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Corporate
Europe Observer - Issue 11
Rio +10 and the Privatisation of Sustainable Development
As the preparations for the Johannesburg summit advance, a corporate dream scenario is about to unfold. Instead of effective political action to solve the world's most pressing social and ecological problems, such as rules to control corporations, the summit is likely to focus on promoting 'public-private partnerships'. These projects, for instance between governments, NGOs and corporations, will be included in the Johannesburg declaration, thus becoming official outcomes of the summit. Industry expects a long list of greenwash projects to get the ultimate seal of approval in Johannesburg, including controversial initiatives like the Mining, Minerals and Sustainable Development (MMSD).Privatising Implementation
The upcoming World Summit on Sustainable Development (WSSD) in Johannesburg will mark the 10 year anniversary of the original Earth Summit. Rather than renegotiating the original Rio agreements, governments will gather in South Africa with both little to show and little to offer in terms of progress on key environmental and social objectives. "There is undoubtedly a gap in implementation," remarked UN Secretary-General Kofi Annan in his report on implementation of Agenda 21 - the main action plan to emerge from Rio, "…in some respects conditions are actually worse than they were 10 years ago."[1]
But while growing consensus that not much has been achieved is cause for concern in its own right, the emerging 'solutions' to the implementation crisis are even more disturbing. Most notable among these are what are being referred to in the UN jargon as 'Type-II outcomes'. These are UN-branded voluntary projects carried out in partnership between different 'stakeholders' such as governments, NGOs and business. The idea is that since government action has been so inadequate, encouraging voluntary partnership initiatives might bring new impetus to the implementation of the various commitments. Business in particular is being singled out as a prime source of 'innovative financing' for such projects. Through 'Type-II' partnerships, the UN leadership is also keen to promote, "productive relationships between NGOs and business."[2]
While some of these projects - particularly those involving only non-for-profit actors - may have a positive impact, the real danger of the Type-II approach is that such projects will likely be seen as an alternative to enforceable outcomes negotiated by governments. Sadly, the strength with which these partnerships are emerging reflects a deep neoliberal bias and a lack of political will to effectively tackle the social and environmental crises of the age. It also reflects the success of corporate campaigns that have long been championing the voluntary approach as opposed to government regulation. The 'Type-II' approach is essentially the privatisation of implementation. The job of ensuring 'sustainable development' will be outsourced to various NGO and corporate actors, while governments look on approvingly and compare verbiage.
Major corporate lobby group campaigns for Rio +10 have been aggressively marketing such partnerships as part of their core strategy to avoid any legally binding outcomes which may impact their business (see Observers 9 and 10). For the last few years, the International Chamber of Commerce (ICC) and the World Business Council for Sustainable Development (WBCSD) have been highlighting case studies of environmental, human rights or social initiatives conducted by member corporations and promoting them as proof of their good 'corporate citizenship'. In the last year, both groups and their latest offspring, Business Action for Sustainable Development (BASD), have concentrated on showcasing projects done in partnership with others such as with national and local governments, UN agencies, international institutions such as the World Bank and some NGOs.
The politics of partnership
The partnership approach has infected much of the discourse in the United Nations of late. Hardly a piece of text or speech goes by which doesn't extol the virtues of partnerships. They build upon the concept of 'multistakeholder dialogues' which have become a fixture in modern governance processes. This seemingly benign concept of various 'stakeholders' getting together around a table and hashing out issues has been championed by business groups since the days of the original Earth Summit in Rio. The reason is clear. By institutionalising their role as 'stakeholder' in official fora, corporations gain considerable influence in any outcomes and benefit from an image boost as they are seen to be 'part of the solution'.
