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Harm reduction or harm promotion? Prostitution, drugs and nicotine addiction

FREEPIK

What do prostitution, drugs, alcohol, and nicotine addiction have in common? They all demoralize and harm society. Since they cause harm, strict regulation is absolutely necessary.

Strict regulation, however, can take different forms. A persistent difficult behavior like engaging in prostitution, drugs, binge drinking or smoking may cause a government to use threats or coercion. Worse, the government resorts to criminalizing some activities like prostitution and drug use.

Criminalization of certain activities deemed harmful to society, however, can do more harm than good. The case of prohibition of alcohol in the United States in the last century stands out as a negative example of criminalizing an activity. The Prohibition may have discouraged alcohol drinking but did not eliminate it. Worse, it deepened criminality and violence, and made otherwise harmless people into criminals. The Prohibition was eventually lifted, an acknowledgement of a failed policy.

The appropriate policy is very contextual. In many cases, instead of criminalization, a better benign approach is harm reduction. But the concept of harm reduction can also be manipulated and distorted.

I first learned about harm reduction as an essential political tool during my college thesis writing class. A controversial topic got my interest after watching a Jay Taruc documentary regarding prostitution in the country. The current policy focusing on criminalizing and penalizing prostitutes is so anti-poor and discriminatory. Most of the victims are women from poor or hard-up families. Yet, making prostitution a crime has not ended the oldest profession in the world. Unfavorable economic conditions like the rise of unemployment make prostitution viable.

Having a progressive mindset, I thought: “Oo nga no, sex work is work.” So, for my political science thesis paper, I wrote about a harm reduction strategy to decriminalize adult prostitution, and at the same time combat the rising abuse cases, human trafficking, and prostitution of minors. I pushed for strict regulations that protected the rights and welfare of sex workers, not criminalization, which punished them.

Harm reduction is both a principle and practice with the aim of improving the safety of people who engage in potentially risky behavior. It is a strategy that is directed toward individuals or groups to mitigate or minimize the negative impact or effects associated with certain behaviors.

Sweden is one country that leads the way in harm reduction as applied to prostitution. Sweden introduced a law in 1995 that says that the “seller” of sexual services (or the prostitute) should not be punished. The result was a decline in unsafe, risky street prostitution by 50% since the law’s implementation until 2014. Violence against both female and male prostitutes also decreased by 20% and 25%, respectively, during the same period.

In the Philippine policy environment, harm reduction can also be used as an approach to prevent teenage pregnancy, drug abuse, and nicotine abuse, among others. But authorities prefer an iron-fist policy, and sideline harm reduction for some risky behaviors like prostitution and drug use.

Further, in some areas where harm reduction is ostensibly done, its use is superficial, or even deceptive. What happens then in this case is not harm reduction but harm promotion.

Take the case of President Rodrigo Duterte’s war on drugs. Its violent nature, leading to thousands being killed, contradicts the harm reduction objective. Moreover, the war against drugs has turned into a war against the poor. Most of the civilians killed or targeted in the anti-drug operations come from poor families and impoverished areas.

Near the end of his term, the President has acknowledged that his administration has not solved the drug menace. Recall that his campaign promise was to end the drug problem within the first year of his term.

A harm reduction strategy would have recognized that drug use could not be eliminated, and the important and realistic goal would have been substantially reducing the harm from drug abuse. This could have been done through having good healthcare and treatment facilities, having access to safer alternatives (for example, giving clean and safe needles to those already hooked on opioids), providing counseling and establishing support groups, etc.

A bolder harm reduction policy is to decriminalize drug use. The fact is, many of those using drugs are not habitual users. But when caught, they are sent to jail, making their lives more miserable. The majority of prison inmates are users of drugs, but they do not pose a threat to society. Why jail them? Such an iron-fist policy is ineffective to deal with drug abuse, and it actually results in harm promotion.

But the term “harm reduction” is also being used as a camouflage for harm promotion. Take the case of the Vape Bill, which Congress recently approved. It is packaged as a harm reduction strategy for nicotine abuse.

The proponents claim that vapes and e-cigarettes, most commonly known as electronic nicotine and non-nicotine delivery systems (ENDS/ENNDS) and heated tobacco products (HTPs), are a substitute for harmful cigarettes. The vape proponents say that vape use is harm reduction since vape products are less harmful than cigarettes. That can be true for smokers, even though the jury is out whether vaping is an effective smoking cessation tool.

But here’s the rub. The said bill relaxes the provisions of RA 11467. The existing law strictly regulates vapes, e-cigarettes, and heated tobacco products. It is thus deceptive to say that the new bill introduces harm reduction. There is already a law on vaping that is consistent with harm reduction, but the bill that intends to supplant the current rules will be a deregulation of vaping.

The vape bill, lowers the age of access to vapes and e-cigarettes from 21 years old to 18 years old; transfers regulatory jurisdiction from the Food and Drug Administration (FDA) to the Department of Trade and Industry (DTI); and reverses the ban on multiple flavors.

A Vera Files study says that these provisions in the bill have the intention of enticing the non-smokers, especially the youth, to purchase and use vape products. For instance, e-juices for vapes sold online are categorized under the “toys, games, and collectibles” section on e-commerce websites. Another indication that vaping is mainly targeted to non-smokers is the fact that some of the e-juice flavors, such as bubblegum, marshmallow, and “Yakult,” are being advertised as “beginner-friendly.”

Recall that harm reduction is meant to minimize adverse effects, in this case those associated with nicotine addiction. Introducing vaping to non-smokers or enticing them to do so cannot be called harm reduction. Vaping-related injuries are well-documented; yet legislators endorse vape use by relaxing the regulations. The vape bill is far from being a harm reduction strategy. It is for this reason that the medical associations (except for a handful of doctors defying their associations) want the President to veto the vape bill.

To conclude, much still has to be done for policy-makers, politicians and the public at large to understand and appreciate what harm reduction is.

Since harm reduction is principally a health issue, the health organizations, including the Department of Health (DoH), assume a leading role in the promotion of harm reduction. We must acknowledge the centrality of health practitioners in the decision-making process to shape public health policies, including those on harm reduction. That is why it does not make sense that the regulation of vape products is removed from DoH and transferred to the Department of Trade and Industry.

That said, harm reduction is a whole-of-society approach. The harm inflicted on prostitutes can be minimized by having institutions and policies that generate quality jobs and that provide robust social welfare programs. The harm suffered by drug users can be reduced by making social conditions less stressful, by creating civic spaces, and by giving communities and stakeholders ownership of local programs regarding drug and crime control.

Sadly, at present, we are far from the principle and practice of harm reduction. If it is used, it is done wrongly and even deceptively. What we have is not harm reduction but harm promotion.

 

Ella Iellamo does policy research and analysis for the public health program of Action for Economic Reforms (AER). AER is supporting the medical associations and civil society organizations in opposing the vape bill.

