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German green foundation joins efforts to complete Nord Stream 2



For years, the struggle to finish Nord Stream 2 has pitted Washington against Moscow and divided Europe. Now, a small German state has stepped into the fray with an unusual move: forming an environmental foundation to help finish the gas pipeline.

Mecklenburg-Western Pomerania (MV), along Germany’s northeastern coast, is home to the logistics hub and endpoint of the embattled project that is almost completed but stalled for more than a year by US sanctions.

This week, MV launched the Climate and Environmental Protection Foundation with €200,000 of state funds and €20m from the pipeline project, owned by the Kremlin-backed Gazprom gas group.

Nord Stream 2 opponents are baffled as to why one of Germany’s least populated states would publicly defy powerful US sanctions. German environmentalists, meanwhile, accuse the state of “greenwashing” its role in a geopolitical struggle that has nothing to do with climate change. 

“A foundation claiming to promote environmental protection should not be founded by a fossil fuel project,” said Theresia Crone, an activist who organised a protest and petition with more than 24,000 signatures against the foundation. 

Nord Stream 2 declined to answer queries sent by the Financial Times but said the foundation would “promote Germany’s climate goals and support the work to complete the Nord Stream 2 pipeline”.

The US and most eastern European countries argue that the €9.5bn project would increase Europe’s reliance on Moscow. But Washington is in a tricky position with Germany, an ally that supports what it says is a purely commercial venture. 

The foundation comes at a sensitive moment for German-American relations, as President Joe Biden seeks to reset relations strained during Donald Trump’s presidency. Yet cold war echoes resonate in MV, part of former East Germany, where Moscow remains popular enough to hold a “Russia Day”, and Washington is viewed warily.

The Nord Stream 2 gas pipeline in Lubmin, north-eastern Germany © AFP via Getty Images

Local leaders tout a position widely held in Berlin, too — that US sanctions are meant to force Europe into buying US liquefied natural gas.

Claudia Müller, a local Bundestag MP from the Greens, who opposes both US LNG and Nord Stream 2, said the foundation was particularly questionable.

She pointed out that its laws allow Nord Stream 2 to propose the managing director for the foundation’s business arm, and gives it the right to select two of the 18 board members. Erwin Sellering, one of three appointed foundation heads, is a former state premier and Nord Stream 2 supporter. Neither he nor the other chairs have any environmental qualifications.

 “It’s quite obvious they [Nord Stream 2] rule this entity,” she said. “So the question is: ‘Is this really a foundation?’”

Fossil fuel companies often fund foundations to offset environmental degradation, said Sascha Müller-Kraenner, director of the German Environmental Agency (DUH). “But having a state government involved, with the main purpose being to support construction of the pipeline itself — that’s new,” he said. “I find it highly problematic.”

DUH is filing two lawsuits against the foundation — one in German courts, arguing the entity should not be considered a public foundation, which enjoy looser oversight and transparency regulations, given that 99 per cent of funding comes from a Gazprom-owned project. It has also filed a complaint to the European Commission, saying a public project promoting one company’s project violates state-aid regulations.

Christian Pegel, energy minister of MV, defended the project, saying its main purpose was environmental protection, “over which Nord Stream 2 has no influence at all”.

Perhaps the most contentious aspect of the foundation is that it will also engage in business activities related to Nord Stream 2, purchasing material needed by companies that are interested in working on the pipeline but might face US sanctions. 

Mr Pegel said this would allow the project to be finished regardless of US curbs. “This foundation can buy machines and products now, before the new sanctions take effect, and store them. Then, when they are needed in a year, if sanctions against companies were imposed, these would be available for them to use,” Mr Pegel said.

A US official familiar with sanctions laws expressed scepticism of the aim, arguing any companies that sell products used by Nord Stream 2 would be held liable — regardless of whether the company sold directly to a sanctioned company, or a public foundation. 

“This is either a conscious Russian disinformation scheme to collect supplies from naive firms, or it’s a really irresponsible move by the foundation,” said Thomas O’Donnell, energy and geopolitics analyst at Hertie School of Governance.

Despite backing Nord Stream 2, Berlin has distanced itself from the foundation. Heiko Maas, foreign minister, said it was a state decision, “not a decision made by the federal government”.

