Current Affairs 18 May 2023

CONTENTS

1. Thawing Permafrost in Arctic
2. 6th Indian Ocean Conference
3. LIBOR
4. DoT Develops Facial Recognition Tool for Telecom Operators: ASTR
5. C-PACE (Centre for Processing Accelerated Corporate Exit)
6. Gekko Mizoramensis

Thawing Permafrost in Arctic

Context:

According to a New Study, “Thawing Permafrost poses an environmental threat to thousands of sites with legacy industrial contamination”, thawing of Permafrost may result in the spread of toxic substances in the Arctic Region.

Relevance:

GS III: Environment and Ecology

Dimensions of the Article:

1. About Permafrost
2. Findings of the Study
3. Implications of Thawing Permafrost

About Permafrost

Permafrost is a type of soil or rock that remains below freezing point (0 degrees Celsius or 32 degrees Fahrenheit) for at least two consecutive years.

Location and Occurrence:

• Found in regions with cold climates, such as the Arctic and high mountainous areas.
• Extends across large portions of Alaska, Canada, Russia, and other northern regions.

Composition:

• Consists of a combination of frozen soil, rock, organic matter, and ice.
• Can contain varying proportions of sand, silt, clay, and organic material.

Layers:

• Active Layer: The uppermost layer that thaws during summer and refreezes during winter.
• Permanently Frozen Layer: The layer of soil or rock that remains frozen year-round.

Role and Importance:

• Acts as a natural freezer, preserving ancient plant and animal remains, including mammoths and other prehistoric species.
• Influences the stability of slopes, the availability of water, and the development of ecosystems.
• Plays a crucial role in shaping the landscape.

Climate Change Impact:

• Thawing of permafrost due to climate change is a significant concern.
• Rising temperatures can lead to permafrost melting, causing ground subsidence and landslides.
• Releases greenhouse gases, such as carbon dioxide and methane, into the atmosphere.
• Has implications for the global climate system, biodiversity, and local communities.

Infrastructure and Human Impacts:

• Thawing permafrost can damage infrastructure, including buildings, roads, and pipelines built on previously stable ground.
• Requires special engineering considerations for construction in permafrost regions.
• Affects indigenous communities that rely on permafrost for traditional practices and livelihoods.

Findings of the Study:

• Industrial activities in permafrost regions have likely generated 13,000 to 20,000 contaminated sites across 4,500 facilities.
• Currently, approximately 1,000 industrial sites and 2,200 to 4,800 contaminated sites are at risk of destabilization due to thawing permafrost.
• Types of known industrial waste in the region include drilling and mining wastes, toxic substances like drilling muds and fluids, mine waste heaps, heavy metals, spilled fuels, and radioactive waste.
• The Arctic is warming nearly four times faster than the global average due to climate change, causing rapid permafrost thaw that poses a risk to industrial and contaminated sites.
• By the end of this century, around 2,100 industrial sites and between 5,600 and 10,000 contaminated sites are threatened with destabilization.
• The perception of the Arctic as a perpetually stable and untouched region is incorrect, as it houses numerous industrial facilities, such as oilfields, pipelines, mines, and military bases.
• All this infrastructure is built on permafrost, and the toxic waste from these facilities has been buried in the permafrost with the assumption that it would remain locked away permanently.
• However, with ongoing global warming, the stability of the permafrost is compromised, posing a danger of contamination release.
• The Arctic experienced increased development during the Cold War, serving as a hub for resource extraction and military operations.
• Consequently, industrial and toxic waste accumulated on or within the permafrost, without adequate measures taken to remove it.