Interview no-show and the Marcos myths

FACEBOOK.COM/BONGBONGMARCOS

It was disappointing that Bongbong Marcos opted not to participate in Jessica Soho’s presidential interview last month. Although I am aware that he has much to avoid, I never thought of him as a man who would easily back down from public discourse. His refusal to participate confirmed two of my assumptions about him. First, that he is unable to defend his family’s wealth, human rights record, and his personal achievements in a serious interview. And second, that he would rather let trolls fight his wars for him through half-truths and disinformation.

What are the issues Marcos Jr. cannot seem to defend? What are the questions he is hesitant to answer?

Through well-produced videos, memes, and messages on social media, certain myths have formed about the presidency of Ferdinand Marcos and about Marcos Jr. himself. Some of these myths cannot be defended in an intelligent, fact-based interview.

Myth No. 1. That the 1970s, under martial law, was the golden era of the country. It was the era when the country was prosperous and when poverty did not exist.

Here are the facts. During the 21 years that Marcos was in charge, the economy grew by an average rate of only 3.8%. We were left behind by Thailand and Malaysia whose economies grew by 6-7%.

The peso depreciated from a strong P3.92 to one US dollar in 1965 to P19.99 in 1986 — a 500% loss in value; real wages (spending power) plummeted from P100/day in 1966 to just P27/day in 1986; per capita income increased by only three-fold over 21 years while it increased 10-fold in Thailand and Malaysia; unemployment was at 7.2% in 1965 and surged to 33% in 1986; poverty rates were at 7.2% in 1965 and rose to a staggering 44.2% in 1986.

By the time Marcos was ousted, the Philippines was among the poorest countries in Asia where per capita income was below that of Japan, Singapore, Brunei, Macau, Hong Kong, Taiwan, South Korea, Malaysia, the Maldives, Thailand, and even Mongolia.

We lost competitiveness in most of our industries. Martial law gave Marcos extraordinary legislative and executive powers which he used to sequester successful industrial companies such as those in auto manufacturing, steel mills, and textile mills. These companies were taken over by cronies, all of whom failed to sustain their profitability. The failure was due in one part to corruption and in another part to the sheer lack of management expertise. Marcos selected his cronies not for their talents but for their loyalty.

In agriculture, the cronies were made to establish monopolies to give the dictator absolute economic control of the sector. As court records indicate, Danding Cojuangco controlled the coconut industry, Juan Ponce Enrile controlled logging, and Roberto Benedicto controlled sugar. These industries eventually collapsed too.

The martial law era was not the golden years of the Philippines, rather, it was the time of our great fall from one of the richest countries in Asia to one of the poorest.

Myth No. 2. That the Marcos era was the heyday of infrastructure.

Here are the facts. With borrowed funds, Marcos established the Construction and Development Corporation of the Philippines (CDCP). While it is true that roads, bridges, and classrooms were built by the CDCP, large chunks of funds fell into personal pockets. It was the same story for the power sector, the housing sector, and the transport sector.

History further shows that the infrastructure projects were often over-engineered, designed to extract maximum commissions or kickbacks.

Prestige projects like the Cultural Center, the Coconut Palace, and Folk Arts Theatre gave the image of progress but yielded little or no economic returns. They were built to create an illusion of prosperity, all of which were funded by debt.

Speaking of debt — from a foreign debt of only $600 million when Marcos took office in 1965, foreign obligations increased 43X to an eye watering $26 billion by 1986. In October 1983, the Marcos government ran out of dollar reserves and had no option but to declare a debt moratorium. To keep the economy afloat, Marcos resorted to short term loans at high interest rates. By 1986, Our debts were so massive that debt service alone accounted for half of the country’s exports. This resulted in a currency crisis and the need to devalue the peso even more.

Economist agree that the Philippine economic collapse of the 1980s was due to Marcos’ debt-driven economic policy. The heavy debt load was also the reason why succeeding governments in the 1990s and early 2000s could not invest much on infrastructure and social services.

Myth No. 3. Marcos fought the Oligarchs.

The fact is, Marcos was the oligarch of oligarchs. In 1998, Imelda bragged in an Inquirer interview, and I quote: “We practically own everything in the Philippines, from electricity, telecommunications, airlines, banking, beer, tobacco, newspaper publishing, television stations, shipping, oil, mining, hotels and beach resorts, down to coconut milling, small farms, real estate and insurance.”

Successful companies were sequestered by Marcos from hard-working entrepreneurs. But because the Marcoses and their cronies had little management expertise, these companies eventually fell into bankruptcy. This is why the Philippines lost its economic competitiveness in multiple industries.

Myth No. 4. Marcos Jr. is the most prepared and the most trustworthy presidential candidate.

We all know that Marcos Jr. lied about his academic credentials, lied to the courts about his family’s ill-gotten wealth, lied about human rights abuses, and failed to file his income tax returns. How can a liar and a tax delinquent be considered trustworthy?

As for his governance abilities, the best reference is to look at Ilocos Norte. Marcos Jr. and his kin controlled Ilocos Norte for decades. Yet, it remains one of the poorest regions in the country where the majority live from hand to mouth. A quick look at NEDA statistics on regional GDP proves this. They have no world class industries to speak of. The Bangui wind farm, for which Marcos Jr. takes credit, was not built by him but by Northwind Power, an Ayala subsidiary.

Interviews and debates are meant to reveal the real mettle of a candidate. They are meant to clarify doubts and shed light on grey areas. By refusing to be interviewed, it is clear that Marcos Jr. prefers to live in the shadows — relying on trolls to propagate the myths.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Facebook@AndrewJ. Masigan

Twitter @aj_masigan

COVID backlash brews in Canada, sending warning across globe

REUTERS
People gather in the streets during a protest by truckers and supporters against coronavirus disease (COVID-19) vaccine mandates, in Toronto, Ontario, Canada, Feb. 5. — REUTERS/CARLOS OSORIO

CANADIANS have done as they were told during the pandemic. They lined up for shots until the country had one of the developed world’s best vaccination rates; they endured some of North America’s longest lockdowns; and they’ve complied with a wide assortment of curfews and quarantines.

But even in a society known for its civility and deference to authority, many are reaching their limit.

Pent-up frustration and rage have burst into the downtown core of the nation’s capital, with hundreds of truckers and other protesters occupying Ottawa’s streets for nearly a week to oppose vaccine mandates. Protests are expanding across Canada this weekend and are threatening to spill over into the US with demonstrators planning a convoy to Washington, D.C.

The group in Canada has been championed on Fox News and by podcaster Joe Rogan, Tesla billionaire Elon Musk and former President Donald Trump. Demonstrators have started to build makeshift shelters and collect propane tanks, vowing to stay until vaccine mandates are lifted.