And while Mr Biden may be reluctant to pick a fight over a foundation while trying to mend transatlantic fences, Antony Blinken, secretary of state, said in his confirmation hearing this week that the administration would use “every persuasive tool” to fight the Nord Stream 2 project.

In MV, some officials say the foundation’s success may not matter as much as local pride in this geopolitical tussle.

“Standing up to America here plays well,” one politician said, “whether you win or lose”.

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Brazil virus variant found to evade natural immunity




The P.1 Covid-19 variant that originated in Brazil and has spread to more than 25 countries is around twice as transmissible as some other strains and is more likely to evade the natural immunity people usually develop from prior infection, according to a new international study.

The research, conducted by a UK-Brazilian team of researchers from institutions including Oxford university, Imperial College London, the University of São Paulo, found that the P.1 variant was between 1.4 and 2.2 times more transmissible than other variants circulating in Brazil. 

It was also “able to evade 25-61 per cent of protective immunity elicited by previous infection” with any earlier variant, the researchers found, in a sign that current vaccines could also be less effective against it.

International concern about the P.1 variant has escalated recently, with more than 25 countries detecting the variant, including Belgium, Sweden and the UK, which has identified six cases.

The scientists are expected to release a paper describing the research on Tuesday. Dr Nuno Faria, the lead author, did not immediately respond to a request for comment. The study has not yet been peer reviewed.

The researchers have dated the emergence of the P.1 variant to November 6, 2020, around one month before cases began to surge for a second time in the Brazilian city of Manaus. They found that the proportion of cases classified as P.1 in Manaus increased from zero to 87 per cent in the space of 7 weeks. 

The paper concluded: “Our results further show that natural immunity waning alone is unlikely to explain the observed dynamics in Manaus, with support for P.1 possessing altered epidemiological characteristics.”

“Studies to evaluate real-world vaccine efficacy in response to P.1 are urgently needed,” it added.

The researchers also found that infections were 10 to 80 per cent more likely to result in death in Manaus after the emergence of P.1. However, the authors cautioned that it was not possible to determine whether this meant the variant was more lethal or whether it was a result of increased strain on the city’s healthcare system, or a combination of both. 

The P.1 variant has over 17 mutations, which alter its genetic sequence from the virus originally identified in Wuhan, including 3 key changes to the spike protein that it uses to enter human cells.

Researchers in Brazil have been using genetic sequencing technology developed by Oxford Nanopore in the UK to identify and track the variant. The technology was first used in Brazil during the Zika outbreak in 2015.

Dr Leila Luheshi, director of applied and clinical markets at Oxford Nanopore, told the Financial Times that while the B.1.1.7 variant in the UK has similar properties of high transmissibility to P.1 — it is thought to be around 1.5 times as transmissible as variants that preceded it — there was no evidence to date that it evaded past natural immunity in the same way. Studies so far have also shown that current vaccines retain their efficacy against B.1.1.7.

Luheshi said that the concern with P.1 is that “because it has these mutations around the spike . . . the hypothesis is that the vaccine will be less effective.” But she added that there is not yet definitive evidence to support this theory. 

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Coronavirus latest: Production glitches to delay Johnson & Johnson vaccine distribution




Coronavirus latest: Production glitches to delay Johnson & Johnson vaccine distribution

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Norsk Hydro blamed for birth defects in Amazon forest pollution case




Maria do Socorro explains in graphic detail the spate of ailments affecting newborns in her remote community in the Amazon: her grandson died after being born with his intestines outside his body, while others were missing organs or had undeveloped bones.

For the 56-year-old community leader, there is little doubt about the cause of these illnesses. She said the rainforest town had for years suffered from toxic waste pollution from the local operations of Norwegian aluminium producer Norsk Hydro.

Long a simmering environmental scandal in Brazil, the allegations were brought on to the international stage this month when Socorro’s community sued the Norwegian giant in a Dutch court, seeking damages for claims that “the incorrect disposal of toxic waste” from operations in the area had caused a variety of health ailments, polluted the rainforest and destroyed economic opportunities.

“We cannot have future generations because the children are born and then die. Whole families are contaminated,” said Socorro from the Barcarena township in the northern state of Pará.

The case — filed just days before the UK’s top court ruled that Royal Dutch Shell could face legal action in London brought by thousands of Nigerian villagers over alleged pollution — is the latest international trial pitting large, resource-hungry companies against impoverished rural communities.

