Families of New Zealand mine disaster victims seek justice

Tom Peters

The Court of Appeal in Wellington heard a case last Tuesday brought by two women who lost family members in the November 2010 Pike River mine disaster. Sonya Rockhouse, whose 21-year-old son Ben died, and Anna Osborne, who lost her husband Milton, sought a judicial review of the Ministry of Business, Innovation and Employment’s (MBIE) decision in December 2013 to drop charges against Pike River Coal chief executive Peter Whittall.

The three judges have not yet said when they will hand down their ruling.

Ben Rockhouse

Milton and Ben were among 29 men killed by an underground explosion in the remote coal mine on the west coast of New Zealand’s South Island. In 2012, a royal commission found that the tragedy was preventable and numerous warnings about dangerous conditions had been ignored by the company and government regulators. The mine did not have a satisfactory second exit, as required by law, and its ventilation and monitoring of methane gas was inadequate.

In July 2013, Pike River Coal was found guilty of health and safety violations and ordered to pay $3.41 million in reparations, but its directors refused to do so on the grounds that the company was bankrupt. Whittall was the only individual charged over the disaster, accused of 12 health and safety violations. The charges were dropped, however, after a back-room deal between his lawyers and the MBIE. To avoid prosecution, Whittall and the former Pike River directors agreed to pay $3.41 million to the families without admitting any responsibility for the catastrophe.

Nigel Hampton QC, the lawyer representing Rockhouse and Osborne, told Radio NZ the MBIE’s decision to drop charges in exchange for the payment was “unprincipled and unprecedented.” The MBIE had not consulted the families about the decision and “failed to take into account [its] responsibilities to administer and enforce the Health and Safety legislation.” He told the court “the overwhelming purpose of that payment … was, we say on the evidence, to buy-off this prosecution.”

Anna Osborne and Sonya Rockhouse

Sonya Rockhouse told the World Socialist Web Site that she and Osborne wanted “to reinstate the charges against Peter Whittall,” but if they won the judicial review “nobody is quite sure what will happen because bringing him back to New Zealand to answer those charges is unlikely.” Whittall has moved to Australia, along with some Pike River Coal directors.

“We have to stand up for what we believe to be right,” she said. “There’s been injustices done here. Where else in the world could this happen and nobody be held to account? A drink driver is held to account if he kills somebody.”

Rockhouse opposed the decision to drop charges in exchange for the $3.41 million payment. “In court the other day they tried to intimate that we accepted the money. But if they had discussed it with the families, I would say that more than three quarters of the families, if not all, would have rather had the charges against Mr. Whittall. We were never asked by the ministry.”

Asked why she thought the Ministry dropped the prosecution, Rockhouse said: “I’m not really sure what their reasoning was. Maybe they were trying to hide something, maybe they were worried about what might come out … I think they just wanted the whole sorry mess over and done with as quickly as possible.”

Whittall refused to answer questions at the royal commission about his role leading up to the mine explosion, arguing that he expected to face charges. With the charges now dropped, Whittall has never had to give a full account of what happened at the mine.

Speaking about conditions in the mine, Rockhouse explained that Ben’s brother Daniel, a mine worker who survived the disaster, “told us afterwards that his gas sensor would go off frequently [indicating a potentially dangerous build-up of methane] and he would tell his boss. He was told: ‘Just shut the hell up and get on with your job.’ It was production over safety in Pike.” Pike River Coal was heavily in debt to its investors and making safety repairs would have been costly and interrupted production.

Ben was studying geology in Christchurch before moving to work at Pike River three months before it exploded. He was one of three workers killed who were employed by the contractor VLI Drilling. The company, a subsidiary of Valley Longwall International, pleaded guilty in 2012 to three health and safety violation charges for failing to maintain reliable safety gear. It was fined just $46,800.

Ben’s mother described the fine as “quite minimal considering they’re a huge company in Australia. It wouldn’t even have been an annoyance to them, it was so small, it was pathetic really.”

Rockhouse also denounced the National Party government and state-owned company Solid Energy, which purchased Pike River after the explosion, for refusing to allow the mine to be re-entered so evidence could be collected. Photographs taken by a camera lowered into the mine after the explosions, published in the media, appeared to show a body. “At the very least they could have tried to get into the 2.2-kilometre drift, which is the first part of the mine. We had several experts who said it was completely doable.”

Rockhouse was highly critical of the Engineering, Printing and Manufacturing Union (EPMU, later renamed E Tu), which had 65 members at the mine, over half the 120 Pike River Coal employees. “I feel very let down by the union and I know Daniel does too. After the explosion he barely heard from them and nor did we. I think that they could have played a bigger role before the explosion as well. They should have been making sure that safety was being followed. I just think they let [the miners] down.”

In the days after the explosion, then-EPMU leader Andrew Little told Radio NZ and the New Zealand Herald there had been no warnings of unsafe conditions in the mine and he praised its safety standards. He made no mention of a spontaneous walkout by workers to protest against the lack of emergency equipment, of which the EPMU had been made aware. The union did not organise any industrial action and worked with the company to prevent any interruption to mining operations or costly improvements in safety. In November 2014, Little became leader of the opposition Labour Party, touting his record of collaboration with big business.

“It doesn’t matter who’s in power, National or Labour, they’re all the same,” Rockhouse told the WSWS. “I honestly believe that it wouldn’t matter which government gets in, we’d still be fighting them.”

Border and immigration workers strike at Australian airports and ports

Terry Cook

Australian Department of Immigration and Border Force (DIBP) personnel, mostly members of the Community and Public Sector Union (CPSU), joined 24-hour stoppages from last Thursday. The union staggered the strikes over three days, affecting international airports, ports and other sites across the country.

The DIBP stoppages are part of a long-running enterprise agreement campaign involving over 100,000 federal public sector workers across a range of departments. The previous agreements expired in 2014, which means that, apart from cost-cutting enterprise deals signed in a few government departments, the vast majority of CPSU members have had no pay increase for three years.

During this time, the union has reduced its pay claim from a 4 percent increase per year over three years to between 2.5 percent and 3 percent.

Last week’s rolling stoppages came after the CPSU called off scheduled strikes by Border Force workers last April, following a Fair Work Commission (FWC) injunction banning all industrial action. The FWC acted on an application by the federal Liberal-National Coalition government, which claimed the strike posed a “threat to national security.”

The application was made under section 424 of Australia’s industrial laws, which were introduced by the previous Labor government with the full support of the unions. The FWC, or the federal industrial relations minister, can prohibit any industrial action deemed to “threaten to endanger the life, the personal safety or health or the welfare of the population or part of it.”

It was the second time “national security” had been invoked to shut down industrial action by DIBP workers. In March, the CPSU called off planned 24-hour stoppages following a request by Prime Minister Malcolm Turnbull after bombings that month in Brussels, Belgium. The union’s agreement to end industrial action on so-called national security grounds established a new anti-democratic precedent that will be used against other workers in key industries.

