. The scheme has come under fire by camp residents and human rights groups, with
even a USAID evaluation raising some serious critiques.[12] The jobs are unpredictable,
workers have said, and while the short duration can palliate personal crisis for the
moment, the program quickly returns the worker’s family to its desperate state. Those
hired are paid officially at the unlivable minimum daily wage of 200 gourdes, or US$5,
though unofficially they often earn less. A Haiti Grassroots Watch exposé found,
furthermore, that cash-for-work hiring is often based on corruption, with many workers
having to pay a ‘kickback,’ negotiate sex (in the case of women) for a job, or affiliate
with political parties or candidates.[13] USAID also noted that cash-for-work programs it
funded increased risks of “serious and avoidable” accidents on the job “by failing to
develop and enforce consistent workplace safety rules and accident procedures.”[14]
CHF’s projects, based on factory jobs and cash-for-work, have given neither livable
incomes to employees nor offered development opportunities to the nation. Meanwhile,
CHF has gained humanitarian clout and an influx of funding, and its garment industry
partners sit happily with the perks.
^^^^^^
Using tried-and-true strategies of political manipulation, some corporations have been
able to edge their way into post-earthquake contracts despite histories of fraud and
corruption.
AshBritt Environmental, for instance, has a record of disaster response elsewhere that
spells trouble for Haiti. The company had received $900 million in contracts for
Hurricane Katrina clean-up, after hiring lobbyists formerly involved in state
government.[15] An MSNBC investigation later brought to light complaints by local
contractors, a mayor, and local legislators that the company’s work was too slow, that it
overcharged, and that it was not hiring local contractors.[16] The extent of “layer cake”
contracting was so extreme that in one case, AshBritt was paid $23 per cubic yard of
debris removed but subcontracted through three middleman companies so that the
company that actually removed the rubble received $3 per cubic yard.[17]) Even a 2006
federal report accused the company of wasting money in this subcontractor layering after
Katrina.[18]
Given its experience, AshBritt wasted no time unleashing its skills in lobbying and
political pressure to get in on the Haiti game. Early in 2010, the company paid $90,000 to
a lobbying firm to pressure the government for Haiti contracts, according to disclosure
records described in the press.[19] In a prime instance of revolving door between public
and private sectors, one of the lobbyists working on the case was the former chief of staff
for Senator John Kerry.[20] Kerry, in turn, was the senator who co-sponsored the
legislation for Haiti relief funding.
With influential people circulating between the givers and receivers of funds, AshBritt
was confident enough about future contracts that it spent an initial $25 million setting up
for anticipated operations in Haiti with a soccer field-sized base camp and services to
house future project managers.[21] In July 2010, AshBritt won a $500,000 US
government contract for debris removal, the first of what the company anticipated would
be many contracts to come their way.[22] Continuing the revolving door trend, another
lobbyist for the firm was the former USAID Mission Director in Iraq, Lewis Lucke, who
was paid $30,000 per month to help win contracts via a partnership venture AshBritt set
up.[23] Lucke claimed he “played an integral role” in obtaining three contracts for the
company, including $10 million from the World Bank and about $10 million more from
the Haitian government (one of the first major government contracts for debris
removal).[24] As of this writing, not even the company’s website contains an update on
what work it has or has not completed in Haiti.
^^^^^^
Like AshBritt, CH2M Hill, a large engineering and construction firm, should have raised
warning signals as a company to be hired on the taxpayer dollar. A government database
that monitors federal contracts reveals a track record of corruption, listing nine instances
of misconduct for the company since 1995.[25] In one case, the company was paid $4.1
million for a contract in Iraq though no work was actually completed. [26] On the Gulf
Coast, a US government investigation of $45 million paid to CH2M and the three other
companies in no-bid contracts for Katrina response was declared wasteful spending. [27]
CH2M was also accused in a congressional investigation in 1992 of misusing money
during its cleanup of toxic waste sites in the U.S. More than two million dollars of this
contract were allegedly used for “unallowable and questionable costs,” such as $11,379
for a Christmas party and $2750 for specialty chocolates.[28] The company is listed in
the top 50 of U.S.-based contractors and has been a major player in wartime contracting
in Iraq and Afghanistan.[29]
The track record was nothing that some strategic lobbying efforts couldn’t mitigate,
however. The lobbyist who headed up CH2M Hill’s efforts to win contracts in Haiti was
Larry LaRocco, a former congressman from Idaho who now runs his own lobbying
firm.[30] And unsurprisingly, the company spent half a million dollars in political
contributions in 2010. [31] Thus equipped with politicians in its pocket, CH2M was wellpositioned to compete in the latest contract game. It received its first post-earthquake
contract just days after the disaster, and was given a joint contract with KBR Global
Service (itself notorious due to its Iraq and Afghanistan activities) for facilities operations
support at the end of 2010.[32]
^^^^^^
In the case of a few other contracts that we know to be operating in Haiti, we’ve spent
hour after hour on the scent. We’ve scoured internet resources, news articles, and
company websites to track companies we know received post-earthquake contracts in
Haiti. Nothing. Not even a mention, sometimes, in the 100-plus-page 2010 annual
reports.
