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Corporate Europe Observer - Issue 10
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Responding to UNED

The following is a reply to a letter sent to us by Felix Dodds, UNED Forum Executive Director, reacting to an article in the last Observer (Issue 9) entitled "Rio +10 and the Corporate Greenwash of Globalisation". Dodds' letter is reproduced in full below.

Dear Mr. Dodds,

Thank you for your response to our article in the last issue of the Corporate Europe Observer (Issue 9).[1] As you know, the substance of the article focuses on business preparations for the World Summit on Sustainable Development (WSSD) to be held next year in Johannesburg. It takes a cursory look at some of the industry initiatives which are taking place in the run-up to Rio +10, including the formation of the Business Action for Sustainable Development (BASD) group,[2] as well as corporate participation in 'multi-stakeholder dialogues' and partnerships with NGOs as central elements of their strategies for Rio +10.

The central argument we make in the article is that transnational corporations, operating through lobby groups such as the World Business Council on Sustainable Development (WBCSD) and the International Chamber of Commerce (ICC), are working tirelessly to prevent any efforts to achieve binding international regulation of corporations. They have established themselves firmly within the deregulated environs of the global economy, and exert ever more influence over the United Nations system, considered by many to be the last vestige of international democratic accountability in the age of corporate-led globalisation. Through a multi-pronged public relations strategy of branding, image management, intensive lobbying, adoption of voluntary codes of conduct, and dialogue with so-called 'civil society groups', TNCs are hoping to stave off those demanding strong, enforceable and effective regulations.

They are keenly aware that there are many in the movements challenging corporate-led globalisation who are working to achieve just that and who are targetting the Johannesburg summit as the ideal opportunity to place the issue firmly on the international agenda. Similar calls for binding and enforceable global rules governing corporate behaviour are increasingly being echoed by many within government departments and some United Nations institutions as well. Transnational corporations appear to be in a mild panic over this emerging threat to their interests, as the increasingly querulous newspaper editorials by corporate personalities like the ICC's Maria Livanos-Cattaui reveal.[3]

However, not to be outdone, corporate lobby groups are seeking to entrench themselves in both the official and unofficial preparatory processes leading up to the Johannesburg summit, and by doing so, gaining some modicum of control over the outcomes, as was the case with the original Earth Summit in Rio de Janiero. We contend that the main motivation for industry's eagerness to participate in the various official and unofficial preparatory initiatives such as multistakeholder dialogues, including UNED's, does not stem from some altruistic regard for the Rio conventions, but rather to ensure that any concrete outcomes from the process do not harm corporate interests.

Many advocates of multistakeholder approaches often admit that corporations can be obstructive, but maintain that 'enlightened self- interest' can be a 'win-win' situation. Often people judge groups like the WBCSD and the ICC, much to their delight, as benevolent organisations trying to change corporations for the better. Many of these impressions are based largely on the rhetoric and public profile of these groups. Indeed, if one reads the many WBCSD documents proclaiming itself to be 'Dedicated to Making a Difference', replete with soothing language on sustainability and industry commitment to environmental protection, one may get a very favourable impression of them. But beyond the glossy brochures, is an organisation that is dedicated to lobbying aggressively on behalf of its corporate members, and that is where a critical assessment of these groups is crucial. When one looks at their day-to-day activities, the evidence suggests that rather than focusing solely on changing business practices, they spend much of their resources on lobbying in every major international treaty process which may impact business. Their lobbying positions, set by their member corporations which include some of the world's most notorious environmental polluters and human rights abusers, have successfully watered-down and diminished effective environmental and social conventions in almost every field from climate change to chemicals.

To support this assertion, we've recently published a short exposé on the ICC, which documents how obstructive the group has been with regards to the Rio Conventions and subsequent environmental agreements.[4] From the Convention on Biodiversity, to the Kyoto Protocol, the ICC in tandem with what is now the WBCSD, has been there blocking progress and weakening provisions all along the way. The ICC effectively led the campaign to abolish the UN Center on Transnational Corporations, a UN agency which was looking into regulating transnational corporations (TNCs), and mandated to prepare proposals for the original Rio Summit. Progress at the Rio Summit itself was hampered by the obstructive influence of corporate actors, leading to weak and non-binding commitments in many fields.

