issue 246 - August 1993
The green machine
Legions of lobbyists, public relations experts and slick marketing
specialists are out to prove that corporations are the real friends of the earth.
Andre Carothers reports on the greening of the boardroom.
More than a year before last June’s United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, the conference chairperson Maurice Strong appointed Swiss billionaire Stephan Schmidheiny to marshal the international business community’s perspective on global environmentalism. Schmidheiny formed the Business Council on Sustainable Development, which in turn hired Burson-Marsteller, the world’s largest public relations firm.
Burson-Marsteller, with 56 offices in 28 countries, is the king of global public relations firms. The company has had an excellent track record protecting the reputations of its corporate clients. Babcock and Wilcox, a major manufacturer of nuclear power plants, used the firm to restore its reputation after the infamous Three Mile Island disaster. AH Robins (purveyor of the occasionally fatal Dalkon Shield birth control device) employed the firm to handle its credibility gap. Burson-Marsteller was likewise at the side of Exxon after the Exxon Valdez Alaskan oil spill and in Bhopal with Union Carbide. And the public relations firm has advised various despots around the world when they were in need of a public facelift, including Romania’s Nicolai Ceausescu and Argentina’s former military regime. Recently Burson-Marsteller has been spearheading Mexico’s campaign to persuade the US Congress to approve the North American Free Trade Agreement.
For the multinational front-group at the grandly-titled Earth Summit in Rio, Burson-Marsteller’s job was to make sure the corporate viewpoint was well-stated and well-received. As a coalition of some 50 multinationals (including some of the worst polluters on the planet) the Business Council on Sustainable Development’s goals were predictable: ‘voluntary’ rather than legislated reduction in toxic emissions, the right to corporate privacy and wholesale support for ‘free trade’ as the key to planetary prosperity and environmental protection.
Not surprisingly the results of the conference were largely favourable to business. The UN had directed the meeting to produce ‘specific agreements and commitments by governments for defined activities to deal with major environmental issues’. Instead it produced watered-down platitudes.
Of eight ‘potential outputs’ listed by Maurice Strong none was accomplished. The UN initially calculated that $600 billion would be needed by the less-industrialized world. Months before the conference Strong suggested that $100 billion was an appropriate commitment. He subsequently backed off to $10 billion. By the end of the conference barely $2.5 billion had been pledged.
The Biodiversity Treaty was shelved at the urging of the US biotech industry. Specific proposals supported by the South and by environmental groups were defeated. These included a call for ‘effective monitoring, enforcement and imposition of penalties’ for the illegal transport of hazardous waste. All references to over-consumption by the rich nations were removed, as was any mention of specific schedules for reducing carbon dioxide emissions. Even discussions about disarmament were shunned.
Faced with stiff opposition from the US and Europe, the UN Center on Transnational Corporations was unable to inject wording on corporate conduct into the conference declarations. Finally, over the objections of all the environmental groups in attendance, the conference endorsed the Uruguay Round of the General Agreement on Tariffs and Trade negotiations, effectively putting the Earth Summit’s imprimatur on the corporate goal of free trade.
It is difficult to say whether it was public relations or private arm-twisting that swayed the outcome of UNCED. There was plenty of both. Some 60 business lobbyists registered at the preparatory meeting in New York along with 18 trade associations and 25 major corporations. The Global Climate Coalition, a group of oil and coal comp-anies, sent a delegation, as did the Climate Council, headed by former Reagan admin-istration official Donald Pearlman. Pearlman went on to Rio, snagging a coveted room in the hotel where the US delegation was staying. According to Environmental Defense Fund staffer Michael Oppenheimer, Pearlman had unique access to the US delegation ‘beyond anything the environment-alists could manage’.
Outside of events like Rio, the influence of multinationals is more diffuse – though equally effective. Running for office in the US costs anywhere from $5 million to $100 million and most of that money comes from corporate political action committees. Some 70 per cent of the contributions to the two political parties comes from corporations. There are 40,000 registered corporate lobbyists in Washington, many of them former administration officials with close ties to Capitol Hill.
Special interests usually form lobby groups to influence environmental policy, using innocuous names such as the National Wetlands Coalition, the Alliance for a Responsible CFC Policy (a front group for Du Pont) or the National Wildlife Coalition (an industry group that advocates opening up public lands to mining and oil exploration). Often the brainchild of a public relations firm, these lobbying coalitions marshal letter-writing campaigns and congressional visits complete with aggrieved ‘citizens’ spouting ghost-written testimony. The Coalition for Vehicle Choice, created by a public relations firm and funded by General Motors, Ford and Chrysler to combat fuel efficiency standards, spent $10 million to lobby Congress, producing print advertisements and video commercials arguing that fuel efficiency means small cars and small cars mean more traffic fatalities.