What we have been unable to uncover is at least as alarming as what we have learned
about some of the firms receiving millions from the US government, and what they have
done with those millions. We wonder whether the US government has had any more
knowledge or oversight of the corporate actions than have the corporation's investors. As
for the American people, they have no way to know how their money has been spent or
what has been done in their names. The lack of transparency has also given a green light
to profiteers to neglect standards, quality, and honesty.
There is one group for whom the secrecy, foul play, taking of power that should never be
taken, giving away of what should never be given away, matters most of all: Haitians, the
ones whose country is being treated like a Monopoly game. They alone will have to live
with the long-term outcome of what foreign companies build, demolish, restructure, or
steal in their country.
[1] Mike Clary, “Broward Rivals Battle for Work in Post-Quake Haiti,” Sun-Sentinel.com, July 14, 2010.
[2] Paul Cullen, “Attracting trade now focus for Haiti’s president,” The Irish Times,
http://www.irishtimes.com/newspaper/world/2012/0130/1224310943929.html
[3] Alex Dupuy, “One Year after the Earthquake, Foreign Help is Actually Hurting Haiti,” Washington
Post, January 7, 2011.
[4] Emma Perez-Trevino, “Beating Death Lawsuit Ends in Settlement,” The Brownsville Herald online,
January 7, 2010, http://www.brownsvilleherald.com/articles/rosa-107144-settlement-beating.... Martha
Brannigan and Jacqueline Charles, “U.S. Firms Want Part in Haiti Cleanup,” Miami Herald, February 9,
2010.
[5] “Haiti Earthquake Report,” Federal Procurement Data System, data updated as of 9/15/2011,
https://www.fpds.gov/downloads/top_requests/Haiti_Earthquake_Report.xls.
[6] See, for example, Jeremy Scahill, Blackwater: The Rise of the World’s Most Powerful Mercenary Army
(New York: Nation Books, 2007); Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism
(New York: Picador, 2007); Jeremy Scahill, “US Mercenaries Set Sights on Haiti,” TheNation.com,
February 1, 2010; and Anthony Fenton, “Private Contractors ‘Like Vultures Coming to Grab the Loot,”
IPSNews.net, February 19, 2010.
[7] “Al Jazeera Reports on the Haiti ‘Summit’ for Private Contractors,” YouTube video, 3:32, Al Jazeera
reporting, posted by "WebofDem," May 6, 2010, http://youtu.be/kkNCdy0GXyc.
[8] “Haiti Earthquake Report,” Federal Procurement Data System, data updated as of 9/15/2011,
https://www.fpds.gov/downloads/top_requests/Haiti_Earthquake_Report.xls.
[9] Jane Madden, “Corporations Must Consider Haiti's Long Term Needs,” Philanthropy News Digest
online, March 10, 2010, http://foundationcenter.org/pnd/commentary/co_item.jhtml?id=287300002.
[10] “New USAID-Funded Haiti Apparel Center to Provide Training to Thousands of Haitians in the
Garment Industry,” press release by USAID, August 11, 2010,
http://www.usaid.gov/press/releases/2010/pr100811_1.html.
[11] USAID, Haiti Earthquake: Fact Sheet #48, April 2, 2010,
http://www.usaid.gov/our_work/humanitarian_assistance/disaster_assistance/countries/haiti/template/fs_sr/
fy2010/haiti_eq_fs48_04-02-2010.pdf.
[12]Center for Economic and Policy Research, “USAID/OTI’s Politicized, Problematic, Cash-for-Work
Programs,” December 21, 2010, http://www.cepr.net/index.php/blogs/cepr-blog/usaidotis-politicizedproblematic-cash-for-work-programs; Antèn Ouvriye, Submission to the United Nations Universal Periodic
Review: Labor Rights (Transnational Legal Clinic, University of Pennsylvania Law School, 2011),
http://ijdh.org/archives/17948; and Office of Inspector General, Audit of USAID’s Cash-for-Work Activities
in Haiti (San Salvador: September 24, 2010), www.usaid.gov/oig/public/fy10rpts/1-521-10-009-p.pdf.