The Liberal-National Coalition government has offered public sector workers nominal 2 precent annual pay increases, conditional on workers accepting the loss of hard-won conditions.

For DIBP staff, the government’s “offer” involves eliminating multiple allowances, which could leave some workers $8,000 a year worse off, and scrapping various entitlements and arrangements, including access to flexible work hours.

In July 2015, when the government merged the Australian Customs and Border Protection Service and the Department of Immigration to create the DIBP, it abolished a raft of entitlements, severely reducing workers’ take home pay. After DIBP workers struck last year, the government agreed to maintain the former conditions but only until negotiations for new enterprise agreements were completed.

DIBP employees—along with most federal public sector workers, including in Human Services, Employment, Environment, Education, Agriculture, Veteran Affairs, the Australian Tax Office, the Bureau of Meteorology and the Bureau of Statistics—have repeatedly voted down government “offers” and overwhelmingly endorsed campaigns of industrial action.

In line with previous strikes, the CPSU has done everything possible to limit action by DIBP workers and isolate them from other public sector workers. It is seeking to wear them down in order to impose new agreements to meet the government’s budget-cutting requirements.

The government has insisted that any wages settlement will not be backdated. This means that the government, with the CPSU’s assistance, has imposed a three-year pay freeze, setting another precedent that will be taken up by employers across the board.

The CPSU has ensured that industrial action by DIBP workers and other public sector workers causes minimal disruption. On August 3, the union directed DIBP staff in 50 areas not to strike. In a statement announcing the exemptions, the union restated its commitment to “national security and safety.”

The CPSU’s principal concern throughout the dispute—the longest enterprise agreement conflict in the union’s history—has been to convince the government that collaboration with the union can best achieve its cost-cutting agenda.

The CPSU called no industrial action during the campaign for the July 2 federal election, while urging its members to vote for Labor as a “lesser evil” to the conservative Coalition. In reality, Labor governments at both state and federal levels have destroyed thousands of public sector jobs over the past three decades.

In 1987, the Hawke Labor government introduced an “efficiency dividend.” This measure, imposing annual funding reductions across the public sector, has been used by successive federal administrations to cut jobs and working conditions.

In 2013, the Gillard Labor administration increased the efficiency dividend from 1.25 percent to 1.5 percent, just before the 2013 federal election, clearing the way for the destruction of an estimated 14,500 jobs by the incoming Coalition government.

The narrow re-election of the government has seen the CPSU resume its appeals to Prime Minister Malcolm Turnbull to partner with the union to head off a confrontation. On the eve of last week’s strike, CPSU national secretary Nadine Flood said Turnbull could “avert future strike action, including the prospect of broader industrial action across the Commonwealth public sector, by working with us to fix this mess.”

The “mess” to which Flood referred was the refusal of the overwhelming majority of public sector workers to accept the government’s austerity demands. The CPSU is desperately seeking closer collaboration with the government in order to deliver the deep spending cuts being demanded by the financial and corporate elite.

Chinese power plant explosion kills 21

John Braddock

At least 21 people were killed, and five critically injured, by an explosion at a coal-fired power plant in central China last Thursday.

Asia Times reported that the incident occurred when a high-pressure steam pipe exploded at the plant at around 3:20 p.m. The pipe burst and started leaking during testing, according to Xinhua, the state news agency. The cause of the blast has not been immediately determined.

The plant is currently under construction in the city of Dangyang in Hubei Province. It is owned by the Madian Gangue Power Generation Company, which generates thermal power and sells slag, ash and petroleum products. A spokesman of the Dangyang government propaganda office told the New York Times that an investigation was underway and the government would release more details later.

Du Qiuxin, a villager who lives a kilometre from the plant, told Xinhua: “I was woken up by a loud bang which lasted for several minutes.” The news agency reported that a dozen emergency vehicles were seen at the factory gates and an unspecified number of injured were rushed to hospital.

The power plant uses coal gangue, also known as low-calorific coal, which is a waste product from the mining and processing of coal. Although coal gangue has relatively low energy value, and is considered more environmentally harmful than other types of coal, some central government officials and provincial governments have pursued approvals for more plants burning the gangue so that it is not left piling up at mine sites.

China’s industrial disasters are not “accidents,” but involve the systemic sacrifice of the health and safety of workers and residents for profit. The latest blast came a day before the first anniversary of large explosions that killed at least 165 people in the northern port of Tianjin.

The explosions at the Tianjin facility, which was storing more than 11,000 tonnes of chemicals and hazardous goods, sparked widespread anger over negligence by factory management and the lack of openness by officials about the cause of the disaster and its possible environmental impact. Ten chemical plants were later moved after being found to be too close to residential areas around the city.

Authorities in February released the findings from an official investigation, which recommended that 123 government employees be punished for offences, including dereliction of duty. Investigators blamed more than 10 government departments for their role in the disaster—from work safety and environmental protection officials, to customs, the police and planners—for failing to supervise and oversee the warehouse. The report also found that legal loopholes and lax implementation of regulations contributed to the catastrophe.

The State Council investigation was designed to close the matter down, and there has been almost no follow-up in the official media. Local residents, who remain deeply concerned about possible chemical contamination of the area, were forced to start moving back in June when the government stopped contributing financially toward alternative accommodation.

The authorities are trying to persuade the public and the media that those responsible for the Tianjin disaster have been punished, and that it is now time for everything to return to normal. Huge billboards placed around the vast denuded blast site call on people to unite in the construction of a “bright future” and “not dwell on the past.”

Anger over callous disregard for safety standards, corruption and bureaucratic cover-ups is growing after three decades of economic deregulation and the relentless pursuit of profits that has characterised China’s anarchic economic expansion under capitalist restoration.

In the wake of the Tianjin report, the Hong Kong-based South China Morning Post said questions remained over whether China had “really learned lessons from the Tianjin blasts.” While thousands of firms produce and store hazardous chemicals across the country, only six provinces make their information publicly available. Liu Chunlei, the head of Qingyue Environmental Information, said even in those six provinces, the information on the type and amount of chemicals used or stored was not complete. Few provinces made it clear where the potentially dangerous enterprises were located.

In order to quell deepening popular hostility, the State Administration of Work Safety published new regulations in June requiring companies to devise detailed contingency plans for workplace accidents. The revised measures give more detailed guidance to companies on writing, implementing, publicising and filing contingency plans for workplace accidents. The new rules also hike the penalties for violations.

Substandard safety practices are the norm, not the exception, and the regulations will change very little. Any disruption to the corporate profits extracted from the Chinese working class would only deepen the economic slump within China and globally.

