N. Korea proposes joint probe over Sony hacking

SEOUL, South Korea — North Korea on Saturday proposed a joint investigation with the U.S. into the hacking attack against Sony Pictures Entertainment, warning of "serious" consequences if Washington rejects a probe that it believes would prove Pyongyang had nothing to do with the cyberattack.

The proposal was seen by analysts as a typical ploy by the North to try to show that it is sincere, even though it knows the U.S. would never accept its offer for a joint investigation.

U.S. officials blame North Korea for the hacking, citing the tools used in the Sony attack and previous hacks linked to the North, and have vowed to respond. The break-in resulted in the disclosure of tens of thousands of confidential Sony emails and business files, and escalated to threats of terror attacks against U.S. movie theaters that caused Sony to cancel the Christmas Day release of "The Interview," a comedy about a plot to assassinate North Korean leader Kim Jong Un.

On Saturday, an unidentified North Korean Foreign Ministry spokesman in Pyongyang proposed the joint investigation with the U.S., saying the North knows how to prove it's not responsible for the hacking. He also said Washington was slandering Pyongyang by spreading unfounded rumors.

"The U.S. should bear in mind that it will face serious consequences in case it rejects our proposal for joint investigation and presses for what it called countermeasures while finding fault with" North Korea, the spokesman said in a statement carried by Pyongyang's official Korean Central News Agency, or KCNA.

"We have a way to prove that we have nothing to do with the case without resorting to torture, as the CIA does," he said, adding that the U.S. lacks any specific evidence tying North Korea to the hacking.

The White House had no immediate comment Saturday.

Koh Yu-hwan, a professor at Seoul's Dongguk University, called the North's proposal a "typical" tactic the country has taken in similar disputes with rival countries. In 2010, North Korea proposed a joint investigation after a South Korean-led international team concluded that the North was behind a torpedo attack that killed 46 South Korean sailors, though Pyongyang denied its involvement. South Korea rejected the North's offer for the joint probe.

"They are now talking about a joint investigation because they think there is no conclusive evidence," Koh said. "But the U.S. won't accede to a joint investigation for the crime."

On Friday, President Barack Obama declared that Sony "made a mistake" in shelving the satirical film about a plot to assassinate the North Korean leader, and pledged that the U.S. would respond "in a place and manner and time that we choose" to the hacking attack on Sony that led to the movie's withdrawal.

"I wish they had spoken to me first. ... We cannot have a society in which some dictator someplace can start imposing censorship," Obama said at a year-end news conference, speaking of executives at Sony Pictures Entertainment.

Sony said it had had no choice but to cancel distribution of the movie because theaters were refusing to show it.

U.S. options for acting against North Korea are limited. The U.S. already has severe trade sanctions in place, and there is no appetite for military action. Even if investigators could identify and prosecute the individual hackers believed responsible, there's no guarantee that any located are overseas would ever see a U.S. courtroom. Hacking back at North Korean targets by U.S. government experts could encourage further attacks against American targets.

North Korea and the U.S. remain in a technical state of war because the 1950-53 Korean War ended with an armistice, not a peace treaty. The rivals also are locked in an international standoff over the North's nuclear and missile programs and its alleged human rights abuses.

Earlier Saturday, North Korea angrily denounced a move by the United Nations to bring its human rights record before the Security Council and renewed its threat to further bolster its nuclear deterrent against what it called a hostile policy by the U.S. to topple its ruling regime.

Pyongyang "vehemently and categorically rejects" the resolution passed by the U.N. General Assembly that could open the door for its leaders, including Kim Jong Un, to be hauled before the International Criminal Court for crimes against humanity, according to a Foreign Ministry statement carried by KCNA.

The Security Council is due to meet Monday to discuss Pyongyang's human rights situation for the first time.

The meeting caps almost a year of international pressure, and even though ally China could use its veto power to block any action against the North, the nonbinding resolution has broad support in the General Assembly and has drawn unusually strong and vitriolic protests from Pyongyang.

