August 2002
This briefing is a report and analysis on the outcomes on corporate accountability of the Johannesburg World Summit on Sustainable Development (August/September 2002). Corporate accountability and the role of big business was a major issue at Johannesburg. In the end governments reached an agreement that opened the door to binding corporate accountability, but did not actually commit themselves to it. Friends of the Earth International worked intensively on this issue and while the result is a modest boost for communities suffering from bad business practices, it is deeply flawed and there remains a long campaign ahead.
1. What Friends of the Earth International Was Calling For
FoEI and our colleagues in other non-governmental organisations were calling for a binding legal framework to deliver corporate accountability – in other words rules for big business. This would include: liability of companies for their activities; rights for citizens and communities to protect their resources and to challenge bad business practices; duties for companies on social human rights and environmental matters; adherence to better practices detailed in international agreements (such as International Labour Organisation conventions); improved transparency and disclosure; and an institution or instrument under the United Nations to enforce compliance. In short FoEI called for an international framework to secure corporate accountability under the United Nations with a specific commitment to a process to deliver it. International and local community groups came together before the Summit in South Africa and agreed a clear and forceful resolution on people's action for corporate accountability which can be found at http://www.groundwork.org.za/WSSD/resolution_August_2002.htm
2. What Governments Agreed
Inter-governmental agreement
The most significant agreement at Johannesburg was outlined in paragraph 45 of the Summit outcome (known as the Plan of Implementation) in a section on globalisation: "45.ter Actively promote corporate responsibility and accountability, based on Rio Principles, including through the full development and effective implementation of intergovernmental agreements and measures, international initiatives and public-private partnerships, appropriate national regulations, and continuous improvement in corporate practices in all countries." Such an agreement does not amount to hard international law, but it does oblige the governments who signed up to it to follow-up the words they agreed. However, in the documentation that accompanies the agreement, the World's largest economy, the United States has formally stated it believes this agreement only "refers to existing intergovernmental agreements and international initiatives". In other words, the United States is already blocking the idea of new Global mechanisms to deliver legally binding corporate accountability. But there were also less helpful agreements in the final Plan. In another section about sustainable production and consumption, governments agreed to: "17. Enhance corporate environmental and social responsibility and accountability. This would include actions at all levels to: (a) Encourage industry to improve social and environmental performance through voluntary initiatives, including environmental management systems, codes of conduct, certification and public reporting on environmental and social issues, taking into account such initiatives as the International Organization for Standardization (ISO) standards and Global Reporting Initiative guidelines on sustainability reporting, bearing in mind Principle 11 of the Rio Declaration on Environment and Development; (b) Encourage dialogue between enterprises and the communities in which they operate and other stakeholders; (c) Encourage financial institutions to incorporate sustainable development considerations into their decision-making processes; (d) Develop workplace-based partnerships and programmes, including training and education programmes." In the section relating to institutional arrangements to deliver the Plan governments agreed to: "122(f) Promote corporate responsibility and accountability and the exchange of best practices in the context of sustainable development, including, as appropriate, through multi-stakeholder dialogue, such as the Commission on Sustainable Development and other initiatives;" In the overall Political Declaration which accompanied the Summit, governments watered down even the modest aspirations in the Plan outlined above and stated: "24. We agree that in pursuit of their legitimate activities the private sector, both large and small companies, have a duty to contribute to the evolution of equitable and sustainable communities and societies. 26. We agree that there is a need for private sector corporations to enforce corporate accountability. This should take place within a transparent and stable regulatory environment."
Partnerships
A major outcome of the Summit was a long list of voluntary ‘partnerships' between governments and businesses on various specific initiatives such as gas flares, investment principles and tourism. The need for partnerships was a foundation of the corporate lobbyists' message and they proved to be extremely successful in convincing governments they were the main way forward. In fact even some business lobbyists were shocked by the overwhelming emphasis governments put on partnerships rather than on delivering a substantial inter-governmental agreement with good targets. Lord Holme of Business Action for Sustainable Development (BASD) said in the Financial Times: "The UN would like a lot of new partnerships. But business is really showcasing partnerships that are already in existence."
3. Analysis of Official Outcome
Strengths:
Weaknesses:
In short, the agreement on this issue is better than expected, but only a curtain-raiser for what is actually needed. The need for a time-bound target and explicit commitment to new international binding rules (such as a convention) remains. The need for a follow-up conference or UN process remains. The overemphasis on partnerships rather than government-led action and resources is a matter of great concern.
4. Other Summit Outcomes on Big Business
Greenwash exposed
The role of some corporations and business lobby groups in greenwashing their image was comprehensively exposed. International media coverage was deeply critical of the two-faces of business – the (often clumsy) attempts at positive PR compared to the reality or corporate bad practices; and the re-branding of corporate baddies suddenly as corporate goodies – for example how oil companies have suddenly marketed themselves as renewable energy companies.