Follow-up negotiations in the Convention on Biodiversity (CBD) and Convention on Sustainable Development (CSD) were also hampered by the obstructive influence of corporate lobby groups. In the CSD multi- stakeholder review of voluntary codes you refer to in your letter, you failed to mention that the ICC and others managed to water down the mandate of the review to only look at an "exploration" of the elements of a "potential" review, and then ultimately pulled-out of the process anyway. Since then, there has been no movement on the issue and the process has effectively stopped dead in its tracks. Given that, how can you draw the conclusion that it did, "move on the debate?"

While trying to present a progressive and sincere attitude about environmental and social responsibility to the general public, internally corporations openly admit to themselves that their primary motivation is to influence the global debate in their favour and improve their image in the process. Sir Mark Moody-Stuart, former CEO of Royal Dutch Shell and current head of the new Business Action for Sustainable Development (BASD) group, affirmed that the aim of the BASD is, "…to ensure the world business community is assigned its proper place for the Summit and that we are seen at the event itself to be playing a constructive role."[5] "To be seen to be" is an interesting choice of words, which expresses most closely what the business strategy is largely about- image.

Part of the solution?

By promoting themselves as 'responsible corporate citizens' through largely symbolic gesturing, philanthropy, dialogue with 'civil society groups' and branding excercises, TNCs are hoping to make the case that binding regulations are unnecessary and overly burdensome. Industry groups are gearing up for the Rio + 10 Summit with the agenda of promoting themselves as 'part of the solution'. Given that corporations and their lobby groups have been so obstructive in the Rio process and elsewhere on the international stage such as through aggressive promotion of destructive neoliberal policies in the WTO and Organisation for Economic Cooperation and Development (OECD), we argue that such self-promotion of 'corporate social responsibility' lingers largely in PR ether. It is not part of a pure commitment to change their core business practices. Business, as such, is part of the problem.

The choices are clear. One can attempt to engage industry through 'stakeholder' processes, dialogues and annual events such as your recent annual meeting at BPAmocos's headquarters, and hope that somehow TNCs will see the light and miraculously change their core business practices. Or, one can conclude that corporations and their lobby groups have failed so miserably in areas of environmental protection, consumer and workers safety, and human rights protections, that they can not be seen as responsible parties, and must be forced to comply with some binding legal framework which can at the least restrict the worst excesses of corporate power abuse. Moreover, one can say that the true test of 'corporate social responsibility' (CSR), should be a company's willingness to comply fully with any such international regulations and standards. This is however not a popular definition of CSR in the business world. This does not mean that voluntary initiatives are always ineffective, or that all industry efforts are insincere, just that voluntary initiatives can only go so far, and are no substitute for a legal mechanism which can enforce rules.

You suggest in your letter that UNED's promotion of multi-stakeholder dialogues is primarily as a tool to expose greenwash, yet you do not cite any examples of greenwash being exposed by UNED dialogues. Regardless, greenwash can be exposed whether one decides to 'sit at the table' with a corporation or not. Distorted messages from industry only succeeds in diverting public, government and some NGOs attention away from crucial issues regarding a company's core business practices. We would argue that one can more effectively expose greenwash from a critical and confrontational position, compared to an NGO engaged in a dialogue process, which may also be receiving funding from said corporation.

The vast majority of dialogues attempt to foster a spirit of 'partnership' between all parties, seeking to come to some magical balance between the different 'stakeholder' viewpoints. Such a seemingly benign objective can dramatically weaken the effectiveness of a campaign organisation and it's ability to challenge a corporation (to expose greenwash for example) while a company might benefit enormously from "being seen to be" listening to its critics. Having committed to 'play the game' so to speak, it takes quite a high degree of integrity and moral certitude to maintain a consciously critical approach in such an atmosphere. Corporations are simply better placed to benefit from such dialogues.

