Global Policy Forum

 

Who controls the brave new globalized world? States or Transnational Corporations (TNCs)? This page keeps track of the argument: how much power do TNCs have? What are the areas where they exercise their power? And, most importantly, how can citizens gain democratic control over these institutions?

Key Documents

Transparency International 2006 Bribe Payers Index (BPI) Analysis Report (October 4, 2006)

Transparency International's Bribe Payers Index looks at the tendency of companies from 30 leading exporting countries to engage in bribery abroad. While companies from the wealthiest countries generally rank in the top half of the index, countries score within a relatively small range, indicating "a considerable propensity for companies of all nationalities to bribe when operating abroad." While OECD governments demand improved governance in poor countries, they fail to sufficiently clamp down on their own companies' shameful contribution to undermine these good governance efforts.

Making Corporations Accountable (December 2000)

Discusses voluntary codes and regulatory approaches to the accountability of global corporate investment. A background paper for the UN Financing for Development process, written by James A. Paul and Jason Garred of Global Policy Forum.

Report on the Responsibilities of Transnational Corporations and Related Business Enterprises with Regard to Human Rights (February 15, 2005)

This United Nations report provides an overview of the existing corporate social responsibility initiatives and standards. It also discusses the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights, and makes recommendations on how to advance the dialogue between states, transnational corporations and other stakeholders.

UN Norms on Transnational Corporations and Human Rights (August 2003)

The UN Sub-commission on the Protection and Promotion of Human Rights adopted norms stating that "transnational corporations ..., as organs of society, are also responsible for promoting and securing ... human rights," including the right to development. While those norms signify an important step towards codification of corporate accountability, they do not include binding monitoring mechanisms.

Multinational Corporations in Least Developed Countries

A background guide from the North American Invitational Model United Nations (Georgetown International Relations Association, Inc.) on the problems inherent in close relationships between the UN and multinational corporations.

2009

Water Pressure (June 12, 2008)

Growing pressure from NGOs and some governments is forcing transnational corporations to become environmentally responsible. Coca-Cola, which uses 2.5 liters of water to produce each liter of its products, vows to become "water neutral." Its CEO has pledged that the company will compensate for every drop of water used through conservation and recycling initiatives. However, critics argue that corporations like Coca-Cola use such campaigns to promote their image as environmentally conscious whereas in reality they do not change their practices. Coca-Cola has not set a target date to achieve its water-neutrality goal. (Time)

Why the Oil Industry Benefits from Bottled Water Sales (June 26, 2008)

The world's largest oil companies – Royal Dutch Shell, Exxon, ConocoPhillips and British Petroleum – have close ties to the bottled water industry. The oil companies supply the bottled water industry with oil-based plastics that release large amounts of toxic pollutants during production. Bottled water companies claim that their products are healthy and clean, but the connection between the oil and water industry reveals the negative environmental impact of bottled water. (AlterNet)

The Global Crisis: Food, Water and Fuel (June 5, 2008)

This Global Research article discusses the triangular relationship between water, food and fuel: three basic commodities whose prices have risen in the past few years. The article argues that price hikes do not result from the shortage of commodities, but from market manipulation by international corporations and financial institutions. Financial groups that speculate in the oil market and large private corporations that control the grain market are responsible for the global food and oil crises. The author warns that the increasing power of these non-state actors directly affects the livelihoods of millions of people.

Artificial Foods and Corporate Crops: Can We Escape the "Frankenstate"? (May 2, 2008)

This article criticizes the effect of industrial agriculture on global food security. The author points out that a few large corporations have patented or genetically modified most of the plants humans rely on for their basic needs. These corporations use chemical and genetic technologies to "dominate agricultural production from seed to stomach and to profit from every bite." In addition, industrial food production exhausts Earth's basic biological support systems, and makes the planet more vulnerable to climate change. (AlterNet)

Cargill – A Corporate Threat to Food and Farming (May 2008)

Cargill is one of a handful of corporations that control the global system of food production and agriculture. By selling farmers agricultural input, and then buying outputs for further processing, Cargill has created a worldwide agricultural system in which it is "both buyer and seller" and has near unlimited freedom to maximize profit. In this report, Food & Water Watch warns that Cargill's enormous and under-regulated influence on global agricultural trade threatens the health of consumers, family farmers, the environment and even entire economies and governments.

