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World Social Forum Conference on Transnational Corporations

by Joshua Karliner and Ted LewisCorpWatch and Global Exchange
February 1st, 2002

This paper was circulated prior to the Second World Social Forum in Porto Alegre, Brazil in February 2002. It was used as a point of departure to spark debate during a panel on transnational corporations, that CorpWatch co-chaired with Global Exchange, another San Francisco-based group.

Paper introduced by lead debaters, CorpWatch and Global Exchange*


SUMMARY PROPOSAL:

The current corporate-globalization paradigm, which prioritizes corporate profit maximization over human rights, labor rights and environmental rights, should be turned on its head to prioritize these universal life values.


ISSUES AND PROPOSALS:

Corporations have too much power...

It is well documented and widely accepted among those attending the FSM that transnational corporations and big business in general have increased their power greatly in the last decade. To note just a few indicators of this power:

  • In sheer size of economic activity, the giant corporations now rival all but the largest countries. Comparing corporate turnover to national GNP, fifty-one of the world's top 100 economies are corporations.

  • Royal Dutch Shell's revenues are greater than Venezuela's Gross Domestic Product. Using this measurement, WalMart is bigger than Indonesia. General Motors is roughly the same size as Ireland, New Zealand and Hungary combined.

  • There are 63,000 transnational corporations worldwide, with 690,000 foreign affiliates. Three quarters of them are based in North America, Western Europe and Japan. Ninety-nine of the 100 largest transnational corporations are from the industrialized countries.

  • These corporations profit from and perpetuate a racist global system that benefits the North, and a small minority in the South, at the expense of the vast majority of people in the South and a growing number of people (often of African, Latin American and Asian descent) in the North.

  • WTO rules overwhelmingly favor giant transnationals. In fact, these companies play a central role in shaping the WTO and other trade and investment agreements that allow corporations to increasingly transcend the state.

  • Cultural and media companies such as Disney sell their products almost everywhere in the world, and concentration of media in fewer companies has accelerated recently.

  • U.S. and other big business interests have succeeded in watering down and appropriating international environmental agreements.

...governments and corporations are intimately intertwined

Complicating any attempt to confront corporate power is the widespread support for the status quo among governments. There are few governments that deviate from accepting a basic dynamic of competition to attract investment to create jobs and wealth. At the United Nations, business' claim to represent "a part of the solution" to environment and development problems is accepted by the Secretary General and most delegations. The trend toward privatization is virtually worldwide. And political influence by corporations on governments is also widely accepted. The forms of this influence includes legal campaign contributions (e.g. US), direct representation in government (e.g. Italy) and corruption (e.g. Mexico).

We are fighting corporate power to promote another, more democratic, world...

At the same time, the "Seattle movement," which corresponds significantly to the World Social Forum, has identified "corporate-led globalization" and corporate power in general, as one of the main battlegrounds in our struggles.

Therefore, the movement against excessive corporate power is also a movement to expose its corrupting influence on governments and intergovernmental bodies, in other words, a movement to strengthen democracy, locally, nationally and internationally.

Many if not most of the groups represented at the FSM would agree on the need to reduce corporate power at local, national and international levels while increasing the power of the majority classes (eg. workers, family farmers and the small business sector).


PROPOSAL:

A key strategic goal of our movements should be the Separation of Corporations and the State. Just as the intertwinement of religion and the state can lead to a religious fundamentalist state antithetical to democracy, so can the intertwinement of corporations and the state lead to a corporate fundamentalist (or market fundamentalist) state-also antithetical to democracy. Separation of corporations and the state should also extend from local and national governance, to global governance institutions such as the WTO, World Bank, IMF, UN, etc..

...but we have different approaches within our movements.

Nevertheless, there are significant differences in approach between various sectors of our movements. This paper identifies some of those differences and makes proposals to better unify our efforts.

So let's get together.

***

Sectors, Individual Corporations, Structural Power

A great deal of the anti-corporate movement is made up of campaigns against the reputations and actions of specific corporations, such as Nike, Shell, etc. Complementary efforts focus on sectors, such as apparel, oil, nuclear power, etc. Some of us focus on the structures of corporate power per se, regardless of whether the corporations in question are "good" or "bad" actors.

Sometimes, the impression given to the press and public is that some corporations are good and some are bad, and it's just a matter of influencing the bad ones toward being better. As soon as the company does "better," the campaign is called off. It is difficult to convey the message that corporations in general are too powerful, or that an entire sector needs reform.


PROPOSALS:

  • Campaigns against specific corporations and their activities should include, in the analysis, the company's activities in other sectors.

  • Campaigns should contain the message that the rules giving corporations so much power must be changed.

