New Internationalist

Just don’t do it!

Issue 407

Cautionary tales of co-option and compromise from UN-insider Jean Ziegler and anti-sweatshop activist Jeff Ballinger.

The United Nations’ ‘partnership’ with corporations is a travesty, argues Jean Ziegler, UN Special Rapporteur for the Right to Food.

The UN Global Compact boasts that it is ‘the world’s largest, global corporate citizenship initiative’. Why are you so critical of it?

The Global Compact started from an idea by former UN Secretary-General Kofi Annan. The UN Conventions only address themselves to nation states, but with globalized capitalism all of a sudden there are transnational corporations who have much more financial, marketing and ideological power than governments. We need to address their activities if we want to universalize and implement human rights. This idea is good, but the execution has been a total fake.

In 1999, when Annan launched the Global Compact, he was much applauded. 3,000 companies signed up, including Nestlé, Novartis, General Foods (Kraft) and Cargill. They can put on their letterheads ‘Member of the Global Compact of the United Nations’. But it is not working because it places no constraint whatsoever on the 3,000 companies who have signed up. They are there to make profits, not to advance solidarity, social justice or human rights. There is no sanction if, for example, a company violates the right to strike. So the Global Compact serves the interests of the global corporations. They can do whatever they want, so they are really happy with it!

What should the UN be doing to make corporations more accountable?

Transnational corporations must submit to the scrutiny of the UN Human Rights Council. This Council makes resolutions which condemn states if they are not conforming to all human rights. But it is completely useless to have such a body if it doesn’t also address itself to publicly condemning and controlling the massive violations of economic, civil and political rights committed daily by transnational companies.

Unfortunately, the Americans have sabotaged any resolutions on this, so we have to fight for public opinion to put pressure on governments.

What is happening inside the UN at the moment?

An American lawyer called John Ruggie has been given the title ‘Special Representative of the Secretary-General on Business and Human Rights’. He is leading a process to report on these issues. It is horrible; an exercise of lip-service to the corporations. He is a total neoliberal who says everything is OK because all these big companies, from Nike to BP, have internal mechanisms for social responsibility now, and this is sufficient.

We cannot go on like this – this theory murders Colombian workers, who are killed if they strike, by paramilitaries paid by multinationals.

The neoliberal poison is everywhere in the UN. They say these issues are simply ‘a problem for the market to resolve’. Human rights are the responsibility of states, not the private sector. We cannot go on like this – this theory murders Colombian workers, who are killed if they strike, by paramilitaries paid by multinationals.

Isn’t it obvious that the voluntary approach of ‘corporate responsibility’ isn’t working?

No, not to an American CEO. If you talk to them, they are in a difficult situation. I don’t approve of them, but global capitalism is jungle capitalism. The competition for markets is intense and savage. They say: ‘If we have to have minimum standards for human rights, then our competitive position is weakened and our shareholders will throw out the management.’

So is there an alternative movement for controlling corporations building among member states?

There is a very strong political argument. 152 countries have signed Convention Number One on Social, Economic and Cultural Rights, which means they agree to monitor human rights on a supranational basis. For instance, Switzerland signs and is responsible for what Nestlé is doing in the world. France is responsible for Total in Myanmar (Burma). There is unity on this in international law, but it is not enacted.

I just came back from the Niger Delta, where Royal Dutch Shell is doing terrible things: flaring the gas, completely destroying the environment and the economic basis of local communities. There is a strong civil movement in Holland but Shell is stronger than the Dutch Government. That’s the problem.

Solving it is a question of democratic organization and of consciousness. During the abolition of slavery, the British House of Lords ordered the Navy to intercept slave ships in the Atlantic, when 50 years before, slavery was seen as ‘just a problem of the market’ – a matter of profit and investment. The anti-slavery movement became very strong, and Parliament had to act.

The same thing has to happen now. The transnationals are very powerful if they can act in confidentiality with governments. But in the face of worldwide public opinion, awareness and mobilization, they can do nothing. They would have to conform.

Jean Ziegler spoke to Jess Worth.

Corporate Responsibility was a disaster for the anti-sweatshop movement, explains Jeff Ballinger.

