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Corporate Europe Observer - Issue 7
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ICC steps up counter-campaign against critics of corporate-led globalisation

"The economic and political environment is still in the hands of governments. We need to give them a clear message. Time is short and we need to adjust quickly. The aim is to create shareholder value. The public and the governments have to understand this."

- Gyorgy Mosonyi, CEO of the Hungarian oil company MOL [1]

ver 1,000 industrialists gathered at the 33rd World Congress of the International Chamber of Commerce (ICC), May 3-5th 2000 in the Hungarian capital Budapest. Also in attendance were many politicians from Central European (CE)[2] countries as well as representatives from international institutions such as the United Nations, World Bank, International Monetary Fund and the World Trade Organisation.

Investing in Central Europe

After its relaunch in the mid-90's, the International Chamber of Commerce (ICC) has emerged as arguably one of the most ambitious and influential global business lobby groups, enjoying privileged access to the most powerful international institutions and decision-making fora. The 33rd World Congress in Budapest enabled the ICC to promote its agenda to the many Central European (CE) political leaders who participated in the corporate event. The Congress slogan - 'The New Europe in the World Economy' - and the choice of Budapest for the venue, reflected the business community's support and eagerness for dramatic restructuring of Central European economies and social structures.

Many CE countries are forced to implement sweeping restructuring programmes in order to comply with strict criteria for membership into the European Union- in many ways akin to the infamous Structural Adjustment Programmes of the International Monetary Fund (IMF). Although industry to date, has been generally pleased with the pace of restructuring in the East, Western European industrialists who dominated the Congress, urged the CE leaders to continue transforming their economies and societies along the prescribed neoliberal formula. Speakers portrayed the EU's eastward enlargement as an irreversible process while openly referring to the "tempting access" to new markets the process offers corporations from the West.

The ICC leadership presented their 'New Europe' vision, in which democracy is subjected to the disciplines of financial markets and where competitiveness is the leading principle of policy-making. Politicians from the region dutifully reported on how successfully they have imposed the 'unpopular measures' needed to get closer to EU membership and become more attractive to foreign investors. Yet not one speaker mentioned the negative impacts which the dramatic restructuring of these societies has had on social standards, employment and the environment in the region.

The Budapest Congress was also an opportunity "to strengthen the ICC's presence in the region," explained ICC Secretary General Maria Livanos Cattaui. Central European companies were encouraged to join the ICC, with promises of gaining political influence both at the national and international level. Cattaui explained that much of this influence comes from the ICC's privileged access to national governments as well as institutions such as the United Nations and the World Trade Organisation. Despite the fact that the event took place in Hungary, few business leaders from the region had been invited to speak.

All on board for a new round

The ICC also used the Budapest Congress to promote the launch of a 'Millennium Round' or new round of negotiations in the World Trade Organisation (WTO). Six months after the failure to launch such talks in Seattle, the ICC's ambitions for a global round to further liberalise trade and investment remain unchanged. In the 'Budapest Business Declaration', the statement presented on the last day of the Congress, the ICC pledged to "continue to press governments to create a consensus to begin a new, broad-based round at an early date." [3]

The presence of WTO Director General Mike Moore at the event, belied the close ties between the ICC and the world trade body. Moore took the opportunity to urge the US Congress to vote in favour of China's accession, arguing that "business will get better access to an economy of 1.3 billion consumers that is growing at 8% a year." Dismissing critics of the WTO, Moore recited one of his favourite sound bytes, "2,000 people may have rioted against capitalism in London this week, but thirty countries, more than 1.5 billion people, are queuing up to join the WTO." Moore concluded his address to the corporate assembly, by encouraging business to work harder to launch a new round, "We need others to speak out on our behalf too. That is where you can help. Businessmen are not doing enough to promote freer trade." The WTO boss reassured the corporate leaders that, "There is no shame in pushing hard for a new round of trade liberalisation. Free trade are not ugly words."

Chiming-in in support of a new round, were also the former GATT and WTO Directors-General, Arthur Dunkel and Peter Sutherland, now both top industrialists and leading 'corporate politicians'. The two chair the Trade and Investment Working Groups of, respectively, the ICC and the European Roundtable of Industrialists (ERT). The substance of future negotiations was much discussed, however there was little talk of expanding the negotiations to a new agreement to deregulate investment rules globally. Columbia University Professor Jagdish Bhagwati, a leading US proponent of neoliberal globalisation, was alone in bringing-up the controversial investment issue. Bhagwati, former advisor to Dunkel, advised business not to push this demand "for at least 5 years," in order to avoid waking-up the ghost of the recently drowned Multilateral Agreement on Investment (MAI), "that was handed so badly by the OECD." The ICC continues to oppose social and environmental clauses in the WTO calling for "non-trade issues such as human rights, labour standards and environmental protection" to be dealt with by other bodies, namely the United Nations. [4]

The NGO Threat

A recurring theme during the three-day meeting was the perceived threat to the process of corporate-led globalisation posed by NGOs and civil society movements. In his opening speech, ICC President Adnan Kassar warned participants that the main challenge for business today, "takes the form of a highly vocal and well-organised array of special interest groups with their own agendas." Fears about a backlash to the corporate agenda was a constant worry among participants. Almost every session, regardless of the issue on the agenda, turned into a discussion on how to counter the globalisation-critics.

