news20091018jt

[TODAY'S TOP STORIES] from [The Japan Times]

[NATIONAL NEWS]
Sunday, Oct. 18, 2009
Russia 'illegally' on isles: Maehara

NEMURO, Hokkaido (Kyodo) Seiji Maehara, state minister in charge of the Northern Territories — as the government calls four Russian-held islands off Hokkaido claimed by Japan — said Saturday that Tokyo should keep demanding their return from Russia's "illegal occupation."

"Historically, the Northern Territories are an integral part of Japan. It is literally an illegal occupation (by Russia) and Japan should keep saying so," Maehara told reporters after viewing the islands from a Japan Coast Guard vessel.

Before boarding the boat, Maehara also viewed the islands — Kunashiri, Etorofu, Shikotan and the Habomai islet group — from Cape Nosappu in the city of Nemuro.

"Though faintly, you can see Kunashiri with the naked eye. As a Japanese national, I felt nostalgic," Maehara told reporters.

"Prime Minister Yukio Hatoyama intends to resolve the territorial issue. Negotiations (with Russia) will not be easy but we will do our best," he added.

Maehara, also land, infrastructure, transport and tourism minister, arrived in Nemuro on Friday and met with former residents of the islands and Hokkaido Gov. Harumi Takahashi.

In the meeting, the residents called on the government to achieve an early return of the islands, which Russia refers to as the Southern Kurils. Maehara, meanwhile, revealed he intends to visit the islands after next spring.

Earlier this year, the Diet passed a bill declaring the islands to be an integral part of Japan. Then Prime Minister Taro Aso called Russia's occupation illegal, sparking protests from Moscow.

The Soviet Union seized the four islands just before the end of World War II. After occupying them, the Soviet Union declared they were part of its territories in February 1946 and all Japanese residents were forced to leave by 1949.

The dispute has prevented Japan and Russia from concluding a peace treaty to formally end the war.


[NATIONAL NEWS]
Sunday, Oct. 18, 2009
Straits' slim limits set to let U.S. nukes pass
Kyodo News

Japan decided in the 1970s to set narrow territorial limits on five key straits to allow passage of U.S. warships carrying nuclear weapons, a former envoy who represented Japan at U.N. talks on international maritime law said in a recent interview.

Some of the U.S. submarines that passed through Japanese territorial waters or called at Japanese ports during the Cold War were carrying nuclear weapons, said Shigeru Oda, who represented Japan during talks on the U.N. Conference on the Law of the Sea. Oda said the decision to let them pass was a political one.

Countries involved in the 1973-1982 talks agreed to allow territorial waters to be set at a maximum of 12 nautical miles (22 km) from shore.

Under the Territorial Waters Act that took effect in 1977, Japan expanded its territorial waters to 12 nautical miles from the previous limit of 3 nautical miles (5.6 km).

But the limits on Japan's territorial waters in the Soya, Tsugaru, Osumi, Tsushima and Korea straits were mysteriously left unchanged at 3 nautical miles.

The Foreign Ministry demanded that Oda not disclose how and why the decision was made in a book he was writing after leaving the ministry in 1976, he said, adding he eventually gave in to the demand.

He went on to become a judge at the International Court of Justice that year and served until 2003.

"The Tsugaru Strait would have become Japan's territorial waters (if the limit was expanded to 12 nautical miles)," Oda, 84, said.

"In order to say 'no bringing in nuclear weapons' and 'submarines must surface when passing through Japan's territorial waters,' you could not make the limit 12 nautical miles," he said, referring to the three nonnuclear principles of prohibiting possession, production or introduction of nuclear arms on Japanese territory.

Japan needed to keep the limits in the five straits at 3 nautical miles so it could deny that U.S. ships or subs with nuclear weapons were plying official Japanese waters, he said.

Official U.S. documents and testimony from people involved with the issue have already confirmed that Japan voluntarily chose to set narrow limits on the straits and that pressure from the United States was involved in the matter.


[NATIONAL NEWS]
Sunday, Oct. 18, 2009
Sadistic Mika Band founder Kato hangs himself

NAGANO (Kyodo) Musician Kazuhiko Kato, founder of the internationally successful Sadistic Mika Band from the 1970s, was found hanged at a hotel in the resort town of Karuizawa, Nagano Prefecture, on Saturday, police said.

Local police said that Kato, 62, was a guest at the hotel and probably committed suicide, adding that an apparent suicide note was found in the room.

Police found Kato's body after hotel employees reported they were unable to contact Kato in the morning.

Kato, known for his ability to create innovative sounds, started his recording career in the 1960s as a member of the Folk Crusaders. The band's debut single, "Kaettekita Yopparai," which was released under the English title "I Only Live Twice" after the James Bond movie "You Only Live Twice," was a hit.