The populace may disapprove of their un-Canadian-like antics, but there is a growing sense of support for a message they’re delivering — that strict COVID restrictions no longer make sense. The protests have been the talk of the nation, around dinner tables, on talk shows and social media. And they serve as a warning shot not just to Prime Minister Justin Trudeau but to leaders everywhere: If even Canada is starting to resist pandemic measures, what does that mean for the rest of the world?

“People are starting to ask, what is the point or what is the efficacy of these restrictions?’” said Shachi Kurl, president of the Angus Reid Institute, a research firm in Vancouver.

A late January poll by the institute found 54% of Canadians want to end restrictions and let people self-isolate if they’re at risk. That was up 14 percentage points from just a few weeks earlier. Omicron, a variant that’s highly infectious but appears less likely to cause serious illness, has changed the perception of risk, Ms. Kurl said.

The reaction is “not knee-jerk. It’s just been building,” she said.

As COVID fatigue turns into angst, weary government leaders must decide whether it’s time to start treating the virus as an endemic disease, like seasonal flu. Experts have warned that might be premature. But if Canada is any guide, there will likely be growing public pressure to remove restrictions, whether the science supports that or not.

Inside the capital, it’s the ongoing presence of hundreds of rigs that has made this a unique event. Although there has been almost no violence or property damage, the crowd of trucks lends the demonstrations a menacing air, with the implied threat of heavy machinery in the streets. The city center is almost entirely blockaded, with trucks spilling out into residential neighborhoods. Drivers blast deafening air horns all day and, in some cases, deep into the night.

The protests started in reaction to Canadian and US laws that went into effect in January, requiring truckers crossing the border to be fully vaccinated. They have morphed into a fury over COVID restrictions more broadly. Measures to control Omicron hit the economy hard in January, resulting in the country losing 200,100 jobs during the month, Statistics Canada said Friday.

“I’m here because I’ve been segregated from my family,” Cody Ward, a 30-year-old father of three, said while hanging out in the four-door sedan he drove in from Nova Scotia. Parked less than a mile from the House of Commons, near an intersection with apartment buildings and a Catholic church, Mr. Ward was surrounded by scores of trucks, lined up three lanes across.

Mr. Ward said that some extended family members won’t let him into their homes because he’s unvaccinated and he blamed Canada’s politicians for creating a divisive environment. He said he’d arrived in Ottawa on Tuesday and is prepared to demonstrate for weeks, or even months.

He’s not a trucker, but he’s been taken in by an “Adopt-a-Trucker” program set up by protest organizers, and a local couple is giving him food and shelter. About a third of Canadians support the protest, while 36% think Mr. Trudeau should scrap the vaccine mandate for truckers, according to new polling from Innovative Research Group.

More than C$10 million ($7.8 million) was raised for the protesters on a GoFundMe page, but the crowd-funding site shut it down on Friday, citing reports from police of violence and other unlawful activity.

Mr. Trudeau — who labeled the trucker convoy a “fringe minority” — has shown no sign of reversing his government’s vaccine mandates. He campaigned and won last year’s election promising to protect health care and impose new travel restrictions on the unvaccinated. 

Yet the backlash is being felt by political leaders. Conservative Leader Erin O’Toole, Mr. Trudeau’s primary rival in the 2021 election, was dumped by his caucus this week in a putsch led by lawmakers who disliked the party’s turn to the center. For some, his refusal to embrace the protesters’ cause was another sign of weakness. After deposing him in a vote on Wednesday, a few went out and posed for pictures with the truckers.

Quebec’s premier backed down on a threat to impose a special tax on unvaccinated residents. The government of Saskatchewan, in the heart of country’s more conservative west, said it will scrap all restrictions soon, including proof-of-vaccination requirements for public places.

“Eradicating COVID is not realistic and COVID zero is not achievable,” Saskatchewan Premier Scott Moe said Thursday, imploring residents to live normal lives. “Have dinner with your friends. Go to the movies. Go to your kids’ games, most importantly. You should do all of these things without constantly assessing if your every activity is absolutely necessary.” — Bloomberg

N.Korea grows nuclear program, profits from cyberattacks — UN report

UNITED NATIONS — North Korea continued to develop its nuclear and ballistic missile programs during the past year and cyberattacks on cryptocurrency exchanges were an important revenue source for Pyongyang, according to an excerpt of a confidential United Nations report seen on Saturday by Reuters.

The annual report by independent sanctions monitors was submitted on Friday evening to the U.N. Security Council North Korea sanctions committee.

“Although no nuclear tests or launches of ICBMs (intercontinental ballistic missiles) were reported, DPRK continued to develop its capability for production of nuclear fissile materials,” the experts wrote.

North Korea is formally known as the Democratic People’s Republic of Korea (DPRK). It has long-been banned from conducting nuclear tests and ballistic missile launches by the U.N. Security Council.

“Maintenance and development of DPRK’s nuclear and ballistic missile infrastructure continued, and DPRK continued to seek material, technology and know-how for these programs overseas, including through cyber means and joint scientific research,” the report said.

Since 2006, North Korea has been subject to U.N. sanctions, which the Security Council has strengthened over the years in an effort to target funding for Pyongyang’s nuclear and ballistic missile programs.

The sanctions monitors noted that there had been a “marked acceleration” of missile testing by Pyongyang.

The United States and others said on Friday that North Korea had carried out nine ballistic missile launches in January, adding it was the largest number in a single month in the history of the country’s weapons of mass destruction and missile programs.

“DPRK demonstrated increased capabilities for rapid deployment, wide mobility (including at sea), and improved resilience of its missile forces,” the sanctions monitors said.

North Korea’s mission to the United Nations in New York did not immediately respond to a request for comment.

CYBERATTACKS, ILLICIT TRADE
The monitors said “cyberattacks, particularly on cryptocurrency assets, remain an important revenue source” for North Korea and that they had received information that North Korean hackers continued to target financial institutions, cryptocurrency firms and exchanges.

“According to a member state, DPRK cyberactors stole more than $50 million between 2020 and mid-2021 from at least three cryptocurrency exchanges in North America, Europe and Asia,” the report said.

The monitors also cited a report last month by cybersecurity firm Chainalysis that said North Korea launched at least seven attacks on cryptocurrency platforms that extracted nearly $400 million worth of digital assets last year.

In 2019, the U.N. sanctions monitors reported that North Korea had generated an estimated $2 billion for its weapons of mass destruction programs using widespread and increasingly sophisticated cyberattacks.

The latest report said North Korea’s strict blockade in response to the COVID-19 pandemic meant “illicit trade, including in luxury goods, has largely ceased.”

Over the years the U.N. Security Council has banned North Korean exports including coal, iron, lead, textiles and seafood, and capped imports of crude oil and refined petroleum products.

“Although maritime exports from DPRK of coal increased in the second half of 2021, they were still at relatively low levels,” the monitors said.