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Associated Press writer Eric Talmadge in Tokyo contributed to this report.

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Apple ‘deeply offended’ by BBC report claiming poor working conditions

LOS ANGELES — A senior Apple executive said he was "deeply offended" by the BBC's allegations that Apple mistreats its workers in overseas factories.

Footage from an undercover BBC investigation, which aired Thursday, shows what the British broadcaster said were child laborers in Indonesia digging through mud pits for the tin used in phones and tablets. The report also shed light on the treatment of employees in factories of Apple supplier Pegatron near Shanghai, some of whom were seen sleeping at their workstations during their 12-hour shifts.

One undercover reporter was hired to make Apple computer parts, the BBC said, working 18 days in a row without reprieve.

"Like many of you, Tim (Chief Executive Tim Cook) and I were deeply offended by the suggestion that Apple would break a promise to the workers in our supply chain or mislead our customers in any way," Jeff Williams, Apple's senior vice president of operations, wrote in an email to the staff.

The email, published by the Telegraph, reached nearly 5,000 Apple employees in Britain.

Williams said he "(knows) of no other company doing as much as Apple does" to ensure safe working conditions, investigate complaints and fix problems with transparency in suppliers' operations.

"I want you to know that more than 1,400 of your Apple coworkers are stationed in China to manage our manufacturing operations," he said in the email. "They are in the factories constantly — talented engineers and managers who are also compassionate people, trained to speak up when they see safety risks or mistreatment."

While the Cupertino, Calif.-based company has worked to improve factory conditions in recent years, the BBC investigation is the latest in a spate of reports that have revealed evidence that Apple's suppliers mistreat their workers. Previous investigations uncovered hellish conditions in China's Foxconn factories, which also serve Sony.

Following reports of suicides and dangerous working conditions in the facilities, Apple and its suppliers allowed the Fair Labor Association to inspect Foxconn factories in February and March of 2012. The audits uncovered "significant issues," including excessive overtime and health and safety risks, the organization said.

The Taiwan-based supplier had successfully completed more than 280 recommended actions by August of that year, the watchdog group said.

But Williams admitted Apple and its manufacturers could "still do better" in the employee email.

"Several years ago, the vast majority of workers in our supply chain worked in excess of 60 hours, and 70+ hour workweeks were typical," he wrote. "After years of slow progress and industry excuses, Apple decided to attack the problem by tracking the weekly hours of over one million workers, driving corrective actions with our suppliers and publishing the results on our website monthly — something no other company had ever done."

This year, Williams added, Apple suppliers achieved an average of 93 percent compliance with the company's 60-hour workweek limit.

The BBC's report uncovered other workplace hazards, including overcrowding — a problem also prevalent in Foxconn factories. In one Pegatron dormitory, 12 workers shared a single room. Apple's guidelines note a maximum of eight people.

"We will not rest until every person in our supply chain is treated with the respect and dignity they deserve," Williams said.

———

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Health care signups increasing, but many unpaid

BOSTON — State officials say the number of people enrolling for insurance through the state's health connector is increasing with a key deadline just days away.

Figures released Friday show that more than 18,000 people have selected, signed up and paid for coverage through the connector beginning Jan. 1. Officials say that's more than double the number from a week ago.

But more than 35,000 people who have gotten as far as choosing plans have yet to pay — which they must do by Tuesday to be covered on the first of the year.

The connector says its call center will be open from 9 a.m. to 3 p.m. to handle consumer questions.

In all, more than 210,000 have used the connector's revamped website since Nov. 15 to determine eligibility for coverage.

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Three T rail lines reopen on weekends

The MBTA is restoring weekend service to three commuter rail lines beginning next Saturday, two years after budget constraints forced it to cut the runs.

Saturday and Sunday service will resume for the Kingston/Plymouth and Greenbush lines, and Saturday service will restart for the Needham line.

"We are happy to be delivering weekend service on these three commuter rail lines once again in response to customer demand and opening up more transportation options and access for the communities they serve," acting Massachusetts Department of Transportation Secretary Frank DePaola said in a statement.