According to the China Labour Bulletin (CLB), the latest official figures show that there were 28,115 workplace accidents and 16,059 deaths reported in the first seven months of this year. The majority stem from small-scale incidents that never get reported in the official media. In a “fairly typical” month for accidents in May, the CLB listed 11 separate incidents with a total of 16 fatalities. The most common causes of workplace accidents are structural and mechanical failures, particularly during maintenance or repair work, and traffic accidents, such as street cleaners being hit by cars.

Major explosions, like the one in Dangyang, represent a small proportion of the overall number of accidents. CLB’s Work Accident Map has recorded 37 explosions this year. In January, three people died when blasts swept a fireworks plant in Jiangxi Province. In April, a chemical fire burned for 16 hours in the coastal province of Jiangsu after an explosion at a facility storing chemicals and fuel, requiring 400 firefighters to put it out.

Many of the workers injured or killed in these incidents struggle to get a fraction of the compensation they are entitled to by law. Many poor and vulnerable workers in remote areas in China are lucky to get anything at all, especially if their employer is in league with local government officials who can cover the accidents up.

International bond markets turn “surreal” as speculation grows

Nick Beams

The value of negative-yielding bonds reached more than $13.4 trillion last week amid growing concerns that the actions of major central banks in pumping billions of dollars into the global financial system via various forms of “quantitative easing” are creating the conditions for a financial disaster.

According to figures compiled by Tradeweb for the Financial Times, the mass of bonds, corporate and government, with sub-zero yields rose by $300 billion in the course of the week. The escalation seems to have been sparked, at least in part, by the decision of the Bank of England to resume bond buying with purchases of £60 billion worth of government debt over the next six months in a bid to boost the markets following the Brexit vote to quit the European Union.

The decision sent yields plunging as bond prices rose—the two move in an inverse relationship to one another—with the yield on 30-year UK bonds now down to a record low of 1.3 percent, compared to 2.3 percent just three months ago.

The UK central bank was unable to find sufficient sellers for all the bonds it wished to purchase last Tuesday, indicating that bond market investors and speculators expect still further central bank action and even higher bond prices.

The international bond market is increasingly taking the form of a speculative bubble. A negative yield means that demand for a bond is so great and its purchase price so high that any purchaser would incur a loss if he held the bond to maturity. The investor is purchasing the bond in the expectation that its price will rise even further and he will be able to make a profit by selling it at a later date.

The demand for German government debt is so high that it now has on issue €160 billion of zero coupon bonds. These bring no interest and have been purchased solely in the expectation that their price will continue to rise.

Significant profits have already been made as the international bond market, once regarded as providing stability for the global financial system, increasingly resembles a multitrillion-dollar casino.

The soaring price of long-term British government debt means that the rate of return on 30-year bonds over the past 12 months is 31 percent. The rise in price of so-called “gilts” has been so rapid that the yield on the longest-dated bond, which matures in 2068, has almost halved since the day of the Brexit referendum, falling from 2 percent to 1.06 percent. The price of the bond has risen by 53 percent so far this year—the kind of rise normally associated with highly speculative stock, not long-term debt issued by the British government.

Mike Amey, the manager of sterling portfolios for the one of the world’s largest bond-trading companies, Pimco, described the speed of the move as “eye-popping.”

A senior investment officer at Prudential Fixed Income, Gregory Peters, told the Financial Times the situation had become “surreal.” He said, “It’s clear that central banks are dominating markets. There’s a race to the bottom.”

It appears that trading in bond markets has assumed the form of a mania, as everyone seeks to maximise immediate profits with no concern for what could be the consequences. “There’s too much acceptance of this,” Peters warned. “We’re talking about it in a cavalier way, but that’s not appropriate. It’s extremely distortive, and if we see a pick-up on the fiscal side, or inflation, it will look less comfortable sitting in this negative-yielding universe.”

The concern is that any action taken by governments to boost their economies through increased spending, or any unexpected spike in inflation, could send bond yields rising and prices falling. This would leave speculators who bought in at the top of the market, in the expectation that bond prices would climb still higher, with major losses.

The amounts involved are massive. Earlier this month, Fitch Ratings estimated that if yields went back to the levels of 2011, when they were already at historically low levels as a result of the quantitative easing programs following the 2008 financial crisis, total market losses could be as much as $3.8 trillion.

The official rationale for the quantitative easing policy was that lower interest rates were necessary to stimulate investment and consumer spending by lowering the cost of borrowing, thereby preventing the global economy from falling into a full-scale depression. But almost eight years of financial stimulus have failed to lift the real economy, with investment rates remaining well below where they were before the financial crisis. In the US, for example, the latest data on gross domestic product shows investment dropping by 9.7 percent in the second quarter.

In a comment published in the Financial Times on Friday, Eric Lonergan, the macro fund manager at M&G Investments, wrote that the policy of the central banks had been based on a false theory. There was, he noted, no empirical evidence to show that consumers tended to increase spending as a result of lower interest rates, and that when interest rates were very low, households tended to save more because of concerns about the future direction of the economy. Corporate investment was similarly unresponsive to lower rates.

“Investment decisions have financial consequences over many years, and are more influenced by beliefs about future growth and attitudes to risk than by overnight rates set by central banks,” he wrote.

“Companies have in the past few years responded to very low borrowing costs by engaging in relatively low-risk financial engineering such as share buybacks, potentially crowding out productive risk-taking.”

Lonergan did not say so openly, but his remarks pointed to the underlying cause of falling investment despite lowered borrowing costs—the persistent tendency of the rate of profit to fall. This decline was in evidence even before the crisis of 2008, and has increased since.

In the US, where the stock market has reached record highs because of low interest rates, profitability is worsening, with S&P 500 firms reporting weakening overall profits for four quarters in the row.

The only major area where falling interest rates have had a significant impact on the real economy is in housing, where ultra-low rates have fuelled the formation of housing bubbles in a number of leading economies, creating the risk of a new collapse in the housing mortgage market, as happened with the bursting of the subprime bubble eight years ago.

But the world’s major central banks are now caught in a trap produced both by fundamental trends in the global capitalist system and the results of their own policies. The US Fed would like to bring about a return to a more normal interest rate regime, while in the UK, Bank of England Governor Mark Carney declared that he was “not a fan of negative interest rates,” even as he introduced policies that sent British rates lower.

Such is the extent of speculation resulting from the quantitative easing regime that any return to even a semblance of normalcy threatens to set off a financial crisis that would go far beyond that of 2008.

Last week, the Swiss-based financial corporation UBS issued a research note citing several factors that could set off a major sell-off in the US Treasury market. Among the factors it listed were higher growth and inflationary expectations. But a return to these conditions is supposedly the aim of official policy.

As a comment in the Financial Times noted last month, any policy switch to loosen the austerity agenda that is devastating the lives of workers the world over would “herald a stampede” from the best performing sectors of global markets and prompt a rush for the exits, as investors moved to sell off their holdings.

