New Internationalist

Spinning out of control

Issue 407

It is often the least ethical companies that plough the most resources into Corporate Responsibility. Rebecca Spencer delves into four classic cases.

1 Blatant Propaganda

BP’s new logo and name change to ‘Beyond Petroleum’ in 2000 was derided by environmentalists as a shameless case of greenwash. Solar-powered petrol stations? What was the point? However, in the public imagination, the company effectively rebranded itself as ‘green’.

The company ran a major PR campaign in 2005 to coincide with the G8 summit in Scotland. Newspaper adverts trumpeted its investments in alternative energy, despite renewables comprising only 5.7 per cent whilst 72 per cent was being spent on looking for and extracting more oil and gas.

Plans were announced to build a power station at Peterhead, Scotland, which would convert natural gas into hydrogen and carbon dioxide (CO2), using the hydrogen to generate electricity while the CO2 would be pumped into depleted gas fields under the North Sea. Never mind that carbon capture and storage technologies were still in their infancy, and no-one could be sure whether the CO2 would stay underground or escape into the atmosphere. A secondary motive was that pumping CO2 into depleted gas fields allows additional natural gas to be extracted from the field. The Peterhead project required a heavy Government subsidy, so BP asked for it to be treated as a renewable energy project.

In May 2007, with considerably less fanfare, the plans were shelved. This closely followed the fall from power of John Browne, BP’s long-serving CEO and architect of the ‘Beyond Petroleum’ makeover.

Meanwhile, BP’s massive oil and gas extraction projects continue around the world: in Angola, one of the world’s most corrupt countries, where oil enriches the Government without reaching the people; in West Papua, where BP’s Tangguh natural gas development has been criticized for ignoring the human rights of local indigenous people and contributing to environmental problems; and in Alaska where two major leaks in its oil pipeline have been blamed on wilful negligence and the harassment of employees who voiced concern. BP has also just been fined $373 million by the US Department of Justice for price-fixing and an explosion at a Texas refinery that killed 15 and injured 170.


www.oilwatch.org www.artnotoil.org.uk



2 Just don’t mention dead babies

The World Health Organization estimates that 1.5 million children die each year because they are not adequately breastfed. Corporations’ aggressive marketing of breastmilk substitutes, especially in the Majority World, is part of the problem, encouraging mothers to give up breastfeeding in favour of expensive, nutritionally inferior milk formula.

Nestlé is the worst offender and has become one of the world’s most boycotted companies as a result. So what does it do? Change its practices? No chance.

On the milk formula issue, it simply denies the problem. Nestlé’s website claims: ‘Nestlé actually stopped advertising and promotion to the public in the developing world in the late 1970s and abides by the WHO’s International Code of Marketing of Breast-milk Substitutes.’ But recent research by the International Baby Food Action Network (IBFAN) found ‘nothing more than a concerted effort to simply avoid many of the core provisions of this Code.’

Instead, to clean up its image, the company favours ‘cause-related marketing’ – associating itself with good causes, especially anything connected to children, to create ‘goodwill’. One example is the ‘Make Space’ young people’s clubs campaign – a ‘partnership’ between Nestlé and the charity 4Children which, whatever good work it’s doing, is doing it plastered with Nestlé logos. Does 4Children know Nestlé’s real attitude to charitable giving? In March 2005 Nestlé CEO Peter Brabeck-Letmathé told the Boston Herald: ‘Companies should only pursue charitable endeavours with an underlying intention of making money for investors.’

Unsurprising, then, that it launched the ‘box tops for education’ scheme, which gives small amounts of cash to schools when they send in the tops off Nestlé cereal boxes (collected by the schoolchildren). Nestlé demonstrates how nice it is by giving tax-deductible donations to schools and gets the schools to market its products.


www.ibfan.org www.babymilkaction.org



3 The high priest of Corporate Responsibility

Mining company Anglo-American acknowledges the difficulties its industry faces in the ‘Chairman’s View’ section of its 2006 Corporate Responsibility report: ‘Mining involves the extraction of a non-renewable natural resource and, therefore, presents distinct challenges in relation to sustainable development.’

A recent War on Want report into the activities of Anglo-American and its related companies alleged links with the murder of trade unionists in Colombia, cyanide pollution in Africa, forced displacement of communities in several countries and collaboration with armed groups in the Democratic Republic of Congo. The ‘challenge of sustainable development’ is clearly not being met.

Anglo-American’s Chair, Mark Moody-Stuart, has been at the heart of the Corporate Responsibility movement for years. He took over as Chair of Shell in 1997 at a time when the oil company was seen as a notorious corporate criminal, following the execution of Ken Saro-Wiwa. Moody-Stuart oversaw Shell’s equally notorious rebranding as an ethically and environmentally responsible company, even though business-as-usual continued.

Moody-Stuart went on to lead the ‘Business Action for Sustainable Development’ (BASD) initiative, launched in 2001 to prepare for the 2002 UN Earth Summit in Johannesburg. BASD spearheaded the successful effort by corporations at the summit to avoid any chance of international regulation of their activities, pushing instead for ‘voluntary regulation’ and ineffective ‘partnerships’ with governments and NGOs.

It’s hard to tell whether Moody-Stuart and his ilk believe their own spin. But after 10 years heading dirty extractive companies and as a director of HSBC Bank, which funds deforestation of the Amazon for soya plantations as well as oil and mining projects, you’d think he might have started to notice that his efforts aren’t changing the world for the better.


www.minesandcommunities.org www.waronwant.org/?lid=14777/



4 Supermarket sweatwash

The Ethical Trading Initiative (ETI) is one of the world’s leading ‘multi-stakeholder’ endeavours, a partnership between NGOs, trade unions and companies aimed at improving working conditions in the Majority World.

Corporations make much of their membership. British supermarket giant Tesco’s Corporate Responsibility Review boasts: ‘As a founder member of the ETI we strive towards high labour standards throughout our supply chain by using the ETI Base Code as the standard with which our suppliers must comply.’ A sweeping statement which might reassure the casual concerned shopper, but does not actually say all clothes are produced in accordance with the Base Code, nor whether it is making any difference. Evidence shows it is not.

Supermarkets are increasingly taking over clothing markets in industrialized countries, but an investigation by ActionAid into Bangladeshi garment factories which supply supermarkets has shown that pressure to squeeze costs is what dominates buyers’ actions. Much of the pain is falling on the workers. The ETI code calls for workers to be paid a living wage, which even Tesco estimates as $47 per month in Bangladesh. Yet most are still on the minimum wage of just 1,665 taka ($26). Often they must work seven days a week even to make that much. There are no contracts and an anti-union culture prevails.

A worker in a factory supplying Asda/Wal-Mart described the systematic deception of ‘social auditors’. ‘When buyers come to visit, everything is changed. We are asked to wear scarves and masks. The floors and toilets are cleaned… They give stools to the helpers so that they can sit and work… But as soon as the buyers leave, all these things are removed.’

The ETI’s own monitoring of its Code found that it had had ‘almost no impact’ in ensuring workers receive a living wage or have the freedom to organize. Factory managers complained it was difficult to improve labour practices given the aggressive purchasing practices of the retailers and brands buying from them. The most frequently cited problems were short lead times, inflexible deadlines, and falling prices.

Unless big supermarkets change their buying practices, the ETI Code will only be there to persuade shoppers that it really is ethically okay to buy those $8 jeans.


www.actionaid.org.uk

Rebecca Spencer

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