Tag Archives: corporate accountability

Latest Developments, November 9

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Cluster munition comeback
The Independent reports the UK is backing a US-led proposal that would legalize virtually all cluster munitions and be “a nail in the coffin” of a two-year-old ban on the controversial weapons.
“In recent years, the UK has played a leading role in trying to rid the world of cluster bombs. It is one of 111 countries that have signed up to the Convention on Cluster Munitions, is on target to destroy its own stockpile, and has ordered the US military to remove any submunitions it holds on British soil.
But The Independent has learnt that the UK Government is supporting a Washington-led proposal that would permit the use of cluster bombs as long as they were manufactured after 1980 and had a failure rate of less than one per cent. Arms campaigners say the 1980 cut-off point is arbitrary, and that many modern cluster bombs have far higher failure rates on the field of battle than manufacturers claim.”

Corporate liability
Alliance Sud reports more than 50 organizations are calling on Switzerland to draw up laws that will require Swiss-based companies – “on a per capita basis the country has the highest number of internationally active firms” – to respect human rights and the environment while operating abroad.
“In response to pressure from public campaigns in recent years many companies have indeed adopted regulations for socially and environmentally responsible behaviour or have signed international guidelines like the Global Compact. Yet that is not enough to prevent human rights abuses and environmental destruction. These initiatives are often only about acquiring a social or a green image. Implementation depends on the goodwill of companies. Control and sanction mechanisms are either absent or very weakly formulated.”

Corporate Democracy
Harrington Investments’ Jack Ucciferri who caused a stir last month by calling the UN’s framework for business and human rights a “patently worthless document” has announced plans to launch the Corporate Democracy Initiative [DOC] and to develop “metrics to assess the ‘democracy quotient’ of publicly traded corporations.”
“The simple fact is that corporations and economic elites have too much power over governance and governments.  Power is never relinquished voluntarily.  Power must be met with power. I am not suggesting violence, but I am suggesting coercion.  Laws are coercive, binding bylaw resolutions are coercive, civil disobedience can be coercive, democratic elections are coercive.
…
Frameworks are not coercive, but they do take an awful lot of scarce non-profit and public sector resources to negotiate.  Now that we’re done with drafting the framework, let’s re-channel all of that energy and smarts toward more empowered forms of engagement.”

The rise of unelected officials
The Globe and Mail’s Doug Saunders writes about the rise of unelected officials in the context of Europe’s current crisis, as illustrated by the forceful speech International Monetary Fund chief Christine Lagarde delivered today in China.
“This starkly political message was being delivered by an unelected official. It joined messages delivered by European Union president Herman Van Rompuy, by European Commission president Jose Manuel Barroso, by European Central Bank chief Mario Draghi – as it appears that elected leaders still do not fully agree on a path forward.
With the fate of millions of hard-pressed voters being left to unelected officials, some of them on the other side of the world, it shouldn’t be surprising that many Europeans are taking to the streets.”

World finance’s black hole
The Res Publica Foundation’s Jean-Michel Quatrepoint looks at world trade figures from the last five years to buttress his argument that international trade imbalances – and a “black hole” – lie at the heart of the current financial crisis.
“First observation: the numbers don’t add up. Logically, the total of the account balances (balance of goods and services, financial revenues and capital movements) should cancel each other out. Far from it. Each year, the discrepancy is greater. It’s the black hole of world finance. Even taking into account the margins of error and the different accounting systems, there is still a gigantic gap that no one can, or wants to, explain. No doubt because that would involve taking a close look at the reality of Chinese statistics, the accounting of big corporations, the role of tax havens, the revenues of drug trafficking and organized crime. But the World Trade Organization, the International Monetary Fund and the central banks do not want to deal with any of that. There’s an omerta over this black hole.” (Translated from the French.)

Dysfunctional disarmament
Simon Fraser University’s Paul Meyer argues multilateral disarmament efforts are in the depths of a decade-long “crisis of non-performance.”
“The designated forum for negotiation of arms control and disarmament agreements, the 65-nation Conference on Disarmament in Geneva, has not concluded any agreement since the 1996 Comprehensive (Nuclear) Test Ban Treaty. Operating under an extreme version of the consensus rule, whereby nothing can be decided unless all 65 members are in agreement, the conference has not even been able to adopt a functioning work program since 1998.
As a result, major multilateral files such as the negotiation of a ban on the production of fissile material for nuclear weapons and the prevention of an arms race in outer space go unaddressed. States shed copious tears over this lamentable situation, but take no effective measures to fix it.”