It also comes amid mounting pressure on companies to abide by strict environmental standards, a push being spearheaded visibly by Scandinavian investors.

One of the allegations in the lawsuit is that the pollution has caused birth defects © Alessandro Falco/Bloomberg

“If business can be global, why can’t justice? These companies have businesses everywhere, but then when they do something wrong they want to smother the possibility of people getting compensation,” said Pedro Martins, partner at law firm PGMBM, which is representing 40,000 alleged victims bringing the suit against Norsk Hydro.

“International corporations have different standards for how they do business in the northern and southern hemispheres as if life in the southern hemisphere does not have the same value.”

Through local entities, Norsk Hydro runs three facilities — a bauxite mine, a refinery and a smelter — in Pará, a vast Amazonian state that is a flashpoint for illegal deforestation, gold mining and land-grabbing.

The company said it would respond to the request before the court in the Netherlands, where its subsidiaries controlling the local entities at issue are headquartered. It denied that in 2018 pollutants from its facilities spilled over during heavy rains and polluted nearby rivers and earth. The company declined to comment further.

A source close to the company said, however, that it did “not see the [health] effects that have been claimed. The actual impact is hard to see and there aren’t any studies showing that.”

Map of Brazil

A combination of poor sanitary conditions and the tropical climate could be behind many of the health issues, he added: “There are a lot of feelings and not so many things relating to actual facts.”

Locals say bauxite, lead and aluminium pollution have turned the region’s rivers red. A study from the Evandro Chagas Institute, a Brazilian public health body, found in 2018 that the region’s waters were so polluted with industrial waste from the Norsk Hydro facilities that they “cannot be used for recreation, fishing, or human consumption”.

Like many Amazonian communities, much of the Barcarena township depends heavily on fishing and farming for survival, work that they now say is impossible.

“I invite these Norwegians to come and bathe in our waters. I challenge them. They have good water there in Norway. Our wealth just goes there,” said Socorro, who heads Cainquiama, a group representing mainly indigenous people and quilombolas — the descendants of runaway slaves.

Nearly all of the claimants in the suit have complained about chronic pain, hair loss and skin conditions. The suit also contains claims in relation to birth defects, such as those that have affected Socorro’s grandson, who was born with gastroschisis — a hole in the abdominal wall.

A pipe belonging to alumina refinery Alnorte, which is owned by Norsk Hydro, in Barcarena © Ricardo Moraes/Reuters

“Studies around the world have shown the effects [of toxic metals] on pregnant women, foetuses and children at birth,” said Marcelo de Oliveira Lima, a public health researcher at the Chagas institute. “But our studies so far did not go deep enough to show the [connection]. Other studies are still being done.”

The case is a sensitive one for Norwegian investors and the government, which owns a 34 per cent stake in Norsk Hydro. Oslo has long attempted to hold Brasília to account for the environmental destruction of the Amazon, even publishing its own data on deforestation in the world’s largest rainforest.

“There seem to be quite some dispute about the facts in this case and in particular about the actual harm of the spill to local environment and whether the company is somehow to blame by neglecting important safety measures,” said Jeanett Bergan, head of responsible investments at the KLP pension fund, Norway’s largest pension provider.

“We know Norsk Hydro as a responsible corporate actor when doing businesses abroad. I do not think [this case] will damage the credibility of Norwegian actors.”

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here 

Martins, the lawyer leading the group action, said they brought the case in the Netherlands because of the inertia of the Brazilian court system. He believes the case can reach a verdict in 18 or 24 months.

Brazil is no stranger to environmental disasters. This month, miner Vale agreed to a $7bn settlement with authorities over a dam breach in 2019 in the Brumadinho township that killed hundreds of people and polluted vast tracts of lands with industrial sludge.

BHP was sued in a British court over a dam failure in Brazil’s Mariana township in 2015 that left 19 dead. The case was thrown out because parallel proceedings were taking place in Brazil.

“The Hydro case draws attention for having caused significant environmental damage,” said Luiz Eduardo Rielli, director of sustainability consultancy Novi. “After three years, what I care most about is: What lessons have been learned? How can we ensure that new damages do not occur?”

Additional reporting by Richard Milne in Oslo and Carolina Pulice in São Paulo

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