The same service schedules as those previously offered will be in effect.

MassDOT and the MBTA said the resumption of service was in response to requests from commuters and state legislators.

This year's state budget included $2 million in funding that allowed the weekend service to be restored.

The MBTA also will start a new weekday schedule for the Needham line Dec. 27, while adjustments in the Newburyport/Rockport line schedule will allow for a new weekday 11:45 p.m. departure from North Station to Newburyport.

All of the new MBTA commuter rail schedules are posted at mbta.com/about_the_mbta/news_events/?id=6442453545&month=&year.

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Russia dismisses new US sanctions as useless

MOSCOW — Russia on Saturday dismissed new U.S. sanctions as useless and said it was poised to wait as long as it takes for the U.S. to recognize its historic right to the Crimean peninsula.

Following several rounds of sanctions earlier this year, President Barack Obama on Friday approved new restrictions on Crimea which Russia annexed in March after a hastily called referendum.

The Russian foreign ministry on Saturday expressed regret that "the United States and Canada still cannot get over the results of a free vote in Crimea in March," the referendum that was condemned by the international community as illegal and held under the guns of Russian troops.

Canada on Friday announced travel bans for dozens of individuals as well as restrictions on the export of technology used in Russia's oil industry.

In a pithy statement, Moscow insisted that the new sanctions won't push Russia to give up Crimea since it is a "historic and integral part of Russia" and said it was working on unspecified measures to retaliate.

The ministry referred to Cuba where it took the U.S. decades to restore diplomatic relations. "The White House took half a century to admit that blockading Cuba with sanctions was useless: well, we can wait too," the statement said.

Obama's order prohibited U.S. companies and individuals from exporting or importing any goods, services or technology to or from Crimea. Likewise, U.S. individuals or companies cannot buy real estate or businesses in Crimea or finance Crimean companies.

It also freezes any assets in the U.S. of individuals determined by the U.S. Treasury Department to be operating in Crimea.

Obama's order follows a European Union ban on investment in Crimea, and other economic restrictions including measures aimed at keeping tourists away.The new measures on investment, services and trade, announced Thursday, beef up the EU's previous response to Russia's annexation of the peninsula.

Europeans and EU-based companies are barred from buying real estate or businesses in Crimea, financing Crimean companies or supplying services as of Saturday.

In addition, EU operators will no longer be allowed to offer tourism services to Crimea's Black Sea beaches or other destinations. Cruise ships owned by an EU-based company or flying an EU member state's flag will also no longer be allowed to call at Sevastopol or other Crimean ports, except in an emergency.

Moscow's harsh anti-American rhetoric comes a time when the Kremlin seems to be departing from its defiant stance on a settlement in eastern Ukraine. It has, for instance, given up its persistent suggestion that the only solution to the bloody conflict in the east is the federalization of Ukraine.

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Tick-tock: Tips for last-minute shoppers

PORTLAND, Ore. — The clock is ticking, and your holiday shopping list isn't complete.

Don't fret — you aren't alone.

The National Retail Federation found that only about half of shoppers had finished shopping as of Dec. 10. That means tens of millions will be ticking those final items off their lists in the coming days.

But procrastination doesn't have to mean desperation. Here are a few tips to help survive last-minute shopping:

—SEIZE THE DAY: Retailers know the rush is coming, and they are doing everything they can to attract last-minute shoppers. This includes extended shopping hours, expedited shipping and exclusive promotions.

That opens up lots of strategies for shopping that will keep you out of the crazy lines in stores at noon on Christmas Eve.

One tactic is to become a night owl. Many retailers are open longer in the week before Christmas. For example, Wal-Mart says its stores are open 24 hours a day up until 8 p.m. on Christmas Eve and it is offering shipping options up until Dec. 23. Toys R Us stores are open around the clock from the morning of Dec. 23 through 9 p.m. Christmas Eve; it also is extending its hours in the days preceding.