Implications of Thawing Permafrost:

• Thawing permafrost leads to the release of greenhouse gases (GHGs) into the atmosphere, contributing to climate change.
• According to a 2022 NASA report, Arctic permafrost alone holds an estimated 1,700 billion metric tons of carbon, including methane and carbon dioxide, which is significantly more carbon than the world emitted from fossil fuel emissions in 2019.
• Frozen plant matter within the permafrost does not decay, but when it thaws, microbes within the dead plant material begin breaking it down, releasing carbon into the atmosphere.
• Thawing permafrost can unleash dormant viruses and bacteria, as highlighted in a 2022 study by Columbia University.
• Some of these viruses and bacteria could be entirely new or ancient ones for which humans lack immunity and cures, or they may include diseases that society has eliminated, such as smallpox or the bubonic plague.

-Source: The Hindu

6th Indian Ocean Conference

Context:

Recently, The sixth edition of the International Indian Ocean Conference took place in Dhaka, the capital city of Bangladesh.

Relevance:

GS II: International Relations

Dimensions of the Article:

1. About 6th Indian Ocean Conference:
2. Major highlights
3. About Indian Ocean Conference

About 6th Indian Ocean Conference:

• The 6th Indian Ocean Conference, which took place in Dhaka, Bangladesh, highlighted the significance of prioritizing and strengthening connectivity within the Indian Ocean region.
• The conference, centered around the theme “Peace Prosperity and Partnership for a Resilient Future,” convened delegates from more than 25 countries.
• The objective was to engage in discussions and explore strategies that foster economic development while upholding peace and stability in the region.

Major highlights

Connectivity Challenges and Goals:

• India faces challenges in achieving enhanced connectivity in the Indian Ocean region.
• Establishing a land connection with Southeast Asia poses unique difficulties.
• There is a call for collective efforts to overcome obstacles and improve connectivity.
• India aims to establish effective connectivity with the Association of Southeast Asian Nations (ASEAN) and develop multi-modal connectivity to the Gulf and Central Asia.

Cooperation and Long-Term Perspective:

• Cooperation among countries in the Indian Ocean region is crucial for tackling connectivity challenges and promoting regional development.
• Examples like the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) demonstrate the significance of deeper cooperation and shared efforts.
• Upholding legal obligations and agreements is vital for building trust and confidence among member nations.
• Adherence to international law, norms, and rules is essential for a stable international order.

Sustainable Projects and Debt Concerns:

• Unsustainable debt generated by unviable projects is a concern for countries in the region (e.g., Sri Lanka).
• Encouraging transparent lending practices and considering market realities is necessary to avoid future complications.
• Shared Responsibility and Focus:
• The stability and prosperity of the Indian Ocean region require shared responsibility and focused efforts.
• Ensuring maritime security is a collective responsibility that should not be compromised for individual dominance.
• Practical action is needed to complement diplomatic positions.
• The importance of climate action and counter-terrorism initiatives was highlighted.
• Addressing threats posed by extremism and fundamentalism is crucial for safeguarding social fabrics.

About Indian Ocean Conference

The Indian Ocean Conference (IOC) is an annual event that has been held since 2016, serving as a crucial platform for regional countries to engage in discussions on matters pertaining to the region. Here are the key points about the IOC:

Focus and Objectives:

• The IOC concentrates on fostering regional cooperation under the framework of Security and Growth for All in the Region (SAGAR).
• It brings together key states and maritime partners in the Indian Ocean region to address pertinent issues.

Participants:

• While the primary focus is on coastal countries of the Indian Ocean, the conference has expanded its scope to cover important global issues.
• Dignitaries attending the conference include the President of Mauritius, Vice President of Maldives, and India’s External Affairs Minister, S Jaishankar.
• Foreign Ministers from Bhutan, Nepal, Bahrain, and Singapore, along with ministerial representatives from Seychelles, Sri Lanka, and Madagascar, are also expected to participate.
• Around 150 foreign guests, including representatives from D8, SAARC, and BIMSTEC, are anticipated to attend.

Significance of the IOC:

• The IOC holds significant importance in terms of strengthening partnerships with Indian Ocean countries, promoting regional political engagement, and facilitating decision-making during crisis situations.
• It provides a platform for participating countries to discuss global events and make informed decisions regarding future actions.

