Corporate Globalization and Unsustainable Non-development


Why does the UN World Summit on Sustainable Development in Johannesburg engender such profound despair in large segments of progressive civil society? For a global convention swaggering unabashedly with superlatives (the largest international conference in history, 174 countries, 106 heads of government, 65 000 delegates, etc.), one would have anticipated celebratory emotions. And the brave new millennium ought to conjure up elevated paradigms which should catapult human development from the material to the spiritual plane. So why the pervasive pessimism?

To approach the answer obliquely, one should perhaps rummage through the dustbins of history which will yield some unexpected jewels amongst the mountains of detritus – and quanta of hope.

Let us commence our investigation at a defining moment for our global community a decade ago – the Rio Earth Summit (or UNCED, if you prefer). Here we unearth our first jewel: the ingeniously elegant construct of “sustainable development” which integrates the environment and development irrevocably (until extinction thee do part). The manner in which the two variables are related to the universal constant would have elicited a twinkle in Einstein’s eye [since the amount of cognitive energy liberated by the linguistic fusion is equivalent to the fusion energy of elementary particles in the celebrated  E = mc2]. Just consider the astonishing impact of the concept of sustainable development on the political, economic, jurisprudential and social landscapes over the past decade. But this is also, alas, the point at which the ideal diverges fatally from reality – from the sublime to the putrefying – when malevolent forces get to work.

The Rio Declaration was a watershed document underpinned by an “amazing level of intellectual discourse, a sharing by the South of the realities of poverty and economic deprivations, and by the North of the lessons of environmental mistakes made by industrialisation” (G C Yen & S R Iyer). The quintessential tenet of the Rio agreements is the ‘Common but Differentiated Responsibilities’ whereby the North acknowledges that it is  “more responsible for the despoliation of the global environment, has more resources due to the uneven nature of the world economy, and thus has a proportionately greater responsibility in resolving environmental problems” (Martin Khor).

But the decade since Rio has witnessed the relentless erosion of the North’s commitments to Agenda 21 (UNCED’s Plan of Action). The UNCED Secretariat estimated that $600 billion was required annually to implement Agenda 21. But even the target for the North of contributing a mere 0,7% of GDP as Official Development Assistance (ODA) was nothing but a cynical pipe dream. From the target of $125 billion, the actual ODA contributions fell from $69 billion in 1992 to $53 billion in 2000. Now repudiation of the principle of ‘Common but Differentiated Responsibilities’ hammers the final nail into the coffin of unrealistic expectations.

Two decades before the inter-Summit period the first significant salvos fired by corporate-driven globalisation originated from the Bretton Woods twins: the IMF and World Bank. The most devastating of these assaults in terms of sustainable development was Structural Adjustment which was unleashed on the global South in 1982 when Mexico defaulted on its debt payments. This diabolically ingenious weapon was applied so insidiously that free-market liberalisation was imposed on most Southern countries before any major protestations were voiced.

These structural adjustment regimes had universally disastrous impacts on economic development and social justice. Since they were invariably imposed as a package the damage was compounded. Cuts in government spending on social services decimated health, welfare and education programmes, and soon reversed the development successes of the preceding two decades. The deregulation and privatisation of state enterprises enabled transnational corporations (TNCs) to extend their global reach across most Southern countries, while large-scale retrenchments of public-sector employees assured them of a convenient supply of unemployed people who were forced to work at any wage. Other elements of adjustment included cuts in subsidies for basic goods and services, currency devaluation, freezing or cutting wages, amending labour laws in favour of capital, liberalisation of trade and investment, monetary and fiscal austerity, etc. The cumulative effect of these regimes on impoverished and highly indebted countries has been heart-rending.

Is it possible, then, to define structural adjustment more eloquently and cogently than “A fate worse than debt”? (Susan George).

At the height of the negotiations at the Rio Summit the ominous rumblings of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in the background were mere harbingers of the impending cataclysmic convulsions. The same pen that had signed the Rio Declaration then proceeded to draft into existence in 1994 at Marrakech the World Trade Organisation (WTO) which became the pre-eminent weapon of economic globalisation and the gravest threat to sustainable development (and probably to our entire ecosystem). It was merely the latest salvo of an inexorable onslaught by the North on the global South and all its supporting institutions which had been escalating since the era of decolonisation and the Cold War. It is also another of our global multilateral bureaucracies which has worked tirelessly to earn all the derogatory epithets.

But the spirit of the WTO had already been hard at work in Rio in 1992. Chapter 2 of Agenda 21 recommended “promoting sustainable development through trade liberalisation” (Article 7) and “to take into account the results of the Uruguay Round and to promote a … multilateral trading system” (Article 9). This, however, does not diminish the indictment against UNCED for failing to counter burgeoning corporate power decisively when global euphoria at the Summit might have tipped the scales in favour of an enlightened outcome.

An organisation like the WTO, which has such a malignant effect on global affairs, is bound to have a rather chequered history: Its genesis can be traced back to 1947 when the establishment of the International Trade Organisation (ITO) was nipped in the bud by the US in favour of the early neoliberal GATT, which blossomed in the balmy Washington Consensus sun. The ITO was considered too nerdish (i.e. too respectful of the UN’s Universal Declaration of Human Rights), too regulated and ensconced in the UN’s jurisdiction. And since flowers don’t possess teeth, a ’round’ in Uruguay was expedited to effect the metamorphosis of the GATT into the fearsome WTO, a global governance goliath with draconian legislative and judicial powers which dwarfs the UN’s. It is empowered to overturn national laws which inhibit free trade and has no provisions to respect human and labour rights or the environment. On the contrary, these rights could be ruled against as ‘non-tariff’ barriers to trade if they ‘distort’ or ‘obstruct’ trade in any way.