Following the breakup of the Folk Crusaders, Kato formed the Sadistic Mika Band with his first wife, Mika Fukui, and other members, and achieved international acclaim in the 1970s.

The Sadistic Mika Band opened for Roxy Music on tour in Britain in 1975, becoming the first Japanese band to tour the country. The group broke up and reformed several times.

Kato also performed as a solo musician and worked as a composer and producer for other musicians.

He was nicknamed "Tonovan" because he was known as a friend of Donovan Leitch, a Scottish singer-songwriter and British folk icon in the 1960s.

news20091018gdn

[News] from [guardian.co.uk]

[Environment]
Stingless wasp species discovered in Kent
Lewis Smith
guardian.co.uk, Sunday 18 October 2009 00.34 BST Article history

A new type of wasp has been discovered living quietly in Sevenoaks, Kent, and, rather than being a foreign invader, it has been identified as a reclusive British native.

The wasp does not sting, but is a parasite which lays its eggs in the live bodies of whitefly that can plague maple trees. The eggs hatch inside the whitefly and the larvae eat the host insect from within until they are ready to pupate and emerge as adult wasps.

"It's a bit of a John Hurt Alien scenario," said Dr Andrew Polaszek, of the Natural History Museum in London, who discovered the species. "But it's an effective form of pest control."

He found the wasp, Encarsia aleurochitonis, after taking samples of whitefly from trees near his home.Parasitoid wasps are seen as being an ideal form of biological control because they only attack one host species or a handful of closely related hosts. Being host specific prevents the wasps from getting out of control and becoming a pest itself as happened with the cane toad when it was introduced to combat a crop pest in Australia.


[Environment > Climate change]
Protesters and police in violent clashes at Ratcliffe-on-Soar power station
> Police officer airlifted to hospital after clashes
> Demonstrators try to invade coal-fired plant
James Orr, Mark Townsend and Adam Vaughan
guardian.co.uk, Saturday 17 October 2009 17.05 BST Article history

A police officer has been airlifted to hospital after being hurt during violent scuffles with activists at Ratcliffe-on-Soar power station in Nottinghamshire.

Witnesses said one protester was also treated by ambulance crews at the site following a volatile stand-off with authorities.

A total of 21 people have been arrested after sections of the fence surrounding the station were torn down by protesters.

The violence broke out as lines of police attempted to push back the activists outside the fence.

Muray Smith, a spokesman for Camp for Climate Action, one of the groups that organised the demonstration, said: "Protesters pulled down two sections of fence and police are trying to restrict them getting through and are trying to move people back."

Some activists managed to enter the site and were arrested, he added.

Earlier, 10 people were held by police on suspicion of conspiracy to commit aggravated trespass. Nine were from Manchester and one from West Yorkshire. They were aged between 19 and 53.

About 1,000 protesters are understood to have gathered at the site. Groups including Camp for Climate Action are demanding that coal-fired stations be decommissioned in favour of more environmentally friendly options.

A spokeswoman from Nottinghamshire police said: "Throughout the day officers have been assaulted but police remain in control of the site.

"We have one officer who sustained head injuries at the protest. He was airlifted to Derbyshire Royal Infirmary where he is being treated. His wife has been made aware but we have no update on his condition.

"One protester also received treatment on site by police officers and was taken away by ambulance. His condition is unknown.

"Officers are using appropriate force to stop protesters but are not trying to contain them, all are free to move away from the perimeter. The breach of the fence line has now been secured."

The A453 has been closed between junction 24 of the M1 and the A52 and diversions have been put in place.


[Environment > Activism]
Environmental activist arrested ahead of coal-fired power station protest
Campaigners claim police have stepped up intimidation in week in which four activists were detained on way to Copenhagen
Adam Vaughan
guardian.co.uk, Friday 16 October 2009 13.04 BST Article history

An environmental activist has been arrested in advance of a protest planned at a Nottinghamshire coal power station this weekend. As the unnamed campaigner was arrested yesterday on suspicion of conspiracy to commit criminal damage, it also emerged that a total of four climate activists have been detained this week attempting to travel to Copenhagen.

Climate activists including members of campaigning groups Climate Camp and Plane Stupid have pledged to shut down the Ratcliffe-on-Soar coal power station run by German energy giant E.ON. The arrests follow an injunction taken out by E.ON against protesters that will allow police to arrest anyone who enters the plant's grounds. A large police and private security presence is expected at the site, which has upped its security measures, including the erection of a new electric fence.

The campaigner charged yesterday has been released and bailed to return to a police station on Saturday, when the power station protests are due to take place. On Tuesday this week, 31-year-old office worker Chris Kitchen was prevented from travelling to Copenhagen to take part in events around the UN climate talks this December. Three other activists are now understood to have been detained and searched this week while attempting to travel to Copenhagen, though they have subsequently completed their journeys.