The real issues in the 2016 US elections

Patrick Martin

With Election Day only 12 weeks away, the Democratic and Republican candidates, Hillary Clinton and Donald Trump, are running the most right-wing campaigns in the history of the United States.

Last week, Trump and Clinton each gave what were billed by their campaigns as major addresses on economic policy. They did not go beyond the demagogy and right-wing nostrums that characterize American capitalist politics. Trump called for even more tax cuts for the rich. Clinton called for a continuation of the policies of the Obama administration, which has overseen the greatest redistribution of wealth from working people to the rich in American history.

A new police murder Saturday in Milwaukee provoked widespread outrage and disturbances in the city. Trump campaigns as the defender of the police against any criticism of its violence and brutality. Clinton portrays the issue as purely a racial one, covering up for the class role of the police as the front-line defender of the wealth of the capitalist ruling elite.

As for the growing threat of imperialist war, Trump is to elaborate Monday on his plans for deploying more US troops and warplanes in the Middle East. Clinton has focused her campaign on her credentials as an aggressive “commander-in-chief,” attacking Trump from the right as a tool of Russian President Vladimir Putin.

Clinton has been backed in this by an unprecedented intervention from the military-intelligence apparatus, as former generals, admirals and spies declare their support for the former secretary of state and vouch for her credentials as a reliable representative of the national-security state. Three former CIA chiefs—Republican Michael Hayden, Democrat Leon Panetta and the “nonpartisan” Michael Morell—have gone on national television in the past week to tout her qualifications.

A growing number of Republican officeholders and former officials have declared their opposition to Trump, and in many cases their support for Clinton, for the most part citing her foreign policy “experience” and her hawkish views, going back to her vote for the Iraq War in 2002.

The corporate-controlled two-party system has presented the American people with the choice between the fascistic billionaire Trump, who advocates a mass roundup of immigrants, a ban on Muslims entering the country, and a massive buildup of the American military, and Clinton, the personification of the political establishment and the corporate status quo, an advocate of militarism and the drive towards war with Russia and China, both nuclear-armed powers.

There is a vast and growing gulf between the entire political system and the sentiments of millions of workers and young people. Trump and Clinton are the two most unpopular major-party candidates for president in modern history, with Trump deemed unacceptable by close to 70 percent of the population, while Clinton’s unfavorability rating tops 55 percent. As the Washington Post noted in a front-page report Sunday, for young people especially, the choice of Clinton vs. Trump “feels like a joke.”

While expressing revulsion at Trump, dozens of younger voters interviewed for the report voiced no enthusiasm for Clinton, a development the Postcalled “ominous.” Gone were the illusions inspired by the Obama campaign of 2008. According to the Post, “most talked about both her and Trump in searing, caustic words: Super villain. Evil. Chameleon. Racist. Criminal. Egomaniac. Narcissist. Sociopath. Liar. Lying cutthroat… Horrifying. Dishonest. Disgusting. Dangerous. Disaster.” Which term applied to which candidate was left unsaid, though most could equally apply to both.

Many of these younger voters backed the campaign of Bernie Sanders, yet his so-called political revolution has proven a cynical fraud, aimed, as the WSWS warned, at channeling oppositional sentiment into the dead-end of the Democratic Party.

One-quarter of younger voters told Post-ABC polls that they would support a third party candidate. In a separate study reported by USA Today, Trump’s support among voters under 35 stood at only 20 percent, an historic low for a major-party candidate, with more young voters planning to support no party or a third party than the Republicans.

The two officially recognized “third parties,” however, the Libertarians and the Green Party, offer no alternative to the Democrats and Republicans. The Libertarians espouse a more extreme “free market” version of capitalism than even the Republicans, while the Greens defend the profit system, combining minor reform proposals with economic nationalism and reactionary calls to reduce consumption. Where the Greens have come to power, they have invariably supported war and austerity directed against the working class.

Only one campaign offers a genuine alternative to the working class and youth: the Socialist Equality Party and its candidates, Jerry White for president and Niles Niemuth for vice president. The SEP campaign advances a socialist perspective based on three fundamental principles:

1) Oppose US militarism! Stop the drive to World War III!

Our campaign is breaking the conspiracy of silence of Clinton, Trump, the Obama administration and the corporate media on the war plans of American imperialism. Millions of people--in Iraq, Libya, Syria and Afghanistan--have been killed, injured or turned into refugees in the wars launched by the United States since 2001. These regional wars are leading to global conflict, as Washington prepares to confront Russia in the Middle East and Eastern Europe, and China in the Far East. The SEP campaign seeks to build the foundations for a powerful international anti-war movement based in the working class.

2) Put an end to poverty and social inequality!

The SEP fights to abolish a system in which the super-rich exploit the labor of billions of workers around the world. We call for a vast redistribution of wealth to secure basic social rights, including the right to a decent-paying job, quality education, affordable housing, universal health care, a dignified retirement and access to culture. The SEP advances a program not for the reform of capitalism, but for its abolition and replacement by socialism.

3) Defend democratic rights! No to government spying and police violence!

The growth of anti-capitalist sentiment in the US, as revealed in the support of millions of workers and young people for the campaign of Bernie Sanders, has frightened the US ruling elite. It is stepping up its preparations for mass repression of social opposition in the United States while relying on the Democratic Party and its pseudo-left apologists to split workers along the lines of race, gender and sexual orientation.

Whatever happens in November, the working class around the world confronts profound dangers. Even before the elections, a new war could erupt, as shown by the provocations this past week by the US-backed government in Ukraine against Russia. The world economy is mired in crisis, with mounting signs that the endless free money policy of global central banks is exhausting itself. Workers around the world are beginning to fight back against austerity and the greatest levels of social inequality since the Great Depression.

The struggles of workers all over the world must be unified and transformed into a conscious political struggle to overthrow the capitalist system and establish socialism--a global system of economic planning based on the satisfaction of social need.

It is to build the necessary political leadership for this struggle that the SEP is running candidates in the 2016 elections. We call on all our readers to join us in this struggle. To fight against war and barbarism, against inequality and dictatorship, make the decision to support our campaign and join the Socialist Equality Party.

Sri Lankan government imposes IMF privatisation demands

Saman Gunadasa

Late last month SriLankan Airlines signed an agreement with Pakistan International Air Line (PIA) to lease three A330 planes to PIA. The deal, which is another stage in the privatisation of the national carrier and follows job downsizing in preparation for its sale, is in line with International Monetary Fund demands for the “reform” of Sri Lankan state-owned-enterprises (SOEs).

The new leasing arrangement follows announcements by Prime Minister Ranil Wickremesinghe that several state-owned enterprises, including the Hilton Hotel, the Grand Hyatt and Lanka Hospitals, will be put up for sale. The government, he said, was considering the sale of Mattala airport and Hambantota seaport to the Chinese companies that built them in order to reduce government debt.