New imperialism
The Daily Maverick writes that former South African president Thabo Mbeki is concerned NATO’s Libyan intervention was the beginning of a new imperialism that threatens to recolonize Africa.
“He points out that Nato far exceeded its UN mandate in Libya, which allowed for the protection of civilians, not regime change. And he argues that the intervention was never motivated by anything other than a fig leaf to legitimise the involvement of foreign powers. ‘It is clear that the beginning of the peaceful demonstrations in Libya served as a signal to various Western countries to intervene to effect “regime change”. These countries then used the Security Council to authorise their intervention under the guise of the so-called “right-to-protect”.’”

Latest Developments, October 28

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Land rights as human rights
An international human rights hearing could mark a fundamental change in the relationship between Canada’s aboriginal peoples and its federal and provincial governments.
“[University of Victoria anthropologist Prof. Brian Thom] said he believes it signalled the moment where B.C. First Nations may turn away from the treaty negotiation process and move towards settling their issues as human rights abuses.
‘They’re reframing the whole discourse today,’ said Thom. ‘The decisions of this commission could be crucial in reframing the next generation of aboriginal leadership. We’ve just had 20 years of that process and the current generation, I think, is tired of that discussion.’
‘The next generation may be thinking about human rights for a good long time.’”

The price of justice
The Bureau of Investigative Journalism’s Nick Mathiason writes that the British coalition government’s proposed legal aid amendments could have serious consequences well beyond the UK’s borders.
“One major lesson from cases such as this [against UK-based miner Monterrico over alleged abuses in Peru] is that transnational companies can no longer operate in poorer countries thinking they can’t be pursued. But will similar claims be pursued in the future if the coalition government’s bill becomes law?
[Human rights law firm] Leigh Day, which also successfully fought Trafigura on behalf of more than 30,000 Ivorian victims allegedly poisoned from toxic waste, thinks not. It believes that it will now be much harder for indigenous communities and others living in poorer countries to get legal redress for human rights violations associated with the activities of multinational companies based in the UK.
This is because under sections 41–43 of the proposed reforms are three clauses that will make it all but impossible to pursue claims in British courts.”

Empty words
Jack Ucciferri of Harrington Investments calls the UN’s framework for business and human rights a “patently worthless document” and asks if “we really think that the best way to regulate corporate behavior is engage them in “Multi-Stakeholder Processes.”
“I searched the Document-Whose-Name-is-Too-Uppity-to-be-Uttered [Protect, Respect and Remedy] for a few terms. Ready?:
Variations of the word ‘responsible’ appear 14 times in 7 pages
Variations of the word ‘liable’ – 0 times.
Variations of the word ‘accountable’ – 0 times.
Variations of the word ‘culpable’ – 0 times.”

Sacred and valuable land
Al Jazeera reports on a dispute over land in Central Mexico that is sacred to the local Wixarika people but potentially lucrative for a pair of Canadian mining companies.
“‘It’s as if they wanted to put a gas station in the middle of the Basilica,’ said Santos de la Cruz, referring to the most sacred shrine of Mexican Catholics, the Basilica of Guadalupe. De la Cruz is a traditional authority in his community of Bancos San Hipólito and also an attorney engaged in the legal battle to defend his people’s lands and traditions.
In a press conference flanked by a cadre of grim-faced Wixarika men and women who had travelled for days from their communities in the western Sierra Madre, De la Cruz grew visibly emotional. ‘What they want to do is to rip out the vein of the heart of Wirikuta – and that’s why we’re here… We’re not interested in gold and silver; what interests us is life.’”

Mining for Development
Pro Bono News reports the Australian government’s new Mining for Development Initiative, which includes $22 million in funding for NGOs, is getting mixed reviews from civil society groups, with Oxfam enthusiastically endorsing it and ActionAid expressing serious reservations.
“[ActionAid’s Florence Apuri] said, ‘Our experience shows mining often brings more hardship than benefits to poor communities. Land grabs and the destruction of local ecosystems as a result of mining often makes it more difficult for poor communities to earn a living from the land and to feed their families.’
ActionAid said it applauds the idea of supporting developing countries to maximise the social return on mining, however the Government must recognise that the benefits of mining are not always equally spread.”