“The quantity of illicit imports of refined petroleum increased sharply in the same period, but at a much lower level than in previous years,” the report said. “Direct delivery by non-DPRK tankers to DPRK has ceased, probably in response to COVID-19 measures: instead, only DPRK tankers delivered oil.”

North Korea’s humanitarian situation “continues to worsen,” the report said. The monitors said that was probably due to the COVID-19 blockade, but that a lack of information from North Korea meant it was difficult to determine how much U.N. sanctions were unintentionally harming civilians. — Reuters

UK’s Elizabeth wants Charles’ wife to be ‘Queen Camilla’ when he’s king

JOE GIDDENS/ POOL VIA REUTERS
Britain’s Queen Elizabeth reacts as she attends a reception in the Ballroom of Sandringham House with representatives from local community groups to celebrate the start of the Platinum Jubilee, in Sandringham, Britain, Feb. 5, 2022. — JOE GIDDENS/ POOL VIA REUTERS

LONDON — Britain’s Queen Elizabeth said on Saturday that she wants Prince Charles’ wife Camilla to be styled Queen Consort when he becomes king, cementing her place at the heart of the royal family after once being judged an outsider.

In a letter written to mark the 70th anniversary of her accession to the throne, Elizabeth said the occasion had given her pause to reflect upon the loyalty and affection shown to her by the British public.

She said she hoped Charles and Camilla would receive the same support.

“(It) is my sincere wish that, when that time comes, Camilla will be known as Queen Consort as she continues her own loyal service,” Elizabeth said.

Charles and Camilla, long-time lovers, were married in 2005 in a civil ceremony in Windsor. Their Clarence House residence said on Saturday that they were “touched and honored by Her Majesty’s words.”

Elizabeth’s move reflects a wider acceptance of Camilla’s status as a royal.

Tabloid newspapers no longer target her as they did in the decade following the death in 1997 of Charles’ first wife, Princess Diana.

Camilla — whose current title is Duchess of Cornwall — now regularly represents the royal family alongside Charles during official duties.

Throughout British history, the wife of a king typically is given the title Queen Consort. At the time of their marriage, it had been officially decided that Camilla would use the title Princess Consort if Charles were to become king.

While Elizabeth on Sunday celebrates 70 years on the British throne — an unprecedented stretch — the anniversary comes at a time of tumult for the royal family.

From the US sex abuse court case facing her son Prince Andrew to allegations by her grandson Prince Harry and his wife of racism in the royal household, rarely has the 95-year-old Elizabeth’s family faced such scrutiny and damaging headlines.

Last year she lost her husband of 73 years, Philip, whom she acknowledged in her letter on Saturday.

“I was blessed that in Prince Philip I had a partner willing to carry out the role of consort and unselfishly make the sacrifices that go with it. It is a role I saw my own mother perform during my father’s reign,” Elizabeth said.

POMP AND POIGNANCY
Earlier on Saturday, Elizabeth kicked off celebrations for the 70th anniversary of her accession to the throne by inviting local community groups to her Sandringham residence in the east of England.

The queen, pictured smiling and wearing a light blue dress, cut a celebratory cake baked by a local resident and heard a rendition of “Congratulations” played by a concert band.

“I remain eternally grateful for, and humbled by, the loyalty and affection that you continue to give me,” she said in her letter to the public.

Ironically Elizabeth was not destined to be monarch at her birth, and became queen only because her uncle Edward VIII abdicated to be with American divorcee Wallis Simpson.

But in 2015, she overtook Victoria as Britain’s longest-reigning sovereign in a line that traces its origin back to Norman King William I and his 1066 conquest of England.

This weekend’s low-key events are a prelude to more pomp and ceremony to mark the platinum jubilee in early June, when the government will add an extra public holiday.

But Elizabeth said the anniversary was to her one of reflection and poignancy.

“It is a day that, even after 70 years, I still remember as much for the death of my father, King George VI, as for the start of my reign,” she wrote.

“As we mark this anniversary, it gives me pleasure to renew to you the pledge I gave in 1947 that my life will always be devoted to your service.” — Reuters

UN’s Guterres to China’s leaders: allow ‘credible’ visit by rights envoy

REUTERS/MIKE SEGAR/FILE PHOTO

UNITED NATIONS — U.N. Secretary-General Antonio Guterres told Chinese leaders on Saturday that he expected authorities to allow U.N. human rights chief Michelle Bachelet to make a “credible visit” to the country, including Xinjiang, the United Nations said.

Mr. Guterres met with China’s President Xi Jinping and Foreign Minister Wang Yi on the sidelines of the Winter Olympics, according to a U.N. readout of the meetings.

Ms. Bachelet has long sought access to Xinjiang to investigate accusations of abuse against ethnic Uyghurs. The issue has soured relations between Beijing and the West, sparking accusations of genocide from Washington and a US-led diplomatic boycott by some countries of the Winter Olympics.

“The Secretary-General … expressed his expectation that the contacts between the office of the High Commissioner for Human Rights and the Chinese authorities will allow for a credible visit of the High Commissioner to China, including Xinjiang,” said the U.N. readout of Mr. Guterres’ meetings.

Ms. Bachelet’s office in Geneva said last month that conversations were underway for a possible trip to the area in northwest China in the first half of the year.

Rights groups accuse China of widescale abuses against Uyghurs and other minority groups, including torture, forced labor and detention of 1 million people in internment camps.

China calls them re-education and training facilities, denies abuses, and says it is combating religious extremism.

Mr. Guterres also discussed Afghanistan and climate change — among other issues — during his meetings with Mr. Xi and Mr. Wang.

“The Secretary-General recognized the important efforts China is making to address climate change but reiterated the appeal for additional efforts to accelerate the transition to the green economy to bridge the emissions gap,” said the U.N. statement.

Mr. Guterres traveled to Beijing to attend the opening ceremony of the Winter Olympics on Friday. The ceremony concluded with the Olympic flame cauldron lit by two young Chinese Olympians, one of them a member of China’s Uyghur minority. — Reuters

Jimmy Butler scores 27 as Heat use big third quarter to beat Hornets

JIMMY BUTLER — REUTERS

JIMMY Butler poured in 27 points and the Miami Heat used a tremendous third quarter to produce a 104-86 victory over the host Charlotte Hornets on Saturday night.

Bam Adebayo supplied 20 points and 12 rebounds as Miami controlled the play in the lane for much of the second half.

The Heat trailed 51-46 at half time, but cranked out a 35-8 edge in the third quarter. Butler had nine points in the quarter.

Tyler Herro added 19 points for Miami, which has won back-to-back games following a three-game skid.

The Hornets lost their fourth consecutive game, including the second one in two nights at home. Charlotte dropped to 14-10 at home.