And many retailers, such as Best Buy, allow shoppers to find an item online and pick it up at a store. Even 7-Eleven is targeting shoppers, offering gift cards, toys and stocking stuffers in its stores.

The bottom line: Take advantage of those last-minute discounts and other deals.

— DO YOUR HOMEWORK: Marshal Cohen, chief industry analyst at market researcher NPD Group, says many people do not yet know what they want to give, or get.

"These consumers are the ones who put themselves in a stressful situation," he said. "The one saving grace is online (shopping) is a chance for a lot of people to do their homework."

He said shoppers can narrow down their options ahead of time by looking online.

You can also check Amazon.com to see if the person has a wish list you didn't know about, or study Facebook or Pinterest pages for ideas.

Such prep work can save a lot of headaches and potentially limit last-minute impulse purchases that can prove costly.

— WEAR COMFORTABLE SHOES: Seriously, this is a common-sense step many shoppers skip.

"Wear comfortable shoes for goodness sake," Cohen said. "It (shopping) is exercise and it's not very comfortable."

Don't waste time cruising to find the closest spot to the store either, he said. Those comfortable shoes will make it easier to just park and walk.

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Hopes, fears, doubts surround Cuba's oil future

MIAMI — One of the most prolific oil and gas basins on the planet sits just off Cuba's northwest coast, and the thaw in relations with the United States is giving rise to hopes that Cuba can now get in on the action.

It's a prospect welcomed by Cubans desperate for economic growth yet deeply concerning for environmentalists and the tourism industry in the region.

But a Cuban oil boom is unlikely anytime soon even if restrictions on U.S. businesses are relaxed because of low oil prices and far better drilling opportunities elsewhere.

"(Cuba) is not going to be the place where operators come rolling in," says Bob Fryklund, chief strategist for oil and gas exploration and production at the analysis firm IHS.

Although Cuba's oil and gas industry has long been open to foreign investment, the U.S. embargo has denied it some of the world's best deep-water drilling technology and expertise. As a result, Cuba produces just 55,000 barrels of oil per day. About one-third of that is produced by a Canadian firm called Sherritt International.

Cuba needs 155,000 barrels per day, and it fills the gap with oil from Venezuela, part of a trade agreement established under former Venezuelan President Hugo Chavez. By comparison, a single large oil platform in the deep water U.S. Gulf of Mexico can produce 200,000 barrels per day.

The few major exploration projects in Cuba in recent years have had little success. Most recently, the Spanish company Repsol abandoned a yearslong exploration project in 2012 when an offshore exploratory well failed to find much oil.

Fryklund says that U.S. oil services firms, which have been prevented from working in Cuba, could provide technology to operators in Cuba to help increase production somewhat. Also, U.S. refiners could find a new market in Cuba for gasoline and diesel or refining technology. Cuba has been struggling to find a partner to finance an upgrade an expansion of its largest refinery, in Cienfuegos.

But a factor that helped push Cuba to seek closer ties with the United States also could impede major oil exploration there: low oil prices.

A plunge of nearly 50 percent in the global price of oil has crushed the oil-dependent economies of Venezuela and Russia, threatening aid from Cuba's biggest benefactors.

"None of Cuba's friends have the financial capability to throw a safety net or a safety line to Cuba," says Jorge Pinon, former Amoco Oil Latin America president now at the University of Texas. Cuba suffered enormously when foreign aid dried up after the fall of the Soviet Union, and it wants to avoid similar economic pain now that Venezuelan aid is uncertain.

Low oil prices also force drillers to shy away from risky projects because the potential for a big financial return is so much smaller.

Even though Cuba sits relatively close to some of the biggest deep-water oil fields in the Gulf of Mexico, the geology under Cuba's waters is drastically different from that of the rest of the Gulf.

The U.S. Geological Survey estimates there are 4.6 billion barrels of undiscovered oil in Cuba — a substantial but not enormous amount because not all of that oil could possibly be produced. The U.S. Gulf of Mexico contains an estimated 10 times that much.