-Source: The Hindu

LIBOR

Context:

Recently, the RBI stated that some banks and financial institutions were yet to facilitate an absolute transition away from the London Interbank Offered Rate (LIBOR) benchmark.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. About LIBOR
2. Controversies Surrounding LIBOR
3. Alternative to LIBOR: Secured Overnight Financing Rate (SOFR)
4. Response to the Regime Change from LIBOR

About LIBOR

• LIBOR, or the London Interbank Offered Rate, is a widely used benchmark interest rate.
• LIBOR is a global benchmark interest rate that combines individual rates at which banks opine they may borrow from each other (for a particular period of time) at the London interbank market.

Applications and Significance:

• Benchmark for financial instruments:
• Used as a reference rate for settling trades in various financial instruments, including futures, options, swaps, and other derivatives.
• Applied in over-the-counter markets and on exchanges globally.

Impact on consumer lending:

• Serves as a benchmark rate for consumer lending products, such as mortgages, credit cards, student loans, and more.
• Determines the interest rates offered to consumers by financial institutions.

Indicator of financial system health:

• Provides insights into the stability and liquidity of the financial system.
• Helps assess the potential direction of central bank policy rates.

Controversies Surrounding LIBOR:

Integrity and Reporting Accuracy:

• Banks were relied upon to provide honest reporting of their borrowing rates.
• This system neglected the potential conflict of interest that banks might have had in manipulating the rates for their own benefit.

Concealment of Disadvantages:

• As LIBOR rates were publicly disclosed, banks had little incentive to disclose any difficulties they faced in obtaining funds.
• During the 2008 financial crisis, some banks artificially lowered their rate submissions, concealing the true extent of their financial distress.

Barclays’ Misconduct and Penalties:

• In 2012, Barclays admitted to misconduct related to LIBOR manipulation.
• The bank agreed to pay $160 million in penalties to the U.S. Department of Justice as a result.
• Discrepancies in Borrowing Costs:
• The Wall Street Journal reported in May 2008 that some panelists paid significantly lower borrowing costs than other market measures indicated.
• This suggested a potential discrepancy between reported LIBOR rates and the actual costs of borrowing.

Profit-Motivated Rate Alteration:

• There were instances of banks adjusting their rate submissions based on the derivative positions of their trading units to enhance their profitability.
• This manipulation could result in inaccurate and misleading LIBOR rates.

Alternative to LIBOR: Secured Overnight Financing Rate (SOFR)

• In 2017, the U.S. Federal Reserve introduced the Secured Overnight Financing Rate (SOFR) as a preferred alternative to LIBOR.
• India also adopted the use of SOFR, along with the Modified Mumbai Interbank Forward Outright Rate (MMIFOR), to replace the existing MIFOR for new transactions.

Features of SOFR:

• Based on observable repo rates: SOFR is derived from repo transactions, which involve borrowing cash overnight collateralized by U.S. Treasury securities.
• Transaction-based rate: It is determined by actual market transactions, making it a more reliable and transparent benchmark.
• Reduces reliance on expert judgment: Unlike LIBOR, SOFR eliminates the need for expert judgment in rate-setting, reducing the potential for market manipulation.

Advantages of SOFR:

• Reduced manipulation risk: By using actual transaction data, SOFR is designed to be less susceptible to manipulation compared to LIBOR.
• Increased transparency: SOFR is based on observable market rates, promoting transparency and enhancing market confidence.
• Reflective of collateralized borrowing costs: As a secured rate, SOFR captures the cost of borrowing cash collateralized by U.S. Treasury securities accurately.

Response to the Regime Change from LIBOR:

Assessment of LIBOR Exposures:

• The Reserve Bank of India (RBI) instructed banks to evaluate their exposures to LIBOR in loan contracts, Foreign Currency Non-Resident Accounts (FCNR-B) deposits, and derivatives.
• This assessment aimed to understand the extent of reliance on LIBOR and facilitate the transition to alternative reference rates.