Activists for Plane Stupid also claimed they were phoned yesterday by Nottinghamshire police and told "they would be arrested" if they came to Ratcliffe-on-Soar. Tracy Singh from Plane Stupid said "the police are acting like hoodlums. We are absolutely disgusted." A press spokesperson for Nottinghamshire police said it would be facilitating lawful protest around the power station and denied activists would be arrested simply by coming to the site.

Richard Bernard, a spokesperson for Climate Camp, added: "They're threatening and arresting people for just thinking and talking about taking meaningful action. This is clear intimidation — they're just trying to scare us. But what's really scary is climate change, and that's why we're going to take control of Ratcliffe on Saturday."

E.ON has responded to the planned protest by placing a series of videos on its YouTube channel with comments from its press team, the power station manager and protestors.

A spokeswoman for E.ON, said: "We respect the right of people to have their say as long as it's peaceful and lawful. [The planned action] is incredibly dangerous and irresponsible. What I would say is by all means come, but don't try to break into the power station."

Activists have been sharing satellite maps and photos of the power station online, which they plan to travel to by train and bus. The Ratcliffe-on-Soar power station emits 12.8m tonnes of CO2 a year and is Britain's third largest source of direct greenhouse gas emissions. E.ON says it is one of the UK's most efficient coal power stations.

In April this year, 114 people were arrested at a Nottingham school on suspicion of planning a direct action on the power station. At least 25 of the activsts have been subsequently charged with conspiracy to commit aggravated trespass, a charge which places restrictions on communications with friends and family and potentially carries a sentence of six months.

E.ON has also been the subject of an ongoing campaign by climate activists for its plans to build a new coal-fired power station at Kingsnorth in Kent. Last week the company said Kingsnorth had been postponed because of the global recession, an annoucement that campaigners viewed as a victory for the climate movement.

news20091018bbc1

[One-Minute World News] from [BBC NEWS]

[Asia-Pacific]
Page last updated at 14:40 GMT, Saturday, 17 October 2009 15:40 UK
North Korea gulags 'hold 150,000'
{North Korea is a regimented and repressive society, say refugees}
North Korea still runs six prison camps holding 154,000 political prisoners, a South Korean lawmaker has said.

Yoon Sang-hyun, of the ruling Grand National Party, said inmates worked long hours in return for meagre food rations, reported Yonhap news agency.

Mr Yoon said he was basing his claims on a South Korean government report.

North Korea denies claims it abuses human rights. Earlier this year it amended its constitution to refer to its "respect" for human rights.

But human rights groups and North Korean refugees describe blatant, widespread and ongoing violations of basic rights in the Stalinist country.

In his statement to the National Assembly, Mr Yoon said North Korea used to operate 10 labour camps holding some 200,000 people in the 1990s, but had closed four under international pressure.

But he said six large camps were still going, holding dissidents, those who had attempted to flee the country, the losers in political power struggles, and ordinary North Koreans accused of being disrespectful towards the leadership.

'Crimes against humanity'

These 154,000 inmates - who are held in separate prisons from common criminals - are forced to work more than 10 hours a day on only 200g (7oz) of food, and are denied medical care, Mr Yoon said.

"North Korea perpetrates various crimes against humanity, including public executions, tortures or rapes, against those who try to escape," Mr Yoon was quoted as saying.

Observers say that over recent years South Korea has often been reluctant to highlight evidence of rights abuses in its northern neighbour for fear of jeopardising attempts at rapprochement.

But South Korea's conservative President Lee Myung-bak pledged to be more openly critical of the North's authoritarian regime when he took office last year.


[Asia-Pacific]
Page last updated at 13:42 GMT, Saturday, 17 October 2009 14:42 UK
Iraq cabinet ratifies oil deals
{The Rumaila project aims to increase output at the field by 2m barrels a day}
Iraq's cabinet has ratified a deal with two foreign energy companies to develop the giant southern oilfield in Rumaila.

The contract with Britain's BP and CNPC of China is the first major deal with foreign firms to be signed since an international auction in June.

The project aims to almost triple output at the 17bn barrel field - increasing it by 2m barrels a day.

Iraq has the world's third largest oil reserves, but production lags behind potential due to a lack of investment.

The country's total daily output of 2.4m barrels is lower than it should be due to problems stemming from sanctions against former Iraqi governments, lack of investment and insurgent attacks, analysts say.

Bidders withdraw

Thirty two companies - including Shell, Exxon, BP and Total - bid for contracts to develop six oil fields and two gas fields in June's televised auction, Iraq's first big oil tender since the invasion of 2003.

{Foreign companies remain wary of investing in Iraq's energy sector}
But most of the bidders withdrew at the last moment, saying the terms on offer were unfavourable.

BP and CNPC agreed to run the Rumaila field - near the southern city of Basra - after US giant Exxon Mobil turned it down.