Terry Rozier led Charlotte with 16 points, while Miles Bridges had 15 points and LaMelo Ball provided 12 points. Gordon Hayward, who was in his second game back following an ankle injury, was scoreless in 22 minutes, missing all seven of his shots from the floor.

The Hornets’ 3-point shooting was spotty, going 10-for-36. Super sub Kelly Oubre, Jr. struggled by going 3-for-15 from the field (1-for-9 on 3s).

Butler made 10 of 13 shots from the field. The Heat’s efficiency for parts of the second half helped overcome the team’s 11-for-32 shooting on 3-pointers for the game. Miami also was 17-for-18 on free throws.

The Hornets had good moments in the second quarter, when Miami was limited to 15 points. The Heat connected on only two shots from the field in the final 5-1/2 minutes of the first half.

The Heat led 31-23 before going cold.

Miami was in its fourth game of a six-game road swing, now 2-2 in those games. The Heat had Kyle Lowry back for his second game after a nine-game absence because of a personal issue, and he turned in nine points.

Twin brothers Caleb Martin of Miami and Cody Martin of Charlotte both scored eight points in reserve roles. — Reuters

Cameroon stages dramatic comeback to win third place at Cup of Nations

YAOUNDE — Skipper Vincent Aboubakar scored two late goals as Cameroon staged an extraordinary comeback from three goals down against Burkina Faso to level the match at 3-3 and win third place on penalties at the Africa Cup of Nations on Saturday.

The tournament hosts put together a thrilling recovery in the final 20 minutes at the Ahmadou Ahidjo Stadium to force a draw and go on and win the third-place playoff game 5-3 in the resulting penalty shootout.

Aboubakar was brought on at half time as Cameroon played most of their unused squad players from the start and found themselves 2-0 down at the break.

A 28th-minute goal from defender Steeve Yago and an own goal from Cameroon goalkeeper Andre Onana on the stroke of half time handed a Burkina a shock lead and Djibril Ouattara added a third early in the second half to the surprise of the home crowd.

But Cameroon pulled a goal back in the 71st minute through Stephane Bahoken in a melee following a corner before Aboubakar took advantage of two goalkeeping howlers to score twice in the space of two minutes in the 86th and 87th.

It means he ends the tournament on eight goals.

A stunning comeback was completed as Cameroon converted all their kicks in the shootout while Onana saved one from Blati Toure to ensure some consolation for the home country, days after they were eliminated on post-match penalties in the semifinal against Egypt. — Reuters

Three players sit atop leaderboard at Pebble Beach

BEAU Hossler shot a third-round 65 on Saturday to vault into a three-way tie for the lead with Andrew Putnam and Tom Hoge at the Pebble Beach Pro-Am in Pebble Beach, Calif.

Hossler recorded an eagle on his way to a bogey-free round on the Pebble Beach Golf Links. Putnam and Hoge shot matching 4-under 68s as all three players sit at 15-under 200 after 54 holes.

Patrick Cantlay (third-round 68), Jordan Spieth (63) and Joel Dahmen (66) sit tied for fourth at 14 under, one stroke back. Irishman Seamus Power, the second-round leader, is alone in seventh at 13 under, two shots back.

Australian Jason Day (70) and Denny McCarthy (66) are four shots back in a tie for eighth.

Hossler has shot back-to-back 65s after an opening 70. Playing “conservatively” Saturday, he finished with a flurry, posting four birdies in his last six holes. Hossler jumped 14 spots up the leaderboard on moving day.

“Pebble can give and take so quickly, right?” Hossler said. “I was glad to be on the receiving end today. I hit it well, played really conservatively, frankly, as even though it might not look like it and was fortunate to not have any misses really get me in significant trouble. It was as fairly stress free as you can be around here.”

Hoge posted his bogey-free round on Spyglass Hill Golf Club, getting two birdies in his final five holes.

“I don’t know what it is, but I always seem to shoot better scores at Spyglass than I have at some of the others,” Hoge said. “I don’t know, I mean, it certainly is an advantage just from the way the scoring averages are and all the golf courses, but I seem to play Spyglass a little bit better, so it was a good one for me today.”

Putnam had a chaotic round on Pebble Beach Golf Links. Starting on No. 14, he settled down after posting a bogey and double-bogey in consecutive holes. He would finish the round with seven birdies, including five in a row on Nos. 4-8.

“It was pretty ugly, that first nine,” Putnam said. “It was a really bad start, a 3-putt, kind of a stupid mistake and then kind of got a bad break, ball got kind of buried up in a lip. So it can happen out here. And kind of kept it in play and started hitting some good shots, and the putter started working pretty good on that front side.”

Spieth vaulted 34 spots up the leaderboard playing on Pebble Beach. He opened with two birdies, added an eagle on No. 6, and finished the round with eight birdies against a bogey on No. 13.

Pebble Beach hosts the final round on Sunday. — Reuters

Systemic infirmities

It took the Lakers all of three minutes and 36 seconds to be facing a double-digit deficit in their match yesterday. Never mind that they were as close to being complete as possible under the circumstances. All-Star Game captain LeBron James was back after a five-contest absence due to knee swelling, and they looked to convert their homestand into a win against the struggling Knicks, losers in seven of nine outings. Instead, they found themselves playing catch-up early on, and, in the process, second-guessing their capacity to live up to expectations. In other words, they were experiencing the same old, same old.

The script is now extremely familiar to the Lakers. They would be down in a given contest, spend much of it digging out of the hole, and then, depending on how the ball bounces, either eke out a win or fall short in the end. The problem is that, more often than not, said ball does not bounce their way.

Given how the set-to against the Knicks unfolded, it seems the Lakers relish being masochists. For all the handicaps they were given to start, they got the lead near the end of the third quarter, and then actually pushed it to a supposedly safe nine points with two minutes and change left in the fourth. Unfortunately, they found their worst enemy staring back at them in the mirror, and so gave up all the advantage they had by the end of regulation. And though they finally claimed victory in overtime, the extra five minutes they required to do so represented another five minutes they could have spared their ailing — and, yes, aging — bodies.

Because of the extra period, another 40 minutes were added to the 37-year-old James’ tally for the season. Clearly, the plan to bring additional playmaking to the fold so that he would be burning rubber less is dead in the water. In part, it’s because he feels he can — and needs to — take on the load. Yesterday, for instance, would the Lakers have won without his 29-13-10 triple-double? In larger measure, it’s because Westbrook has been a decided bust; against the Knicks, the former Most Valuable Player awardee canned only five points on one-of-10 shooting from the field.