Adoption of Alternative Reference Rates:

• The RBI directed banks to prepare for the adoption of alternative reference rates, such as SOFR and MMIFOR, to replace LIBOR.
• Contracts entered into after December 31, 2021, were required to use the new reference rates instead of LIBOR.

Inclusion of Fallback Clauses:

• Contracts entered into before the specified date were advised to include fallback clauses.
• These clauses would outline revised considerations and terms in case LIBOR is no longer published, ensuring transparency and consistency in contractual agreements.

Regulatory Guidance and Support:

• The RBI provided guidance and support to banks throughout the transition period.
• This assistance aimed to facilitate a smooth and orderly shift away from LIBOR to alternative reference rates.
• The response to the regime change involved a proactive approach by the RBI, emphasizing the assessment of exposures, adoption of alternative rates, and the inclusion of fallback clauses to ensure a seamless transition away from LIBOR.

-Source: The Hindu

DoT Develops Facial Recognition Tool for Telecom Operators: ASTR

Context:

The Department of Telecommunications (DoT) has developed an artificial-intelligence-based facial recognition tool that it claims has the capability of running checks on subscriber databases of telecom operators to deduce whether it contains multiple connections associated with the same person.

• The DoT claims the tool — called Artificial Intelligence and Facial Recognition powered Solution for Telecom SIM Subscriber Verification (ASTR) — can potentially bring down cyber frauds by detecting and blocking possible fraudulent mobile connections.

Relevance:

GS III: Science and Technology

Dimensions of the Article:

1. Origins and Testing of ASTR
2. How ASTR Works
3. Actions Taken After Detection

Origins and Testing of ASTR

DoT’s Order for Subscriber Database:

• In 2012, the Department of Telecommunications (DoT) mandated telecom operators to share their subscriber databases, including user pictures, with the department.
• These images form the core database used for the facial recognition algorithm employed by ASTR.

Conceptualization and Design:

• The ASTR project was conceptualized and designed by the DoT’s unit in Haryana between April 2021 and July 2021.
• During this period, the necessary framework and algorithms for facial recognition were developed.

Pilot Project in Haryana’s Mewat Region:

• To assess ASTR’s feasibility, a pilot project was launched in the Mewat region of Haryana.
• Prior to the pilot project, Mewat had approximately 16.69 lakh SIM cards across various telecom operators.
• Through ASTR’s implementation, it was discovered that nearly 5 lakh SIM cards were fraudulent.

Fraud Detection and Validation:

• ASTR’s facial recognition algorithm was employed to analyze the subscriber database and identify potentially fraudulent connections.
• The pilot project in Mewat served as a validation of ASTR’s effectiveness in detecting and identifying fraudulent SIM cards.

How ASTR Works?

Face Encoding:

• ASTR utilizes convolutional neural network (CNN) models to encode human faces in the subscriber images.
• The encoding process accounts for factors like face tilt, angle, opaqueness, and dark colors in the images.

Face Comparison and Grouping:

• ASTR conducts a face comparison for each face against all faces in the subscriber database.
• Similar faces are grouped together under one directory based on their similarities.
• ASTR considers two faces to be identical if they match to a minimum extent of 97.5%.

SIM Detection:

• ASTR detects SIM cards associated with a suspected face within 10 seconds from a database of up to 1 crore (10 million) images.
• It checks if there are more than nine connections linked to a single individual’s photograph, which exceeds the permitted limit set by the DoT.

Fuzzy Logic for Name Matching:

• ASTR employs fuzzy logic to find similarity or approximate matches for subscriber names.
• It can generate related results for a name search, accounting for typographical errors in the subscriber acquisition forms.

Cross-Checking with Different Names:

• ASTR searches the database to identify if the same person has obtained SIM cards using different names.
• This helps detect potential cases of individuals acquiring multiple connections under different identities.