Most speakers did their best to downplay the importance of the Seattle protests, reassuring each other that the media had exaggerated and that anti-WTO demonstrators were simply "badly informed protectionist forces." Others called on business to be more proactive and directly engage in dialogue with other 'stakeholders', including NGOs as a way to preempt future action against industry. Shell's Phil Watts, a well-known proponent of this strategy, suggested to "promote and participate in dialogue among business, governments, inter-governmental bodies and NGOs to help business maximise its contributions to society."

Watt's recommendations provoked heated reactions from Nestlé's Helmut Maucher, former ICC President, who was very hostile to the idea of including NGOs in such dialogues. Peter Sutherland, Chair of Goldman-Sachs and BP Amoco, defined the Seattle demonstrators as "an unholy alliance of protectionists, with no real objective other than to close the opening of opportunities for others," and warned against the risk of letting NGOs lead the debate. Nemir Kirdar, CEO of Investcorp asserted that, "The issue is not to discuss whether globalisation is good or not, just how to benefit from it." Bhagwati, meanwhile, called on business to focus on politicians rather than NGOs. He described Seattle as a wake-up call for free-traders, "Now you have to fight for what you believe in, rather than expect to get it delivered by politicians who are not yet ready for it." Bhagwati singled-out UK Prime Minister Tony Blair as the exception. His unabashed public criticism of the anti-capitalist May Day protests in London earned him much respect from the neo-liberal economist. "He was great, he has guts. This is the kind of leadership we need," Bhagwati said.

World Business Organisation?

Many speakers were full of self-praise for the work they've done in breaking-down barriers, penetrating markets, shrinking government and building a global economy. But their confidence and zeal was occasionally shaken by interventions from the floor. Some business people from India, South Africa, Bangladesh and other 'developing' countries challenged the assertions made by the ICC leadership that corporate-led globalisation was a 'win-win' process. While as successful business people, they admitted benefiting themselves from globalisation, they also pointed out that globalisation has its losers and that the corporate leaders shouldn't ignore this. Concerns were raised about increasing income gaps, negative impacts on employment and the environment, as well as the limited chances for small business and other local companies to survive competition with Northern transnational. ICC leaders however, aggressively dismissed these 'in-house' critics claiming that by making such statements, they were "threatening globalisation itself."

Exchanges such as these, often along the fault line of North and South, revealed cracks in the ICC's self-promoted image of being the 'world business organisation'. The reality is that the ICC is dominated by the world's largest and most powerful transnational corporations which aggressively pursue their own interests often times without even seeking consensus in the world business community for which it claims to speak for. However, the dissension in the ranks was not worthy of mention as the final declaration reiterated the ICC's claim to be "the collective voice of business throughout the world."

From bluewash?

The ICC is keen to pull the rug from underneath the critics of globalisation by dispelling any public fears about the effects of globalisation. Being a business organisation, it's main strategy for achieving this is by engaging itself in an intense marketing campaign for globalisation. 'An Opportunity, Not a Threat' is the title of the 'Budapest Business Declaration'. It states that, "Business accepts that it has an indispensable role to play, together with governments, in explaining the benefits and opportunities that flow from the global economy and a readiness to adapt to change. The fears and misconceptions must be dispelled." [5] ICC President Adnan Kassar, warned the participants that business should be prepared to answer questions related to the downsides of globalisation. Discussions were, however, not focused on finding solutions to the very real problems which have brought about public "fears and misconceptions," but on how to be 'perceived' to be doing so, exposing an attitude of deep cynicism and self-interest which pervades the business community.

One of the strongest weapons the ICC will have in its arsenal to try to fend-off the critics of globalisation, will be the Global Compact with the United Nations (see update on the UN Global Compact in this issue). In this non-binding agreement launched in July 1999, ICC member corporations promise to become 'global corporate citizens' and embrace UN social, environmental and human rights principles in their mission statements and practices. Since signing-up, the ICC has been eagerly using the Global Compact as a tool to improve the image of its member corporations. Kassar, seeking to fully exploit the PR potential of the Compact, outlined plans to enlist, "the support of international media organisations to make the business response to the Global Compact even more widely known."