The logic behind the multistakeholder model is that by bringing together the 'Major Groups' identified by the UN,[3] consensus can be reached on certain outcomes which are in turn easier to implement and more legitimate. However, this logic does not take into account the unequal power relations between different 'stakeholders' and the negative consequences of emphasising consensus when one or more of the powerful parties involved attempts to engineer outcomes to suit its interests. As the participants of the Asia-Pacific People's Forum on Sustainable Development observed: "This concept of partnerships and stakeholders perpetuates the myth that there is a collective endeavour, that all players are equal and conflicts of interest can be resolved by roundtables seeking consensus."[4]
The UN has set some criteria for which partnership initiatives will be branded as official outcomes of the Summit. Projects have to be: international both in scope and reach; be new - or if on-going have a demonstrable 'added value' in the context of the Summit - and aimed at implementing Agenda 21, Millennium Declaration goals or sustainable activities in developing countries and countries with economies in transition. Candidate projects will not be reviewed by the preparatory committee of the Johannesburg Summit, the main body responsible for preparing the inputs into the official summit, nor will they be at the summit itself. Project approvals will be left to the 10 member Bureau of the Commission on Sustainable Development (CSD) and the WSSD Secretariat to decide, with only a few months to go through all the proposals. As such, it is unlikely that the project proposals will receive serious scrutiny. The lack of stringent criteria, coupled with the overall neoliberal bias of the UN leadership, is a recipe for disaster.
The news that partnerships will be adopted as a Summit outcome has raised numerous concerns among civil society groups. Some of these groups tried to make their voices heard at the last PrepCom (III) of the WSSD, held in New York at the end of March. Third World Network warned of the risks of partnerships undermining the intergovernmental implementation programme and the fact that business, with a much stronger economic power than other groups, drives the Multi-Stakeholder Dialogue processes.[5] The Women's Caucus strongly rejected UN-business partnerships, such as the Global Compact and refused to be in any partnership with transnational corporations. They challenged the partnerships concept, saying that it, was not clear, contained no criteria, and did not consider the impacts of the initiatives. "How can we be partners on an equal footing?"[6]
Corporate groups on the other hand are very receptive to the emphasis on partnerships. The ICC welcomed the move, strongly supporting, "actions that deliver results rather than procedures." [7] Former Shell boss and now leading the BASD, Sir Mark Moody Stuart, confirmed that his group's main contribution will be to present partnerships to the WSSD.[8] The BASD is busy compiling flagship partnerships which are showcased on their website.[9] Moody Stuart said that the BASD will submit a few of them for formal consideration including the Energy and Biodiversity Initiative, the Global Mining Initiative, the Marine Stewardship Council and the chemical's industry Responsible Care program. Some of these initiatives are not new, so in order to qualify, the corporations involved have made minor changes or brought new partners on board. The projects are largely an attempt to improve the corporate members' tarnished images. They are also a reaction to pressure by campaign and community groups or as a move to pre-empt binding regulation. For example, the Responsible Care program, long criticised as greenwash by campaign groups and academics, was established by the chemical industry after the Bhopal disaster where a Union Carbide plant leaked poisonous gas killing 4,000 people and injuring hundreds of thousands in the community. The move effectively killed efforts to toughen regulation that would have forced industry to comply with safer and cleaner standards.[10]
Sustainable Mining?
Another project strongly opposed by affected communities and campaigners is the Mining, Minerals and Sustainable Development (MMSD) initiative. The MMSD is a partnership project between the WBCSD, the Institute for International Environment and Development, the Global Mining Initiative (GMI), and sponsored by some 30 mining companies (among them notorious environmental and human rights abusers such as Rio Tinto, BHP Billiton, Freeport McMoran, Newmont and Mitsubishi). The project is described as, "an independent process of participatory analysis aimed at identifying how mining and minerals can best contribute to the global transition to sustainable development." All the 'measurable results' and 'expected milestones' announced on the BASD website, so far have been confined to one report and some working papers.[11]
There is a danger that projects such as the MMSD, which has one of the most visible corporate lobby campaigns in the run-up to Johannesburg, will be considered 'official outcomes' of the WSSD. If this were to happen, it would leave the impression that the mining industry has nothing to change; that its production patterns are sustainable; that its activities do not violate human rights; or displaces indigenous people or create massive environmental destruction. Danny Kennedy of Project Underground and Vicky Tauli, long-time experienced campaigners against the destructive practices of the mining industry say about the MMSD: "No process is independent that relies on US$5 million or more from the very companies whose activities it is trying to analyse."[12]
WSSD: The Ultimate Seal of Approval for the Greenwash of Business
The most vocal supporters of the partnership approach are generally corporations from some of the most environmental and socially dubious industries - namely oil, gas, chemicals and mining. For them, 'Type-II' outcomes represent an ideal marketing opportunity for their maligned industries. By committing to a few select projects in partnership with 'pragmatic' NGOs and UN agencies, these corporations are now being held up as shining examples of corporate social responsibility. Official endorsement of what are, at best, tokenistic contributions by business, is the ultimate seal of approval for the greenwashing efforts of business.