Also, there are also bigger and better-known fields in Mexico, which recently amended its constitution to allow foreign investment in its oil industry.

Cuba could offer very favorable terms to entice drillers to come, however, and smaller firms willing to take bigger risks may give Cuba a shot.

A major concern for environmentalists and the tourism industry in the region is Cuba's ability to drill at international safety standards, including its response to any spill, according to Bob Graham, who co-chaired the national commission on the Deepwater Horizon oil spill. They fear a spill could quickly spread to ecologically rich and economically important reefs and beaches in nearby Florida and throughout the Caribbean.

Under the U.S. embargo of Cuba, which remains in place, anything comprised of more than 10 percent U.S. parts cannot be sold to Cuba or a Cuban contractor. That covers almost all modern drilling systems, Graham says. "It's going to require some modification of the embargo to allow state-of-the-art equipment to be used for Cuban drilling."

The U.S. National Oceanic and Atmospheric Association has been working with the U.S. Coast Guard and other state and federal agencies to study the possible threats posed by offshore oil drilling near the Florida Straits and the Bahamas, says NOAA spokesman Ben Sherman. The agency also shares technical expertise on oil spill planning and response with Caribbean nations, including Cuba, Sherman says.

When William Reilly, Graham's co-chair on Deepwater Horizon spill commission and head of the EPA under President George H. W. Bush, presented the commission's final report to Cuban regulators in Havana, he found they had already made plans to follow the commission's recommendations with the resources they had. That included sending staff to Canada to learn English to improve communications in the event of an oil spill.

Reilly says Cuban officials had high hopes for their oil industry. A delegation had a telescope trained on an offshore rig that was exploring for oil and gas, though it could be seen without a telescope. "It was like a beacon of economic hope to Cubans in Havana," he says.

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Fahey reported from New York. He can be reached at http://twitter.com/JonathanFahey . Jennifer Kay can be reached at http://twitter.com/jnkay .

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A Facebook TV show? HLN teams with social-media giant on pilot

Facebook is trying its hand at TV, teaming with Time Warner's HLN network to produce a pilot for a series that will use the popular social network to find and tell interesting stories.

"We don't and they don't want this to feel like 'The Facebook Show,'" said Kari Kim, vice president of development at HLN, in an interview. "It's really about the stories and how we are using their tools" to discover information and identify what's happening around the world.

Executives at the network, which is part of CNN Worldwide, said initial details remain sketchy. The pilot will make it to air in the first half of 2015, said Lila King, HLN's senior director of product strategy and partnerships, but the network remains uncertain so far as to what form the program will ultimately take.

Options ranging from a weekly format to a series of specials have all been discussed, said Kim. No hosts have been decided upon either.

Social-media outlets like Twitter and Facebook have all put forth the notion that the conversations they host about popular culture, celebrity and TV programming boosts the ratings of any show one can name. But Facebook's alliance with HLN suggests, in at least this one instance, that one of the big consumer-chatter giants sees a chance to generate more of the same with its own series.

"The initial ideas HLN came up with are very encouraging, and we are looking forward to getting to work and seeing what comes out of the production process," said Andy Mitchell, director of news and global partnerships at Facebook, in a prepared statement.

Facebook teams with HLN as the network moves forward with a broad reworking of its content that centers more around social media than the traditional news updates that were once its stock in trade. That process was interrupted earlier this year when parent Time Warner considered an arrangement that would have let Vice Media, which has a reputation for you-are-there video journalism that takes viewers to far-flung parts of the world, essentially take over HLN. The arrangement would have created a new venture in which Time Warner might have had an ownership stake, but the two sides remained far apart on several aspects of the potential deal, which fell apart.

Now HLN is returning to its mission: Sifting through tweets, memes, posts and more to find cultural shifts and interesting stories. Among the programs HLN put on its development slate last February were a show that counts down the most-talked about entertainment properties, a game show that uses search and tag terms and a third that looks behind the scenes at online phenomena. Albie Hecht, a Viacom programming veteran, is leading the effort. Hosts like Nancy Grace and Dr. Drew remain on air.

