Compulsory, binding corporate policing

John Madeley, Author, 'Big Business, Poor Peoples: The Impact of Transnational Corporations On the World's Poor', Guardian News Service, London

Ten years ago, in the wake of the Rio Earth Summit big business had good reason to smile. Intensive lobbying by International Chamber of Commerce, which represents the interests of many global corporations (or transnational corporations, the TNCs), had paid a huge dividend.

The 1992 summit's key Agenda 21 document for sustainable development made no reference to the corporations and, perhaps more importantly, no reference was made to their regulation.

In the last 10 years, however, a great deal has changed. The surging economic globalization of the 1990s gave the TNCs huge power and saw the creation of the World Trade Organization and an accelerated drive towards economic liberalization.

Today, 51 of the world's largest 100 economic entities are corporations -- the other 49 are, understandably, governments -- and this size and, with it, the ability to shift vast amounts of capital about the world, have turned TNCs into a formidable global force influencing the world's agricultural, forestry and fishing industries, mining, energy and manufacturing and the health and tourism sector. But as their size and power has grown and become more visible so too have the calls for their effective regulation.

But those hoping the fourth -- and biggest -- Earth Summit (more formally the UN World Summit on Sustainable Development), which opens in Johannesburg on Monday (Aug. 26), will turn the tables on the corporations and bring them more to heel look set to be disappointed.

Observers now believe the corporate triumph at Rio de Janeiro, Brazil, in 1992 is likely to be repeated next week in South Africa.

Once again corporations have been persuading governments that regulation should not be mentioned. And, once again, they seem to be getting their way. According to Christian Aid, proposals for binding, enforceable, rules on companies, covering issues such as human rights and the environment, have been dropped from the Johannesburg agenda in favor of voluntary agreements.

In January this year, says Christian Aid, The Draft Plan of Implementation -- the text to be negotiated at the summit -- included the following imperative: That governments "launch negotiations for a multi-national agreement on global corporate accountability".

Now, according to the agency, the draft has been watered down and talks instead about promoting corporate responsibility and accountability and the exchange of best practices in the context of sustainable development.

"All we're asking for is what several transnational companies, such as Shell and BP, say they are already doing. We just think for it to be effective, it needs to be compulsory," says Christian Aid's Danny Graymore.

And supporters of enforceable regulation say that since Rio their case has become even stronger. They point to the role big business played in setting up the World Trade Organization and the accelerating pace of global economic liberalization with an early WTO agreement on intellectual property rights -- the Trade Related Intellectual Property Rights agreement (Trips) -- offering an early pointer to the way the wind was blowing.

Representatives from TNCs staffed all of the 15 advisory groups in the negotiations which led to the establishment of the WTO and supplied drafts of the Trips agreement.

Trips, the brainchild of an industry coalition, from the United States, the European Union and Japan, gives patent rights to food and drug companies.

In the food sector, for example, such rights can deprive farmers of their own freedoms to develop and exchange seed and can make them dependent on the corporations. WTO rules are binding on the organization's 144 member countries and observers say it is easy to see just why the big corporations were keen to see intellectual property rights on the WTO's agenda.

In the run up to Johannesburg, the corporations plead that binding regulation is not needed, that voluntary codes of conduct are sufficient. But, according to the United Nations 1999 Human Development Report, the corporations are too important and too dominant a part of the global economy for voluntary codes to be enough.

In corporate language, there seems to be a rather large gap in the market place.