A dangerous trend is emerging in the area of social and environmental international 'governance'. Governments are increasingly dodging their responsibilities and hiding their impotence behind a façade of partnerships and noble rhetoric to avoid taking steps to bring about real systemic change. Corporations are more than happy to step in and occupy the political space granted them by governments in the increasingly deregulated environs of the global economy. The neoliberal transformation of society continues at a rapid pace as the scope and powers of institutions such as the World Trade Organisation are expanded, while those dealing with social and environmental goals are either co-opted to legitimise the corporate globalisation agenda, or are relegated to the scrap heap of history. All the while, ordinary people are left to wonder what possible avenues there are left to pursue meaningful change.
The Doha Distortion Agenda
Much has been made of the so-called 'Doha Development Agenda' in the run-up to Johannesburg. Speeches by Secretary-General Kofi Annan, Under Secretary-General Nitin Desai, and UNEP's Klaus Töpfer, have all praised the new round in the WTO recently launched in Doha, Qatar. The UN leadership is keen to give the impression that the new round is a sustainable development agenda and are likely to refer to it is a official outcome of the WSSD ('Type I' if you will). A key driving force behind this has been the EU, particularly the European Commission Directorate General for Trade under the leadership of Pascal Lamy. Despite all the rhetoric on sustainable development deployed by the European Commission, DG Trade has effectively hi-jacked the EU´s own agenda on sustainable development. Instead of addressing the multiple ways in which corporate globalisation has accelerated poverty and environmental degradation around the world, the EU wants the Johannesburg summit to endorse the new WTO round launched in Doha. In an attempt to greenwash its corporate-centred trade and investment policies, the Commission claims that the WTO negotiations will benefit the world's poorest countries and thereby contribute to ´sustainable development´. The Chairman's Paper, used to reflect consensus on issues in the preparatory process for Johannesburg, is littered with references to "the supremacy of the WTO," and the need to promote free trade. The uncritical embrace by the UN leadership of the new WTO round, is further evidence of the deep neoliberal bias permeating the halls of the UN Plaza.
Another boost for business came from the UN Monterrey Conference on Financing for Development, where foreign direct investment (FDI) and public-private partnerships were officially endorsed by the government delegations as the main strategies and sources for poverty alleviation. With such outcomes, it is likely that we will see the perverse effects of competition to attract investments exacerbated even further. The ICC was particularly satisfied with Monterrey, as for the first time the private sector - represented by the ICC - was invited to make an official contribution to the program and shared seats with UN officials and heads of state.[13]
Co-opting Corporate Accountability
'Type-II' outcomes have another perverse effect. By reinforcing the business-led ideology that corporate voluntary action is the way to go, they will inevitably weaken efforts to impose binding rules on corporate activity. 'Corporate accountability' has long been on the agenda of campaign groups, going back decades.[14] However, recently the campaign has won new strength and has surfaced as one the major demands by civil society groups in the run-up to Rio +10. One of the concrete proposals, spearheaded by Friends of the Earth International, is to launch international negotiations for a set of legally enforceable rules on transnational corporations at Johannesburg.[15]
Political response to the call for binding regulations at PrepCom II and III was at best lukewarm. The US, Japan, Canada and New Zealand were clearly opposed to the idea, while the European Union, in its usual placating manner, considered it unrealistic. The G-77 was also reportedly uninterested, preferring to limit any such discussions to corporate financial accountability. The corporate response has been notably silent, although a number of government delegations at PrepCom II reported 'fierce lobbying' by business to get 'accountability', as spelled-out by the coalition of civil society groups, off the agenda.