UN Secretary-General Kofi Annan, in a video-taped message to the Budapest Congress, told the ICC that without "corporate citizenship, we will see the backlash against globalisation grow even stronger." Most business leaders at Budapest supported the Global Compact as a golden opportunity for business to win the globalisation debate, but they made it clear that it should never lead to binding obligations for business. "Let me make an important proviso. There must be no suggestion of hedging the Global Compact with formal prescriptive rules. We would resist any tendency for that to happen," Kassar warned.

With its close links with the UN's leadership, the ICC aims to ensure that the debate on regulating the global economy stays within the narrow parameters of the corporate agenda. The 'Budapest Business Declaration' states that, "a balance between freedom and rules needs to be achieved for the smooth functioning of the market economy and the good management of globalisation."[6] In the ICC's hypocritical view, such a balance consists of full industry self-regulation and international rules to protect corporate interests, while avoiding rules that regulate corporate conduct.

?to greenwash

UN Environmental Programme (UNEP) Executive Director Klaus Töpfer, in his speech to the Congress, was full of praise for the partnership between his agency and the corporate lobby group. He even declared that he viewed the ICC as a tool for solving environmental problems. The ICC's Maria Livanos Cattaui and Lord Holme of Cheltenham, who chairs the ICC's Commission on Environment, had much praise for UNEP. An awards ceremony for the first ever joint ICC/UNEP 'Millennium Environmental Award' was held at the Congress. The awards, which will now be an annual event, were given to 12 relatively unknown ICC member companies from around the world - "green heroes," according to Töpfer. The minor environmental achievements of these companies were celebrated as proof of industry's commitment to UN principles.

The 'other' Budapest Declaration

Much to the consternation of the ICC, the Budapest event was met with a large demonstration by local grassroots activists, protesting against the increasing political power of corporations and their lobby groups. The protestors charged that large corporations were responsible for many of the environmental problems that the world is facing - from global warming to the unchecked spread of genetically modified organisms. Hungarian groups drafted their own 'Budapest Declaration' in which they emphasised the social and environmental harm that corporate-led globalisation has inflicted upon Hungary. They referred specifically to the destruction of small businesses that can not compete with large foreign corporations as well as the virtual collapse of traditional areas of economic activity such as in the textile and agricultural sectors.[7]

They argued that the model of development promoted by the ICC and its member companies has worsened welfare conditions, increased unemployment and expanded the growing gap between rich and poor. The Hungarian groups stated their intention, "to join the worldwide movement which had its peak in Seattle." The declaration was addressed to the participants of the ICC Congress and delivered to the Chairperson of ICC Hungary, Károly Henger. In his speech, during the closing session of the Congress, Henger did not refer to the protestors or the statement at all, preferring to ignore his fellow Hungarians still protesting outside the conference centre.

This was not the first time the ICC was beleaguered by protestors. ICC offices in the UK and France were previously targeted by activists outraged at the role the lobby group played in developing and pushing for a Multilateral Agreement on Investment (MAI).[8] The ICC's 1998 Geneva Business Dialogue [9] was also met with similar demonstrations as protestors accused 'NesKofi Annan' of essentially selling the UN to corporate interests. The protests in Budapest marked another milestone in the growing awareness of civil society groups and their mounting discontentment and outrage at the arrogance of industry. Industry groups such as the ICC and others of the same ilk, such as the Transatlantic Business Dialogue (TABD), the European Business Summit (EBS), and the World Economic Forum (WEF), must now resign themselves to a future plagued with protests and a growing globalisation-critical movement that will keep its sights firmly on the likes of the 'World Business Organisation'.


1. Please note that all quotes are taken from notes made at the Congress, unless otherwise indicated.| Back to Text |

2. Central European political and business leaders repeatedly emphasised the distinction between Central and Eastern European countries. This was also evident by the overwhelming attendance of Central European leaders and delegations, whereas the Eastern countries were very underrepresented.| Back to Text |

3. "The Global Economy: An Opportunity, Not a Threat," The Budapest Business Declaration, ICC, Hungary, 5 May 2000.| Back to Text |

4. Ibid.| Back to Text |

5. ibid.| Back to Text |

6. ibid.| Back to Text |

7. The full declaration can be found on the CEO website at http://www.xs4all.nl/~ceo/icc/budapest.html
| Back to Text |

8. See, "MAIgalomania: Citizens and the Environment Sacrificed to Corporate Investment Agenda," published by Corporate Europe Observatory, February 1998.| Back to Text |

9. See, "The Geneva Business Dialogue: Business, WTO and UN Joining Hands to Regulate the Global Economy?" Corporate Europe Observer Issue 2, October 1998.| Back to Text |

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