The multi-stakeholder approach often promotes or insinuates the notion of equal participation and representation of differing viewpoints on an issue. Any outcome of such a process would, the theory goes, therefore be somehow reflective of society as a whole and so could be deemed a fair assessment of the full range of views. However, this does not take into account some crucial questions about the essential dynamics of the actors involved, the power imbalances among them, and the selective nature of the definition of 'stakeholder'. There is also the question of who then represents, or has the right to represent a certain constituency, not to mention the context in which the process has been initiated and by whom. Many NGOs, for example, are drawn to participate in projects whose framework neither they nor the communities and constituencies with whom they work have any substantive role in designing, because they feel it is the only way to exert influence.

This is a travesty. Industry and governments are keenly aware of the power of grassroots resistance and the opinions of ordinary people. It is why they spend billions on public relations, advertising, and initiatives such as the BASD, and even UNED, to compensate.

Genuine participation requires social transformation and structural change to the systems of social relations through which inequalities are reproduced, not kind words over tea. While UNED's support for multi-stakeholder dialogues may help to make some positive changes in the CSD, such as the example you cite addressing 'financial leakages' in the tourism industry, the much more urgent and pressing systemic issues of environmental destruction and social upheaval caused by corporate-led economic globalisation remain largely undisputed.

While many NGOs spent years in the CSD multi-stakeholder review of voluntary codes and have little to show for it, grassroots groups, movements and ordinary people in their own communities campaigned to stop the Multilateral Agreement on Investment (MAI) which would have had devastating consequences for people and the planet had it been adopted. It was thanks to the resilience, trust and unity of the groups and people involved that we managed to stop it. I doubt very much, that had we been involved in a multi-stakeholder dialogue with the ICC, which was one of the MAI's biggest proponents and architects, that we would have had the same effectiveness.

To quote James Baldwin, "so long as the water is troubled it cannot become stagnant."

Yours sincerely,

Adam Ma'anit
On behalf of Corporate Europe Observatory


1. See Corporate Europe Observatory (CEO), "Rio + 10 and the Corporate Greenwash of Globalisation". Corporate Europe Observer, Issue 9. Page 2, September 2001. | Back to Text |

2. See Corporate Europe Observatory (CEO), "Industry's Rio +10 Strategy: Banking on Feelgood PR". Corporate Europe Observer, Issue 10. December 2001. | Back to Text |

3. See International Herald Tribune editorials, 'Diminishing returns for the rebels without good cause', 'Violent fringe gives the NGOs a bad name', 'Back Away From the Vandals Who Give NGOs a Bad Name', 'Code of conduct will turn clock back', as well as numerous 'letters to the editor' in the Financial Times. | Back to Text |

4. Corporate Europe Observatory (CEO), "High Time for UN to Break 'Partnership' with the ICC". Corporate Europe Observatory Issue Briefing. June 2001. | Back to Text |

5. Sir Mark Moody-Stuart, quoted by Jack Whelan, International Chamber of Commerce, "Statement by Business and Industry to the 10th Session, UN Commission on Sustainable Development". April 30, 2001.   | Back to Text |


Felix Dodds' letter follows…

Dear Friends,

I want to correct a few mistakes in the article on Rio+10 published recently. First to deal with the comments about UNED, and then secondly the profile for Rio+10 (Earth Summit 2002).

UNED is a multi-stakeholder not-for-profit organization, it is not a United Nations institution. We are working towards enhancing the official process for the Johannesburg Summit (which is being coordinated under the auspices of the UN Division for Sustainable Development ), as well as seeking to engage as wide a range of stakeholders in the process as possible. We have an International Advisory Board which includes FoE, WWF, ENDA, Centre for Science and Environment, the Arab Coalition on Sustainable Development, Development Alternatives, ELCI, ANPED, EcoAccord to mention a few NGOs; from the trade unions, ICFTU; women, WEDO, Womens Super Coalition; and industry, WBCSD and ICC.

