Saturday, 23 November 2013

UN surveillance resolution goes ahead despite attempts to dilute language

NSA debate Germany
Angela Merkel speaks at an NSA debate in Berlin. Germany and Brazil were co-sponsors of the resolution. Photograph: Reynaldo Paganelli/NurPhoto/Rex
The US, UK and their close intelligence partners have largely failed in their efforts to water down a United Nations draft resolution expressing deep concern about “unlawful or arbitrary” surveillance and calling for protection for the privacy of citizens worldwide.
The attempt to soften the language in the draft resolution was almost exclusively confined to the US, Britain and Australia, members of the ‘Five-Eyes’ intelligence-sharing partnership at the heart of the international controversy over mass surveillance and revelations about spying on allies. 
The draft resolution shows the extent to which the three countries have been left isolated on the issue.
Diplomats involved in the negotations have told the Guardian that the US was reluctant to be seen as leading the opposition publicly and instead orchestrated from the sidelines, leaving Australia in the forefront. 
Australia’s role is sensitive, coming in a week in which its government has been forced on the defensive over revelations that it attempted to listen in on the private cellphone of the Indonesian president and the first lady. 
The co-sponsors of the draft resolution, Brazil and Germany, made several concessions, diluting some of the language to appease the US, Britain and Australia but keeping intact the bulk of the original version.
Crucially, the draft retains language which says the right to privacy should apply no matter the citizenship of the individual. US citizens currently have greater protections from NSA surveillance than foreign nationals. 
The final draft agreed on Wednesday after more than a week of negotiation says the UN general assembly is “deeply concerned at the negative impact that surveillance and/or interception of communications, including extraterritorial surveillance and/or interception of communications, as well as the collection of personal data, in particular when carried out on a mass scale, may have on the exercise and enjoyment of human rights”.
The resolution, titled ‘The right to privacy in the digital age’, was hammered out at a committee open to all 193 UN members. It represents the biggest show of international opinion yet in response to the revelations about mass surveillance exposed by whistleblower Edward Snowden. 
Brazil and Germany co-sponsored the resolution following disclosure that the the NSA eavesdropped on Brazil’s president Dilma Rousseff and German chancellor Angela Merkel. 
Other sponsors include: Austria, Bolivia, North Korea, Ecuador, France, Indonesia, Lichtenstein, Peru, Switzerland, Spain, Luxembourg and Uruguay.
A vote at the UN general assembly on the resolution is scheduled for Tuesday but only if a member state calls for one. Otherwise it will pass automatically as a consensus measure. The US may decide against calling for a vote rather than find itself, as diplomats and officials based at the UN predict, in a tiny, embarrassing minority.
“There is a head of steam building up behind this draft resolution. It is a basic rights issue and these attract a lot of support,” a UN official said. 
The main sticking point in the negotiations was over “extra-territoriality”. The US, Britain and Australia argued that the rights to privacy were internal matters for states alone. Brazil and Germany argued that all citizens enjoyed such rights.
José Luis Díaz, head of Amnesty’s office at the UN, welcomed the final draft. “[Brazil and Germany] got most of what they wanted. It is compromise language but it still includes the important line about extraterritoriality”.
He added that this is only the start of UN involvement. “The resolution is going to kick off a very important discussion about surveillance,” he said.
The major concession made to the US, UK and Australia was to drop a reference linking “human rights violations” to extraterritorial surveillance. The original draft had the general assembly “deeply concerned at human rights violations and abuses that may result from the conduct of any surveillance of communications, their interceptions and the collection of personal data, in particular massive surveillance, interception and data collection”.
Reuters quoted a senior UN diplomat describing the new language as a compromise that "sort of breaks the link between extraterritorial surveillance and human rights violations."
The long-term significance of the draft resolution may be its call for the UN high commissioner for human rights, based in Geneva, to conduct an inquiry and present a report next year on “the protection and promotion of the right to privacy in the context of domestic and extraterritorial surveillance and/or interception of digital communications and collection of personal data”.
Brazil’s foreign affairs minister, Luiz Alberto Figueiredo, asked earlier this week by the Guardian about attempts by the US and Britain to water down the draft, said he would not comment on specific countries. “But what I would like to say is that the privacy, the right to privacy, is a well established right. It's a human right, it's a basic right in democracy.”
Figueiredo expressed hope that countries that placed a priority on human rights “will support our movement for making sure the internet is kept as a very democratic and free area so that it will benefit everybody”. 
The British position expressed at the start of the negotiations was that it had no overwhelming objection to the draft resolution and its concerns were primarily legalistic: that it might create new rights not in existing international treaties. Like the US, it was also concerned about the issue of extra-territoriality. 
British ambassador, Sir Mark Lyall Grant, responding to a question from the Guardian last week at the start of the negotiating process, said: “We have seen the first draft of the resolution and there are certainly some amendments that we will be looking to secure. But we are basically engaging constructively and hoping that it will be a consensus resolution. 
“We are not talking major changes here. We want to make sure the resolution is consistent with human rights law.”
But a diplomat at the UN closely involved in the negotiations and supportive of the draft resolution accused the US and Britain of creating a smokescreen in claiming their concerns were purely legalistic. 
copy of the US negotiating position, leaked to the foreign policy website Cable, set out its red lines.
It said that the right to privacy is already contained in the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights. The US expressed concern that the early drafts of the resolution went beyond these. 
The leaked US paper says: “As reads, it suggests that states have international human rights obligations to respect the privacy of foreign nationals outside the US, which is not the US view of the ICCPR.”
The paper says that as the US government does not consider its surveillance activities illegal, it does not have a problem with condemning illegal surveillance. “Recall that the USG’s collection activities that have been disclosed are lawful collections done in a manner protective of privacy rights, so a paragraph expressing concern about illegal surveillance is one with which we would agree.”
During the negotiations, countries such as Venezuela and Cuba pushed for more explicit language on alleged extra-territorial human rights violations. Russia expressed concern, according to one diplomat, over the possible expansion of language on freedom of expression.
Revelations of the prominent role taken by Australia in trying to water down the draft resolution comes in a week that its government has faced calls from a privacy group to support Brazil and Germany. 
The position on the draft resolution of the two remaining members of the Five Eyes partnership, New Zealand and Canada, is not known.