Iraq's oil ministry offered 20-year service contracts on the field, stipulating that companies would not be paid anything until a minimum level of production - close to the amount currently being produced - was reached.

Above that point, the companies would be paid a certain amount per barrel up to a maximum level stipulated by the ministry.

The maximum amount being offered by the ministry in the case of the Rumaila field was significantly less than the oil companies were asking for.

Exxon Mobil declined to accept the maximum payment, but BP and CNPC, which had originally asked for $4 a barrel, agreed to do the work for $2 a barrel.

They will also be able to charge the ministry for the costs of the work they have to do on the production facilities.

Questions over approval

Iraq's oil laws are still vague and many foreign companies remain wary of investing in Iraq's energy sector, says the BBC's Gabriel Gatehouse in Baghdad.

The Iraqi government has urged the companies involved in June's auction to resubmit their bids.

But questions remain over who exactly has the authority to approve such contracts, our correspondent says. Many companies fear politics could get in the way of business, especially with parliamentary elections looming in January.

BP was thrown out of Iraq in 1972 when Saddam Hussein nationalized the oil industry.

The British company will hold a 38% stake in the venture, compared to CNPC's 37% share, while Iraq's State Oil Marketing Organization will control the remaining 25%, the Associated Press reported.

The fields up for auction in June contained about 43bn barrels of Iraq's proven oil reserves of 115bn barrels.


[Asia-Pacific]
Page last updated at 14:47 GMT, Saturday, 17 October 2009 15:47 UK
Ageing plane hits Manila suburb
{Firefighters in Manila battle flames in the spot the DC-3 went down.}
A propeller-driven plane, reportedly from the 1930s, has crashed in the Philippines, killing four people.

Officials say the DC-3 plane scraped the roofs of 14 houses in Manila before crashing into an abandoned warehouse and bursting into flames.

No-one was reported injured on the ground but residents said two houses close to the warehouse caught fire.

Minutes after taking off from Manila airport, the pilot asked permission to make an emergency landing.

The freight plane was heading towards Puerto Princesa City in Palawan province southwest of the capital, Manila airport security manager Angel Atutubo said.

Flight records showed there were seven people aboard the aircraft, including the pilot, but officials are yet to confirm this number.

The DC-3 was developed in the US in the 1930s but is still in use in many places around the world, mainly for transporting cargo.

news20091018bbc2

[One-Minute World News] from [BBC NEWS]

[South Asia]
Page last updated at 07:28 GMT, Sunday, 18 October 2009 08:28 UK
Taliban resist Pakistan onslaught
{The army has mobilised artillery and troops in the area}
Taliban militants are putting up fierce resistance to the Pakistan army as it attempts to oust them from strongholds in the remote South Waziristan region.

Dozens of casualties have been reported after the first day of the attack - the biggest offensive for six years.

Unconfirmed reports say 26 militants and five soldiers have been killed as heavy artillery and air strikes pound Taliban hideouts for a second day.

Thousands of civilians have fled the area for safety.

Up to 20,000 people have entered camps just outside the area, with aid agencies warning that many more could be displaced by fighting.

The military, mobilising from three directions, is controlling entry and exit points in the region.

Reports from the area are sketchy as it is difficult and dangerous for foreign or Pakistani journalists to operate inside South Waziristan.

Soldiers captured a Taliban stronghold at Spinkai Raghzai on Saturday after the militants withdrew to nearby mountains.

"It is a flat area, so whenever they tried to put up resistance, the helicopter gunships fired at them so they decided to flee to the mountains," a senior government official told Reuters news agency.

Troops established a checkpoint en route to Kotkai, the home town of Pakistani Taliban chief Hakimullah Mehsud, AFP reported.

There had been several co-ordinated Taliban attacks in the run-up to the offensive, killing more than 150 people in cities across Pakistan.

{{FORCES IN WAZIRISTAN}
> Pakistan army: Two divisions totalling 28,000 soldiers
> Frontier Corp: Paramilitary forces from tribal areas likely to support army
> Taliban militants: Estimated between 10,000 and 20,000
> Uzbek fighters supporting Taliban: Estimates widely vary between 500-5,000}

Security is tight in towns and cities throughout Pakistan in case the Taliban carry out revenge attacks.

Nearly all communications in the region were down after the Taliban destroyed a telecommunications tower at Tiarza, local officials said.

Aerial bombardments in the Makeen area, a stronghold of the Mehsud tribe and a key army target, were also reported by local officials and witnesses.

The ground operation comes after weeks of air and artillery strikes against militant targets in the region, which lies close to the Afghan border.

There is a huge army presence on the road between Tank and Dera Ismail Khan, says the BBC's Islamabad correspondent Shoaib Hasan, near South Waziristan.