[13] Haiti Grassroots Watch, “Is Cash-for-work Working?”, http://www.ayitikaleje.org/Dossier2Story2.
Haiti Grassroots Watch, “Cash for Work – At What Cost,” http://www.ayitikaleje.org/haiti-grassrootswatch-engli/2011/7/18/cash-for-work-at-what-cost.html.
[14] Office of Inspector General, Audit of USAID’s Cash-for-Work Activities in Haiti, September 24, 2010,
www.usaid.gov/oig/public/fy10rpts/1-521-10-009-p.pdf.
[15] Jordon Flaherty, “One year after Haiti earthquake, corporations profit while people suffer,” Monthly
Review Magazine, January 12, 2010. “It’s who you know,” CorpWatch, August 16th, 2006,
http://www.corpwatch.org/article.php?id=14008
[16] Mike Brunker, “Dust flies over Katrina’s debris,” MSNBC, January 29, 20006,
http://risingfromruin.msnbc.com/2006/01/fighting_over_t.html
[17] Rita King, “Layers and Layers,” CorpWatch, August 16, 2006,
http://www.corpwatch.org/article.php?id=14011.
[18] Martha Brannigan and Jacqueline Charles, “U.S. Firms Want Part in Haiti Cleanup,” Miami Herald,
February 9, 2010.
[19] Kevin Bogardus, “Haiti’s recovery aided by U.S. lobbyists,” The Hill, October 11, 2010.
[20] Ibid.
[21] Ben Fox, “Masters of disaster: Foreign firms set up shop in Haiti and wait for construction boom,”
Associated Press, June 7, 2010.
[22] Mike Clary, “Broward rivals battle for work in post-quake Haiti,” Sun Sentinel, July 14, 2010,
http://articles.sun-sentinel.com/2010-07-14/news/fl-haiti-recovery-rivals-20100714_1_ashbritt-postearthquake-haiti-debris.
[23] Ben Fox, “Ex-US official sues contractor in Haiti for fees,” Associated Press, December 31, 2010.
[24] Mark Weisbrot, “Haiti and the international aid scam,” The Guardian, April 22, 2011,
http://www.guardian.co.uk/commentisfree/cifamerica/2011/apr/22/haiti-aid.
[25] Project on Government Oversight, http://www.contractormisconduct.org/
[26] Matt Kelley, “Canceled Iraq contracts cost U.S. $600 million,” USA Today, November, 17, 2008.
[27] Center for Economic and Policy Research, “Impatient to Profit from Disaster,” October 14, 2010,
http://www.cepr.net/index.php/blogs/relief-and-reconstruction-watch/impatient-to-profit-from-disaster
[28] Keith Schneider, “Company Accused of Bilking U.S. on Waste Sites,” New York Times, March
20,1992.
[29] Top 400 Contractors Sourcebook cited on http://newsroom.ch2mhill.com/pr/ch2m/industryrankings.aspx. Statement of Mr. Fred M. Brune, President, Government Facilities and Infrastructure
Business Group, CH2M Hill Constructors, Inc. before the Commission on Wartime Contracting in Iraq and
Afghanistan, July 26, 2010, www.wartimecontracting.gov/.../hearing2010-0726_testimony_Brune_(CH2M%20Hill).pdf.
[30] Kevin Bogardus, “Haiti’s recovery aided by U.S. lobbyists,” The Hill, October 11, 2010.
http://thehill.com/business-a-lobbying/123565-haitis-recovery-aided-by-lobbyists
[31] CH2M Hill Expenditures, Center for Responsive Politics,
http://www.opensecrets.org/pacs/expenditures.php?cycle=2010&cmte=C00143305
[32] “Haiti Earthquake Report,” Federal Procurement Data System, data updated as of 9/15/2011,
https://www.fpds.gov/downloads/top_requests/Haiti_Earthquake_Report.xls.
Copyleft Other Worlds. You may reprint this article in whole or in part. Please credit
any text or original research you use to Deepa Panchang, Beverly Bell, and Tory Field,
Other Worlds.
Business as government:
Capitalizing on disaster in post-earthquake Haiti
Sign from a Port-au-Prince protest in October 2011, declaring
“IHRC = Occupation. Long live a sovereign Haiti.” Photo: Ansel Herz.
February 29, 2012
by Deepa Panchang and Beverly Bell
“I am optimistic that in 18 months, yes, we will be autonomous in our decisions. But
right now I have to assume... that we are not.”[i] With these words, Haiti’s Prime
Minister Jean-Max Bellerive watched a swath of his government’s decision-making
power shift into foreign hands in early 2010.