Snowden cache reveals diplomats' hotel bookings being tracked by GCHQ

GCHQ
Der Spiegel reported that an automated system alerted GCHQ to the timings and locations of diplomats’ travel arrangements. Photograph: AFP/Getty Images
A programme devised by British intelligence allowed analysts to monitor the bookings of foreign diplomats at 350 top hotels across the world, according to documents leaked by the whistleblower Edward Snowden.
The German news magazine Der Spiegel reported on Sunday that the automated system alerted the UK's eavesdropping centre, GCHQ, to the timings and locations of diplomats' travel arrangements.
The papers make clear that these details allowed the "technical operations community" to make necessary preparations before the visits, the magazine said, suggesting that the diplomats' rooms would be monitored or bugged.
The GCHQ programme, called Royal Concierge, was first trialled in 2010 and has been in operation since then, the papers reveal.
The programme worked by intercepting reservation confirmations when they were sent to government addresses from any of the 350 monitored hotels, said Spiegel online.
The papers did not name any hotels or diplomats who had been spied upon, though unnamed hotels in Zurich and Singapore were cited as examples.
Separate documents seen by Spiegel listed the potential capabilities for monitoring a hotel room, which included wiretapping the telephone and fax machine as well as monitoring computers hooked up to the hotel network.
According to Spiegel, one of the presentations describing Royal Concierge was entitled Tales from the Wild, Wild West of GCHQ Operational Data-Mining.
GCHQ said it would not confirm or deny the story, which is the latest to emerge from the cache of documents leaked by Snowden this year.