Actions Taken After Detection

Blocking of Connections:

• Once the Department of Telecommunications (DoT) identifies a set of numbers obtained through fraudulent means, it provides a list of these connections to telecom operators.
• Telecom operators then block the identified connections based on the DoT’s list.

Discontinuation of Connections:

• In the initial phase, ASTR analyzed over 87 crore (870 million) mobile connections.
• Using ASTR, more than 40 lakh (4 million) cases of individuals using a single photograph to acquire mobile connections were detected.
• After due verification, telecom operators discontinued over 36 lakh (3.6 million) connections.

Sharing with Other Platforms:

• The list of fraudulent connections is shared with banks, payment wallets, and social media platforms.
• These platforms take action to disengage the identified numbers from their respective platforms.

Collaboration with WhatsApp:

• According to Minister of Communication Ashwini Vaishnaw, WhatsApp has cooperated with the government in disabling accounts created using the identified fraudulent numbers.
• The government is also working with other social media platforms to address similar issues.

-Source: Indian Express

C-PACE (Centre for Processing Accelerated Corporate Exit)

Context:

The Ministry of Corporate Affairs (MCA) recently established C-PACE, or Centre for Processing Accelerated Corporate Exit, to bring efficiency into the strike off process of companies.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. About C-PACE (Centre for Processing Accelerated Corporate Exit)
2. New Rules and Impact

About C-PACE (Centre for Processing Accelerated Corporate Exit):

• C-PACE is an initiative established to centralize the process of striking off companies from the MCA Register.
• It is located at the Indian Institute of Corporate Affairs in Gurgaon, India.
• C-PACE operates through the Registrar of Companies (RoC) and has functional jurisdiction over processing and disposal of applications.
• The center functions under the supervision of the Director General of Corporate Affairs (DGCoA).

Objectives and Benefits:

• C-PACE aims to reduce the burden on the registry and streamline the process of striking off companies’ names from the register.
• It facilitates hassle-free filing and ensures timely and process-bound removal of company names.
• The establishment of C-PACE is part of the Ministry of Corporate Affairs’ (MCA) efforts to promote ease of doing business and ease of company exit.

New Rules and Impact:

• As per the new rules issued by the MCA, applications for the removal of a company’s name under Section 248 of the Companies Act will be made to the registrar at C-PACE.
• The implementation of C-PACE is expected to expedite the voluntary winding-up process, reducing the timeline from two years to six months.
• Section 248 of the Companies Act allows for the removal of a company’s name from the RoC if it hasn’t conducted any business or operations for two consecutive financial years and hasn’t applied for dormant company status under Section 455 within that period.

-Source: Economic Times

Gekko Mizoramensis

Context:

Recently New species of flying gecko found near Myanmar border named after Mizoram.

Relevance:

GS III: Species in News

About Gekko Mizoramensis:

Taxonomic Classification:

• Gekko Mizoramensis belongs to the subgenus Ptychozoon within the Gekko genus.

Distribution:

• The species is found in Southeast Asia.
• It is specifically found in Mizoram, a region in India, as well as parts of Bangladesh, Myanmar, Thailand, and Cambodia.

Previous Species in Mizoram:

• Prior to the discovery of Gekko Mizoramensis, only one species, Ptychozoon lionotum or the smooth-backed gliding gecko, was known to exist in Mizoram.

Habitat and Behavior:

• Gekko Mizoramensis is arboreal, meaning it primarily inhabits trees.
• It is nocturnal, being most active during the night.
• The gecko has the ability to glide from one tree to another, aided by its webbed limbs and flat tail. However, it does not possess the capability to fly.

Similar Species:

• Gekko Mizoramensis is most closely related to its sister species Gekko popaensis.
• The two species differ in terms of genetic divergence, morphology, and color pattern.
• The uncorrected pairwise sequence divergence between the two species is 7-14%.

Cryptic Species:

• The species Gekko Mizoramensis is considered paraphyletic and consists of multiple cryptic species.
• Cryptic species refer to organisms that are morphologically similar but genetically distinct.

-Source: The Hindu