Minister of Development Strategies and International Trade Malik Samarawickrama told the recent Sri Lanka Economic Summit: “Over the next few months it is our intention to dispose of hotels, Lanka Hospitals and private commercial property in Colombo business districts via the stock exchange or through requests for proposals,” he said.

In a report last May, the IMF said it wanted the privatisation of SriLankan Airlines completed by September this year. According to the Sri Lankan ministry of finance, the national carrier had a debt burden of over 62 billion rupees ($US427 million) and was seeking a suitable business partner.

Last February, the airline ended its Colombo–Rome route and plans to withdraw from its Colombo–Frankfurt and Colombo–Paris routes by October.

On June 28, SriLankan Airlines chairman Ajith Dias told staff that ground-handling duties currently organised by the airline at Bandaranaike International Airport (BIA) will be privatised. Airline workers have protested against the move, pointing out that ground-handling is profitable for the airline and warning that other departments, such as catering and engineering, would also be sold off to private companies. A staff representative told the media that the government was forcing the airline to “suffer a slow but natural death.”

The privatisation of SriLankan Airlines is an indication of what is in store for other Sri Lankan SEOs. The IMF regards Sri Lanka’s state-owned enterprises as a major burden on the economy as well as a potential source of profit for private investors.

Its May report declared: “Sri Lanka had some 235 public enterprises representing 17 percent of the nation’s economic activity in 2010. Although some SOEs are profitable and performing well, collectively they represent a drag on the private economy and a drain on public finances (both directly, and through the state banks, which fund the largest SOEs).”

The IMF identified six of the largest SOEs—Ceylon Petroleum Corporation (CPC), the Ceylon Electricity Board (CEB), SriLankan Airlines, National Water Supply and Drainage Board, Airport and Aviation Services Limited, and Sri Lanka Ports Authority—and demanded major “structural reforms.”

It called on the government and the SOEs to publish “statements of corporate intent,” outlining “the SOE’s mission, high level objectives, and multiyear corporate plan; capital expenditure and financing plans; explicit financial and non-financial targets; and description and cost of non-commercial obligations.”

The IMF declared that the CPC and CEB were losing money because of “implicit energy subsidies—retail fuel and electricity prices have been set below cost-recovery levels” and signalled that the government would increase the rates on these items, as well as water, by December.

“The authorities will introduce a formula-based automatic pricing mechanism for petroleum products, so as to ensure that future losses by the CPC and large retail adjustments are avoided. Also, the Public Utilities Commission will be granted enhanced authority to set electricity and water tariffs in a cost-reflective manner,” the IMF said.

The Sirisena-Wickremesinghe government has included these directives in the ministry of finance’s half-year report, declaring that the CEB would “move towards cost reflective pricing policies” and that the National Water Supply & Drainage Board was quickly moving “to reduce non-revenue water.”

Addressing the recent Sri Lankan Economic Summit, Development and Trade minister Malik Samarawickrama said the government was establishing a public private partnership (PPP) framework that “clearly lays out policy, legal and institutional obligations for contracting PPPs.”

He said that a Public Enterprises Development Bill, which is aimed at “efficient governance” of SOEs, will be presented to parliament next month. This means downsizing, layoffs and attacks on working conditions similar to those being already being implemented at SriLankan Airlines.

A job destruction “Voluntary Retirement Scheme” has already been introduced at the Sri Lanka Transport Board. Minister of Fisheries and Aquatic Resources Mahinda Amaraweera has also announced that 415 jobs, or almost half of the 1,100 positions at the Fisheries Corporation, should be eliminated in order to create the conditions to convert the state-owned corporation into a private public partnership.

The Sirisena-Wickremesinghe government is acutely aware that these moves to corporatisation and privatisation will face stiff resistance from the working class. This is why Colombo is strengthening the police-state apparatus built up during in the 30-year civil war against the separatist Liberation Tiger of Tamil Eelam.

The government has enacted a range of new laws on national security and organised crime that will be used to curb all democratic rights, including strikes, workers’ protests and demonstrations. A warning of how these new measures will be used is indicated in the police repression against the struggles of university students and the crackdown against the recent strike by non-academic university staff.

Australian government blocks Chinese bids for electricity grid

Mike Head

The Australian government announced on Thursday that it would block bids by two Chinese-based companies for a controlling stake in a major power grid network on unspecified “national grounds.” The decision, which has triggered deep disquiet in Australian business circles, is in line with Washington’s escalating confrontation with China throughout the region.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison both cited security concerns to justify barring the $14 billion sale of a 99-year lease of 50.4 percent of Ausgrid to either of the bidders—China’s government-owned State Grid Corp and Hong Kong’s privately-owned Cheung Kong Infrastructure Holdings (CKI). They gave the two companies a one-week deadline to “mitigate” these concerns before making a final ruling—an indication that the outcome is already determined.

The Liberal-National government provided no explanation for an obvious shift in its stance. Both companies have been cleared in recent years to buy significant stakes in electricity and gas networks across the country, and were given initial clearances late last year to proceed with their Ausgrid bids.

These are not small firms. State Grid is the world’s second largest company, according to Fortune 500, and the largest electricity utility corporation, with energy assets in the Philippines, Brazil, Portugal and Australia. CKI is part of the CK Hutchison Holdings empire of billionaire Li Ka Shing, which has infrastructure and telecommunications operations around the world.

Turnbull and Morrison denied that the decision was “country-specific,” but this has convinced no one. Morrison declared that he could not reveal what the national security concerns were, not even to the two bidders.

Turnbull said the advice of Australia’s security agencies was “unequivocal,” but denied that the decision was aimed at China. Yet all these intelligence agencies have close ties to their US counterparts.

Peter Jennings, the executive director of the government-funded think tank, the Australian Strategic Policy Institute, was explicit that China was the target, however. “The danger for us is to pretend that there’s some sort of invisible separation barrier between how China behaves militarily in the region on the one hand and how it directs investment on the other,” Jennings told Reuters today.

Significantly Jennings spearheaded a campaign last November against the leasing of Darwin’s civilian port to a Chinese company—a move that had provoked outrage in Washington. Darwin, in northern Australia, is increasingly becoming a crucial hub for US military operations in Asia.

Jennings said the situation had altered since power grids in some Australian states were leased to Chinese companies. He told the Weekend Australian: “There’s been a change of leadership in China and under President Xi Jinping, and what we see is a much more assertive and aggressive Chinese foreign policy, particularly in the South China Sea. Now China’s foreign policy looks increasingly like (Russian President Vladimir) Putin’s foreign policy.”

While Jennings did not spell out the implications, his comments only have any meaning within the context of Washington’s accelerating preparations for conflict against China. Why else would a Chinese company pose an unspecified security threat to the Australian power grid, or carry out hostile actions that would forfeit its investment, except in conditions of all-out war?