The army has been massing troops near the militants' stronghold for months - ever since the governor of Pakistan's North West Frontier Province announced a ground offensive in South Waziristan on 15 June.
Pakistan's government has been under considerable pressure from the US to tackle militancy there.

North and South Waziristan form a lethal militant belt from where insurgents have launched attacks across north-west Pakistan as well as into parts of eastern Afghanistan.

South Waziristan is considered to be the first significant sanctuary for Islamic militants outside Afghanistan since 9/11.


[South Asia]
Page last updated at 00:57 GMT, Sunday, 18 October 2009 01:57 UK
US senator warns on Afghan troops
{There is a request for 40,000 US troops for Afghanistan}
US Senator John Kerry has said it would be irresponsible to send more US troops to Afghanistan before the result of the presidential election there is clear.

Mr Kerry's comments came as foreign officials pressed Afghan President Hamid Karzai to accept that he might have to face a run-off.

A fraud investigation is expected to bring Mr Karzai's vote count below the 50% needed to avoid a second round.

Washington is debating a request for 40,000 more troops in Afghanistan.

Gen Stanley McChrystal, the US and Nato commander in the country, recommended sending the extra troops as the US reviewed its strategy.

US and international troops are fighting resurgent Taliban forces in Afghanistan, an effort that observers say has been complicated by uncertainty over the 20 August election.

'Good governance'

In comments to CNN to be broadcast on Sunday, Mr Kerry advised against a troop increase before the result of the vote was clear.

{{ AFGHAN FRAUD ALLEGATIONS}
> 13 Oct: Karzai casts doubt on fair functioning of ECC, but his opponents accuse him of manufacturing his concerns
> 30 Sep: UN recalls envoy Peter Galbraith following row over the vote recount process
> 15 Sep: ECC chief says 10% of votes need to be recounted
> 8 Sep: IEC says votes from 600 polling stations "quarantined"
> 3 Sep: Claims 30,000 fraudulent votes cast for Karzai in Kandahar
> 30 Aug: 2,000 fraud allegations are probed; 600 deemed serious
> 20 Aug: Election day and claims 80,000 ballots were filled out fraudulently for Karzai in Ghazni
> 18 Aug: Ballot cards sold openly and voter bribes offered}

In an interview from the Afghan capital, Kabul, the senator said it would be "entirely irresponsible" for US President Barack Obama to commit more troops "when we don't even have an election finished and know who the president is".

"When our own... commanding general tells us that a critical component of achieving our mission here is, in fact, good governance, and we're living with a government that we know has to change and provide it, how could the president responsibly say, 'Oh, they asked for more, sure, here they are?'" he said.

Mr Kerry, who chairs the US Senate's foreign relations committee, was one of several senior international figures in Kabul this weekend meeting Afghan leaders.

Initial results from August's election gave Mr Karzai 55% of the votes, with his nearest rival, Abdullah Abdullah, getting 28%.

{Hamid Karzai is said to be angry at the prospect of facing a run-off}

But the UN-backed Electoral Complaints Commission (ECC) launched an investigation into the vote following allegations of widespread electoral fraud.

It will report to the Independent Election Commission (IEC), which could adjust the final tally, bringing Mr Karzai's vote total below 50% and triggering a run-off.

Officials say Mr Karzai is furious over the prospect of facing a second round, threatening to delay or block attempts to hold a second round.
He has refused to accept the ECC's findings before they are released.

US Secretary of State Hillary Clinton and British Prime Minister Gordon Brown telephoned the main candidates on Friday, urging Mr Karzai to accept the findings of the ECC's fraud investigations.

The French Foreign Minister Bernard Kouchner was also in Kabul to meet Mr Karzai and Mr Abdullah.

The ECC had been expected to announce its findings on Saturday. But the reported confrontation with Mr Karzai may delay the official announcement of results.


[South Asia]
Page last updated at 04:30 GMT, Sunday, 18 October 2009 05:30 UK
Canadians intercept migrant ship
{The Ocean Lady was taken to Ogden Point, Victoria}
A ship carrying 76 suspected illegal migrants has been seized off Canada's Pacific coast, officials say.

Those on board the ship said they were trying to reach Canada, according to local authorities.

The identity of the migrants was not confirmed, although Canada's public safety minister said there were indications they were from Sri Lanka.

He said it appeared to be a case of human smuggling. The migrants, all men, were said to be in good health.

The merchant vessel, named Ocean Lady, was intercepted by a navy frigate off Vancouver Island before being escorted to a dock in Ogden Point in Victoria, British Columbia.

Officials there were carrying out health and safety and immigration checks.

Those on board the ship were pictured wearing civilian clothes. Some were shirtless.

"The signs do point toward human smuggling," said the public safety minister, Peter Van Loan.