Rio Tinto's Lord Holme of Cheltenham, veteran of both the ICC and the WBCSD and now second-in-command after Moody Stuart at the BASD, has been so far the only voice of business openly reacting to the call for binding regulations. In a speech delivered at the Business in Environment (BiE) conference, Cheltenham gave an outline of the way the BASD intends to deal with the demand for corporate accountability. According to him, there is no need for a choice between regulation and, "so-called 'voluntary initiatives'." As long as regulation is decided by governments and not by NGOs, "do not stifle initiative and enterprise." He went on to say that business supports regulations if done in consultation with business, but never, "at the expense or in competition to the infinitely more powerful force of voluntary action and initiative."[16]
To illustrate the superiority of the voluntary approach espoused by the BASD, Cheltenham cited the Global Reporting Initiative (GRI) as a case in point. Initiated in 1997 by the Coalitions for Environmentally Responsible Economies (CERES) - a network of Corporate Social Responsibility groups and foundations - together with the UN Environment Programme (UNEP), the GRI is aimed at developing voluntary guidelines for reporting on economic, social and environmental performance. The GRI has been readily endorsed by major business groups, due to its voluntary nature and non-controversial emphasis on reporting rather than action.
Environmental and social reporting is the new buzz in the Corporate Social Responsibility (CSR) sector. Greenwash gurus such as Shell and BP have been using reporting as part of a sophisticated PR drive to improve their battered images, with great effect. Shell's 'People, Planet, and Profits' report and is often heralded as 'ground-breaking' and 'pioneering' by many in the CSR sector.[17] Shell's clever positioning on climate change for example, has earned it green approval ratings from groups like Families Against Bush, based solely on its rhetoric.[18] Partially due to the success Shell has had through its successful image makeover, other companies are seeking to emulate that success by adopting reporting guidelines such as those of the GRI. They are also getting more directly involved in guiding the development of those standards. The WBCSD and General Motors, for example, are now on the steering committee of GRI, together with the World Resources Institute, UNEP and SustainAbility among others. The WBCSD has openly admitted the convenience of supporting voluntary initiatives like the GRI, as it will grant business "increased credibility," while not requiring it to fundamentally change core business practices.[19]
Voluntary guidelines for reporting on corporate performance are a far cry from effective legally binding regulations, nonetheless, reporting is at the core of industry's response to calls for corporate accountability. According to Tomorrow magazine, "the guidelines, thanks to GRI's massive commitment to inclusiveness, have fast become the leading way for companies to respond to the growing global demand for corporate accountability."[20] But the BASD is quick to brandish anyone calling for binding rules on TNCs as heretics. According to Lord Cheltenham, "it needs to be understood that this call in itself is a compromise between a fundamentalist minority whether of a neo-Marxist type who see all capitalism as evil and whose aim is to find out what large companies are doing and make them stop it, whatever it may be, or of a deep green 'trade is harmful, lets all stay in Hobbiton variety' and on the other hand, a much larger majority group who see that job and wealth creation are essential but who want to ensure it is done more responsibly and equitably."[21] Similar attempts to dismiss groups who articulate a solid critique of corporate power are a constant feature of business's divide-and-rule strategy. Cheltenham added, "I believe that is right for business to work in a constructive way with this concerned majority for better and more accountable governance…. even if it's difficult to see how common ground can be achieved with the minority of fundamentalists."[22]
Another way in which the BASD is trying to divert attention from the need for effective societal control over corporations is by calling for 'better governance' in the South. BASD chairman Mark Moody-Stuart, speaking at the Globe 2002 conference, argued that good governance is needed to help develop "regulatory frameworks within which the market can operate."[23] The former Shell boss admitted that corporations "have a real sensitivity about regulation…I am not talking about the regulation that binds us hand and foot and buries us in forms, but frameworks which make delivery of a reasonable outcome through market forces more likely."[24] The BASD chairman blamed the lack of effective governance structures for creating world poverty. Arguing that if it weren't for 'corruption' in Southern governments and the lack of business opportunities in some sectors, society would have the resources to eliminate poverty. According to Moody-Stuart, business can play a key role in helping to build good national governance. The role of states would then be not to control corporate excesses, but to create the 'enabling environments' whereby business can operate freely. The BASD vision was backed by Canadian environment Minister David Anderson, who endorsed the business mantra saying that, "the traditional environmental approach - where government sets the targets, makes the rules, and points the way - won't get us there."[25]
It is clear that corporate campaigns for Rio +10 will eventually engage directly in the debate around corporate accountability, and strive to control the outcomes of any such debate. In line with the "don't worry, be happy!" approach taken by the BASD, business will not plainly oppose the call for binding regulations, but instead seek to control the definition of the term corporate accountability to the most narrow of meanings. As it has happened with other terms such as 'sustainable development', industry will embrace the term and thereby render it meaningless. The then Business Council on Sustainable Development (now the WBCSD) was already using the language of 'corporate accountability' back in 1992 as part of its campaign to promote voluntary solutions.[26] There is also a danger that business groups will seek to engage with its critics, in an effort to improve their image and split the opposition, as well as to ensure that they can water down proposals and engineer certain outcomes favourable to business. The ICC recently demonstrated this with great effect, when they manoeuvred themselves into co-drafting and signing a joint statement with NGOs, including groups calling for binding regulations, at a UNEP conference in Cartagena, Colombia. The statement calls for, among other things, corporate accountability to be promoted through initiatives such as the GRI and regulation, where needed.