NSA bulk data collection violates constitutional rights, ACLU argues

Keith Alexander and James Clapper before a Senate intelligence committee hearing in September.
Keith Alexander and James Clapper are named as defendants in the lawsuit brought by the ACLU. Photograph: Alex Wong/Getty Images
Civil liberties campaigners told a New York court on Friday that the National Security Agency’s bulk collection of all US phone records violates the constitutional rights to freedom of association and privacy.
The American Civil Liberties Union called for the NSA's program, first revealed by the Guardian in June, to be ended, arguing that it breached the first and fourth amendments as well as exceeding the authority Congress gave to the government through the Patriot Act.
“This kind of dragnet surveillance is precisely what the fourth amendment was meant to prohibit,” ACLU deputy legal director Jameel Jaffer, said before the hearing. “The constitution does not permit the NSA to place hundreds of millions of innocent people under permanent surveillance because of the possibility that information about some tiny subset of them will become useful to an investigation in the future.”
The case, ACLU v James Clapper, director of national intelligence, Keith Alexander, director of the NSA and others, was filed in June, shortly after the Guardian published a top-secret court order requiring Verizon to pass personal call data from millions of its customers to the NSA “on an ongoing daily basis”. The revelation was the first in a series of articles exposing the scale of the NSA’s operations based on documents obtained by whistleblower Edward Snowden.
The ACLU is a customer of Verizon Business Network Services, which was the subject of the order issued under by foreign intelligence surveillance (Fisa) court.
According to the Snowden documents, the NSA receives massive amounts of “metadata” from the company including the numbers of both parties on a call, call duration, unique identifiers, and time of call. The contents of the conversation itself are not covered.
ACLU’s lawsuit argues that the government’s blanket seizure of its phone records compromises its ability to work with clients, journalists, advocacy partners, whistleblowers, and others.
In February, the supreme court dismissed the ACLU’s case challenging the constitutionality of the Foreign Intelligence Surveillance Act (Fisa), a case it filed in 2008 before the Snowden revelations. That suit was rejected on the grounds that the plaintiffs could not prove that they had been monitored. ACLU now argues that it has standing to sue because the Fisa court order showed that its phone records were collected by the government.
Earlier this week the supreme court rejected a request to review whether the Fisa court had exceeded its authority when it compelled Verizon to disclose the records. The request, made by the Electronic Privacy Information Center (Epic), a public-interest group dedicated to privacy concerns, argued “the production of millions of domestic telephone records that cannot plausibly be relevant to an authorized investigation.”
The court did not explain its reasoning but the government argued only it or the recipient of an order can seek review of an order. Other appeals are expected.
The legal challenges come as Verizon, AT&T and others are coming under increasing pressure to make more disclosures about their dealings with the NSA. Tech giants including Google, Facebook and Yahoo have increasingly spoken out against the NSA’s tactics and called for more disclosure. The telecoms companies have been largely silent.
Shareholder pressure groups are now calling for the telecom companies to release more details of the type and volume of information they give to the NSA. Activists including Trillium Asset Management of Boston and the $161bn New York State Common Retirement Fund have filed motions calling for AT&T and Verizon to release reports on the "metrics and discussion regarding requests for customer information by US and foreign governments