Several ships attempting to smuggle migrants from China to Canada's Pacific coast were intercepted off Vancouver Island a decade ago.

news20091018reut1

[Top News] from [REUTERS]

[Green Business]
Republican senator says open to U.S. climate bill
Sat Oct 17, 2009 11:05am EDT
By Richard Cowan

WASHINGTON (Reuters) - A senior Republican in the United States Senate, conservative Senator Lisa Murkowski, said she would consider voting for a "cap and trade" climate change bill Democrats are pushing if it also contains a vigorous expansion of nuclear energy and domestic oil drilling.

In an interview set to air on Sunday on the C-SPAN cable TV network, Murkowski said cap and trade legislation, which aims to mandate reductions of carbon dioxide and other greenhouse gas emissions, must protect consumers from energy price increases and contain safeguards against market manipulation of pollution permits that would be traded by companies.

Some of these elements already are included in Democratic legislation in the Senate and House of Representatives.

"Count me as one of those who will keep my mind open as we move forward," said Murkowski, the senior Republican on the Senate energy panel and a member of her party's leadership.

Murkowski's remarks came after her fellow conservative, Senator Lindsey Graham, published a column in The New York Times with liberal Senator John Kerry, in which they vowed to work together to advance legislation tackling global warming.

In signaling her willingness to work on a bill, Murkowski said Democrats must include tangible incentives for building nuclear power plants and stepping up domestic oil drilling, offshore and on land. It has got to be "more than just window dressing," she warned.

Most Republicans in Congress have dismissed the Democratic initiative as little more than a "national energy tax" that would kill U.S. jobs at a time when the country is grappling with severe economic problems.

While the full Senate probably will not have time this year to debate and vote on a climate change bill, the willingness of some Senate conservatives to consider major environmental legislation could keep the effort in play next year.

Legislation narrowly passed the House in June, but faces a tougher time in the Senate.

ALASKA SEEING CLIMATE CHANGE

Asked about the Kerry-Graham column, Murkowski said, "It's a good indicator that perhaps the conversation is changing."

As the senior senator from Alaska, Murkowski acknowledged problems that could be linked to climate change.

"When you see changes to the land coming about ... what is causing the loss of the sea ice that adds to the erosion issues, yes, in Alaska we are seeing change," she said. "That's why I have been one of those Republicans who has stepped out front a little bit more on the issue of climate change."

President Barack Obama has been urging Congress to pass a bill reducing industries' carbon emissions through a cap and trade system. It would require companies to hold a dwindling number of pollution permits over the next four decades.

Companies that find ways to use clean, alternative energy in manufacturing and end up with an excess number of permits could sell them to firms making slower environmental progress.

The effort in Congress is intended to be part of an international fight against global warming, which scientists say could bring catastrophic consequences as temperature changes hurt agriculture, especially in poor countries, and create more violent storms and the spread of disease.

The problem with weaning the world off of cheap, high-polluting fossil fuels is that they would be largely replaced by wind, solar and other energy sources that for now are more expensive, with some of the technology unproven.

(Editing by Chris Wilson)


[Small Business]
Facebook sees ad potential bigger than Google search ads
Fri Oct 16, 2009 6:45am EDT
By David Lawsky

PALO ALTO, California (Reuters) - Facebook's chief operating officer said the social networking company was targeting a bigger ad market than the search ad market that has made Google Inc rich.

Sheryl Sandberg also told a group of high-tech specialists on Thursday that revenues were growing so fast at privately held Facebook that it turned cash positive recently, instead of in 2010 as predicted earlier this year.

A member of the board told Reuters the company was on target to bring in revenue of $500 million this year. Sandberg gave no numbers that would update that figure.

Sandberg, who has long fought the perception Facebook lacked a revenue model, laid out a gameplan to turn the company into a cash machine by describing how the company aimed to bring in revenues from novel ads aimed at its 300 million users.

She said advertising was a "funnel" that starts at the top by engaging many people and creating demand, then getting to the bottom where a select group bought a product.

Google does a better job than any other company in advertising to people who are at the bottom of the funnel and know what they want, and are searching to buy it, she said hours after Google reported third quarter net revenue of $4.38 billion, beating analysts expectations.

"If you look at global ad spend its about a $640 billion annual business ... It's 10 percent demand fulfillment," which is what Google's search ads do, she said.

"Where we are playing in the ad market is in that demand generation, which is the top 90 percent of the funnel."

Sandberg said Facebook has been shifting to an approach similar to Google's, in which the style of the ad resembled the style of its searches.

One success story she cited involved Starbucks Corp, which posted a video that created complaints. In response, Starbucks altered the video and won kudos from Facebook members. She said the message was, "Thanks so much ... isn't it great to have a company that listens."

(Reporting by David Lawsky; Editing by Dan Lalor)


[Small Business]
CIT amends restructuring plan with bondholders
Sat Oct 17, 2009 10:46am EDT

CHICAGO (Reuters) - Commercial finance company CIT Group Inc and a group representing its bondholders have agreed on changes to the company's proposed restructuring plan as it looks shore up its finances.