  • Campaigns should seek to combine efforts of workers, environmental groups and communities negatively affected by corporations (not just in analysis, but also in devising demands and organizing strategies).

  • When appropriate, campaigns should seek to ally with alternative, smaller scale, local, more accountable businesses that are providing similar goods or services.

Dialogue versus Confrontation

Multistakeholder Dialogues and similar processes are in vogue, as is the concept of satisfying stakeholders in general. Yet many groups at the community level are still "engaged" in confrontation and direct action on corporations. In reality, negotiation with adversaries, corporate or governmental, is inevitable. As Martin Luther King Jr. wrote in his letter from a Birmingham Jail, negotiation is the purpose of direct action, and confrontations aim to create enough power and tension to force the powerful to negotiate.


PROPOSAL:

Negotiations with companies should take place when we have enough power to force concessions, rather than before. Negotiations and dialogue must not "sell out" the communities and workers affected by a company's actions and policies. Direct action must be seen as an important aspect of "engagement" by the social movements confronting corporations.

Corporate Responsibility v. Corporate Accountability v. Democratic Control over Corporations

(NOTE to translators: "Accountability" in English doesn't seem to have a good translation in most other languages. In Spanish, it might be "exigibilidad"; accountability can also be taken to mean "enforcement.")

In response to the pressure of public campaigns, transnational corporations have developed diverse programs of "corporate responsibility," that is, voluntary programs to improve their images and activities. These same corporations most often oppose measures for "corporate accountability," defined here as mechanisms for enforcing rules for companies.

Social movements often endorse the promises of corporate responsibility, and the United Nations, is also promoting it. One popular approach to is encourage corporate responsibility by rewarding it in the marketplace, through shareholders and consumers. Another approach is to form partnerships with government and NGOs, so as to promote the "shared values" of these sectors.

However, these approaches are also a source of frustration for some, because the very same corporations promoting their corporate responsibility, are actively working to prevent measures for corporate accountability, such as international treaties and conventions, transnational lawsuits, national legislation, personal liability, and so on.

In fact, it is acknowledged by the corporations themselves that promotion of corporate responsibility in environment, human rights, poverty alleviation and community service is, in part at least, a tactic aimed at avoiding accountability measures -- legislation and regulation of corporate behavior.


PROPOSALS:

  • Campaigns for corporate responsibility should include advocacy of corporate accountability measures.

  • Corporate pledges of responsibility to communities, governments or the United Nations must not be taken at face value, but rather monitored.

  • Indexes for measuring corporate responsibility must include an evaluation of their stand on accountability.

  • Companies lobbying against and evading accountability, should not be considered "responsible."

  • An important step toward forging corporate accountability is for countries where transnational corporations are based to require transparancy through "right to know" laws, that compel companies to publicly disclose important information about the impacts of their global operations.

  • Binding rules on transnational corporate behavior should be established through a Framework Convention on Corporate Accountability.

  • Campaigns for responsibility and accountability should be geared to also help build a broader movement for greater democratic control over corporations (eg. profit maximization subordinated to human, labor and environmental rights; separation of corporations and the state).

Reform versus Banishment

Some anti-corporate campaigners in the U.S. are promoting the idea of "de-chartering" corporations that are especially bad. (In the U.S., corporations are chartered by the state in which they are headquartered.) For environmental campaigners, for example, there is great appeal to the idea that a company can receive a corporate "death penalty" as a deterrent to other companies.

But for workers, that ultimate punishment for a corporation would cause a loss of jobs without hope for a transition.

On the other side of the coin, organized workers seek to engage corporations in a social dialogue to improve corporate commitments to worker rights, while environmental campaigners do not always have the leverage or access to influence corporations in a "dialogue" setting. The interests of workers and environmental campaigners are not always the same.


PROPOSALS:

  • Environmental and human rights campaigns that seek to eliminate a corporation or a major corporate activity, should include dialogue with labor and provisions for a just transition for workers and communities.

  • We should build communication and trust among the trade union movement, progressive NGOs working on human rights and the environment, and community-based initiatives working for social justice, fair trade, renewable energy, organic food, etc..

  • Examples of positive collaboration between these sectors -- such as in opposing free trade agreements -- should be built upon and strengthened.

  • Collaboration between social movements in the South and the North fighting for corporate accountability and democratic control over corporations should be strengthened.

* CorpWatch is a US-based organization working to hold corporations accountable on issues of human rights, labor rights and environmental justice. We are secretariat for the international Alliance for a Corporate-Free United Nations and work as part of various other North-South networks. www.corpwatch.org

13101310Global Exchange is a multicultural human rights organization dedicated to promoting environmental, political, and social justice around the world. Since our founding in 1988, we have been striving to increase global awareness among the US public while building international partnerships. www.globalexchange.org