After President Barack Obama personally admonished Turnbull over the Darwin lease last November, the Australian government altered its Foreign Investment Review Board (FIRB) regime for approving overseas investments. First, former Australian Security Intelligence Organisation (ASIO) director-general David Irvine was added to the FIRB board. Then, in March, all state government asset sales were added to the lists of transactions that must be cleared by the FIRB.

The opposition Labor Party, which backs the US military build-up in Asia against China, quickly supported the Ausgrid ban. Shadow treasurer Chris Bowen stated: “Labor agrees that national security considerations must be paramount in foreign investment approval decisions.”

Beijing has reacted angrily. A comment in Xinhua, the official news agency, dismissed security concerns. “To suggest that China would try to kidnap the countries’ electricity network for ulterior motive is absurd and almost comical,” it stated. The article accused the Australian government of pandering to “paranoia over Chinese investment” and “the dangerous mindset of China-phobia.”

An element of the government’s decision might well be a bid to gain support from right-wing populists such as Pauline Hanson and Nick Xenophon who in last month’s election sought to channel widespread social discontent in economic nationalist and xenophobic directions. The promotion of economic nationalism, blaming China for the lack of jobs and deteriorating living standards, is itself a symptom of the deepening drive to war. Xenophon openly champions the building of the new Australian submarine fleet in his home state of South Australia as the means to ensure that the Australian navy has the capacity to assist the US to confront China.

Within leading business circles, however, the decision has aroused alarm because of its broad economic implications. These go beyond the prospects for multi-billion dollar privatisations, like Ausgrid, on which numbers of state governments are relying to offset falling tax revenues and rising debts. There are wider fears for the impact on inflows of Chinese and other foreign investment, under conditions of global slump including in Australia.

Prominent business leaders described the decision as “perplexing,” “shambolic” and likely to generate “sovereign risk fears” among investors. The Business Council of Australia, which represents the country’s largest firms, said it “respected” the government’s decision, but “it is important to remember that throughout our history, foreign investment, particularly foreign direct investment, has been crucial for Australia’s economic growth.”

These fears were reflected in today’s Australian Financial Review editorial, which noted that “no Western country is as dependent on China as Australia is,” yet now “the underlying assumption is that China is a threat to Australia’s security.”

The ruling elites are caught in a basic dilemma—dependent, on the one hand, on the longstanding US military alliance as the means for pursuing Australian imperialism’s vital interests in Asia and globally, and, on the other, reliant on China as the country’s largest trading partner and increasingly as a source of investment.

In the Weekend Australian, editor-at-large Paul Kelly warned that the dilemma was becoming more profound and blamed China. “Having China as our major trading partner was relatively easy… Australia is now at the cutting edge of two big trends from China—as a creditor power it is surging across the world... yet as a rising military power it is militarising the South China Sea, flouting international arbitration and refining the techniques of cyber infiltration.”

In reality, it is Washington that has stoked territorial disputes in the South China Sea, including by orchestrating the recent Philippines legal challenge to Chinese maritime claims. This is part of Washington’s broader “pivot to Asia” to aggressively confront China, including through a military expansion across the region.

With Australian capitalism facing intense economic and strategic crises, the Ausgrid decision is another warning that workers and youth in Australia, and throughout the Asia-Pacific region, are in danger of being dragged into a potentially catastrophic military conflict between the US and China.

Terror suspect killed in Canadian police-military operation

Roger Jordan

Canadian authorities are claiming that a security operation involving the Royal Canadian Mounted Police (RCMP), a Canadian military Special Forces unit and a bomb squad thwarted an imminent ISIS-inspired terrorist attack Wednesday.

The alleged terrorist, 24-year-old Aaron Driver, was killed in the operation, either from a gunshot fired by a police officer or army sniper, or by an explosive device that he reportedly set off in the back of a taxi just outside his home. Under court order, Driver was living at his sister’s house in Strathroy, a small southwestern Ontario town.

Driver was well known to the authorities. In June 2015 he was illegally detained for eight days without charge. He was subsequently placed under a peace bond, a measure the state can use to restrict an individual’s movements and activities under conditions where they cannot lay criminal charges due to lack of evidence.

According to the RCMP’s version of events, a tipoff from the FBI alerted them to the imminent prospect of a terrorist attack after a video featuring a masked man appeared online. Within three hours, Canadian authorities had identified Driver as the person in question and dispatched personnel from Canada’s national anti-terrorism force to Strathroy. Shortly after 4:30 p.m., as Driver got into the back of a taxi, police opened fire and an explosion was heard, in the course of which Driver died and the taxi driver suffered light injuries.

The RCMP and Canada’s domestic spy agency, the Canadian Security and Intelligence Service (CSIS), say they had concluded Driver’s alleged attack was planned to take place within 72 hours and that it would target a transit system or shopping center in a major urban area with the aim of causing mass casualties.

They concede that there is no evidence he had any accomplices, let alone assistance from ISIS or another terrorist organization. The explosives Driver planned to use were reportedly homemade.

Driver was clearly a troubled individual. A recent convert to Islam, he had repeatedly expressed support for the Islamic State in online postings. In the video released by the police, he vowed to make Canadians pay with their blood for Ottawa’s involvement in the wars in the Middle East, lauded the reactionary terrorist atrocities in Paris and Brussels, and pledged allegiance to ISIS leader Abu Bakr al-Baghdadi.

Driver had a difficult childhood, with his mother dying when he was seven. Both his father and stepmother were Canadian military personnel, and as a consequence, the family moved frequently. He converted to Islam in his late teens after discovering it online. He first came to the attention of intelligence officials in October 2014, when he began posting on Twitter about his support for the twin attacks on Canadian Armed Forces personnel in Ottawa and St. Jean-sur-Richelieu, Quebec.

Extremely restrictive conditions were imposed on Driver when he was released following his 2015 arrest. He was ordered to attend religious counselling, provide the counselor’s name to the RCMP, and wear an electronic tag. These conditions were lifted when Driver agreed to abide by the peace bond in court last February.

Wednesday’s events remain shrouded in secrecy

It is impossible, with the information currently available, to determine whether the authorities’ account is truthful. But Driver’s death and the circumstances surrounding it raise a host of questions, including whether the police summarily executed an injured Driver.

First, the claim that Driver was hours away from conducting a terrorist attack without the authorities having any knowledge begs interrogation. The peace bond subjected him to a number of onerous conditions, including a ban on owning a computer or cell phone unless it was reported to the police, a stipulation that he reside with his sister, a prohibition on accessing social media sites, and regular meetings with a bail officer.

At the very least, Driver’s ability to bring his alleged plan to such an advanced stage points to a major blunder on the part of the security forces, given that they would have been able to monitor his communications at will and otherwise track his movements.