It's one thing to privatize government services. Since the earthquake, US firms have
actually been involved in privatizing governance – in fact, the governance of another
country. Corporations with little to no knowledge of Haiti were brought in as volunteers
to plan, kick off, and even staff the team with the single greatest operational influence
over shaping the reconstruction model for the year after the quake, the Interim Haiti
Reconstruction Commission (IHRC).
The IHRC was created by the Haitian parliament in April 2010 to direct post-earthquake
reconstruction. Its mandate was to oversee rebuilding efforts through the $11 billion in
pledges of international aid, including approving policies, projects, and budgeting. The
World Bank was to manage the money. In creating and investing this body with its broad
power, Parliament conducted a constitutional coup on April 15. Whereas the constitution
mandates shared governance by an executive, a parliament, and a judiciary, the IHRC
shifted it to the executive and the international community. The Parliament voted to give
the IHRC the power to do, effectively, whatever it wanted. The only oversight measure
left the Haitian government was veto power by the president.[ii]
Given the corporate philosophies of the firms that designed it, the resultant features of the
IHRC were hardly surprising. The IHRC’s 26 board members were elected by no one and
were accountable to no one. Half were foreign, including representatives of other
governments, multilateral financial institutions, and non-governmental organizations. An
international development consultant contracted by the IHRC, speaking with the Haiti
Support Group, said, “Look, you have to realize the IHRC was not intended to work as a
structure or entity for Haiti or Haitians. It was simply designed as a vehicle for donors to
funnel multinationals’ and NGOs’ project contracts.”[iii]
McKinsey and Company, a US management consulting firm, was one of the firms that
came in to help "design" and "launch" the IHRC.[iv] A background interview with an
official very close to the process showed the Haitian government at the beck and call of
McKinsey as it structured the commission and determined membership and decisionmaking processes. (All these aspects later received vehement criticism from Haitian civil
society.) At the very first meeting, according to official minutes, it was McKinsey’s lead
consultants who “made a presentation to the Board regarding the mission, mandate,
structure, and operations of the IHRC.”[v] The consultants sat in on subsequent meetings
as well.[vi]
McKinsey & Co. performed its services pro bono. Whether paid or not, the post was a
lucrative one; it well-positioned the firm both to influence future contracts and to shape a
climate favorable to business. A 2010 World Economic Forum document explicitly stated
that “McKinsey helps coordinate with partners to channel interest from the private sector
and connect would-be donors and investors to opportunities in Haiti.”[vii]
McKinsey was a natural choice for the job because of its former managing director’s
long-time personal and political ties to Bill Clinton, who serves as UN Special Envoy to
Haiti and was co-chair of the IHRC board. The firm was also a prime candidate because
it advances the paradigm of ‘government as business,’ serving many governments around
the world.[viii] As one example, McKinsey played a key role in developing the
framework for the reconstruction commissions in Indonesia and Sri Lanka after the
Indian Ocean tsunami which, as with the IHRC, involved infusing foreign private sector
individuals into policy-making. This was another case in which the local population was
excluded from having a say in its own future following another disaster; civil society
groups denounced the Rehabilitation and Reconstruction Agency (BRR in Bahasa) for
being extremely centralized and discounting civil society voices.[ix]
McKinsey came under fire again after Hurricane Katrina and the flood of New Orleans
for work it had done prior to the storm. McKinsey helped major insurance companies
develop tactics that stalled court proceedings and delayed payments that, in practice,
allowed them to avoid paying out claims to their clients who suffered in natural disasters
or accidents. Lawsuits against insurance companies asserted that McKinsey’s pre-Katrina
advice, particularly to Allstate, effectively helped insurers cheat their customers.[x]
Another US firm, Korn/Ferry International, came on board to head-hunt the executive
director of the IHRC. This was to replace the initial staffing that had been provided by
the Clinton Foundation, International Development Bank, and the governments of the US
and Canada.[xi] Korn/Ferry circulated a job announcement, in English, through
politically connected circles in the US and Haiti, as though it were hiring for any profitoriented business instead of for a team that was making major decisions in the name of a
nation and its well-being. The announcement noted that, “Leadership experience in
highly efficient and structured organizations, such as the military, is an advantage.”
Korn/Ferry provides recruitment services for both corporate and government positions,
and keeps its finger on the pulse of the increasing overlap of the two. It even published a
report encouraging companies to hire leadership with government and policy
backgrounds and vice versa, in what it called a "new marriage between business and
government.”[xii]
Vesting foreign enterprises with political power is fundamentally anti-democratic. If US
firms’ performance in post-earthquake governance is any example, it is a frightening
indicator of what might emerge with even greater participation in decision-making, as
mandated by the redevelopment blueprint published in March 2010 by the Haitian
government and international community.
