By Barry James
International Herald TribuneAugust 19, 2002
Many large international corporations are gearing up for the World Summit on Sustainable Development in Johannesburg this month with an outpouring of promotional advertising to highlight their environmental credentials. The ads feature positive images like crystal streams, soaring eagles, leaping whales, bounding tigers and happy humans.
Environmental organizations dismiss the effort as "greenwash," or, as a spokesman for Christian Aid in London put it, "hogwash." Behind the glowing portrait in the public relations campaign, critics say, is another world of contaminated earth, strip mines, sweatshops, ravaged forests and depleted oceans.
The tension between these opposing visions is shaping up as one of the major issues at the Johannesburg conference, the biggest United Nations meeting in ten years on economic development and the environment. Nongovernmental organizations are demanding an agreement at the summit meeting that big private corporations be monitored and regulated on an international level. Business groups are pressing instead to ensure that the UN endorses industry plans for voluntary self-regulation.
The summit meeting is expected to attract more than 60,000 delegates from governments, international institutions, nongovernmental organizations and private enterprise. Business groups will be active, stressing that their corporate goals are compatible with environmentally friendly economic growth.
"Pursuing a mission of sustainable development can make our firms more competitive, more resilient to shocks, nimbler in a fast-changing world, more unified in purpose, more likely to attract and hold customers and the best employees, and more at ease with regulators, banks, insurers and financial markets," says the World Council for Sustainable Development, a coalition of international businesses. The council, of which The International Herald Tribune is a member, is one of two business groups that will press the views and interests of business in Johannesburg.
On the other side of the divide are many nongovernmental organizations that are intensely skeptical of business' role and worried that multinational corporations have hijacked the conference's agenda.
"Big business is increasingly in the driving seat of sustainable development," said Elizabeth Stuart of Christian Aid. What we are seeing is a history of business-friendly policies, including self-regulation for corporate accountability. We are calling it the world summit on business development."
A broad coalition of environmental and human rights groups led by Friends of the Earth, itself a grassroots international coalition, is leading the campaign for regulation of multinational corporations and other big businesses by the UN or other international bodies.
"The corporations should not be scared of legislation," said Hannah Griffiths, the coordinator of the corporate-accountability campaign at Friends of the Earth. "It would help the honest ones. The multinational corporations are given rights through the World Trade Organization. We are calling for an international law that would sit on a par with the WTO and balance rights with responsibilities. We want corresponding rights for people and the environment."
But Maria Livanos Cattaui, the secretary-general of the International Chamber of Commerce, rejects the proposal. "Business would look askance at any suggestion involving external assessment of corporate performance, whether by special interest groups or UN agencies," she said.
Cattaui was instrumental in setting up a "global compact" with the United Nations in 1999, aimed at securing a greater business input into UN activities. Her group and the world council have joined together to form what they call Business Action for Sustainable Development - a group that will be the main voice for the corporations at the summit meeting. One of its priorities will be to oppose new regulations while favoring self-regulation.
"It brings out the cynic in me," said Griffiths, who asserted that the record of corporations in respecting even voluntary standards was deplorable. "We accept that corporations are part of society. But they should not be above society."
The UN relies on business involvement in international causes in part because it needs the private sector's money. The governments of all but a handful of rich countries have disregarded promises made at the World Earth Summit in Rio de Janeiro 10 years ago to increase official development assistance.
Government aid has declined from about $60.8 billion a year to $53.7 billion, but private capital flows quadrupled to nearly $160 billion, according to figures supplied by the Organization for Economic Cooperation and Development.
The vast bulk of that money goes to China and a handful of other middle-income developing countries, while the poorest nations receive only a trickle of investment.
Companies joining the UN's global compact agree to respect the environment, safe science and human rights.
In return, they reap public relations benefits - greenwash - from their close association with the world organization and its agencies, which allows them to use the UN logo in their advertising and other image-making materials.
Some nongovernmental organizations recently wrote to Niti Desai, the secretary-general of the Johannesburg meeting, to express their concern about business influence at the meeting. They accused the International Chamber of Commerce of promoting a development model "in which corporate rights are carved in stone while corporate responsibilities remain voluntary."
Jean-Francois Rischard, the World Bank vice president for Europe, said that although a reaction against business has been propelled by the Enron and WorldCom scandals in the United States, the disastrous rail privatization in Britain and the experience of capitalism in Russia, the alternative was to keep state enterprises in the developing world.
And that, he said, was unacceptable.
"They are a horror story," he said. "Smug and corrupt, they don't provide any services. State enterprises in Africa are losing 10 to 12 percent of GDP, which could have gone to education or health."
Emotions flare when businesses take over public services that people consider a right as well as a need - like water, which the UN secretary-general Kofi Annan has singled out as an issue for discussion at Johannesburg.
When a water consortium headed by Bechtel Corp. got hold of the faucets in Cochabamba, Bolivia, it jacked up prices so high that the population rioted and a young man was shot and killed by the police. The company's managers fled and water service was returned to public ownership. Now Bechtel is suing Bolivia for $25 million.
The word "sustainable" conjures up different ideas to different people. Some big-business groups say there is a vital link between corporate profitability and respect for broader goals. The Business Council for Sustainable Development has published a book, "Walking the Talk," that details the benefits of what it calls ''corporate social responsibility."
The three authors - a Swiss industrialist, the chairman of DuPont and the head of Royal Dutch Shell - say that a growing number of studies "show a link between the profitability of a company and its pursuit of social and environmental goals."
They also say heads of corporations are better placed to understand sustainable development than either governments or civic groups because the issues involved in sustaining a company and sustaining the planet are similar.
"Both require balancing acts between managing for the long term and managing for the short term," they say. "Companies that live only in the present may not notice disruptive technologies coming their way, as happened when some of the big computer makers missed the advent of the personal computer. Yet companies that base their strategy on meeting future needs - as did many of the dot-coms in the late 1990s - may burn through their resources before a market based on those needs emerges."
Some of the environmental organizations and thinkers argue that sustainability means taking the concept of development radically further.
According to Craig Bennett of Friends of the Earth, it means that oil companies should be planning already for the day they get out of the fossil fuel business rather than constantly trying to expand markets for un- renewable and climate-damaging petroleum.
He said that Friends of the Earth and the American president, George W. Bush, saw eye to eye on at least one thing: corporate accountability.
"He wants them to be financially accountable," Bennett said. "We think they should be environmentally and socially accountable as well."
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