The changes, announced by CIT late Friday, include a mechanism to accelerate the repayment of new notes; the shortening of maturities by six months for all new notes and junior credit facilities; and offering more equity to subordinated debt holders.

The changes would include notes maturing after 2018 in the company's exchange offer and increase the interest paid on Series B notes being offered by CIT Delaware Funding to 9 percent from 7 percent. They would also provide preferred stockholders contingent value rights in the reorganization and modify the allocation of common stock in the company's recapitalization after the exchange offers, as part of an agreement with the Treasury Department.

On October 1, CIT, founded more than a century ago, launched a debt-exchange plan as it looks to cut its debt by at least $5.7 billion.

The company, which is one of the largest lenders to small and mid-sized companies, also asked bondholders to approve a prepackaged plan of reorganization that would allow it to initiate a voluntary filing under Chapter 11 if the debt exchange failed.

CIT said on Friday that completion of either the debt exchange or a bankruptcy filing would generate significant capital and improve the company's liquidity.

The exchange offer expires at 11:59 p.m. EST on October 29.

(Reporting by Brad Dorfman)

news20091018reut2

[Top News] from [REUTERS]

[Small Business]
East Europe's SMEs seen key to economic recovery
Fri Oct 16, 2009 10:27am EDT
By Marton Dunai - Analysis

BUDAPEST (Reuters) - Imploding demand and tighter credit have held back eastern Europe's small and medium firms in the economic crisis, and how they cope could significantly determine which countries in the region recover quicker.

Hungarian, Czech and Polish small and medium enterprises (SME's) account for 60 to 70 percent of employment, and about half of the output and taxes in their economies. That makes them crucial for the region's post-crisis growth prospects.

In Poland, whose 38 million people number just under the Czech, Hungarian and Romanian populations combined, small businesses will grow already in the second half of this year.

Export-driven Czech and Hungarian SME's have less of a domestic market and will return to growth later, analysts said.

Factors like fiscal discipline, a pickup of demand in western Europe and the flow of foreign direct investments will also determine the pace of recovery in the region.

How SME's fare could, however, set eastern European countries apart once the economic recovery gathers speed.

"On the long run we need to realize that multinational exporters are helpful but not enough for catching up," said Zsolt Kondrat, an economist at Hungary's MKB Bank.

"There is no recovery without small business."

Kondrat said Poland had a much bigger domestic market and better opportunity there for SME's while the Czechs were in the middle, with a solid tax system and interest rate regime.

"Hungarian SME's suffer from a smaller market, a dependence on large multinationals, as well as counterproductive taxes and higher interest rates, which hinder growth," he said.

Peter Latranyi's HTCM Ltd. manufactures and repairs tools in Szentgotthard, in western Hungary. His biggest client is Opel, the troubled German car company, which makes engines nearby. When Opel scaled back recently, so did HTCM.

"We had to let 12 of our 60 people go," Latranyi said. "We hope to get out of the slump once our clients get new orders, but we can't go on like this forever."

Latranyi said if business does not pick up in a few months, they will have to pack it in.

LENDING SQUEEZE

Scores of Hungarian and Czech business owners are being forced to lay off staff and delay investments. Many of them could go bust soon, victims of weak markets, scarce credit and melting cash reserves, business groups and bankers have said.

The economic effects of bankruptcies and slow recovery are far reaching, from higher unemployment and lower growth to lower consumption and tax revenues, and a higher budget deficit.

While Poland will grow, the Czech and Hungarian economies are expected to shrink by about 0.5 percent and 0.9 percent, respectively, next year and seen growing only from 2011.

Although banks are adequately capitalized, patterns in lending show they see SME's as risky, and fear loan losses.

According to a report issued in August by the National Bank of Hungary, banks expect a tight lending market ahead as SME's drain inventories, spend cash reserves, struggle to collect receivables, and cut back on investments.

Banks have practically stopped signing up new loan clients.

"Lending to SME's is very limited," said Peter Vidlicka, regional banking analyst with Wood & Co. in Prague. "Banks are afraid bankruptcies will spread if the downturn continues."

"Corporate lending, and especially working capital flows, have been declining in Poland, the Czech Republic and Hungary alike. Banks are repricing corporate lending upwards, and companies are not going to banks as much as they used to."

HARDSHIPS AHEAD, BUT SOME SUCCEED

Hungary's financial watchdog PSZAF said in a report that the total outstanding stock of SME loans decreased by 12 percent, or 478 billion forints ($2.64 billion) in the second quarter alone.

In total volume terms, short-term loans outweigh longer term ones nearly 5 to 1 this year, as opposed to 2 to 1 seen in 2008, as firms scale back on strategic investments.