A New Philanthro-Capitalist Alliance in Africa? (March 31, 2008)

This article analyzes the Alliance for a Green Revolution in Africa (AGRA), an initiative by the Bill & Melinda Gates Foundation and the Rockefeller Foundation. AGRA aims to end poverty and hunger by restructuring Africa's food systems. But, this reform may ultimately serve the interests of agribusinesses like Monsanto, by creating a new market for genetically modified seeds and agrochemicals. AGRA's philanthro-capitalism overrides local agricultural techniques by focusing on global market-based "solutions." This diverts attention from the role that global markets systemically play in creating hunger and poverty in the first place. (Pambazuka)

Monsanto U: Agribusinesses Takeover of Public Schools (15 February 2008)

This Alternet article reports that the Bush administration is cutting funding for agricultural research at public universities. Universities must now rely on rich agribusiness conglomerates for research funding. While public institutions do the research, the private sector asks the questions, and influences the answers researchers give them. The author fears agricultural research will thus cater to the wishes of the private sector, resulting in "chemical-dependent, genetically modified, bio-engineered agriculture."

Hedge Funds Look to Increase Transparency (October 11, 2007)

Former deputy governor of the Bank of England Andrew Large proposes a new code of openness and accountability in hedge funds, a £180 billion industry. Large put together the code, which is voluntary, after much criticism from politicians who say that the sector is "overly-secretive" and endangers global financial stability. Investors welcome the code, but critics say that the financial world needs binding regulation. (One World Trust)

Latin American Governments and Foreign Investors (June 18, 2007)

The relations between governments and multinational companies are quickly changing in Latin America. Countries like Bolivia and Venezuela are leaving the International Center for the Settlement of Investment Disputes (ICSID) as they believe it is not "transparent and impartial enough" due to the heavy influence of the World Bank and Washington. The World Bank has long used its supremacy to force governments to implement policies favored by transnational corporations at the expense of the poor. To change this situation, Bolivia raised its royalty rates on hydrocarbons leading to an increase in revenues while Venezuela raised the royalties on foreign investors making huge profits. (World Economy & Development In Brief)

Multinationals to China: No New Labor Rights (May 16, 2007)

US and European corporations in China are trying to block a new law that would improve the working conditions of workers as well as increase their power and protection. Despite China's economic growth, most Chinese workers live on the edge of poverty, earning very little and working in appalling conditions. Multinational companies sent the Chinese government extensive attacks on the proposed law even threatening to leave if the law is passed. (Multinational Monitor)

In India, Outsourcing Moves to the Top Floor (April 3, 2007)

The migration of low-skill service industry jobs to developing countries has become a common practice for many transnational corporations. However, this International Herald Tribune article reports that an increasing number are also outsourcing jobs in fields "which once epitomized the competitiveness of Western economies," such as aeronautical engineering, investment banking and drug research. Although some analysts argue that "the US will progressively become less predominant for US corporations," economists predict that this shift will rather encourage the growth of professions in the West "that must be rendered in person," like the police or clinical medicine.

"MDG Scan" to Benchmark Private Contribution (February 27, 2007)

A Dutch research organization has created an "MDG Scan" to measure the contributions of transnational corporations in achieving the eight Millennium Development Goals. While acknowledging that the scan largely ignores "the dark side of private companies," including environmental degradation and human rights violations, its creators hope that focusing on positive impacts will encourage corporations to take greater responsibility in promoting the MDGs. (Inter Press Service)

Scientists' Report Documents ExxonMobil's Tobacco-like Disinformation Campaign on Global Warming Science (January 3, 2007)

In order to delay action on climate change, ExxonMobil has given nearly US $16 million in funding to groups promoting "climate change contrarians." By financing these organizations, ExxonMobil seeks to cause confusion and doubt over global warming, labeling it "junk science." A new report by the Union of Concerned Scientists compares the oil company's disinformation tactics with those of Big Tobacco in previous decades.