Political debate
In the build-up to Johannesburg, some governments commented that the main issue brought forward from civil society that had shaken them was corporate accountability. The campaign initially shifted the G77 (the block incorporating developing countries) towards support for an international binding framework. Then the European Union was put under pressure and changed its position of wanting business voluntarism only. Finally some countries, such as Canada, Japan and New Zealand that had originally opposed any reference to international corporate accountability, decided to no longer maintain their open opposition. However right up to the end, the US expressed its objections to action on corporate accountability and sought to block the development of new treaties. In short the campaign introduced a major issue to the World stage and changed international opinion. But the political will to deliver necessary change remains patchy. Various UN bodies have also found common cause with the agenda. The United Nations Environment Programme in particular published a summary of 22 industry sector reports on performance since Rio stating that a few corporations had embraced sustainability, but for the ‘majority, it has been ‘business as usual'. Civil society consensus Friends of the Earth International was seen as the leader on this issue, but it was genuinely a Global concern voiced by hundreds of other groups and networks. It found support from mainstream international groups such as Eco-Equity coalition (including Oxfam, Consumers International and WWF) but also from a broad set of radical and community groups, indigenous people, youth, women and farming groups. A core coalition did much of the practical work: FoEI, CorpWatch, Christian Aid, Greenpeace International and Third World Network; but many, many other groups were constantly raising the issue throughout the Summit process. The Summit has seeded an active coalition looking towards future opportunities to press the issue further.
Wider public
The issue has begun to move into the mainstream as indicated by a huge amount of media coverage and analysis. In particular FoEI's analysis has been embraced by some commentators (for example former UK conservative environment Minister John Gummer).
5. What FoEI Did
Challenging governments
FoEI identified and agreed the need to press for binding corporate accountability at the Summit in 2000. A position was launched during the formal preparations for the Summit a year before it actually took place. In January 2002 the issue was firmly put on the official agenda and clear, unambiguous (and useful) language was published by the Chair of the Conference, Professor Salim. At every stage from this point the United Nations placed firm language which was subsequently weakened by governments during negotiations. Campaigning effort was consolidated at the Bali meeting in May 2002 preparing for the Summit. Here the G77 recognised the need for key elements of the FoEI proposal. At Johannesburg first the EU, then other powerful OECD countries changed their positions on the agreement. One Minister commented this was the best campaigning effort he had ever experienced.
Challenging Big Business PR
The relentless positivism of the business lobby group created for the Summit, Business Action for Sustainable Development (BASD), was undermined by two challenges: exposure of corporate bad practices and exposure of greenwash. The former was, for example, demonstrated through the FoEI Clashes with Corporate Giants report. The latter was lampooned through the Greenwash Academy's Green Oscars awards which presented awards to those companies acting as if they were green (see www.earthsummit.biz). FoEI further exposed the role of business lobbying through routes such as Exxon-backed pro-business think-tanks pressuring the Bush administration to return from Johannesburg without any new targets and timetables. The BASD and other lobby groups (the International Chambers of Commerce and World Business Council for Sustainable Development) resorted to calling anyone who disagreed with them questioned the role of business being ‘Marxists'. They responded to FoEI's campaign by rejecting any idea of an international framework stating instead they supported national regulations. This supported the US position that the key issue for the developing World governments is ‘governance' by which they mean providing a climate of certainty where multinationals can operate. The BASD tried to limit the understanding of what accountability means to just being about ‘reporting' of social and environmental matters in the same way as financial matters are reported in accounts. There were, too alternative voices from business which were not in tune with the line from lobby groups and multinationals. But because they tended to be from small and southern-based enterprises, they were drowned out by the bigger competitors.
Action and Mobilizing
FoEI devised and worked with the local Johannesburg community to build a huge corporate giant statue dwarfing thousands of small figures representing ordinary citizens. This installation was the manifestation of thousands of messages collected in the run up to the Summit from around the World. A six metres-tall inflatable corporate giant toured Europe and other parts of the World carrying the message: "Don't let big business rule the World" and calling for "Rights for people, rules for big business". Thousands of postcards were collected at these and other events. FoEI mobilised tens of thousands of people with Radio Earth Summit to bring people's views of big business across. The postcards and messages on specially constructed web sites www.radioearthsummit.org and www.rio-plus-10.org formed ways in which people could have their opinions heard at the Summit, manifested through the giant statue, thousands of figures and a soundscape of messages just outside the Summit venue. www.rio-plus-10.org also featured the best up to date information on the Summit's progress and Radio Earth Summit broadcast across Africa and its packages were used around the World. FoEI further joined with other groups to launch the Greenwash Academy's Green Oscars with a glittering ceremony at Johannesburg and its supporting web site www.earthsummit.biz. Innumerable activities around the World raised the issue in different ways including mass protests in New York, Bali and Johannesburg. Community testimony about corporate bad practices was at the heart of campaigning effort and FoEI joined in efforts around the World Sustainability Hearings which shared testimony on corporate bad practices.
Policy
FoEI published critiques of voluntary business mechanisms and public-private partnerships and specific partnerships such as Croplife and the London Principles. Close links were developed with other groups creating momentum behind key ideas and analysis. New ideas were lodged with all of the World's governments with a clear demonstration that there is, in one respect at least, an alternative to corporate-led globalisation.
6. What Happens Now?
Johannesburg saw the launch of Friends of the Earth's campaign for rights for people and rules for big business. The campaign is set to press for political will to deliver meaningful accountability of big business and a just trade system and will now focus on the lead up to the World Trade Organisation Ministerial meeting in Cancun, Mexico in September 2003. Cancun threatens to give further rights to big business through, for example, liberalising services and investment and has still not dealt with the serious critique of groups such as FoEI expressed at previous Ministerial meetings such as Seattle and Doha. The campaign will continue to call for a UN-based instrument to secure corporate accountability while emphasising the need to halt attempts to develop a corporate charter under the WTO liberalising investment and services. At a political level the experience of what happened on sustainable development since Rio was that governments ignored as much as they could. Therefore progress on corporate accountability will only come from concerted public action. Until that happens, big business still rules.
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