World Summit likely to fail in regulating multinationals
World Summit likely to fail in regulating multinationals
Tantri Yuliandini, The Jakarta Post, Nusa Dua, Bali
The upcoming World Summit on Sustainable Development in
Johannesburg will likely fail to regulate multinational companies
as a demand for a universal code of conduct for them met with
strong opposition from the United States.
A heated debate ensued on the sidelines of the preparatory
committee meeting for the summit here on Wednesday when
representatives from international non-governmental organizations
(NGOs), delegates from Hungary, Japan, the United Kingdom and
Indonesia, faced a representative from the U.S. delegation,
Robert F. Cekuta, in an open dialog.
The head of the Indonesian delegation, Makarim Wibisono, said
that Indonesia as well as the Group of 77 developing countries
(G-77) agreed that corporate accountability was important for
implementing sustainable development.
He said the group was pushing for the inclusion of the wording
"enhance corporate responsibility and accountability," in the
Chairman's Text, but the possibility it would be inserted into
the document was slim.
The Chairman's Text, an action plan and basis for implementing
sustainable development principles, already accommodates
corporate responsibility, but on a voluntary basis.
Voluntary initiatives, however, would not be forceful enough
to hold powerful multinationals, Matt Phillips, from Friends of
the Earth International, said, adding that corporations would
then have the choice of not implementing the initiatives.
Multinational companies have been accused of contributing
significantly to the practices of unsustainable development. They
have been accused of transmitting an environmentally unsound
production system, hazardous materials and products to developing
countries.
Cases of environmental violations by multinational companies
abound, particularly by multinational mining giants, such as the
States' Freeport McMoran in Irian Jaya and Newmont mining in
Peru; the United Kingdom's Premier, and France's TotalElfFina in
Burma, according to the California-based NGO, Project
Underground.
Felia Salim, the former Indonesian Bank Restructuring Agency
(IBRA) deputy chairman, commented that legal systems in most
developing countries were too weak to face powerful multinational
companies.
"We must take affirmative action at an international level.
Not only the management must be addressed but the shareholders
must also be addressed directly because companies are accountable
to them," she said.
Felia attended the dialog as representatives of the private
sector in Indonesia.
Head of the Hungarian delegation, Tibor Farago, said also that
a global framework was needed to regulate multinationals through
an international convention on corporate accountability,
otherwise governments would not be able to face them.
"An international mechanism is needed to talk to multinational
corporations, to question them and make them report (to
governments and the people)," he said.
Cekuta, the director for policy analysis and public diplomacy
at the U.S. Department of State's Bureau of Economic and Business
Affairs, called the proposed international convention on
corporate accountability "unimportant".
He reasoned that local laws were enough to hold multinational
corporations accountable for their actions if local governments
strengthened the practice of good governance and promoted
transparency with multinational corporations.
Therefore, there was no need for an international convention,
he argued.
"The first recourse to hold multinational companies
responsible for the damage done in other countries is through the
government where the company is located. They (multinational
corporations) should behave overseas the same as they would
behave in the United States, if not they should be held
accountable," he said.
The U.S. -- together with Japan, Canada, Australia and New
Zealand -- form a powerful negotiation force under JUSCANZ in the
deliberations of the Chairman's Text, which contains a set of
actions to pursue sustainable development.
JUSCANZ is accused of fighting for the interests of
multinational corporations instead of the general public.