Secrets, Lies, and Sweatshops (November 27, 2006)

While most US retailers assert that their offshore suppliers comply with widely accepted labor codes of conduct, this BusinessWeek piece exposes a very widespread praxis of concealing labor rights abuses in Chinese factories, the largest single source of US imports. The article chronicles one example after the other of Chinese factories keeping double sets of books to fool labor standard auditors, and even using consultants to coach managers in how to mislead auditors. While US companies express regret with their Chinese suppliers' labor standard violations, factory managers complain that the retailers' continuous pressure for low prices forces the violations. Ultimately, the article highlights the problematic coexistence of humane working conditions with inexpensive clothes and electronics for US consumers.

Business Must Adapt to Realities of Earth's Ecosystems, Warns New Publication (November 22, 2006)

This GreenBiz.com piece summarizes main conclusions of 'Ecosystem Challenges and Business Implications,' a November 2006 publication by Earthwatch Institute and World Conservation Union among others. Looking at six environmental topics, including water scarcity, climate change and biodiversity, the report details how corporate business not only affects ecosystems, but also crucial ly relies upon them, a link all too often overlooked by the corporations themselves. The report urges businesses to acknowledge this inextricable link and sets out recommendations for companies to reduce their adverse environmental impacts as well as pursue new sustainable business opportunities.

Putting Teeth in Corporate Social Responsibility (November 21, 2006)

Programs such as the ‘Extractive Industries Transparency Initiative' and the ‘UN Global Compact' have helped create public debate and possibly higher levels of corporate and political awareness about human rights and environmental problems. But as the initiatives are voluntary and unsanctioned, skeptics argue they just allow companies to appear socially responsible while not fundamentally changing operations. The author of this Policy Innovations article sees a future for genuine corporate social responsibility in legally-binding loan agreements incorporating respect for human rights and environmental standards. These would exist between transnational corporations and the private banks financing them that have a "lower reputational risk tolerance."

Oil, Cash and Corruption (November 5, 2006)

The forthcoming corruption trial of US businessman James H. Giffen sheds light upon the massive bribes received by Kazakh President Nursultan A. Nazarbayev, who has "amassed a fortune at the expense of an impoverished citizenry." Giffen has allegedly paid Nazarbayev US$78 billion "to buy access and influence in Kazakhstan for oil giants like Exxon Mobil, BP […] and […] Conoco-Phillips" This New York Times piece indicates that US government officials approved of Giffen's bribery. Moreover, the author highlights the obvious US hypocrisy of claiming to promote good governance and democracy across the world, while graciously receiving the kleptocratic Kazakh leader in September 2006.

Chain-Gang Economics (October 30, 2006)

In this Foreign Policy in Focus piece, Walden Bello argues that the economic relations between China and the US chain the global economy together in a "crisis of overproduction." Restrictive Chinese rules on trade and investment force transnational corporations (TNCs) operating in China to locate the majority of their production processes in the country, making the TNCs major "agents of overinvestment." At the same time, Chinese authorities continue exploiting the country's cheap labor by keeping wages down instead of expanding people's purchasing power. Thus impeding domestic consumption, China has chosen breakneck growth feeding the spending appetite of US consumers over domestic and global stability, argues Bello.

Corrupting the Fight Against Corruption (October 27, 2006)

Having himself been one of the main forces in putting corruption on the World Bank's agenda, Joseph E. Stiglitz in this piece makes recommendations for improving the bank's approach to combating corruption. Pointing out that bribe payments often come from Western based corporations, Stiglitz further calls on rich governments to tie tax deductibility for corporations to transparency in all dealings with foreign governments. Stiglitz also voices the concern of some critics that the corruption agenda is "itself corrupted" with rich governments using it to cut aid to countries that don't please them. (Project Syndicate)

Hey, Nice Clothes. But Are They Ethical? (October 13, 2006)

This Christian Science Monitor article tells how Lesotho has succeeded in giving new life to its textile business by becoming an origin of "ethical clothing." Companies "promise customers" that they do not use sweatshop labor in Sotho clothes production, and that "working conditions me[e]t high safety standards." Under rock star Bono's ‘Product Red' label, companies like Gap and Emporio Armani sell a variety of ethical goods, and give a portion of the profits to the ‘Global Fund to fight AIDS, Tuberculosis, and Malaria.' According to a representative of the Ethical Trading Initiative, "there has been a huge surge" in consumer interest in ethical fashion.