UNED have promoted the multi-stakeholder dialogues at the CSD because it brings to the table the stakeholders to look at issues together so that 'greenwash' can be exposed if it exists as can other stuff - for example inaccurate comments by NGOs or others. The CSD dialogues birthed the first review of voluntary codes - yes it didn't succeed as well as hoped but it did move on the debate. In the area of tourism, CSD-7 reached agreement to review financial leakages in the tourism industry to see what can be done to retain more money in the destination country, as part of an ongoing multi- stakeholder process. This was the first time something like this had been agreed with the stakeholders. As the Dialogues are held in front of governments and sometimes Ministers, stakeholders can not easily hide stuff. This level of transparency is good for all of us.

UNED's funding is diverse and we publish a list of funders each year in our Annual Report which includes Foundations, Governments and a range of different Stakeholders. We have worked with Novartis on three projects, the later two were funded or co-funded by Novartis:

1) A workshop with NGOs and others to look at the contractual arrangements that the company has with indigenous peoples organisations in the area of bio-prospecting (a copy of the report is on our web site www.unedforum.org)

2) We produced a report on all the international human rights, environmental and labour soft and hard law concerning access and benefit-sharing that companies should be abiding by. This was published and discussed at a side event at CSD-8. The document can be used as a resource to inform companies and hold them accountable on these particular issues. Novartis having funded the production of the document, without any kind of interference from their side, are of cwourse associated with the document. It would be good for other companies to do the same.

3) Novartis co-funded a project we did on multi-stakeholder processes (MSPs). It reviewed 20 multi- stakeholder processes including the Mining Initiative and the World Dams Commission as well as the CSD dialogues and others, outlined the values & ideology behind MSPs and reviewed relevant scientific findings on interaction in diverse groups, dealing with power gaps, ensuring equity etc.. From this a report has been produced and a step by step guide (www.earthsummit2002.org/msp). The objective of this was to laydown a framework for MSPs which defines terms and makes it clear what questions should be asked before doing one and/or when evaluating such processes. Also on the web site you will find the presentations by the speakers at a workshop on MSPs in April

Concerning industry involvement in UNED, as a multi-stakeholder organization we welcome all stakeholders to the table. The basis of the work of UNED is how can we move to implement what we have agreed at the international level and at the national and local level. Your articles are full of complaints about things that haven't happened or been implemented and what we are trying to do is make more of them happen.

On Earth Summit 2002 your article is not completely right. The Summit will review what has happened, or failed to happen, but it will also look forward on the key issues facing us today. The issue of corporate responsibility and accountability may well be one of the key issues to addressed. In the book on 2002 that I edited, "Earth Summit 2002 - A New Deal", this issues is addressed in the chapter 'The Titanic Transnationals: Corporate Accountability and Responsibility' by Jagjit Plahe and Pieter van der Gaag but it was also reflected in other chapters.

The 2002 web site we operate (www.earthsummit2002.org - this is NOT the official UN website which is at www.johannesburgsummit.org) is meant to help people find their entry point and that includes giving the resources. There you will find a paper on the six Rio Conventions - who has ratified - and information on the IDT targets and background papers on some of the key issues. You will also find Network 2002, a monthly e-newsletter that keeps you abreast of the issues and we would be very happy if you wanted to contribute something to that newsletter.

Earth Summit 2002 does offer an opportunity to present constructive criticism on what is going wrong in terms of progress on sustainable development but what is as important is that we start to articulate proactively what needs to happen to change the direction we are going in. Contributions both in terms of criticism and solution finding are what we should all be trying to bring to the table.

Best Wishes,

Felix Dodds

UNED Forum Executive Director
UNED Forum
c/o UNA 3
Whitehall Court
London SW1A 2EL
United Kingdom
Tel.: +44 (0) 20 7839 1784
Fax: +44 (0) 20 7930 5893
Websites: www.unedforum.org AND www.earthsummit2002.org

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