Curious tale of the central Asian oligarchs and the City of London

enrc mining
An ENRC mining operation. Shares in the company were floated on the London Stock Exchange in 2007 but the company has now been taken private again.
It is May 2010 at Monaco's vast Le Sporting banquet hall, where 800 guests have responded to an invitation from one of central Asia's most powerful, and secretive, oligarchs.
The host has packed the venue's gardens with white roses and arranged for entertainment from the singer Jennifer Lopez and French DJ David Guetta.
Several guests execute an impromptu lezginka, a traditional dance from the Caucasus, and a crowd forms to shower them with $100 and €100 bills, a sign of the donors' respect, which is then paid to the musicians.
The grand celebrations have been arranged to mark the wedding of one Sabir Chodiev, the son of Patokh Chodiev, 60, an Uzbek businessman whose then £1.85bn fortune had largely been secured with two Kyrgyz business partners in resource-rich Kazakhstan.
The timing of the wedding just about coincided with the zenith of the worldwide boom in commodity prices and the whole event is estimated to have cost Chodiev around £6m, a fifth of which went on Lopez's one-hour turn.
Those were better times in the world of Patokh Chodiev – plus his two business partners, Alexander Machkevitch, 59, and Alijan Ibragimov, 60 – a trio who largely became known in the City because of their links to a painful hit to many UK savers' pension pots.
After floating their mining company, Eurasian Natural Resources Corporation (ENRC), on the London Stock Exchange in 2007, the company's shares were quickly propelled into the FTSE 100 and, therefore, into many British pension funds.
But the past two years have seen persistent allegations of corruption against the company, along with a string of corporate governance rows, and the shares have crashed, prompting the trio to take the company private again. When the stock market closed on Friday evening the shares, which have fallen by 85% from their peak, were traded publicly for the last time.
So is London bidding farewell to the trio, whose company was dubbed "more Soviet than City" by Ken Olisa, a former non-executive director who was ousted by the three founders? Probably not.
ENRC may be disappearing from the London Stock Exchange, but the professional and personal lives of the tycoons link them inextricably to the UK.
One of their main businesses, private firm International Mineral Resources (IMR), is run out of London, several of their legal scraps are still being fought here, while ENRC continues to be investigated by the Serious Fraud Office for "fraud, bribery and corruption".
Lavish properties in the most exclusive parts of the capital continue to be owned by the businessmen, while among the diverse collection of London names touched by the oligarchs are Miriam Gonzalez, the lawyer and wife of deputy prime minister Nick Clegg; the steel billionaire Lakshmi Mittal; and the British artist Damien Hirst.
The tycoons' partnership was conceived in Kyrgyzstan, one of central Asia's poorest countries to the south of Kazakhstan, where Machkevitch and Ibragimov grew up.
The pair are thought to have met at a wedding in 1971 but pursued separate careers, as Chodiev worked in Japan for the Soviet ministry of foreign trade.
But by the late 1980s, in a move that has never been explained, they came together during the early stages of perestroika. Machkevitch and Ibragimov are believed to have moved to Moscow in 1987 to trade everything from scrap metal to iron ore, aluminium and oil.
Chodiev joined them two years later, with much of the trio's business being conducted in Kazakhstan, a market they knew well.
From there, they gained control of newly privatised chromium, alumina, and gas operations in Kazakhstan, creating partnerships (and eventually feuds) with some of the pioneers of early post-Soviet capitalism, including the London-based Reuben brothers and the metals trader Lev Chernoy.
Quite how this transformation was achieved remains unclear. Observers of the period say anybody could succeed in Kazakh business if they enjoyed powerful sponsorship, which explains the tales of alleged sweetheart deals with Kazakhstan's president, Nursultan Nazarbayev, and of charging "special commissions" to the Mayfair-based Mittal for acting as intermediaries to the Kazakh elite.
A spokesman for the trio would not comment on the payments, while Mittal's spokeswoman has denied the payment was a commission.
What is known for certain, however, is that from the chaos of the 1990s, the trio grew a substantial business, part of which became ENRC.
But by the time that company floated in 2007, some of their wealth had already arrived in Mayfair. In 2005 a British Virgin Islands-based company associated with Machkevitch paid £14.5m for a palatial three-storey Georgian mansion in one of London's most opulent squares.
Five years earlier, Chodiev bought his £10m penthouse in a glass-fronted development near London's Vauxhall Bridge, that boasts a 24 hour concierge service, residents' gym and secure underground car park.
Two Mayfair properties are registered to a company run by Chodiev's daughter Mounissa Chodieva, head of ENRC's investor relations.
A two-mile stroll north to Portman Square brings you to the offices of Amre Youness, who runs the trio's private mining business IMR.
Youness has married into the Heinz family, and so is related by marriage to US secretary of state John Kerry.
But despite his high-level links, IMR's private status has meant the company has been far less visible than ENRC.
Even so, the firm has attracted controversy. It sold ENRC a business that the listed company's former lawyers say may have made "cash payments to African presidents", while IMR is accused in the Dutch courts of "blatant fraud, exacerbated by bribery" by Russian fertiliser group EuroChem. IMR denies the accusations. ENRC and the trio deny all allegations of bribery and corruption.
Meanwhile, the oligarchs are furious at how they believe they have been treated by the City, arguing they have spent millions on lawyers and bankers in order to meet London compliance standards, only for their shares to slump. One close associate says: "They've been mugged by the City."
That anger is being played out against Dechert, the law firm that raised the allegations about payments in Africa, which ENRC is suing for allegedly overcharging for an internal corruption investigation.
The lawsuit names Clegg's wife, Gonzalez, who worked on the project. Dechert did not comment.
That case follows ENRC's pursuit of its former director, the City grandee Sir Paul Judge, who it accuses of leaking company information to the media. Judge denies this and is suing for libel.
Meanwhile, potentially embarrassing details about the tycoons and their families are set to be aired elsewhere in London's high court, as ENRC's former head of corporate finance, Kirill Stein, is suing the trio for £17m in bonuses and interest he says they reneged on paying.
Stein also names as defendants three of the oligarchs' children – Chodieva, Alla Machkevitch and Dostan Ibragimov – all of whom have London connections.
Alla, along with her sister Anna, is a director of the London-based Machkevitch Foundation.
Anna is said to be one of the largest collectors of Damien Hirst: she has acquired pieces including butterfly wing mosaics, cabinets of manufactured diamonds and the signature Hirst "dots".
All of which means that – for now – London and the trio remain bound.