"As HLN refines their programming to reflect the social conversation, which happens at an unprecedented scale on Facebook, we are excited to produce a pilot that reflects Facebook on TV in a very unique and creative way," said Mitchell.

HLN's King said she reached out to major social-media outlets as soon as she joined the network in February. "I think Facebook was the first call I made," she said. "We've been trying to figure out what the right thing to do is, and I think we've hit on it." Viewers of the show can likely take to Facebook to register their opinions on the program when it actually surfaces.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Sony hit with fourth class action lawsuit over hacking attack

The litigation continues: Sony Pictures Entertainment now faces yet another class action lawsuit from ex-employees alleging that the studio failed to take adequate precautions to protect private information.

The lawsuit filed in federal court in Los Angeles on Thursday is similar to three others filed earlier this week. It alleges negligence on the part of SPE and violations of privacy laws.

SPE, which "engages in the entertainment industry as part of a vast multinational corporate conglomerate, knows or should know that it may be the target of the world's most sophisticated data hackers or cybercriminals," and it failed to take "adequate steps" to protect itself from the possibility of an attack, says the suit filed by Michael Levine, former technical director for Sony Pictures Imageworks from 2003 to 2012, and Lionel Felix, a former director of technology who ran IT infrastructure for Sony Pictures Digital Entertainment from 2001 to 2004.

The plaintiffs were represented by Michael Sobol and RoseMarie Maliekel of Lieff Cabraser Heimann & Bernstein.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Why the Sony hack isn't big news in Japan

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Over at newswire Kyodo News, just after the FBI formally blamed North Korea for the cyberattack, mega pop group AKB48 topped headlines online instead.

While American journalists have extensively covered the fallout from the unprecedented Sony hacking attack, it hasn't exactly been massive news in Japan. Stories certainly surfaced after President Barack Obama weighed in on the issue at his year-end press conference Friday. But overall it has received relatively modest attention, mostly in short stories on the inside pages of Japan's major newspapers.

This might all be perplexing to the rest of the world since Sony is one of Japan's most iconic global brands. Here are a few reasons why the story hasn't gotten major play in Japan's mainstream media:

SONY vs SONY PICTURES

While Sony Pictures is technically part of the Sony empire, it has long been run as an entirely separate U.S. company. So far, the Japanese media seems to view the hack as an American problem rather than a domestic one. Indeed, at Sony headquarters itself, officials have refused all comment and referred questions about Sony Pictures to the movie division's headquarters in Culver City, California.

"This is seen mainly as an attack on Hollywood," Damian Thong, a senior analyst at Macquarie Capital Securities in Tokyo, said earlier this week. "I feel they want to clean it up as fast they can and just get on with life."

The studio shelved the Christmas Day release of the North Korea spoof movie "The Interview" after the hackers threatened to attack theaters that showed the film. But for Japan, the movie's demise hardly matters. Sony Pictures never planned to show the film there.

NEWSPAPER DEMOGRAPHICS

Japan's newspapers, which have the highest daily circulations in the world, are inclined to avoid news that is technologically complex. Like hacking. Nobuyuki Hayashi, a veteran freelance tech journalist and consultant based in Tokyo, said the tendency stems from reporters and editors who often don't have a deep understanding of technology. And neither do their aging readers.

"If you are technically savvy and need information (about the Sony hack), you will get it from the Web news media," Hayashi said. "Some technically-savvy people subscribe to a printed newspaper as well, but that's only to read other kinds of news."

OTHER NEWS

It has been a newsy December in Japan, especially with national elections last weekend. Prime Minister Shinzo Abe's Liberal Democratic Party locked up a solid majority in the lower house and reaffirmed his hold on power for up to four more years. In addition to politics, the national chatter was focused on a big blizzard that hit the northern island of Hokkaido this week, dumping heavy snow, derailing trains and killing several people.

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AP Business Writer Elaine Kurtenbach contributed to this report.

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