Corporate influence / UN
White ants - Australian for termites - are pale grubs that chomp their way through wooden structures which still look intact from the outside. Until, that is, you lean on the framework and find yourself crashing through rotten, hollowed-out wood. In the run-up to the second 'Earth Summit' which will open on 26 August in Johannesburg, South Africa, 10 years after the Rio Conference which brought environmentalism centre stage, the world will look to United Nations frameworks to protect the planet and its people. But corporations with a record of undermining UN initiatives - on climate change, toxic waste, tobacco, apartheid sanctions and more, are now 'valued partners' of the institution. Secretary General Kofi Annan says: 'The UN and private companies are joining forces.' Critics say corporations have successfully 'white anted' the UN.
As the economy has globalized, political and social institutions that mitigate the worst ravages of the market have become hopelessly outgunned. For some, the UN still holds out hope for a planetary social contract for the age of globalization. But for that optimistic hope to be realized, the UN would need to have enforceable powers over corporate polluters and human- rights abusers.
Big business is ahead of the game. As one international lobbyist put it: 'The first thing I tell an industry that's being threatened with regulation is to self-regulate, put in place voluntary codes of conduct.' There are now over a quarter of a million voluntary, non-binding corporate codes of conduct in place - and not a single international binding agreement of corporate responsibility. As the UN is the likeliest venue for such an agreement, corporate partnerships and voluntary codes of behaviour are their best weapon of defence.
The story of the UN's troubled relationship with big business reads like a biography of corporate globalization. In the early 1970s, a swathe of recently independent colonies used their combined weight at the UN to call for a 'New International Economic Order' that would challenge inequality between rich and poor nations. The countries of the South had won political independence. Now, they wanted economic independence too. In their view the transnational corporations based in rich countries were perpetrators of 'neo-colonialism', subjugation via the marketplace.
Thus in April 1972, under a bright Santiago sun, the UN Conference on Trade and Development (UNCTAD) issued the first call for an international, binding code of conduct for transnationals.
A year earlier Chileans had elected a Marxist government under Salvador Allende, who was bringing in a radical social programme bitterly opposed by US corporations on Chilean soil. The president of the US-owned International Telephone and Telegraph Corporation (ITT), the largest US investor in Chile, offered a million dollars to anyone who could overthrow Allende. Alerted to the designs of ITT and other US businesses, Allende appealed to the the UN for help in fending off these powerful corporations.
His appeal fell on deaf ears. Allende was overthrown in a bloody coup led by General Pinochet on 11 September 1973. Under Pinochet's dictatorship Chile became the first to undergo the ultra-freemarket neoliberal experiment that was to become the economic orthodoxy of globalization.
International shock in the wake of the Chilean coup put a UN code of corporate behaviour high on the international policy agenda. A new UN body, the Centre for Transnational Corporations was born - and, to the alarm of big business, a set of binding regulations for corporations became one of its top priorities.
In response, corporate lobby groups attacked the UN as anti-corporate and 'Third Worldist'. The Heritage Foundation, a right-wing US think-tank wrote: 'The war against economic freedom, the free-enterprise system and multi-
national corporations permeates the UN structure. This structure is antithetical to US interests and policies.' The US Government began a serious concerted effort to subordinate the UN, defaulting on its fees and blocking numerous UN initiatives that might limit the behaviour of transnationals, from the Code of Conduct of Transnational Corporations to emerging environmental regimes.
Grabbing the Earth Summit
The UN's Centre for Transnational Corporations had developed a series of recommendations for inclusion in the final summit declaration which outlined environmental regulations for business. Corporate lobby groups, principally the International Chamber of Commerce, moved in for the final kill. In 1991 the US Government had issued a request to its foreign embassies to lobby their host governments to 'quietly build a consensus against further negotiations' on the UN Code. By 1992, before the Earth Summit began that June, UN Secretary General Boutros Boutros Ghali obediently closed down the UN Centre for Transnationals. Its recommendations for a proposed UN Code of Conduct for Transnational Corporations lay in tatters.
The Secretary General of the Earth Summit, Canadian businessman Maurice Strong, then invited a new corporate lobby group, the Business Council for Sustainable Development to write the recommendations on industry and sustainable development themselves. All mentions of corporations in the final summit declaration were removed, except where their contribution to sustainable development was praised.
Transnational companies had made the evolutionary leap. They were no longer entities to be managed by governments, but had mutated into 'valued partners' and 'stakeholders' formulating global policy on their own terms. Though few realized it at the time, the Rio Earth Summit fundamentally transformed the role that corporations were allowed to play in global policy-making, launching, in effect, the version of corporate globalization we have today.
The Corporate Compact
In January 1999, Kofi Annan announced the Global Corporate Compact, a partnership with the UN's old nemesis, the International Chamber of Commerce. Transnationals, Annan proposed, should 'embrace, support and enact a set of core values in the areas of human rights, labour standards and environmental practices. I fear that, if we do not act, there may be a threat to the open global market, and especially to the multilateral trade regime.' Protesters outside, by now a staple of any globalization meeting, were a testament to that threat, and the corporations signed up.
Yet, as Annan himself stated, 'The Global Compact is not a code of conduct. Neither is it a disguised effort to raise minimum standards.' He did not elaborate on how a more humane world is to be achieved without raising minimum standards. The Compact has no mechanisms for monitoring, nor enforcement, nor exclusion for violators - nothing, indeed, that might make it worthwhile. Corporations with disastrous social and environmental records entered into the Compact, among them Shell, BP, Nike, Rio Tinto, Novartis, Bayer, DuPont and Suez Lyonnaise des Eaux. Several violations of the Compact by Rio Tinto, Aventis and others have already been spotted but ICC supremo Maria Livanos Cattaui has warned that 'business would look askance at any suggestion involving external assessment of corporate performance'.
The road to Johannesburg
Johannesburg is likely to promote partnerships with the private sector as the best road to sustainability. Corporate initiatives such as 'Mining and Minerals for Sustainable Development' - sponsored by mining companies with terrible human-rights records such as Freeport MacMoran (see West Papua NI 344) and RioTinto - may be the shape of things to come.
But there is a massive reality gap. The UN's green business partners are some of the very same corporations who have lobbied against UN environmental agreements.
Crucially, the Johannesburg Summit may be the clinching moment when international environmental agreements become subservient to World Trade Organization rules. Whilst UN conventions have more focus on the environment and the South, WTO rules tend to favour big business. WTO rules have been repeatedly invoked by the International Chamber of Commerce to undermine the environmental agreements that came out of Rio on climate change, biodiversity and the 1994 ban on trade in hazardous waste.
The corporate vogue for self-regulation needs to be exposed as self-interest. Friends of the Earth has launched a campaign for binding rules on global corporations in time for the summit. As their campaigner Matt Philips says: 'I don't want to disparage the genuine efforts some are making on corporate social responsibility. But the real point is, if the majority of corporations are so sustainable, why are they so scared of being held to account?'
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