In most Western nations the media rule public perceptions – and the corporations rule the media. In the US they spend $1 billion a year on advertising, giving them considerable influence over what is published and broadcast. In a 1992 survey of 150 newspaper editors conducted by Marquette University, 90 per cent of editors said they received interference from advertisers, an equal number said that advertisers had withdrawn as a result of a story and nearly 40 per cent admitted that advertisers had succeeded in influencing a story.
A dozen corporations control half the US daily newspaper circulation. Of 11,000 major US magazines half-a-dozen corpor-ations get most of the revenue. Three corporations have most of the audience and revenues of the four US television networks and 900 commercial stations. Ford and General Motors were able to alter the text of a skit on the popular TV show Saturday Night Live when they found out it poked fun at layoffs in the auto industry. When a public interest group aired an advertisement on a Boston TV station linking the coffee company Folgers with repression in Central America, Folgers yanked all advertising from the station, forcing it to apologize.
Corporate influence over public perception can be traced to the corporate leaders who shuffle between business and government. The boards of the major multinationals headquartered in the US are crammed with government officials, media moguls and like-minded Chief Executive Officers, forming a near-seamless continuum of mutual interest and shared perceptions.
The vice-president of Hill and Knowlton, one of Burson-Marsteller’s main rivals, was a general policy adviser to President Bill Clinton. Vernon Jordan, Clinton’s transition chairman, sits on the boards of Union Carbide, Xerox, RJR Nabisco, American Express, Dow Jones and six other corporations. Secretary of State Warren Christopher’s former firm, O’Melveny and Myers, defended Exxon against lawsuits stemming from the Exxon Valdez disaster.
As business critic Graef Crystal puts it, corporate boards in the United States consist of ‘ten friends of management, a woman and a black’. Given the corporate world’s efforts at ‘greenwash’ he could easily have added ‘an environmentalist’ to the list.
Andre Carothers is the former editor of Greenpeace Magazine and is now a freelance journalist in Washington, DC.
In the early 1970s multinationals were attacked as agents of Western imperialism, bleeding the Third World’s wealth. When the US corporation ITT was implicated in the 1973 coup in Chile the allegations gained substance. It was in that atmosphere that the international community came up with the idea of setting rules for corporate behaviour.
The UN responded by creating the Centre on Transnational Corporations (UNCTC), a research group based in New York. The Centre’s small staff of 35 was to follow principles set by the UN’s Commission on Transnational Corporations; to maximize the contribution of multinationals to development and to provide technical assistance to developing countries on foreign investment issues. But the issue that caused hearts to flutter in corporate boardrooms was talk of an ‘international code of conduct’ for multinationals. The idea that corporations should be responsible to anyone other than their own stockholders was anathema.
From the start, the Centre was criticized by business and treated as far more powerful than it really was. The International Chamber of Commerce – a high-powered corporate lobby-group – denounced anything the Centre published if specific multinationals were named. When Ronald Reagan came to power the UNCTC was attacked by the ultra-conservative Heritage Foundation.
The ‘sins’ of the Centre included helping a few Third World governments work out non-binding principles for foreign investment, and documenting the investment of foreign firms in Southern Africa. The Centre did little more than suggest that multinationals were a legitimate subject for international consideration – not exactly earth-shattering stuff. But even that proved too threatening.
In 1992, after years of sniping, the attacks succeeded. UN Secretary-General Boutros Boutros-Ghali reduced the Centre’s stature by merging it into a new mega-department. Then the President of the General Assembly announced that the attempt to draft a much-feared ‘code of conduct’ for multinationals was dead. Finally, in the Spring of this year, the UNCTC was quietly put down.
Working at the Centre through all this was not easy. The mood alternated between intense aggravation and excruciating boredom. The message from the top was that appearance of organizational change was more important than the actual work. Most staff effectively stopped working during the final four months. Some felt constant reorganizations were designed to paralyse the UN’s work on social and economic issues, just as the Heritage Foundation wished.
But the heart of the issue is that multinationals fear even the semblance of public scrutiny. They shun any serious discussion of critical issues: their global market dominance, price fixing practices in small countries, wage cuts and job losses in the Third World, huge commercial debt repayments, and other ‘negative’ matters. A peak of absurdity was reached at the final preparations for the Earth Summit when there was heavy lobbying to remove the term ‘transnational corporations’ from the draft text of Agenda 21.
But removing words does not remove the problems. The three biggest – Third World debt, environmental destruction and the need for millions of new jobs – cannot be addressed without understanding how multinationals operate. Governments and citizens need to know what transnationals are doing, within a legal framework that holds them accountable. In reality we’re less close to this goal than ever.