Bottom line, though, the boos should rain not just on Westbrook, but on all the Lakers — even those in the front office. The saying “If it ain’t broke, don’t fix it” may be clichéd, but it’s true. They saw fit to tinker with the formula that had led them to the championship in 2020 on the basis of a subsequent season hampered by injuries, and they’re paying for the mistake. The good news is that they still have time to right the ship; for all their missteps, they’re just one game out of eighth place in the Western Conference. The bad news is that all the time in the world won’t correct systemic infirmities for which they have no one else to blame.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Inside J&J’s secret plan to cap litigation payouts to cancer victims

Image by Mike Mozart/Flickr/ CC BY 2.0

NEW YORK — Johnson & Johnson created a plan last year to limit the financial bleeding from billions of dollars in jury awards to plaintiffs who alleged the company’s Baby Powder and other talc products caused deadly cancers. The healthcare and consumer-goods giant assigned more than 30 staffers to “Project Plato.” In a memo on the project in July, a company lawyer warned the team: Tell no one, not even your spouse. 

“It is critical that any activities related to Project Plato, including the mere fact the project exists, be kept in strict confidence,” Chris Andrew, a J&J lawyer, wrote in an internal memo reviewed by Reuters. 

The covert team would go on to evaluate a strategy to shift all the liability from about 38,000 pending talc cases onto a newly created subsidiary, which would immediately declare bankruptcy. The goal, as a lawyer for the subsidiary said in a court filing: To halt all the litigation and transfer the cases to bankruptcy court, where plaintiffs would compete for compensation from a limited pool of money. 

In court and in public statements last July, Johnson & Johnson said it intended to keep fighting the allegations that its products were unsafe in trial courts. The company was actively defending itself in talc trials, including one that would result in a $27 million jury award that could be nullified by the bankruptcy maneuver. The plaintiff in that case now may have to instead seek compensation through a bankruptcy process. 

Privately, J&J took concrete steps starting as early as April to consider and plan the bankruptcy maneuver, according to internal company documents, depositions and other court records reviewed by Reuters. The strategy seeks to ensure the pending cases never reach a jury and instead be handled in a bankruptcy court. 

The documents provide the most detailed account to date of how the New Jersey-based conglomerate strategized to limit compensation to tens of thousands of talc plaintiffs. 

Reuters exclusively reported the broad outlines of the bankruptcy strategy being explored by J&J in July. The company went ahead with the plan in October, offloading responsibility for the cases to the new subsidiary, which then filed for bankruptcy. Before the filing, the company faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy-court records. 

Now, J&J proposes to give the subsidiary in bankruptcy $2 billion to put into a trust to compensate all 38,000 current plaintiffs, as well as all future claimants. J&J has said in court filings and in public statements that the subsidiary, LTL Management LLC, could also tap a stream of royalty revenues valued at more than $350 million at the time of the bankruptcy filing. 

J&J did not answer detailed written questions from Reuters about its planning of the bankruptcy maneuver. In a statement, J&J defended the LTL bankruptcy as a way to resolve the talc claims. 

“This filing follows established process, and courts have uniformly acknowledged that equitably resolving these types of claims through Chapter 11 is a legitimate use of the restructuring process,” the statement said. “LTL’s objective is to reach a fair and equitable resolution for claimants through a plan of reorganization and create a reasonable framework to address the unprecedented number of existing and future talc-related claims.” 

It continued: “We stand behind the safety of Johnson’s Baby Powder, which is safe, does not contain asbestos and does not cause cancer. We continue to believe resolving this matter as quickly and efficiently as possible is in the best interests of claimants and all stakeholders. We will continue to follow the process and put forth our position in the court.” 

On Thursday, a lawyer for the J&J subsidiary appeared at a bankruptcy hearing and accused attorneys for people who have sued Johnson & Johnson over its talc products of sharing confidential documents with Reuters in a “calculated” effort to try the case “in the press.” 

Later Thursday, lawyers for J&J and its subsidiary sought a temporary restraining order from the bankruptcy judge to block Reuters from publishing information that, the company claims, comes from confidential documents. 

A Reuters spokesperson called J&J’s claims without merit. 

“We reject the factually-unfounded and legally-meritless claims made by J&J’s lawyers and will continue to report without fear or favor on matters of public interest,” the spokesperson said in a statement on Thursday. 

BANKRUPTCY BENEFITS WITHOUT BURDENS
J&J started secretly considering and planning the maneuver to redirect plaintiffs to bankruptcy court as early as April, when company attorneys were briefed on the strategy by lawyers at Jones Day, a firm with experience in the tactic, according to deposition testimony from an LTL lawyer. 

On July 19, the day after Reuters broke the news of the strategy, a J&J official contacted Moody’s, the Wall Street ratings firm, to ask if the subsidiary bankruptcy would harm the company’s pristine credit, according to emails reviewed by Reuters. She was told it likely wouldn’t because the agency would only consider the maneuver’s impact on the finances of J&J, and not those of the subsidiary in bankruptcy. 

The exchange underscores why the strategy was so attractive: J&J could create a related-party bankruptcy to limit liability, while avoiding “the burdens” of declaring bankruptcy itself, seven legal experts argued in an amicus brief filed with the court. 

Moody’s declined to comment. 

In court papers, a lawyer for the J&J subsidiary said the bankruptcy filing was a “prudent and necessary” step that “offered the only alternative for equitably and permanently resolving” all the talc litigation. 

Last July, Reuters reported that one of J&J’s attorneys told plaintiffs’ lawyers that the company could pursue the bankruptcy plan, according to people familiar with the matter. At the time, J&J publicly downplayed concerns about the strategy and did not confirm that it was exploring the option. “Johnson & Johnson Consumer Inc. has not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate,” the company told Reuters at the time. 

A few days later, in a California courtroom, a lawyer defending J&J against talc plaintiffs told a judge that news of the bankruptcy strategy amounted to unsubstantiated “rumors.” J&J executed the bankruptcy plan starting on Oct. 11, taking the first steps to create the new subsidiary. The new company swiftly filed for Chapter 11, on Oct. 14. 

’ALTERNATIVE JUSTICE SYSTEM’
The strategy, while rare, could be adopted more widely by big companies facing liability crises if Johnson & Johnson gets bankruptcy-court approval, according to lawyers for talc plaintiffs and some legal experts. If J&J succeeds, they argue, it could provide a blueprint for Corporate America on how to circumvent jury trials involving allegations of defective products or misconduct. 

Such a precedent could allow companies to routinely pursue related-party bankruptcies to escape accountability from juries, said Melissa Jacoby, a University of North Carolina law professor. 

“That’s one step closer to making bankruptcy an alternative justice system for big corporations,” Ms. Jacoby said. “If a company as deeply pocketed as J&J can do this, where does it stop?” 

In testimony last November, a lawyer for the Johnson & Johnson subsidiary said the company pursued the strategy in reaction to an onslaught of litigation with the potential for outsized jury awards. A bankruptcy court, the lawyer argued, could provide a more consistent and equitable process for compensating claimants. Johnson & Johnson has said it would provide a fair amount of money to the subsidiary to pay claims. 