New Green Revolution
Macalester College geographer William G. Moseley argues the lessons of China’s Green Revolution are being misapplied by those pushing for greater use of genetically modified seeds and chemical fertilizers in Africa.
“While China and the West benefit from this New Green Revolution strategy, it is not clear if the same is true for small farmers and poor households in sub-Saharan Africa. For most food-insecure households on the continent, there are at least two problems with this strategy. First, such an approach to farming is energy-intensive, as most fertilisers and pesticides are petroleum based. Inducing poor farmers to adopt energy-intensive farming methods is short-sighted, if not unethical, if experts know that global energy prices are likely to rise. Second, irrespective of energy prices, the “New Green Revolution” approach requires farmers to purchase seeds and inputs, which means that it will be inaccessible to the poorest of the poor, who are the most likely to suffer from periods of hunger.”

Creating wealth
Columbia University’s Jagdish Bhagwati argues that economic growth, rather than redistribution of existing wealth, is still the best tool for tackling poverty in poor countries.
“In impoverished countries where the poor exceed the rich by a huge margin, redistribution would increase the consumption of the poor only minimally – by, say, a chapati a day – and the increase would not be sustainable in a context of low income and high population growth. In short, for most developing countries, growth is the principal strategy for inclusive development – that is, development that consciously includes the marginal and poorest members of a society.”

The age of responsibility
Former Australian foreign minister Gareth Evans argues the international community’s handling of the Libyan conflict was the moment the Responsibility to Protect “really came of age.”
“Other developments, both before and since, have reinforced and embedded the RtoP norm. Even as the NATO-led intervention in Libya was being widely criticized for overreaching its narrow mandate, a major General Assembly debate in July 2011 reaffirmed overwhelming support among UN member states for the RtoP concept, in all of its dimensions. The arguments now are not about the principle, but about how to apply it.”

Latest Developments, October 26

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License to bribe
Main Justice reports that a co-author of a US Chamber of Commerce proposal to water down the Foreign Corrupt Practices Act has just become the FBI’s general counsel.
“In its report ‘Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act’ the Chamber said that the FCPA is a costly burden to business and ‘there is also reason to believe that the FCPA has made U.S. businesses less competitive than their foreign counterparts who do not have significant FCPA exposure.’ The paper called for five specific reforms including limiting a company’s ‘successor liability’ for the prior actions of a firm it has acquired and giving a clear definition of ‘foreign official’ under the statute.
The Open Society Foundation, a George Soros-funded organization issued a report, charging that [Andrew] Weissmann’s plan would ‘significantly reduce the scope and efficacy of the FCPA while substantially undermining more than 30 years of successful U.S. leadership in promoting global anti-corruption standards.’ ‘[T]he Chamber’s proposal looks more like a license to commit pervasive and intentional bribery than a modest attempt to eliminate the risk of prosecutorial over-reach,’ the report said.”

Proposed EU legislation I: A victory for transparency
Tearfund’s Jonathan Spencer welcomes proposed EU legislation that would require extractive industry companies listed in Europe and operating abroad to disclose what they pay to host governments on a project-by-project basis.
“[This information] will play a key role in releasing resources for development, improving transparency and engaging citizens with their governments. Evidence from other countries has shown that where details of budgets and projected expenditure is published, the money is much more likely to reach its intended destination and support development.”

Proposed EU legislation II: Bad for business
But a number of the companies – including Anglo American, Rio Tinto, Shell and Total – that would be subject to the proposed legislation have argued in a letter to the European Commission that such regulations are misguided and would be bad for business.
“One example is oil or gas fields which cross borders, where governments are understandably careful to safeguard the confidentiality of the terms they offer to investors,” said the letter.
“Further damage to competitiveness will be caused by the additional cost and administrative burden of project-level reporting.”