Nationwide seeks to raise up to £500m with core capital deferred shares

Nationwide branch
Nationwide's CEO said he expects investors to receive an annual payout of between 9.5% and 11.5%, with a cap of 15%. Photograph: David Sillitoe/The Guardian
Nationwide building society will raise up to £500m by issuing a type of debt that meets new rules on capital but does not compromise the group's mutual model – becoming the first customer-owned lender to do so.
Chief executive Graham Beale said the group spent four years designing the securities and will raise £300-500m through the core capital deferredshares, from institutional and professional investors.
The new instrument is an alternative to permanent interest rate-bearing shares (Pibs), which were issued by mutually owned financial services firms in the past. However, they no longer count toward core capital under new regulatory rules, and may address concerns over the mutual model. Mutuals were seen as vulnerable compared with publicly listed banks because they cannot tap existing shareholders for funds in times of crisis.
Beale said the issue would establish a precedent for mutuals across Europe.
He added: "It's also then available to the rest of the UK mutual sector, the other building societies and, talking to our advisers, they think this may well play out with some of the European mutuals."
Investors who buy the shares will be entitled to just one vote at meetings, regardless of how much they have invested.
The coupon on the shares is discretionary and not fixed. It will be based on how the business is performing. Beale said that, based on current market conditions, he expected investors to receive an annual payout of between 9.5% and 11.5%, with a cap of 15%.
Beale said the issue would improve its leverage ratio by between 0.12 and 0.2 percentage points.
Nationwide's leverage ratio stands at 2.3% and it must get that up to 3%6 by 2015. Beale said it was well-positioned to achieve that goal, which was agreed with Britain's financial regulator in July.
Beale said he does not expect Nationwide to issue more core capital deferred shares before 2015, and is confident it can meet that target through retained earnings. "The important thing is we've got a stake in the ground if we need to call on this sort of issuance but we have no immediate or medium term plans to issue," he said.
A prospectus is being sent to investors and trading in the new instrument will start on 9 December.
Nationwide said last week that it had more than doubled its profit in the first half of its fiscal year and was picking up business from all major competitors.
Its performance has contrasted with that of customer-owned rival, the Co-operative Bank, which has fallen under the control of US hedge funds after a £1.5bn capital shortfall.
Beale said Nationwide had not taken away significant numbers of customers from the Co-operative Bank after the scandal involving the bank's former chairman Paul Flowers.

