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Small is powerful

I suppose I’d better come clean. This whole Corporate Responsibility charade is partly my fault. In my defence, I really believed I was doing the right thing at the time. I was young, naïve…

It was 1999, and I had just landed my first proper job, co-ordinating a student-led campaign for the ethical investment of the British universities’ pension fund.^1^ It was a big deal. No major mainstream fund was invested according to any kind of ethical criteria, and we were targeting the third-largest pension fund in the country, with $40 billion of shares in some of the world’s most notorious transnationals.

Our rationale, we felt, was a radical one. Corporations were too powerful, and they were rampaging across the planet, extracting and exploiting, plundering and polluting, propping up brutal regimes and grinding down small farmers, withholding essential medicines and privatizing basic services. Who was going to rein them in? Governments either wouldn’t or couldn’t, preferring instead to deregulate. Campaigners were too thin on the ground. The only people corporations were legally accountable to were their shareholders. So if people with social consciences got together and exercised shareholder power through their pension funds and savings institutions, we could really start holding these money-making monsters to account.

We won our campaign – the pension fund buckled and adopted a groundbreaking ‘socially responsible investment’ policy, which revolved around ‘engaging’ with the companies where they held large shareholdings. At the time it felt like a huge victory. But while we wanted to exert a restraining influence, what we actually _achieved_ was another nudge in the direction of voluntary Corporate Responsibility.

Looking back, I don’t see this as a failure so much as an opening salvo in a much larger, epic battle to bring corporations back under democratic control. Our campaign win came in the same month as the World Trade Organization summit was, thrillingly, shut down by 100,000 people in Seattle. Suddenly, the problems with corporate globalization that we’d been banging on about had burst through to the mainstream. On the eve of a new millennium, it really felt like the tables could be turning on global capitalism.

Beyond Corporate Responsiblity

Big business has fought back against these challenges to their legitimacy with increasingly sophisticated Corporate Responsibility (CR) strategies. But, eight years down the line, it hasn’t squashed dissent. A backlash is growing. CR’s limitations are clear: it’s perfectly possible for a corporation to be lauded for being a CR ‘leader’ while still engaging in the exact same activities that blighted its reputation in the first place. This has become impossible to hide.

Communities affected by corporations are rejecting ‘stakeholder engagement’ sessions as a waste of their time and energy. Exasperated NGOs are starting to shun corporate partnerships, some quoting CR claims back at companies along with proof that they are nonsense (though not WWF, who still claim: ‘Working with business is as important to us as munching bamboo is for a panda’.)^2^ Even at the GreenCorp conference (see Companies who care?), high-level business employees were asking skeptical questions about the effectiveness of carbon offsetting and the extent to which stopping climate change can also be profitable.

Despite CR, a movement for what might be called ‘corporate justice’ is building. At the World Social Forum (WSF) in Nairobi last January, I went along to a strategy session on ‘rolling back the power of Transnational Corporations (TNCs)’, and found activists from all over the world discussing how to shift power relations in the global economy.

We do not need huge TNCs to meet humanity’s needs. The alternatives to a corporate planet are flourishing everywhere

Clearly a crucial element is resistance – and it is everywhere. In the WSF session were activists from Tanzania fighting a British water company; groups from South Korea trying to stop their government signing a free trade agreement with the US; an NGO from the Democratic Republic of Congo where transnationals are coming in and building mines and dams which people have no choice but to work in. Activists from Brazil described how citizens had recently held a ‘people’s tribunal on the TNCs’ power’; environmental campaigners from Uruguay and China were both trying to stop the destruction of forests by huge papermill companies; community organizers from Angola, where a massive oil spill has destroyed fisherfolks’ livelihoods, swapped stories with activists from the Philippines, where Toyota is union-busting.

Poor communities are on the frontline. The challenge is how to make this a global battle, linking campaigns of local resistance with national and international attempts to change the legal and economic structures that allow corporations such unconstrained power.

Legitimacy and equality are key issues. Too often, Northern campaigns, however well-meaning, have locked Majority World movements into the role of powerless exploited ‘producers’ dependent on the goodwill of Western ‘consumers’ to advocate on their behalf. At the WSF, the vision was of a movement coming together along more egalitarian lines, developing strategies that strengthen the rights and autonomy of local communities and creating the space for people everywhere to build their own solutions. As Indian academic and activist Vandana Shiva puts it: ‘For us, our seeds, our rivers, our daily food are sites for reclaiming our economic, political and cultural freedoms, because these are the very sites of the expanding corporate empire over life.’^3^

Legally wrong

Friends of the Earth International (FoEI) is trying to put these principles into practice with its Shell campaign. Corporate campaigner Hannah Griffiths talked me through it. ‘We have linked up a network of communities and NGOs around the world who are each suffering an impact from Shell: living near a dirty refinery, trying to protect their health, or fighting future projects like the Sakhalin pipeline in Russia. The network partly provides mutual solidarity and support – for example, they all did solidarity actions on the 10th anniversary of Ken Saro-Wiwa’s execution. Partly it is a way of exchanging expertise, skills and experience. Partly it is to have a common voice at major events such as Shell’s AGM.’

Last year, when a new Company Law Bill was being debated in the British Parliament, FoEI brought community representatives over to meet with MPs and argue for changing the law to make corporations more accountable.

‘These communities have been on a journey of realization,’ says Hannah. ‘They have been politicized. They’ve tried all the options: engagement, protest, going to the Board of Directors, and not had much of an impact. They can see that addressing the way corporations are legally structured is the only way things will change.’