The mass spying operations run by the Canadian government, which came to light thanks to whistleblower Edward Snowden, stand in stark contrast to the repeated claims by senior police officials that they lacked the resources to subject Driver along with all the other Canadian supporters of jihadi terrorism to constant surveillance.

In fact, Driver had been singled out for special treatment, no doubt because the authorities deemed him especially dangerous. According to Elizabeth Armitage of the Public Prosecution Service of Canada, only 11 people have been subjected to anti-terrorism peace bonds. With Driver’s death, only one peace bond remains active.

This makes it all the more damning that the authorities failed to investigate a July 31 complaint from a neighbor about explosions, which they thought sounded like fireworks, coming from Driver’s backyard.

Another possibility that cannot be excluded is that Driver was allowed to proceed with his preparations so as to create conditions for the RCMP and armed forces to conduct a “real-life” anti-terrorism exercise.

That such a scenario is far from impossible is demonstrated by the recent court ruling that more than 240 RCMP officers were involved in an entrapment operation, which actively encouraged an isolated couple from British Columbia who had recently converted to Islam, to plan an attack on the province’s legislature.

Even more troubling questions arise from the manner in which the authorities chose to stop Driver from proceeding with his plans. Having surrounded his house, why did they not demand he surrender or at the very least seek to apprehend him before he called and got into a local taxi? And why, almost two days after Driver’s death, have the authorities yet to clarify how he died? Was it from his having set off his crudely-constructed bomb or, as appears more likely, was he felled by police bullets after the bomb blast had left him injured, if not incapacitated?

None of these issues have been raised in the media coverage, nor in the response from the political establishment, which has assumed a predictably right-wing character.

Canada and the phony “war on terror” narrative

Driver’s death is being seized upon to perpetuate the narrative of Canada being under attack from terrorists, an attack that must be countered through a continuation of the Mideast war and a strengthening of the already repressive state apparatus.

The alleged terrorist threat has been used by successive governments to legitimize Canadian imperialist operations in the Middle East, Central Asia and Africa. The Liberal government is currently preparing to announce yet another deployment of up to 1,000 troops and warplanes to an as yet unidentified African country or countries. The fraudulent claims that such a military intervention will be aimed at promoting peace and combatting the emergence of terrorist groups in West Africa are designed to cover up the real motivations for such an intervention—Canadian imperialism’s significant economic and geopolitical interests in Africa.

Liberal Public Safety Minister Ralph Goodale released a statement Wednesday night praising the operation against Driver, saying the RCMP had acted “to ensure public safety.” Goodale added that he had conferred with Prime Minister Justin Trudeau and had reassured him that public security “continues to be properly protected.”

Goodale went on to boast that the Liberals had allotted an additional half billion dollars in their first budget to the police, national security and border control, and that this was proof of the government’s determination to fight terrorism. He added rather ominously, “We’ve made our first investments in that direction and there will be more to follow.”

The Conservatives exploited Wednesday’s events to attack the Liberals for their plans to make minor alterations to the draconian Bill C-51 “anti-terror” law passed by the Harper Conservative government in spring 2015. The legislation, which the Liberals voted for, gives CSIS the power to actively “disrupt” vaguely defined “threats” to public security and to break virtually any law when doing so. It also created a new offence of promoting terrorism in general, established provisions for the prohibition of terrorist “propaganda” and granted police the power to detain suspects without charge for up to seven days.

The Liberals’ planned amendments include the creation of a parliamentary oversight committee, ensuring that all court-issued warrants comply with the law, and a redefinition of the terrorist propaganda clause.

“I think it’s time, sooner than later, that Mr. Trudeau put to rest what it is his plans are with Bill C-51,” said interim Conservative leader Rona Ambrose. “It’s important that the Liberal government reassure all Canadians that … our security and intelligence services are going to be able to keep the tools that they need to do their job.”

Some media coverage has suggested that even more draconian measures are now required. The Globe and Mail noted in a report Thursday, “The episode also underlined the limits of the authorities’ ability to control wannabe terrorists with judicial tools such as peace bonds.”

The RCMP’s former deputy commissioner, P.Y. Bourdas, singled out encrypted communication as a concern in comments to CBC. Driver allegedly communicated via an encrypted messaging service with two British men who travelled to Syria to join ISIS. Citing the threat of terrorist attacks, elements within the national security apparatus in both the US and Canada have been demanding sweeping restrictions be placed on the public’s use of encryption software.

US Special Forces coordinating operations in Libya

Thomas Gaist

American ground troops were involved in fighting in Libya this week, in operations that include supporting local militias and coordinating air attacks from a secret base just outside of Sirte, a coastal city that was reduced to rubble by the 2011 US-NATO bombing campaign.

“US forces have gone in and out of Libya to exchange information with these local forces in established joint operations centers, and they will continue to do so,” US Deputy Defense Press Secretary Gordon Trowbridge said on Wednesday.

The US Special Forces operating in Libya are based out of “joint operations rooms,” and are providing “intelligence, surveillance, and reconnaissance (ISR) and precision strikes—that will help enable GNA-aligned forces to make a decisive, strategic advance,” Trowbridge said.

US Africa Command (AFRICOM) plans more small deployments of US troops, Trowbridge said, and has launched airstrikes against some 30 targets since last week, in support of Libyan militias fighting on behalf of the Government of National Accord, which have reportedly succeeded in retaking some 70 percent of Sirte, previously held by Islamic State.

The Pentagon established at least two secret bases in Libya last fall, unnamed Defense Department sources told the Washington Post in May. US Special Operations forces are using the bases as springboards to develop joint operations with various local militias in preparation for the attack against Sirte.

These operations, though justified in the name of the “war against the Islamic State,” represent the spearhead of a renewed imperialist military intervention in Libya that aims to exploit the chaos produced by the 2011 war to assert control over the country’s oil resources and prepare the way for further neocolonial predations throughout North Africa.

US forces are backing an array of proxy forces inside the war-devastated country, including the Libyan National Army (LNA) led by General Khalifa Hafter, who has been a known asset of the Central Intelligence Agency (CIA) since the 1980s. Washington intends to develop a new “long-term mission” in Libya, US General Joseph Dunford said in May.

Beyond Libya, US military-intelligence cadres are “mapping local networks both friendly and unfriendly,” a retired US Special Operations Command officer said in May. Under the pretext of fighting the Islamic State-affiliated militant group Boko Haram, Washington organized an invasion of northern Nigeria by the Chadian and Cameroonian militaries in the opening weeks of 2015. The US-backed African forces are encamped around Lake Chad, where they are joined by a growing number of US commandos, in preparation for a direct US military intervention in Nigeria.

A new scramble for Africa is unfolding, under the leadership of American imperialism, which is expanding its interventions in every strategic area of the continent. The European powers, following in the wake of their American partners, are eager to re-establish their old colonial dominions.