Johnson & Johnson, valued at more than $450 billion, had about $31 billion in cash and marketable securities on hand at the end of the third quarter, securities filings show. 

The New Jersey judge overseeing the subsidiary’s bankruptcy is scheduled on Feb. 14 to begin hearing arguments on plaintiff-creditors’ contention that the bankruptcy should be dismissed because it was filed in bad faith. 

The October bankruptcy temporarily halted the litigation against Johnson & Johnson. LTL has said it will seek to “permanently” resolve the talc litigation through a reorganization plan that would prohibit current and future plaintiffs from seeking redress in a trial court. Instead, their claims would be directed to a trust, which would divvy up a limited amount of money through an administrative process approved by the bankruptcy court. 

TENS OF THOUSANDS OF PLAINTIFFS
J&J’s bankruptcy strategy is the latest example of the company’s efforts to manage liability amid mounting allegations that asbestos lurks in its iconic Baby Powder and other talc products. A December 2018 Reuters investigation revealed that the company knew for decades about tests showing its talc sometimes contained carcinogenic asbestos but kept that information from regulators and the public. 

Tens of thousands of plaintiffs, many with mesothelioma or ovarian cancer, have filed lawsuits alleging that exposure to talc in J&J’s Baby Powder and other company products made them sick. Records J&J produced in response to those lawsuits led plaintiff lawyers to refine their argument: The culprit wasn’t necessarily talc itself, but also asbestos in the talc. 

That assertion, backed by decades of science showing that asbestos causes mesothelioma and is associated with ovarian and other cancers, has had mixed success in court. The company has insisted in lawsuits and public-relations campaigns that the product was safe and asbestos-free. 

One plaintiff is Thomas McHattie, 78 years old, who traveled the world as an obstetrician-gynecologist before receiving a mesothelioma diagnosis in March 2020. Mr. McHattie said he recommended Baby Powder to “countless pregnant women” while also using it himself. Mr. McHattie said he endured five courses of chemotherapy to treat tumors in his abdomen, and has suffered from pronounced fatigue and shortness of breath. 

He sued J&J in New York in July, a few months after receiving his diagnosis. His case had not yet gone to trial when LTL Management filed for bankruptcy. 

In a 2020 court filing, J&J said it denied “each and every allegation, statement, matter and thing” asserted by Mr. McHattie in his lawsuit. 

Mr. McHattie told Reuters in an interview that he was “disappointed they’ve chosen to do what is expedient and not what is right.” 

“There is no excuse for them filing a bankruptcy,” Mr. McHattie said. “Why? This is a solvent company.” 

RELEASED FROM LIABILITY
J&J’s subsidiary bankruptcy is one variation of a longstanding and increasingly controversial tactic of limiting liability through so-called nondebtor releases granted to companies, owners or executives. The releases can allow companies or executives to piggyback on the bankruptcies of other entities to obtain broad protection from lawsuits and restrict litigation payouts. The party receiving the release typically agrees to contribute a lump sum to the company in bankruptcy to pay off plaintiffs in exchange for an exemption from all future liability. 

That was the case with members of the Sackler family, the billionaire owners of Purdue Pharma LP, which filed for bankruptcy as a hail of lawsuits alleged it had contributed to a deadly addiction epidemic with its opioid painkiller, OxyContin. In a landmark decision in December, a US district judge in New York invalidated Purdue’s bankruptcy reorganization plan on the grounds that it improperly insulated the Sackler family from liability through nondebtor releases. 

Purdue has appealed the ruling. The company pleaded guilty in November 2020 to three felonies covering misconduct regarding its handling of opioids. Sackler family members, who also faced litigation, have denied allegations they contributed to the opioid crisis. 

J&J’s bankruptcy takes the approach a step further. Instead of seeking releases from liability in an existing bankruptcy proceeding, the company created a bankruptcy by forming a company that plaintiff-creditors allege has no business purpose other than to limit J&J’s legal exposure. 

Lawyers for talc plaintiffs contend that the J&J maneuver amounts to an abuse of the bankruptcy system, which is intended to help a struggling business reorganize — and not to help a well-capitalized conglomerate limit legal liability for alleged wrongdoing. 

“This case is all about litigation advantage” for J&J, said Robert Stark, a Brown Rudnick LLP lawyer representing a creditors’ committee of talc plaintiffs during a December hearing of the subsidiary’s bankruptcy. J&J successfully halted the claims by tens of thousands of plaintiffs “while people are dying of cancer” and trying to prepare their families financially for their deaths, Mr. Stark said at the hearing. “It does not get more inhumane than that,” he said. 

The Purdue and J&J bankruptcy strategies have sparked efforts in the US Congress to stop such tactics. US Senator Dick Durbin of Illinois is co-sponsoring legislation with other Democrats that would all but outlaw the strategy J&J is using and restrict the ability of companies to obtain liability releases without declaring bankruptcy themselves. 

“Our bankruptcy code and civil procedure has to be explored to make sure that this exploitation does not take place,” Mr. Durbin said in an interview. 

Business groups and some bankruptcy lawyers say that nondebtor releases can be an effective tool to resolve litigation to the benefit of both plaintiffs and the companies they sue. While limited amounts for compensation are often criticized, they offer plaintiffs better odds of getting paid than if they take their chances in trial courts, said Donald Workman, a Baker & Hostetler restructuring lawyer who isn’t involved in the J&J subsidiary’s case. 

“You have an elegant solution to resolve burdensome if not crushing obligations,” Mr. Workman said, that “provides funding for constituencies that might otherwise receive nothing.” 

TEXAS TWO-STEP
J&J turned to the bankruptcy plan following a series of setbacks. 

The US Food and Drug Administration found trace amounts of asbestos in a bottle of Baby Powder purchased online, forcing the company to issue a recall in October 2019. In May 2020, the company stopped selling talc-based Baby Powder in the US and Canada, citing “misinformation” and “unfounded allegations” regarding the product’s safety. 

In April, J&J attorneys consulted with Jones Day lawyers, who explained how the company could use a Texas law to split the company’s consumer-product business into two parts. One would absorb all the talc liability; the other would carry on the business free from the threat of billion-dollar judgments. Texas pioneered the so-called divisional merger, which allows companies to break apart and more easily divvy up assets and liabilities among the resulting companies. 

Jones Day helped Georgia-Pacific, a company owned by conglomerate Koch Industries, execute the maneuver in 2017 to offload mounting asbestos litigation. Georgia-Pacific faced allegations regarding asbestos exposure from building products that spanned decades. 

Georgia-Pacific used the Texas law to create a new subsidiary called Bestwall to shoulder asbestos liability. As the subsidiary declared bankruptcy, the “new” Georgia-Pacific continued to produce Brawny paper towels and other lucrative brands. The maneuver came to be known in legal circles as a “Texas two-step.” 