TNCs and their Northern governments have spared no effort in crafting the WTO into the perfect vehicle to deliver the corporate agenda efficiently, consistently and mercilessly. Its monomaniacal free-market fundamentalism ensures that all impediments to the absolute freedom of TNCs as well as all tariff and non-tariff barriers to trade are anticipated, ruled upon and ruthlessly dealt with. To this end it is armed with a three-person dispute settlement panel which rules over trade agreements in an punitive, opaque and undemocratic manner.

The WTO polices a plethora of these agreements, of which the General Agreement on Trade in Services (GATS) is one of the most dangerous. It is charged with eliminating all trade barriers in the services sector and the agenda appears to be opening up of the immensely profitable public services to foreign transnational corporations. The resulting steep escalation in costs will rob the poor of access to water, health and education. Another treacherous agreement is the Trade Related Aspects of Intellectual Property Rights (TRIPS). This assures corporations of protection of their ‘intellectual property’ by enforcing patents, copyright and trademark protection. This is severely skewed in favour of TNCs as Southern countries possess little intellectual property but the bulk of the earth’s biodiversity from which a large proportion of patents are obtained. A third problematic agreement is the Trade Related Investment Measures (TRIMS) which will be hotly contested for the foreseeable future.

The UN was the only body that had the potential to advance the Southern development agenda and deliver some semblance of global democracy. This was anathema to the TNCs and their lackeys among the Northern political elites who set about systematically incapacitating the UN and decimating its development agencies. The principal target of the offensive was UNCTAD (UN Conference on Trade and Development) which promised the restructuring of the world economy in pursuit of global economic justice. The WTO was then fashioned to duplicate many of UNCTAD’s functions but with a neoliberal agenda and draconian enforcement machinery in the form of trade sanctions and penalties (while UNCTAD had none). Hence UNCTAD was progressively sidelined and rendered impotent while the WTO has grown into a behemoth with more than mere pretensions of being the de facto seat of global governance.

And while they were about it, the TNCs lobbied their governments very successfully to sabotage other pains in the arse like the UN Centre on Transnational Corporations, which was doing a sterling job of monitoring the depredations of global corporations, as well as the Economic and Social Council (ECOSOC) and the UN Development Programme (UNDP).

The Bali PrepCom (the fourth and final preparatory meeting) in early June was a microcosmic crystal ball of the issues and conflicts to be played out at the WSSD. It attested to the centrality of corporate globalisation on the agenda. The most heated exchanges flared up around the issues of trade and finance, throwing the global divide into stark relief. The North insisted on including a fresh round of trade negotiations in the WTO, in particular the contentious “Singapore” issues (1996 WTO Ministerial in Singapore) of investment (shades of MAI?), transparency in government procurement, competition policy and trade facilitation, all of which have far-reaching implications for the South.

Serious differences also arose about the outcomes envisaged by the two blocs. “Type I” outcomes (traditional obligatory agreements between UN member states) focussed on the five priority ‘WEHAB’ areas of water, energy, health, agriculture and biodiversity. Northern countries pushed hard for private sector participation in service delivery while Southern delegates were concerned about the dire consequences for the poor when essential services are privatised. “Type II” outcomes (voluntary partnership projects) are the worthless voluntary agreements being touted shamelessly by the North as preferred outcomes in contradistinction to the unpalatable enforceable Type I outcomes. And now the UN has indicated that public-private partnerships will be deemed official Type II outcomes of the WSSD.

In the context of unsavoury partnerships and unholy alliances, the UN is being lambasted by large swathes of civil society for its Global Compact. This is a voluntary partnership between the UN, TNCs and a few compliant and misguided NGOs, which merely requires the corporations to adhere to nine UN human rights, labour and environmental principles. No provision is made for any form of monitoring and independent verification of corporate claims. There is also a complete absence of enforcement and expulsion mechanisms. This PR coup de grace earns these corporate violators a face-lift of their reputations in exchange for paltry sponsorship of specific projects designed to benefit the sponsoring TNC and others in that sector instead of funding traditional UN work to fulfil its global mandate. They are then further emboldened to intensify their onslaught on human and labour rights and the environment with impunity,

In an effort to address these disturbing developments and the catastrophic impact of TNCs, Friends of the Earth International has drafted a proposal for a Framework Convention on Corporate Accountability to be presented at the WSSD which would “establish effective international and national law on corporate accountability, liability and transparency. This must be backed by effective sanctions and citizen and community rights to consultation, legal challenge and redress over environmentally and socially damaging corporate activities.” This would include the imposition of duties on companies and their directors to report on the environmental and social impacts of their operations and prior consultation with affected communities; legal liability of directors and corporations; ecological debt liability; comprehensive legal rights of redress for affected communities; robust sanctions including suspension of stock exchange listing, fines, withholding export credit guarantees and withdrawal of limited legal liability status; extending jurisdiction of the International Criminal Court; and international controls over mergers and monopolistic behaviour of corporations. Now isn’t this Convention another jewel that we all can be immensely proud of?

The fact that the US, Japan and the EU are opposed to the Accountability Convention and that many Northern countries and their global corporations are conspiring to sabotage the Summit, comes as no surprise. It should serve to galvanise activists and civil society to redouble their efforts to make it a resounding success.

Just as the energy in elementary particles is interchangeable with their mass, so the negative energy of despondency and anger that pervades the WSSD can be transfigured into positive, creative and healing energy. This is especially so when critical mass is attained – such as at the present moment. And this will be a supremely sustainable development.

Raymond Ker contributed above article to Media Monitors Network (MMN) from Cape Town, South Africa.