‘You did WHAT?!’ I shrieked into the telephone receiver. It was 1998, anti-sweatshop activism was at its height, and I had just heard from Medea Benjamin of Global Exchange that she had begun discussions with Nike. Because she was given the press portfolio in our small NGO coalition she was widely viewed as the company’s fiercest critic. Her decision to enter into ‘dialogue’ meant the way was now clear for anyone on the Left to help Nike’s Corporate Responsibility minions learn NGO-lingo so that they could ‘talk the talk’ – and many did.

The bad news from Medea was the first in an avalanche of NGO-enabled Corporate Responsibility initiatives. Typical was the usually reliable International Labour Rights Fund’s Codes for Business Practices in China. It was vague, unenforceable and a publicity bonanza for Reebok and Mattel. The Sialkot Soccer Ball Agreement to phase out child labour in Pakistan (Save the Children Fund, ILO and UNICEF; Nike, Reebok and Adidas) was a similar travesty.

Jeff (right) in action!

But letting Nike off the hook was clearly the worst, because we discovered years later that North American sales were down for five years after the sweatshop controversy, despite billion dollar advertising spending! Holding ranks for just another year might have won settlements for scores of courageous workers sacked for organizing strikes against ruthless Nike contractors, and derailed Nike’s supercharged Corporate Responsibility juggernaut.

Co-opt and isolate

In 1997-98, over 1,500 news reports about sweatshop involvement led Nike’s share price and earnings to plummet 40 per cent. The shoe and apparel giant fought back by spending several million dollars a month on Corporate Responsibility programmes. Nike enlisted Clinton Administration operatives to rope in key trade union and NGO leaders to the President’s ‘Apparel Industry Partnership’. Our ad hoc network was overwhelmed by the assault, carried out by over 90 staff.

Nike CEO Phil Knight used a former Bush Sr image advisor to help project a ‘reformed’ appearance. But this was only a partial solution. More serious brand-refurbishment was in the works.

Got problems with critical NGOs? Start your own and engage them in partnership! That is what Nike did with the ‘Global Alliance for Workers and Communities’ (GA), which dished out millions of dollars to NGOs willing to help. The International Youth Foundation’s Rick Little was one of the first to spot the opportunity, effectively turning his organization into a consultancy to which big business outsourced their ‘responsibility affairs’.

As Paul Hawken, an entrepreneur turned environmentalist and green-biz theorist, observed after a failed attempt to work with Nike, there was an ‘almost biological’ process under way, by which major corporations co-opt those critical groups they can draw into partnership and isolate and marginalize those they cannot.

Nike’s GA strategy was revealed by its 2001 report about its contractors in Indonesia. The 50-page document failed to mention strikes, fired workers, wage cheating and that no Nike contractor in Indonesia was engaged in meaningful collective bargaining. While admitting other serious wrongdoing, the omissions confirmed that Nike had nothing but scorn for worker activists and representative, worker-controlled unions. Don’t bother looking for the GA on the web. Nike pulled the plug as soon as it had convinced enough people that it had joined the ranks of the ‘most responsible’.

Bring on Round Three

Eighteen years after it was first exposed, forced overtime is still a problem in Indonesia. Evidence of the abject failure of our movement can be found in a cost-breakdown for a university-logo sweatshirt. The 2005 figures show a retail price of $38, with the workers’ share only 18 cents. Nike shoe workers in Indonesia, China and Vietnam still get paid around $1.10 a pair. Being paid about 75 cents more would make a real difference to their lives. Cost to Nike: $210 million per year – what a bargain Corporate Responsibility is at around $25 million.

It is time to commence Round Three of this struggle. We clearly won Round One: Nike was hammered with meticulous research and workers were (somewhat) empowered by international press attention and activism by solidarity groups. Round Two was an ugly affair – Corporate Responsibility boomed and the companies repaired their damaged reputations with no real benefit to the workers.

Round Three ought to be about ‘restitution’ for workers cheated by these companies and pressure on governments to re-fill the void created by self-regulation. Despite all our activism, what positive help the Indonesian workers did get didn’t come from Nike but from their embarrassed government, in the form of a raised minimum wage and media exposure of wage-cheaters. We need to focus more on China and Vietnam and empower those who toil in their factories with the knowledge that the world is watching.

Jeff Ballinger teaches and does research at Webster University, Vienna.

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This article was originally published in issue 407

New Internationalist Magazine issue 407
Issue 407

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