Georgia-Pacific paid nearly $3 billion in dividends to Koch over the next several years, according to a court filing, that it might have been unable to dole out had it filed for bankruptcy itself. Georgia-Pacific has proposed giving Bestwall $1 billion to settle all asbestos claims, an amount plaintiff-creditors are still challenging in bankruptcy court. 

Koch Industries and Georgia-Pacific declined to comment; Jones Day did not respond to a request for comment. 

When J&J needed help last year, it hired Dallas-based Jones Day partner Greg Gordon and other members of the firm’s Georgia-Pacific legal team. 

As the bankruptcy planning moved forward, a major court defeat heightened the urgency. In June of last year, J&J lost a bid to reverse a watershed verdict in favor of 22 women who blamed their ovarian cancer on Baby Powder and other talc products. The women had initially won a verdict of $4.69 billion from a Missouri jury. A state appeals court reduced the award to more than $2 billion. 

PROJECT PLATO
By July 12, the company had secretly set up the Project Plato team. The more than 30 employees staffing it came from J&J’s finance, risk management, tax and business development operations, according to the internal J&J memo and deposition testimony. 

A week later, J&J treasurer Michelle Ryan reached out to Moody’s to get guidance on the impact to J&J’s credit rating. 

“We are looking at a number of ways of capping our talc liability,” Ms. Ryan said in a July 19 e-mail to Michael Levesque, a senior vice president at the credit-ratings firm focused on pharmaceutical companies. One scenario under consideration, Ms. Ryan said, would be to “capture the liability in one subsidiary” and then “basically bankrupt that subsidiary.” 

Ms. Ryan asked whether the bankruptcy would hurt the company’s credit rating. J&J at the time was one of just two US companies with a triple-A rating, the other being Microsoft. 

Mr. Levesque replied that the “technical aspect” of the subsidiary bankruptcy wasn’t likely to cause concern about J&J’s creditworthiness. Rather, he said, Moody’s was “highly likely” to focus on how the subsidiary’s Chapter 11 filing affected J&J’s finances, which the maneuver intended to help. 

Ms. Ryan did not respond to a request for comment. 

To execute the plan, J&J created a limited liability company on Oct. 11 in Texas through a series of transactions. That company then merged with J&J’s existing consumer products business. The merged company then divided itself under the state’s divisional merger law, creating the subsidiary that would take on all the talc liability. 

The consumer business could then go on as if the lawsuits had never been filed. 

GREEN LIGHT
Early on the morning of Oct. 11, Mr. Andrew, the in-house J&J lawyer who initially sent the internal memo to the Project Plato team, sent an email to eight J&J colleagues, including several senior executives. He asked them to approve the Texas two-step bankruptcy plan “as soon as possible” and no later than that day, according to Mr. Andrew’s email to his colleagues, which was reviewed by Reuters. 

He attached a detailed memo outlining the impending bankruptcy’s purported benefits. It would allow, the memo said, the bankruptcy court to determine the final amount of money for resolving all of the litigation, in a process enabling claims to be settled in an “equitable and efficient manner, without the waste and abuses experienced in the state court tort system.” 

The memo warned of risks. The plan would be consummated under a tight time frame and would be scrutinized by the media. “Appropriate messaging (internally and externally) will be required to avoid or mitigate misunderstandings about the nature of the restructuring and negative publicity,” the memo said. 

Mr. Andrew quickly received the green light, within hours of the request, internal emails reviewed by Reuters show. 

LTL, the new subsidiary, held its first board meeting on Oct. 14. 

The board members and lawyers discussed that LTL faced what they viewed as “exorbitant” costs if the current talc litigation barrage continued, which included 12,000 lawsuits alone through the first nine-and-a-half months of 2021, according to meeting minutes and deposition testimony Reuters reviewed. The group noted that J&J faced a total of about $5 billion in costs from judgments, settlements and legal fees. 

The board voted to pursue a Chapter 11 filing. J&J disclosed the move in a news release that evening as one that would “equitably” resolve the litigation. 

A plaintiffs’ lawyer grilled Robert Wuesthoff — a J&J manager appointed president of LTL Management — on that point in a Dec. 22 deposition. 

“One of the considerations was to treat claimants equitably; it was for their benefit? Is that what you’re saying?” asked Jeffrey Jonas, a Brown Rudnick lawyer representing a creditors committee comprising talc plaintiffs. 

“Yes, it would be more equitable to the claimant. Yes, we believe that,” Mr. Wuesthoff responded. 

“But the real reason we filed for bankruptcy,” the LTL executive said, was that the large and growing amount of talc cases — some with “lottery-size” awards — put J&J’s consumer products business in “financial distress.” — Mike Spector and Dan Levine/Reuters

Duterte backs Cusi in Malampaya deal

BW FILE PHOTO

PRESIDENT Rodrigo R. Duterte late Friday defended his energy secretary, Alfredo G. Cusi, after the Senate transmitted a resolution to the Office of the Ombudsman recommending the filing of charges against him over the Malampaya Gas Field deal.

“I view with grave concern an apparent effort at the Senate to put in bad light recent developments involving the Malampaya Gas Field. This casts undue, undeserved, and unwarranted aspersion on the part of some of our key government officials,” Mr. Duterte said in a statement released on Friday night.

“Let me reiterate: Energy Secretary Cusi has my full trust and confidence and shall remain at the helm of the department he heads,” he added.

The Malampaya deep-water gas-to-power project centers around the Philippines’ lone natural gas field and it supplies as much as 20% of the country’s energy requirements.

Senator Sherwin T. Gatchalian, who chairs the Senate Energy committee and led hearings that reviewed the technical, financial, and legal aspects of the Shell Petroleum N.V.–Udenna Corp. deal, proposed the resolution to charge Mr. Cusi along with other energy officials in order to provide them a chance to “defend themselves in the proper venue.”

On Friday, the senator said a case can be filed for their violation of the Anti-Graft and Corruption Practices Act, based on “their favor towards one company that did not have the ability, showing bias towards a company that did not pass the evaluation.” 

The case revolves around the Energy department’s approval of the sale of 45% participating interest in the Malampaya gas project of UC 38 LLC, previously known as Chevron Malampaya LLC, an indirect subsidiary of Udenna.

Mr. Duterte said that he had seen the report on the sale and purchase of the stock of Chevron Malampaya LLC.

“Based on this, I am convinced that this was a private transaction between private entities that must be respected,” he said in the statement. “I am likewise convinced that, in this case, the national interest has been protected and the rights of the government remain intact.”

Calling out what he called the “political antics of some members of the Senate,” the president asked them “to ensure that our ability to compete [with other countries for investments] is not jeopardized by political intrigues and innuendoes.

“Leave business transactions in the capable hands of the business sector. Let us respect their business decisions while we protect our national interests.” 

This as he acknowledged “the power of the Senate to conduct investigations in aid of legislation.” — Alyssa Nicole O. Tan 

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