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Friday, November 26, 2010

Organized crime using global warming issues to acquire 'respectability,' will be leading player in 'renewables,' Europol report

"Organized crime groups...use the energy sector to progress further towards respectability."... (page 3), "Around the world and more specifically in the EU, concerns have been raised regarding future energy availability, particularly levels of dependence on hydrocarbon imports (oil and gas). At the same time, strategic intelligence analysis indicates that
  • organised crime groups are involved in energy supply to the EU and within EU Member States (MS).
In the Strategy for Europol 2010-2014, the Organisation has committed itself to “scan the environment for new developments in internal security threats”. With this in mind,
  • Europol has carried out a scenario management exercise
  • to examine the possible future involvement of
  • organised crime in energy supply....
A timeframe of ten years has been set for the exercise, with the focus on interaction between Organised Crime and the energy sector in 2020. Narratives have been drafted on the basis of plausible features within this timeframe. A questionnaire on both the current situation and future developments was sent to selected experts from MS law enforcement, the EU Commission, academia and the private energy sector. Analysis of these enabled the identification of
  • Since the future is essentially uncertain, consideration of uncertainty is key to scenario building.
(page 4): During the workshop, the following uncertainties were identified as the most critical:
  • Geopolitics and security of supply
  • Price volatility
  • “Respectabilisation” of crime
  • Lifestyle change
Security of supply and price volatility are considered to be the two uncertainties with the largest impact on the energy future and the greatest levels of uncertainty, and as such form the axes on which the scenarios are plotted. A high level of price volatility correlates with a world of unplanned responses and inconsistent regulation, while a low level of price volatility correlates with planned responses and more consistent regulation.
  • Organised Crime’s drive for respectability and lifestyle change are nevertheless considered to be cross-cutting issues (page 4 bottom)
which are key factors in the possible futures described, and therefore serve to flesh out the narratives....
  • EU and other Organised Crime (OC) groups see energy as a safe long term investment,
play the markets for short-term opportunities, profit from price/tax differences
  • and voluntary changes in consumer lifestyles, and
  • use the energy sector to progress further towards respectability....(p. 6)
Key Organised Crime (OC) opportunities:
  • OC profits from energy speculation – profitable money laundering
  • Emissions Trade Fraud (ETF) and other emerging markets
  • Increased infiltration of energy companies by means of investment
  • Corruption of private sector to maximise short-term investment opportunities
  • Leading role in investment in renewables, thanks to lower capital costs...
In cases where supply companies experience high levels of OC (organized crime) infiltration, governments and the EU increasingly rely on “deals with the devil” (page 7) - e.g.
  • bilateral agreements with
  • partners infiltrated by OC,
  • further legitimising OC interests. (p. 7)
Measures to reduce emissions are driven by the prospect of profit rather than by climate change concerns:
  • “cap and trade” gains strength because of an already established trade in carbon credits and a market for Carbon Capture and Storage (CCS);
in the absence of requisite regulation, this is accompanied by an increase in Emissions Trade Fraud (ETF).... (p. 7) p. 8, "Since the EU market remains open both to foreign direct investment and to acquisitions by foreign energy supply companies, OC groups based within and outside the EU have the opportunity to act as shareholders and suppliers respectively. Both eventualities afford OC (organized crime)
  • greater control and influence over the legitimate economy,
and opportunities to exercise power in commercial decision making. (page 8)
  • Fossil fuel insecurity persists
Outside of the EU, private companies compete with local governments to exploit remaining fossil fuel reserves, including those – such as unconventional gas or shale oil – made profitable or accessible through technological developments. In cases where supply companies experience OC infiltration,
  • this leads to increased OC influence over fossil fuel production. (p. 8)
Ultimately, competition for resources leads in some source areas to tension between governments and international energy supply companies, and the re-nationalisation of dwindling fossil fuel reserves. In this event, such actions push the future towards the “Open Season” scenario.... Because on the whole EU energy supply is not yet self-sufficient, it remains vulnerable to disruption by non-state actors, with a potential impact on price levels. Whilst disruption can be achieved by means of terrorist activity (e.g. damage to oil pipelines), equally this vulnerability presents
  • OC groups with opportunities to disrupt supply in order to affect price levels,
  • thereby deriving increased profit on investments....
  • Beyond 2020, the implications of this are that
by default OC (organized crime) will be a leading player in renewable energy supply, (page 10, top)
  • on which the EU will become increasingly dependent as remaining fossil fuel reserves dwindle.
Responses The dominant legislative feature of this world is an absence of effective regulation of the energy and financial sectors, or more specifically, prevailing self-regulation,
  • a situation reinforced by a comparative lack of law enforcement knowledge of these sectors.
Since the geopolitical and economic factors provide fertile ground for OC infiltration of the energy sector,
  • self-regulation serves to facilitate concealment of OC activity...p. 10
(p. 10): Eventually, however, a more consistent focus on asset recovery by governments, and the desire of energy companies to know and manage the expectations of their shareholders, lead to the introduction of tighter controls on investments, e.g. to determine the origin of investments in the energy sector,
  • and legislation throughout the EU against money laundering.
As prices continue to fluctuate, speculation on energy futures comes under particular scrutiny in an attempt to encourage stability. Additionally, there develops a greater focus on corporate criminal liability, in response to the
  • effects of OC infiltration of energy supply companies.
Legislation to protect the environment from damage related to energy production and supply is an afterthought.... As the amount of lost revenue and the level of OC influence on private companies become apparent,
  • the tendency for transnational OC investigations to follow money trails leads to prioritisation at both national and international levels of financial investigation and money laundering cases, incentivised in some countries by the prospect of
additional funding for law enforcement, as provided for in Proceeds of Crime legislation.... (p. 10, bottom)
  • (p. 11): "Prominent and well-funded OC (organized crime) groups enjoy more power
  • and receive more social acceptance
as a result of a lack of cooperation between MS (member states), increased competition for vital resources and reduced success in controlling their activities....
  • "Greater public acceptance of criminality (p.14, bottom)
Private citizens subject to higher prices, a lower quality of life and
  • perhaps unemployment
come into increasing proximity with OC, through direct involvement in criminal activity, purchasing fuel and other goods from the black market, or indeed looking
  • to OC groups for security.
In this society, outages and brown-outs are a reality, and low-level criminals take advantage of the cover of darkness to engage in looting and robbery. (page 15)
  • Fear of crime increases,
fuelled by feelings of insecurity and isolation, and tensions between resident and migrant communities: national and local law enforcement, meanwhile, are subject to the same cuts in expenditure as other government services and
  • are less able to respond effectively.
Street policing is increasingly conducted by private security firms, and OC groups are instrumental in keeping the peace and communities safe. At its worst, this manifests as
  • racketeering, with OC profiting from threats of violence."...(page 15)
10/8/10: ""Governments should start preparing for an onslaught of environmental court cases," said Bakary Kante, head of the United Nations Environment Programme's environmental law division. "... The media isn't the main problem after all. It's organized crime. ed.

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