This is the fundamental problem. A corporation’s legal duty is to maximize profits for its shareholders. Shareholders own the company, but directors run it. ‘Limited liability’ means neither is liable for the company’s debts or other civil or criminal actions, so there is a vacuum of power and responsibility at its heart.^4^

But changing national and international corporate law is much easier said than done. The British campaign around the Company Law Bill mobilized over 750,000 people, through the Trade Justice Movement and CORE (Corporate Responsibility Coalition). They wanted to make directors legally responsible for damage done to the environment, local communities and workers; provide affected communities, wherever they are in the world, with the right to seek ‘redress’ for harm done by a corporation, and require companies to report their social and environmental impacts against internationally agreed standards. British business was determined to stop this happening, and when the Bill became law in November 2006 most of the campaign’s proposed amendments were omitted. Activists had one small but important win: all Britain’s companies are now required to report on environmental and social issues, throughout their supply chains. But now the window of opportunity provided by the Bill has closed, possibly for many years.

Undermining corporate power

Reshaping company law has to be a long-term objective. In the short- to medium-term, regulating markets is perhaps more achievable. Regulation is deeply unfashionable amongst governments who’ve bought into the neoliberal mindset. But lobbies are emerging for binding national and international regulation to curb greenhouse gas emissions and control specific sectors where voluntary codes of conduct have failed, such as supermarkets, garments, tobacco, mining and oil.

Blocking the pathway of all these efforts is big business. Millions of corporate dollars are poured every year into lobbying to ensure that governments continue to act in TNCs’ interests. In the US, shareholder activists are tackling this head-on by exposing Exxon Mobil and other oil giants’ disastrous lobbying against government action on climate change, including the funding of denialist think-tanks. In Europe a coalition campaign to bring in rules for transparency in lobbying is gathering momentum^5^ and the annual ‘Worst EU Lobbying and Greenwash’ awards spotlight some predictably outrageous behaviour.^6^

Just as important is building political movements that override corporate influence on governments, such as the wave of resistance to Free Trade Agreements that has swept Latin America. These movements aren’t just challenging the political and economic power of big business. Crucially, they play a part in undermining corporations’ cultural power.

In the film ^The Corporation^, Richard Grossman – co-director of the Program on Corporations, Law and Democracy – explains how ‘corporations don’t advertise products, they are advertising a way of life, a way of thinking… that the corporation was inevitable, it is indispensable, that somehow it is remarkably efficient, and that it is responsible for progress and the good life.’ Just as, for those embroiled in slavery or apartheid, it was almost impossible to imagine those institutions ending, so it is for us with corporations today.

Tidal wave of alternatives

So perhaps the most important message to hammer home is that the world doesn’t have to be this way. We do not require huge TNCs in order to meet humanity’s needs in a sustainable way. The alternatives to a corporate planet are flourishing everywhere, through food co-ops, seed banks, community vegetable-growing schemes, worker-run factories, micro-generation of power, producer-owned fair trade companies, transition towns preparing collectively for a low-carbon future…

Campaigner, economist and author Andrew Simms suggests that size is what matters: ‘The battle to correct the enormous imbalance created by unmanaged market forces and protect the things that matter to us may look different from older struggles. Rather than the clash of left and right, political certainties are breaking down into a fight between big and small.’^6^

Small becomes incredibly powerful when linked with others. This is what the corporate justice movement could look like: a tidal wave of resistance around the world rising and crashing down collectively on the corporations’ heads, the undertow sucking back their power, while the rights and autonomy of millions of communities building their own alternatives grow and swell above.

Climate change could be the catalyst. Global capitalism’s dependence on infinite economic growth is smashing into planetary limits. International, national and local economies, one way or another, will have to be reshaped. We have reached a moment when we have to decide what we want our future to look like, and get organized to bring it about. Because if we leave it up to the corporations, I don’t fancy our chances.

Illustration by Polyp

Information and action on corporations

Asia Monitor Research Centre

Business and Human Rights Resource Centre

Centre for Corporate Accountability

Centre for Media and Democracy

Centre for Research on Multinational Corporations

Corporate Europe Observatory

Corporate Watch Australia

Corporate Watch UK

Corporate Watch US

Multinational Monitor

Multinational Resource Centre


Corporate Accountability campaigns

Corporate Accountability International

Corporate Ethics International

Corporate Responsibility Coalition (CORE) UK

European Coalition for Corporate Justice

Friends of the Earth

International Labor Rights Forum

Trade Justice Movement

  1. The campaign, organized by People & Planet, was called ‘Ethics for USS’ (Universities Superannuation Scheme). It developed into an organization called Fair Pensions. www.fairpensions.org.uk
  2. Andrew Rowell, ‘Corporations “Get Engaged” to the Environmental Movement’, _PR Watch_, Volume 8, No 3, 2001.
  3. Vandana Shiva, _Earth democracy: justice, sustainability, and peace_, South End Press, 2005, p 183.
  4. Rebecca Spencer, ‘Corporate law and structures: exposing the roots of the problem’, Corporate Watch, 2004.
  5. http://alter-eu.org
  6. www.worstlobby.eu
  7. Andrew Simms, _Tescopoly: How one shop came out on top and why it matters_, Constable, 2007, p 13.

New Internationalist issue 407 magazine cover This article is from the December 2007 issue of New Internationalist.
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