Need to Change Course
It is up to campaign groups to take these factors into account in their own strategic planning, so as to be better able to respond to industry efforts to undermine their call for binding regulations. It is not enough to score points by getting the language of corporate accountability into the official WSSD process, as we've already seen where that road leads. Rather, groups should make clear what they are calling for, both in substance and in form, in such a way that it would be more difficult for corporations to co-opt and counter. Perhaps it is time to employ new language in the ideological jargon wars, reflecting also a more profound vision of what is to be done with transnational corporations.
Sadly, the corporate agenda dominates the political process of the WSSD to an extent unseen before. Nitin Desai, Secretary-General of the Johannesburg summit has whole-heartily embraced the world's most powerful corporate lobby groups such as the ICC and the WBCSD. He has truly followed the lead of former Secretary-General of the original Rio summit, Maurice Strong, in making business his closest ally. A recent open letter to Desai sent by social and environmental justice groups and members of the European Parliament, criticised his uncritical praise for the role these obstructive groups play.[See http://www.corporateeurope.org/un/desailetter.html] The letter was sent as a reaction to Desai's speech at the last World Economic Forum (WEF) that took place in January in New York during the same time as the PrepCom II, where he endorsed the ICC, WBCSD and BASD as 'enlightened businesses' and prayed them for their commitment to sustainable development.
The UN, traditionally a staunch ally of the poor and dispossessed of the world, has over the years taken a dramatic turn in favour of the world's wealthy elite. The irresponsible blanket endorsements given to business by the UN leadership, be it through 'Type-II' outcomes or through Kofi Annan's Global Compact, are a poor response to some of the world's most notorious human rights and environmental abusers. Such attitudes by the UN leadership gives the impression that there is no need to take action and that business is well on the way to resolve unsustainable patterns of production and consumption that they promote on their own terms.
World governments and the UN need to address the fundamental gap between corporations' self-proclaimed commitment to sustainable development and the reality of their lobbying to block and weaken effective policies to combat the global environmental and social crises afflicting us today. The world's leaders need to start listening to the demands by civil society groups and ordinary people, that business can not be allowed to continue as usual. Unless a dramatic U-turn in policy and approach is made soon, Johannesburg risks becoming little more than a propaganda circus.
Notes
1. Commission on Sustainable Development acting as the preparatory committee for the World Summit on Sustainable Development, Second session, 28 January-8 February 2002 "Implementing Agenda 21 - Report of the Secretary-General*" Economic and Social Council Distr.: General, 19 December 2001. Page 4.
3. The Major Groups are: Women, Youth and Children, Indigenous People, NGOs, Local Authorities, Workers and Trade Unions, Scientific and Technological Community, Farmers, and Business and Industry.
4. Statement of the Asia-Pacific People's Forum on Sustainable Development. 25-26 November 2001, Phnom Penh.
5. 'Bali Next Stop for Johannesburg Summit Preparations' http://www.johannesburgsummit.org, WSSD, April 5, 2002.
6. 'Enthusiasm and Some Concerns Voiced Over Partnership Proposals'
http://www.johannesburgsummit.org, WSSD, April 2, 2002.8. "Globalisation in the 21st Century", Mark Moody Stuart speaking at the Globe 2002 Plenary, March 13 2002.