As ineffectual as the Haitian government may be, its functions can’t be outsourced. Haiti
needs a government with responsibility to the citizenry who elected it and the ability to
protect their rights. The pursuits of foreign firms – making governance decisions about
rebuilding, paving the way for other firms’ Haitian debuts, racking up humanitarian clout
– have been at the expense of Haitians still struggling for basic needs and democratic
power.
The public good requires a public sector which can guarantee health, education, adequate
food, water, housing, employment, agriculture, and civil liberties. It requires more than
unaccountable foreign agencies and private businesses that can and do pull out when they
like.
[i] Martin Kaste, “After Quake In Haiti, Who’s The Boss?” NPR, March 31, 2010,
http://www.npr.org/templates/story/story.php?storyId=125328026
[ii] Order by Réné Préval, President (Republic of Haiti, 2010),
en.cirh.ht/files/pdf/ihrc_decree_20100421.pdf.
[iii] Haiti Support Group, "Deconstructing the IHRC's Reconstruction: Beyond Relief, Beyond Belief," The
Haiti Support Group Briefing, no. 69, January 2012, 1.
[iv] Mary Bridges, et al., Innovations in Corporate Global Citizenship: Responding to the Haiti
Earthquake, (World Economic Forum, July 2010), 16-17,
www3.weforum.org/docs/WEF_HaitiResponse_Report_2010.pdf.
[v] “Minutes of the Board Meeting of the Interim Haiti Recovery Commission (IHRC),” Interim Haiti
Recovery Commission, Hotel Karibe, Pétionville, Haiti, June 17, 2010,
en.cirh.ht/files/pdf/ihrc_board_minutes_june_17_2010.pdf.
[vi] Interim Haiti Recovery Commission, “IHRC Board Meeting Minutes,” accessed October 31, 2011,
http://en.cirh.ht/board-meeting-minutes.html.
[vii] “Innovations in Corporate Global Citizenship: Responding to the Haiti Earthquake,” World Economic
Forum, July 2010, www3.weforum.org/docs/WEF_HaitiResponse_Report_2010.pdf.
[viii] Ian Davis, Government as Business (The McKinsey Quarterly, October 2007),
http://www.mckinsey.com/locations/UK_Ireland/~/media/Reports/UKI/Ian_Davis_government_as_a_busin
ess_the_times.ashx.
[ix] Risma Umar et al., Tsunami Aftermath: Violations of Women’s Human Rights in Nanggroe Aceh
Darussalam, Indonesia (Asia Pacific Forum on Women, Law, and Development, 2006),
www.apwld.org/pdf/tsumai_vwhr.pdf.
[x] David Dietz and Darrell Preston, “The Insurance Hoax,” Bloomberg, September 2007,
http://www.bloomberg.com/apps/news?pid=nw&pname=mm_0907_story1.html.
[xi] “Interim Haiti Recovery Commission Announces Over $1. 6 Billion in New Project Proposals,
Outlines Priorities,” PR Newswire online, August 17, 2010, http://www.prnewswire.com/newsreleases/interim-haiti-recovery-commission-announces-over-1-6-billion-in-new-project-proposals-outlinespriorities-100918189.html.
[xii] Nels Olsen, A New Breed of Director Emerges as Public Policy Enters the Boardroom (Korn/Ferry
Institute 2009), 7,
http://www.kornferryinstitute.com/files/pdf1/ANewBreedofDirector_whtppr_FINAL_0309.pdf.
Copyleft Other Worlds. You may reprint this article in whole or in part. Please credit
any text or original research you use to Deepa Panchang and Beverly Bell, Other
Worlds.
****
Beverly
Bell
has
worked
with
Haitian
social
movements
for
over
30
years.
She
is
also
author
of
the
book
Walking
on
Fire:
Haitian
Women's
Stories
of
Survival
and
Resistance
and
is
working
on
the
forthcoming
book,
Fault
Lines:
Views
across
Haiti's
New
Divide.
She
coordinates
Other
Worlds,
which
promotes
social
and
economic
alternatives.
She
is
also
associate
fellow
of
the
Institute
for
Policy
Studies.
Tory
Field
is
an
organizer,
farmer,
and
Research
and
Education
Coordinator
at
Other
Worlds.
Deepa
Panchang
has
worked
in
advocacy
for
human
rights
in
Haiti
since
the
2010
earthquake,
and
is
Education
and
Outreach
Coordinator
for
Other
Worlds.
You
can
access
all
of
Other
Worlds'
past
articles
regarding
post­earthquake
Haiti
here:
http://www.otherworldsarepossible.org/haiti.