"The most difficult period for SME's is up next," said Ferenc Rolek, deputy chairman of Hungary's Confederation of Employers and Industrialists, or MGYOSZ. "The next two quarters will be crucial for their survival."

Rolek said government loan guarantees could help them secure much-needed bridge loans - something that the Hungarian Banking Association has also called for.

"Up to 80 percent of all SME loans are vulnerable," said Tamas Erdei, the association's chairman. "Banks cannot, dare not undertake the risk alone."

Hardship or not, some firms fare very well. Lipoti Bakeries Ltd. has grown from a mom-and-pop bread shop in western Hungary into a crossborder chain of 100-plus outlets in three years.

Owner Peter Toth recently bought a rival company and now employs 300 people. He expects 250 million forints ($1.39 million) in profit this year on revenues of 2.5 billion. In his latest move, he began to ship to Slovakia.

"We have had to take on multinational grocery chains from day one," he said. "Tough times didn't start with the crisis."

(Reporting by Marton Dunai)


[Small Business]
Palestinian soapmakers eye new market
Fri Oct 16, 2009 3:41pm EDT
By Alastair Macdonald

NABLUS, West Bank (Reuters) - Walking on water may be a familiar tale from the Holy Land, but in the heart of ancient Nablus, Majoud Malawani walks on soap. Roomfuls of it.

The white slabs an inch thick are made from pure olive oil, drying slowly under the airy, bleached vaults of a large, scented workshop that seems to have set in another age.

Skipping over hardened floes of soap that have been poured and dammed into place across the factory floor, Malawani wields a long-handled cutter with a dexterity that belies his 75 years and a cataract-clouded eye, slicing the creamy product into bars along lines measured with string and marked up using red dye.

Now that the Palestinian Intifada, or uprising, has receded and the Israeli army is easing roadblocks around Nablus, long the industrial hub of the West Bank, those of the city's once ubiquitous soapmakers who have survived a sharp decline in sales are eyeing new markets abroad for their all-natural product.

Under the arches and buttresses on the ground floor of the Ottoman-era building, beneath the drying loft, Malawani, who like many of his half-dozen colleagues has worked there most of his life, showed off the barrels of olive oil and white bags of soda that, with water, are the only ingredients of Nablus soap.

Among the few concessions to modernity are an electric arm to stir the bubbling open cauldron. There the soap mix "cooks" like a thick pumpkin soup for five days over a gas burner which has replaced the olive-wood fires that once powered the process.

"We are proud to use this because it is pure," said the foreman, Mohammed Fatayer, 71, who has followed in his family's soapmaking tradition since he was 13. Unlike the animal fats and chemicals typical of modern, mass-market hygiene, he said, it was simple and clear what went into the soap from Nablus.

The consumer trend toward that organic simplicity gave him hope that this factory, run mostly by old men, did have a future: "Demand is growing for pure products," Fatayer said.

Once manhandled up the stairs, the liquid mixture dries on the floor before being cut into blocks and stamped with a brass hammer bearing the cross-keys mark of the Touqan family firm.

These are then stacked in tapering, hollow towers, higher than the heads of the workmen, to harden for a further three months. That's where Izzedeen al-Johari comes in.

Chatting easily as he squats on the floor under the cones of drying soap, the 60-year-old's hands fly over paper and glue to wrap each bar individually and neatly in just a few seconds.

Working on a piece rate, he reckons to wrap 600 bars an hour or nearly 5,000 in an eight-hour day. These are then packed into 10 kg (22 lb) cases that sell wholesale for about $30.

Touqan's manager, Nael al-Qubbaj, said the firm is now only one of two commercial soapmakers in Nablus, compared to 17 in the 1990s, before the Intifada brought Israeli tanks, curfews and streetfighting into a town the locals call "Little Damascus" because of the traditional stone alleys of its central souk.

Even before then, the old industry had been in decline -- there were more than 50 soap factories in the 1960s, Qubbaj said. But occupation and violence had taken a toll, pushing down output at the Touqan works to 300 tons a year from 680 tons annually before the Intifada broke out in 2000.

Most of the oil still comes from Palestinian olives, though seasonal supply difficulties mean imported Italian oil is used at times. Some two thirds of the output goes to Jordan and thence further afield in the Middle East. But Qubbaj has spotted a potential market among eco-conscious shoppers in the West.

"I am studying investment. We could increase our capacity," he said this week. "Natural products are very popular with Europeans. I hope that we can open a small market there."

Back on the factory floor, where the workers take Turkish coffee at low stools, bathed in a milky light filtering through the drying stacks of soap, Mohammed Fatayer has heard the message: "Yes," he said, "We hear foreigners are interested."

(Additional reporting by Atef Saad, editing by Paul Casciato)

(For blogs and links on Israeli politics and other Israeli and Palestinian news, go to blogs.reuters.com/axismundi)