Ikea's online expansion helps boost sales by 3.1%

Exterior of an Ikea store
Last year IKEA increased to around 80% the extent of its product range available online. Photograph: Peter Morrison/AP
Ikea has consolidated its flatpacked grip on British households with increased sales and market share, bolted on by its expanding online shopping, the Swedish group has announced.
Sales rose 3.1% to £1.27bn for the financial year to August, with a 29% leap in online sales, which allowed the world's biggest home furnishings store to reach new demographics. Last year IKEA increased to around 80% the extent of its product range available online, and spread its home deliveries to cover most regions of Britain.
In its 25th anniversary year in the UK, Ikea increased its leading market share in home furnishings by 0.2% to 6.4%. The sales figures reflect similar rises across the global group, where revenues reached €27.9bn across 26 countries.
Gillian Drakeford, Ikea's UK retail manager, said: "With the continued uncertainty around the recovery from the recession, we have continued to invest across our online and in-store shopping channels to create a simpler, more convenient and enjoyable experience and it's very humbling that our efforts have resulted in another year of growth."
Outdoor furniture saw the biggest leap in sales, up 58%, with stores now making the product range available throughout the year despite Britain's uncertain seasons. Sales in lighting also rose due to a push towards LED bulbs.
The company, established 70 years ago in Sweden, reached Britain in 1987 with its first store in Warrington. It now has 18 mammoth stores across the UK, its semi-warehouse model effecting a mass conversion of the country to DIY home furnishing and Scandinavian interior design at relatively cheap prices.
Profits for the year have not yet been disclosed and will be published in Ikea's annual report in January. Last year, profits dipped to just under £20m in Britain, which was its worst results for three years.
However, Drakeford said the market outlook in the medium term and Ikea's investment "to improve the shopping experience" should see it double its turnover and total market share by 2020.
Ikea UK is planning to focus in the coming year on selling more kitchens, by investing £8m in rebuilding its showrooms and improving delivery and installation services.
The firm will also be investing in energy-saving products and other environmental initiatives, including ranges designed to help customers save water, cut waste and save money. Solar panels will be sold in all stores by the end of this year and schemes promoted to encourage customers to recycle furniture at the store.
Drakeford said her team had put a renewed focus on trying to understand how their customers live and shop, as well as "their needs, dreams and wants in the home". This involved making more than 500 visits to customers' homes to see how they lived.
The picture is happier for Ikea this side of the Channel than in France, where three of its senior management team are being investigated by police over more unorthodox methods of research. Executives, including the chief executive of Ikea France, are accused of employing private detectives to snoop on staff and customers, with union activists and job applicants among those targeted.

Millions of households 'excluded from housing market

House keys on key ring
Excluded households are found across the country, Savills says, with the north and south of England suffering equally. Photograph: Alamy
More than 500,000 households a year have been prevented from moving on to or up the housing ladder by the fall out from the credit crunch, a report claims, while rising rents and house prices mean they are going to face further barriers to ownership in future.
Research by the estate agency Savills suggests that each year 200,000 would-be first-time buyers have been locked out of the market since banks and building societies started to clamp down on lending, and that initiatives such as Help to Buy are unlikely to benefit them.
"Although the property market is strengthening and mortgage availability is improving, many households are being left behind," says Susan Emmett, Savills residential research director.

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The researchers compared the current property market with activity before the financial crisis and said there was a "shortfall of 527,000 transactions a year". It said excluded households were found across the country, and that the north and south of England had suffered equally.
Even in London, where the housing market remained relatively buoyant throughout the downturn, Savills found the number of sales was down by 60,000 a year.
The government's Help to Buy scheme is designed to assist borrowers with small deposits by offering interest-free loans on new-build properties and a mortgage guarantee to lenders offering 95% deals. On Thursday, figures showed the scheme had resulted in almost 6,000 households buying new-build properties, while the mortgage guarantee had prompted around 2,000 purchases in its first month.
However, Savills said the people helped by the mortgage guarantee element were earning more than the excluded households it had looked at, in every part of the country except London. While the average salary of participants in Help to Buy was £45,000, the media income of an "excluded household" was £36,710 in the south of England, £25,410 in Wales and £22,662 in the north. In London it was £54,756.
The agency forecasts that house prices will rise by 25.2% over the next five years, while rents will go up by 21%, making it increasingly difficult for people to save large enough deposits. It suggested housing associations should step into the breach and provide homes at market as well as social rent.
"We need to end our fixation with homeownership", Emmett says. "With homeownership now in decline, bolstering the private rented sector with high quality housing at market rents is vital.
"Housing associations are well placed to take on this challenge and tackle a different kind of housing need. By broadening their tenant base to provide a proportion of their housing at market rather than social rent they could extend their revenue and cross-subsidise other tenures