9. By April 18th 2002, the BASD website featured 14 partnerships initiatives, some examples include:
The Energy and Biodiversity Initiative with BP, Chevron Texaco, Statoil, the International Union for the Conservation of Nature (IUCN) and other mainstream conservancy groups;
A project to develop the gas market in West Africa by the World Bank, governments of the area and the World LP Gas Association;
The Indonesia & Micro-credit Programme with Local Communities project run by TotalFinaElf;
Yemen Technology Transfer & Community Assistance, run by the Canadian Nexen Petroleum Corp;
And the Elf-in-Rural-Life Project - TotalFinaElf together with communities, focusing on agricultural 'modernisation' and development.
For more details, see: http://www.basd-action.net/initiatives/index.php
10. Joshua Karliner, The Corporate Planet. Ecology and Politics in the Age of Globalisation, Sierra Club Books, San Francisco, 1997. Union Carbide (now owned by Dow) continues to argue that regulations aren't needed claiming it has learned from the disaster, "The legacy of those killed and injured is a chemical industry that adheres voluntarily to strict safety and environmental standards - working diligently to see that an incident of this nature never occurs again." http://www.bhopal.com accessed on April 18, 2002.
11. BASD Website: http://www.basd-action.net
12. "Native Reluctance to Join Mining Industry Initiatives: Activist perspectives." By Vicky Tauli Corpuz and Danny Kennedy.
13. Kofi Annan, heads of state of 6 African countries and senior government ministers of 10 other African countries met in Monterrey with the Investment Advisory Council (IAC), a joint partnership between the ICC and UNCTAD (the UN Conference on Trade and Development). The focus of the meeting was the way in which business, governments and the UN can increase FDI in Africa to help implement the goals of NEPAD. The New Partnership for Africa Development (NEPAD) is an action plan much criticised by African civil society groups who feel it subordinates the development aspirations of Africa to the corporate-led neoliberal agenda.
14. For an excellent overview of the history of regulation of corporations, specifically within the UN system, read, "Holding Corporations Accountable: Corporate Conduct, International Codes and Citizen Action" by Judith Richter, Zed Books, 2002. See also, The Corner House briefing, "Codes in Context: TNC Regulation in an Era of Dialogues and Partnerships", also by Judith Richter, The Corner House, 2002.
15. You can find an outline of the proposal and an overview of the campaign at:
http://www.rio-plus-10.org/en/positions_corporate_accountability_2.php16. Lord Richard Holme of Cheltenham, speaking at the Business in Environment Conference, 26 February 2002.
17. "In a way - and particularly with the expert external groups - Shell has moved from being perceived as a laggard in corporate accountability and the Sustainable Development agenda to something of a leader and a benchmark company not only in the oil industry but more generally." - SustainAbility Ltd., "SustainAbility assessment of effectiveness of relationship with Shell against Rules of Engagement," http://www.sustainability.com/people/clients/shell%2Drelationship3.asp
19. WBCSD-GRI position paper, WBCSD website, http://www.wbcsd.ch
20. "On balance, the GRI guidelines are a huge achievement. So huge that few firms, big or small, can ignore them. The guidelines, thanks to GRI's massive commitment to inclusiveness, have fast become the leading way for companies to respond to the growing global demand for corporate accountability." Bill Birchard, Tomorrow Magazine, November/December 2000.
21. Richard Holme of Cheltenham, speaking at the Business in Environment Conference, 26 February 2002.
23. "Globalisation in the 21st Century", Mark Moody-Stuart, speech at the Globe 2002 plenary, 13 March 2002.
25. "Regulatory Frameworks Needed to Boost Sustainable Growth in Developing World," International Environmental Reporter, volume 25, n 7, 27 March 2002, Globe 2002.
26. See "Fading to Grey: The Use and Abuse of Corporate Executives 'Representative Power'" Nick Mayhew, as appears in "Hijacking Environmentalism: Corporate Responses to Sustainable Development," ed. Richard Welford, Earthscan, 1997.
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DA Amsterdam Netherlands
e-mail: <ceo@corporateeurope.org>