Proposed EU legislation III: No legal teeth
On the other hand, France’s Citizen Forum for Social and Environmental Responsibility argues the European Commission’s proposal lacks legal teeth.
“In fact, notwithstanding progress in certain areas such as reporting obligation, the [European Commission’s] statement on social and environmental responsibility does not address other crucial questions. The proposal lacks concrete measures to improve the legal responsibility between the parent company and its subsidiaries: companies based in Europe cannot, therefore, be considered responsible for violations perpetrated by their subsidiaries and subcontractors in the South. Nor does the statement spell out the legal avenues that would guarantee real access to justice for all victims of violations.” (Translated from the French.)

South-South cooperation
The Guardian has reproduced part of an IRIN series on how countries like Brazil, India, China and South Africa are changing the world of aid as they become increasingly significant donors.
“Many are not new at all – India, Brazil and China have been giving aid for decades – but what is new is that a group of non-western donors is giving more humanitarian and development aid year on year, and reporting it more consistently to official trackers, such as the UN’s Financial Tracking System (127 donors reported aid in 2010).
As they “emerge”, the traditional hegemony held by western donors over how and where aid is dispersed is starting to be dismantled.”

South-South colonization
While many within the development industry speak of the growing importance of South-South cooperation, Al Jazeera uses the issue of African land grabs to raise the question of possible South-South colonization.
“What would Gandhi say today were he to know that Indians, who were only freed from the shackles of colonialism in recent history, were now at the forefront of this “land-grabbing” as part of the race for foreign control over African land and resources; currently being called the Neo-Colonialism of Africa?,” ask the Ethiopian authors of an open letter to the people of India.

One-step solutions
The University of Ottawa’s Rita Abrahamsen argues that attempts to rein in trading of “conflict minerals” are well-intentioned but may not be particularly helpful for ending African conflicts.
“The danger is that by making illegal mining the only story about the conflict in eastern Congo, other causes—requiring more complex solutions—will be ignored. Meanwhile, the international community will invest vast sums in cumbersome tracking procedures that may be easily avoided in an environment of weak institutional capacities and porous borders.
Ultimately, then, the campaign against conflict minerals might do more to restore Canada’s image abroad and make Canadians feel like ‘good global citizens’ than it does to bring peace to the DRC.”

Size doesn’t matter
The UN Population Fund has released its annual State of World Population just as the number of Earth’s inhabitants is set to hit 7 billion, but its authors are more concerned with how people live than with raw numbers.
“Environmental journalist Fred Pearce echoes the view that a small proportion of the world’s population takes the majority of resources and produces the majority of its pollution.
The world’s richest half billion people— about 7 per cent of the global population— are responsible for about 50 per cent of the world’s carbon dioxide emissions, a surrogate measure of fossil fuel consumption. Meanwhile, the poorest 50 per cent are responsible for just 7 per cent of emissions, Pearce wrote in an article for Yale University’s “Environment 360” website. ‘It’s overconsumption, not population growth, that is the fundamental problem,’ Pearce argued”

Latest Developments, September 19

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Gender inequality
The World Bank’s newly released World Development Report 2012 focuses on gender equality and makes the argument that women’s rights have improved at an “astonishing” rate in recent years but substantial inequalities still persist.
“The main message of this year’s World Development Report: Gender Equality and Development is that these patterns of progress and persistence in gender equality matter, both for development outcomes and policy making. They matter because gender equality is a core development objective in its own right. But greater gender equality is also smart economics, enhancing productivity and improving other development outcomes, including prospects for the next generation and for the quality of societal policies and institutions. Economic development is not enough to shrink all gender disparities—corrective policies that focus on persisting gender gaps are essential.”

World Bank blind spots
ActionAid’s Rachel Moussié argues the latest World Development Report once again reveals the World Bank’s tendency to overemphasize the importance of economic growth while glossing over “key” elements of its own research.
“The World Bank’s faith in the market to pick up the pieces after a crisis is evident in its treatment of social protection, or lack thereof. The report reduces this multi-faceted issue to conditional cash transfers, completely neglecting the important role programmes such as South Africa’s child support grant have played in lifting households and women out of poverty. The bank seemingly fails to recognise that poverty is chronic in the current economic system and the shocks frequent.  Stop-gap measures are just not enough if governments are to prevent these shocks from reversing the gains made on gender equality.”