Landless Workers Movement: The Difficult Construction of a New World (September 29, 2006)

This Latin America in Movement article tells the story of farmers' struggle against dependence in a settlement in southern Brazil. When authorities gave 376 landless families access to 6,000 hectare land in 1999, the farmers, settling in agricultural villages, thought all their problems were solved. But as it turned out, they merely went from a relationship of exploitation with the landholding elite to one with multinational corporations. Switching from conventional to organic farming on part of their land, only switched dependence on technological packages to dependence on the corrupt businesses all linked to multinationals that perform the organic certification in Brazil.

Toxic Shock: How Western Rubbish Is Destroying Africa (September 21, 2006)

As Dutch trading company Trafigura Beheer offloaded 400 tons of toxic waste at a landfill near the Ivorian capital of Abidjan in August 2006, the generated fumes killed six people and forced 15,000 to seek treatment for nausea, vomiting and headaches. The incident illustrates that the practice of Western companies dumping toxic waste in poor countries continues. As rich countries' consumption of electronic equipment keeps increasing, so does the amount of electronic waste shipped to poor countries for "recycling," but ending up in landfills posing significant health risks to local residents. (Independent)

The Denial Industry (September 19, 2006)

In this extract from his latest book "Heat," George Monbiot reveals how a small group of people working for the oil and tobacco lobby specializes in challenging scientific consensus on both global warming and the health effects of smoking. According to Monbiot, US tobacco company Philip Morris was curiously the first company to pursue corporate funding of lobby groups denying human-induced climate change. By "dominating the media debate on climate change during seven or eight critical years in which urgent international talks should have been taking place," the "climate change deniers" have set back action by a decade. (Guardian)

Your Guide to Green Electronics (August 25, 2006)

Aiming to prompt a "race to the top" in environmental standards applied by electronics companies, Greenpeace has developed a scorecard assigning points to 14 leading mobile phone and computer manufacturers. Using nine separate criteria, the scorecard evaluates both how much companies do to remove toxic chemicals from their products and whether they have good recycling programs. Nokia and Dell came out "greenest," but with companies scoring an average of only 4 out of 10, the electronics industry still "has a long way to go before it can make any claims to being a green industry."

Green Logo, but BP Is Old Oil (August 12, 2006)

This New York Times article examines whether the oil company BP lives up to its "beyond petroleum" slogan, indirectly questioning CEO Lord Browne's prominence in the UN Global Compact. Recent troubling incidents include a dangerous level of corrosion on an Alaskan oil pipeline, a massive oil spill, and an accident at a BP refinery that resulted in the death of 15 workers. Although BP puts incredible effort into marketing themselves as environmentally friendly, critics such as Greenpeace point out that BP's financial commitment to the cause represents only a marginal amount of their massive profits.

The Contrarian: Are NGOs Playing Both Sides of the Human Rights Abuse Debate? (July 18, 2006)

The author of this Ethical Corporation piece argues that NGOs should not blame multinational firms for human rights violations but instead seek accountability from states. However, such an argument overlooks how big companies sometimes push governments for "favorable deals" that further corporate interests. NGOs demand that UN Special Representative on Business and Human Rights John Ruggie call for "universally recognized standards and effective accountability mechanisms" in his final report.

