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WORLD: The Scariest Predators in the Corporate Jungle

by Thalif DeenInter-Press Service
May 23rd, 2006

The world's oil, gas and mining industries account for nearly two-thirds of all violations of human rights, environmental laws and international labour standards, according to a soon-to-be-released United Nations study.

The food and beverages industry is a distant second, followed by apparel, footwear, and the information and communications technology sector.

"The extractive industries -- oil, gas and mining -- also account for most allegations of the worst abuses, up to and including complicity in crimes against humanity," says the interim report titled "Promotion and Protection of Human Rights". A more detailed study is expected to be released later this year.

These are typically for acts committed by public and private security forces protecting company assets and property; large-scale corruption; violations of labour rights; and a broad array of abuses in relation to local communities, especially the indigenous peoples.

Asked for her comments, Kathryn Mulvey of Corporate Accountability International told IPS that human rights abuses by extractive industries are among "the most concentrated, visible and urgent to address".

"Abuses by other industries such as tobacco, which claims five million lives around the world each year, have not typically been framed as human rights issues, but that is changing," she said.

The interim U.N. study, by a team headed by John Ruggie, a special representative of Secretary-General Kofi Annan, was conducted in response to a resolution by the now-defunct U.N. Commission on Human Rights.

"The problems of corruption and the misallocation of public revenues have been endemic," the report points out. "They undermine the rule of law, impede the pursuit of social objectives, and contribute to conflicts that frequently foster human rights abuse.."

"There being no global repository of comprehensive, consistent and impartial information, we cannot say with certainty whether abuses in relation to the corporate sector are increasing or decreasing over time, only that they are reported more extensively because more actors track them and transparency is greater than in the past," the report points out.

According to the Geneva-based U.N. Conference on Trade and Development (UNCTAD), there are some 70,000 transnational firms worldwide, together with roughly 700,000 subsidiaries, and millions of suppliers spanning every corner of the globe.

Last week, Ruggie met with several non-governmental organisations (NGOs), including human rights groups, mostly based in New York, primarily to brief them on the progress made in relation to protection of human rights vis-a-vis transnational corporations. "The general mood was that his interim report leaned way too much in accommodating business priorities," a spokesman for one of the participating groups told IPS.

He said that Ruggie is planning several regional consultations, including one in Colombia and another in Thailand in late June. "He wants to do site visits to companies, as well as affected communities."

Mulvey said that in most industries -- from water to tobacco -- "transnational corporations engage in irresponsible and dangerous actions". "When campaigns have been organised to protect people and save lives, we have won gains on an issue-by-issue basis," she added.

To reverse the tobacco epidemic, health and human rights advocates have a great tool in the first global corporate accountability treaty, formally known as the Framework Convention on Tobacco Control.

"But in a world where more than one billion people don't have safe water to drink, we must strengthen and enforce international legal instruments to prevent corporate interference in the human right to water," she added.

"Transnational corporations are responding to the demand that they be accountable to people and communities, but in the long run, democratic global institutions and enforcement mechanisms are necessary to stop abuses," Mulvey added.

According to the report, the United Nations is the process of surveying the "Fortune 500" companies -- 500 of the world's biggest corporations -- in relation to the protection of human rights. But only about 80 companies have responded so far.

Asked why, Mulvey said: "This demonstrates why we need global human rights norms that are binding on corporations, with teeth." She said that reporting must be mandatory, as standard as financial reporting, with a rigorous auditing regime.

"The adoption of the Human Rights Norms for Transnational Corporations by the Sub-Commission on the Protection and Promotion of Human Rights was a step in that direction", and Ruggie should build on that progress, she added.

Speaking generally of corporate responsibilities, Saradha Iyer of the Malaysia-based Third World Network told IPS: "I personally do not think corporations have played their role in sustainable development."

In fact, she said, they have pushed for sustained economic growth with little or no regard for the Rio principles -- laid down at the 1992 Earth Summit in Brazil -- that the "polluter pays", or the precautionary approach when it comes to the environment. "They get away with impunity because they have already paid to rig legislation in their favour and therefore appear to have complied," she added. That is the reason, she said, the Papuans and others are protesting in the streets and blockading access to mines.

"Given the recent spate of violations by oil and mining companies, they are going to up the ante on further green-washing," she added.

The United Nations has also been promoting the virtues of its own "Global Compact", described as "the world's largest corporate responsibility initiative", with nearly 3,000 corporate participants and other stakeholders.

But Iyer of the Third World Network said: "The Global Compact has become adept at surveys and publications that tout its members contributions."

While a few corporations are taking a longer term perspective on the issue, she said, the majority pay lip service to the triple bottom line -- and that only because ratings agencies and shareholders are behind the pressure for change.

The U.N. study also said there are at least three "distinct drivers" behind the increased attention on transnational corporations.

The first is simply the expression of one of the oldest axioms of political life: the successful accumulation of power by one type of social actor will induce efforts by others with different interests or aims to organise countervailing power.

"When large firms in industrialised countries first became major players on the national scene in the late 19th century, countervailing efforts came from labour and faith-based communities, among others, and ultimately from the state," the study said.

At the global level, a broad array of civil society actors has been in the lead. Moreover, when global firms are widely perceived as abusing their power -- as was the case with major pharmaceutical companies concerning pricing and patents of AIDS treatment drugs in Africa -- a social backlash was inevitable, the study noted.

The second driver, according to the study, is that some companies have made themselves, and even their entire industries, targets by committing serious harm to human rights, labour standards, environmental protection and other social concerns.

A third rationale for engaging the transnational corporate sector is the sheer fact that it has global reach and capacity, and that it is capable of acting at a pace and scale that neither governments nor international agencies can match.



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