Eco-imperialism?
Al Jazeera reports environmental rights groups are concerned that Africa risks becoming a lab for lucrative carbon-trading schemes they think will likely only enrich speculators in financial capitals.
“The offsets that come from soil carbon capture schemes have been marketed by world bodies as a means to rechannel money back into climate-friendly agriculture.
However, environmental rights groups say the work of offsetting these emissions – and trading credits associated with the process on carbon markets – is where the big business lies.”

Engineering rights abuses
The Sudan Tribune has picked up on a report by Die Tageszeitung (or Taz) that German investigators are looking into the role that engineering and consulting firm Lahmeyer International may have played in alleged rights abuses surrounding the construction of a Sudan’s Merowe dam project.
“According to Taz, preliminary proceedings like this are rare in Germany, because German public prosecutors and prosecution services do not want to assume responsibility for the behavior of domestic corporations abroad. The judiciary in other states too often allows corporations from the rich north to do whatever they want to.”

Arms and their consequences
An Illinois judge has given the go-ahead to a multibillion-dollar lawsuit alleging that US defense contractor L-3 and a subsidiary assisted in the commission of acts of genocide in the Balkans during the 1990s.
“A lawsuit filed in a Northern Illinois federal court says L-3 and its subsidiary, MPRI (Military Professional Resources Inc.), helped arm and train the Croatians, who killed or displaced 200,000 Serbs in the Krajina region of Croatia. The complaint states that, ‘Whether MPRI personnel took part in the genocide is not known and is not alleged here. But what is known definitively is that MPRI provided the means that enabled the genocide to occur.’”

Swiss commodity trading
The Tax Justice Network reports on the release of a new book dealing with Swiss-based trading companies and their role in the global commodities trade.
“Commodities traders often accept far higher risks than oil companies like BP or pure mining companies like BHP Billiton. They also increasingly build their own facilities, often in crisis or even conflict areas. The industry leaders’ increasing openness to risk was recently demonstrated in Libya, where Geneva-based Vitol, with an eye on forming new business relationships, delivered $500 million of fuel to the opposition on credit. And in newly-founded South Sudan, where transparency in the oil business is central for nation building and the peace process, Glencore sealed an obscure deal with the state oil company two days before the official declaration of independence.”

Project-by-project transparency
EarthRights International’s Jonathan Kaufman urges the European Parliament to go beyond existing US extractive industry transparency legislation by requiring companies to publish what they pay to foreign governments on a project-by-project basis.
“Project-level reporting is particularly important to ERI and the groups we work with because it will enable communities to hold governments to account for the resources that are extracted from their own land. It also matters to investors because company payments on various projects within a single country may be associated with different levels of political risk. (Think, for example, about how different it would be to make a large bonus payment to a government for a mining concession in a war-torn part of eastern Congo, as opposed to the peaceful, government-held western part of the country.)”

Voluntary principles
The Overseas Development Institute’s Jonathan Glennie argues the upcoming Busan conference on aid effectiveness should aim for broad new principles that incorporate emerging players who are rapidly changing the world of development finance.
“Voluntary principles are not exactly the most exciting weapons in the international development armoury. Observed as much in their circumvention as in their fulfilment, they are painfully ineffective at creating the kind of rapid improvements most of us want to see. But they are often the best we can do, given the reluctance of powerful entities to submit to binding approaches. And they often set the tone of an era. We recognise the limits of what voluntary principles can achieve, but believe they will help nudge development financers towards better practices.”

Non-communicable diseases
The UN News Centre reports the international body has “launched an all-out attack on non-communicable diseases” with a declaration calling for a multi-faceted strategy to tackle risk factors underlying illnesses that account for nearly two-thirds of all deaths.
“Steps range from price and tax measures to reduce tobacco consumption to curbing the extensive marketing to children, particularly on television, of foods and beverages that are high in saturated fats, trans-fatty acids, sugars, or salt. Other measures seek to cut the harmful consumption of alcohol, promote overall healthy diets and increase physical activity.”

The big picture
New York University’s Alex Evans, frustrated by the perceived lack of human solidarity displayed in UN discussions, quotes former US astronaut Edgar Mitchell on the life-altering experience of seeing the entire planet from afar.
“We have all said over the years, if we could get our political leaders to have a summit meeting in space, life on Earth would be markedly different, because you can’t continue living that way once you have seen the bigger picture.”