Win or Lose in Court (Summer 2006)

Since 1993, lawyers in the US have filed 36 corporate human rights abuse suits under the Alien Tort Claims Act (ATCA), a 1789 law which extends US jurisdiction to cover violations of international law abroad. While human rights activists view the ATCA as "the only effective tool" for holding corporations accountable, only 13 cases remain ongoing compared to 20 dismissals and three out-of-court settlements. Although these figures may not represent a real threat to companies, the negative publicity generated by such procedures might encourage some businesses to improve their human rights records abroad. (Business Ethics)

It's a Gas-Funny Business in the Turkmen-Ukraine Gas Trade (April 2006)

This Global Witness report outlines the corrupt and opaque gas trade in Central Asia and the role played by intermediary companies and political leaders. Secrecy allows Turkmen President Saparmurat Niyazov to use gas revenues for personal expenses and collude with other corrupt officials without anyone holding him accountable for the funds. The EU, Ukraine, and Russia must insist on open accounting of gas companies' revenues to eliminate corruption and secure their energy supply.

ExxonMobil in Aceh (April 17, 2006)

Michael Renner writes about Exxon's vast gas operation in Indonesia's rebellious Aceh province. Exxon's pollution, displacement of populations and complicity with military and police repression fueled conflict for many years. In the wake of the tsunami catastrophe, the central government has made important concessions to local citizen demands, including sharing of the gas revenues with the local government. But fear remains that Jakarta (and Exxon) will not honor their promises, especially when international observers depart.

Invest Globally, Stagnate Locally (April 2, 2006)

The continuous increase of corporate profits in the US and Europe fails to translate into prosperity for domestic economies and wage earners. Transnational Corporations (TNCs) maintain low wages by constantly threatening to leave the country if wage negotiations do not meet their corporate interests. The article predicts a new rise of "economic nationalism" among rich countries as a reaction to the reluctance of TNCs to pay decent wages to their workers. (New York Times)

World's First Humanitarian Insurance Policy Issued (March 6, 2006)

A small group of donor countries, including the US, contracted the private insurance company AXA to cover the risk of droughts in Ethiopia. In this pilot project developed by the World Food Programme (WFP) and the World Bank, an annual amount of US$930,000 would lead to immediate payments of US$7 million if rainfalls drop "significantly below historic averages." However, neither the WFP nor AXA provide details regarding the deal. Furthermore, opening humanitarian aid activities to corporate interests is a "risky business."

Promotion and Protection of Human Rights – Interim Report of the Special Representative of the Secretary General (February 2006)

This report of the Special Representative of the Secretary General (SRSG) John Ruggie, addresses the question of human rights and transnational corporations. Ruggie writes that these companies possess "global reach and capacity," acting at a pace governments cannot match, making corporate involvement essential in curbing human rights abuses. Ruggie insists that progress has occurred in this area, yet only 80 corporations of the ‘Fortune 500' group even responded to the SRSG's survey on human rights practices.

One Death Every Minute (January 25, 2006)

The US$ 20 billion arms trade business is barely regulated. Poor and crisis-shaken countries suffer from its bloody consequences. With a UN meeting on small arms trade in June 2006, this article asks governments and NGOs to push for an international arms trade treaty. Governments must recognize that arms proliferation is one of the main drivers of human rights abuse and poverty. (Guardian)

Big Business Lobbyists Have Undue Influence on Trade Talks (January 24, 2006)

ActionAid draws attention to the way big companies influence global and regional trade talks. With thousands of lobbyists in Washington and Brussels, companies have made bilateral and multilateral trade negotiations excessively open to corporate interests. As a result, international trade deals often favor corporate interests while falling short on development needs.

Self-Regulation Works: ICC Plans Consolidated Global Marketing Code (January 17, 2006)

The International Chamber of Commerce (ICC) praises its initiative on a "worldwide code of practice for advertisers" to improve companies' marketing habits. But, previous experiences with voluntary self-regulation show that such initiatives do not positively impact most companies' behavior. Contrary to the ICC claims, governments should promote universal and binding marketing and advertisement regulations.

Overview of Accountability Initiatives (January 2006)

This One World Trust working paper provides information on initiatives promoting accountability of non-governmental organizations (NGOs), transnational corporations (TNCs) and intergovernmental organizations (IGOs). In addition to a brief description about accountability within each sector, it provides an extensive database on organizations focusing on accountability.