France’s military is involved in military operations in Libya, as revealed by the death of three French soldiers in a secret operation last month, and has seized on the destabilization of Mali by the outflow of guns and fighters from Libya to development of a permanent presence of thousands of troops throughout the Sahel.

BHS scandal in the UK: The real face of capitalism

Jean Shaoul

Years of corporate asset stripping and the financial skulduggery that epitomises the pursuit of “shareholder value” have ensured the demise of high street retailer British Home Stores (BHS).

One hundred sixty-four stores are set to close, while 11,000 workers will lose their jobs and 22,000 workers, including retired workers, will lose much of their pensions. Tens of millions of unpaid taxes and redundancy costs will be borne by taxpayers.

But as far as two House of Commons select committees were concerned, Sir Philip Green, the former owner of the high street retailer BHS once lauded as “king of the high street,” had committed no crime. He was simply the “unacceptable face of capitalism.”

The report of the Work and Pensions and Business, Innovations and Skills Committee is just one of many similar reports into corporate scandals published in the 43 years since Conservative Prime Minister Sir Edward Heath dubbed the events at Lonrho, the African-based mining conglomerate headed by Roland “Tiny” Rowland, as “the unpleasant and unacceptable face of capitalism.” Rowland’s position as Lonrho chief executive was the subject of a 1973 High Court case in which eight Lonrho directors sought his dismissal. Among the claims made against Rowland were that he concealed financial information from the board.

Heath’s aim was to present Lonrho as an aberration, and to deflect attention from the more fundamental processes of which they were an expression. This latest report, which paints a devastating picture of the criminality, parasitism and greed of British capitalism, has the same aim.

BHS, for long a major player on Britain’s high streets, collapsed last April with debts of £1.1 billion. Its owner, Retail Acquisitions Ltd, a financially dubious outfit, was headed by Dominic Chappell, a thrice bankrupt former racing driver with no retail experience. In March 2015, he bought the financially distressed BHS from Green for just £1, following an introduction by Paul Sutton, a convicted fraudster. Green was anxious to offload the chain, which the Work and Pensions Committee said “had become a financial millstone and threatened his reputation.”

Green, a billionaire ranked 29 of 1,000 in the Sunday Times’ rich list, had bought the store for £200 million in 2000 via a leveraged buyout, and proceeded to bleed the company dry, slashing wages and conditions and squeezing his suppliers. While this enabled him to boost BHS’s profits in the short term, it fatally undermined its long-term viability.

Green starved BHS of much needed investment, allowed the pension fund to go from a pension surplus to a £571 million deficit, loaded the company with debt payable to his other companies, and used BHS’s assets to secure the loans. At the same time, Green funnelled at least £1.5 billion out of BHS through a complex web of companies, many of which were registered offshore, in the form of dividends to his wife, a resident of Monaco, thereby avoiding UK tax.

The report accused him of appalling judgement and excessive greed in allowing a pension surplus to become a huge deficit on his watch, taking hundreds of millions out of the business in dividends, and then selling BHS for £1 to Chappell, who was “manifestly unsuitable” and “a chancer” with no retail experience and a long record of bankruptcies.

Moreover, Green loaned money to Chappell to fund the purchase, holding on to £35 million of BHS assets as security. Thus, he is now BHS’s chief creditor who must be paid first, ahead of unsecured creditors, including the tax authorities and outstanding employee claims.

The promised £120 million that would secure the future of BHS—the apparent basis for the deal—never materialised and the situation deteriorated. Despite negotiating a rent reduction and selling some of its property, BHS was unable to pay its creditors or plug the pension gap. After Green’s Arcadia Group demanded “immediate” repayment of the £35 million loan, BHS called in the administrators.

The report also exposed the complicity and criminality of some of the biggest names in the City of London. It noted that the City law firm Olswang and accountants Grant Thornton had received some £8 million in fees in their capacity as advisers to Chappell’s outfit when it was so clearly unfit to lead any enterprise. When the Commons asked for the documentation surrounding their role in the catastrophe, they refused to cooperate, claiming “confidentiality.”

Similarly, Green’s advisers, the leading law firm Linklaters, relied on Olswang for the “due diligence” checks on Chappell to assess whether he was reputable. Green’s investment banker, Goldman Sachs, while claiming only to provide informal advice to Green, became the “gatekeeper” of the transaction, lending “lustre to an otherwise questionable process” and gave Green a chance to say he had acted on the best advice.

The distinguished barrister Lord Grabiner, the well-remunerated chairman of BHS’s ultimate parent company, was asleep at the wheel, taking no part in the sale. He admitted he had only learned about the sale to Chappell from the media. This is the man who, until recently, was collecting huge fees for advising the Bank of England on ethical wrongdoings.

The report reiterated the tired refrain of the need for stricter accounting procedures, oversight and pension controls, and said that Green had a “moral duty” to find a resolution for BHS pensioners. Thus far, he has offered the trifling sum of £40 million. This from a man with three yachts, the latest costing around £100 million, and a penchant for extravagant parties costing millions.

The two parliamentary investigations into the collapse demonstrated the real state of relations between Britain’s corporate and political elites. Green’s evidence session saw him contemptuously dismissing subservient legislators with constant interruptions, bullying, insults and evasions. Every word spoken by this arrogant super-rich billionaire expressed his outrage over their audacity to question him, even in the meekest manner that they did.

Green’s response to the report was to threaten to sue Frank Field, the chair of the Work and Pensions Committee, after the legislator accused him of behaving like a thief during a radio interview.

When Heath made his remarks in 1973 about Lonrho being the unacceptable face of capitalism, the processes he pointed to were only just beginning.

Today, the BHS collapse and Green’s role expresses in so many ways the real face of Britain’s financialised and parasitic capitalism, stripped bare of all the cosmetic niceties in which it is usually dressed.

Asset stripping, sale-and-lease-back arrangements, the use of a complex web of companies and tax havens are now the norm, not the exception. Advisers, in the words of the Work and Pensions Committee, are used to legitimise “people who would otherwise be bereft of credibility,” while the board of directors, far from exercising any check over a CEO, facilitate the expropriation of the wealth created by the workforce by the corporate owners.

BHS is only the most graphic expression of what has become the universal “business model” for achieving “shareholder value.” This mode of accumulation, with its attendant semi-criminal activities, has come to dominate society as a whole. No amount of controls and regulations can rectify this situation because the processes that gave rise to it are no longer peripheral but central to the functioning of the capitalist economy.

The political task today is not a futile attempt to reform the present social order but rather its complete transformation. The needs of working people—the producers of all wealth—are subordinate to the ever-more frenzied process of profit accumulation for the benefit of the enriched few. Living conditions for the majority have become intolerable. Society must be re-organised along socialist lines, so that the mode of accumulation of wealth is subordinated to the needs and requirements of its producers and is controlled and regulated by them.