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Business, civil society face-to-face in Prague

SUNS #5214 Thursday 17 October 2002

Prague, 15 Oct (IPS/Alejandro Kirk) -- Transnational corporations have "manoeuvred brilliantly" at United Nations summits to avoid rules that could make them accountable, says Susan Sonntag, the renowned civil society activist.

Heinz Rothermund, a former Shell executive, says that on the other hand "corporations have learned the hard way to recognise that they are accountable to a large array of stakeholders."

To Sonntag, "it's immediately obvious that the idea of private profit as the lynchpin and basis of society can only have been invented by idiots." To Rothermund, profit "is a fundamental ingredient to progress and societal success and therefore in the public's interest."

Sonntag and Rothermund seem to have little in common. Nor do Rufus Yerxa, deputy director-general of the World Trade Organisation and Anuradha Mittal, an Indian food security activist.

But they will be among 44 panellists with widely conflicting views who will join an international debate called by Czech president Vaclav Havel in Prague on 18-22 October on the global gap between the rich and the poor.

Among other panellists are US economist Jeffrey Sachs, pioneering British environmentalist Edward Goldsmith, deputy managing director of the International Monetary Fund Eduardo Aninat (Chile) and Sylvia Borren, director of Novib, the Dutch non-governmental cooperation agency.

The conference "Bridging Global Gaps" has been held every year since 1997. It is sponsored by Forum 2000, a foundation launched in 1996 by Havel, philanthropist Yohel Sasakawa and Nobel Peace Prize laureate Elie Wiesel. The conference provides an exceptional opportunity for debate among those who hold opposing views on globalisation. The opportunity seems particularly precious when the prospect of war in the Gulf and the Middle East threatens to further divide the world.

Arguments have already begun before the debate. Sonntag and Rothermund joined a debate on the web ahead of the conference on the question "Is There a Gap Between Public Interest and Private Profit?"

Sonntag, a US-born French political scientist, believes there is a gap and it is growing. "It is a myth to believe that large transnational corporations provide a lot of jobs," she says. "Proportional to their size and their sales, they provide very few."

Between 1993 and 1997 the world's largest 20 electronic and computer corporations increased sales 16.5% while the number of people they employ fell 4.3%, Sonntag says in the debate, quoting UN statistics.

The world's 11 biggest automobile and tyre corporations increased sales 25% and employed 6.8% less. The top 11 oil companies increased sales 18.8% with a 24.4% drop in employment, according to the figures cited by Sonntag.

Rothermund argues that "only profitable companies pay taxes, provide long-term employment and through dividends and value appreciation pay for our pensions."

Profitable companies also have "greater abilities in social presence and environmental management as prompted by the objectives of sustainable development," he says.

In July 2000, UN Secretary-general Kofi Annan launched the Global Compact initiative as an attempt "to bring companies together with UN agencies, labour, non-governmental organisations and other civil society actors to foster action and partnerships in the pursuit of good corporate citizenship."

But there is little agreement on how far this has got.

Roberto Savio, founder of IPS (Inter Press Service) and member of the international steering committee of the Global Social Forum, the civil society alternative to the Global Economic Forum, says, "Initiatives like [the] Global Compact are one of the clearest signs of decline in the system of international relations."

There is, "no serious evidence that they (corporations) have changed their genetic mission of attaining profit for some of the values that should govern political institutions, which are clearly social and public."

But the "germ of new criteria" that corporations should accept responsibility to social and public principles apart from profit has begun to be debated, he told IPS. "We will see in a few years in which direction this goes."

Sonntag says that the UN has no capacity to monitor companies' commitment to the Global Compact. "The whole so-called corporate social responsibility movement seems to me to stand more for corporate self-regulation," she says.

"I think the companies have manoeuvred brilliantly first in Rio (Earth Summit, 1992) and then Johannesburg (World Summit on Sustainable Development, 2002) to attain their principal goal: avoid any binding rules or machinery for making them accountable to anyone but their shareholders."

Civil society will have to try to do the monitoring, she says. But, she adds, "the number of things civil society is expected to do which ought to be done by official national or international bodies is rather exhausting for the people concerned - nearly all of them are volunteers."

Rothermund says that corporations cannot be blamed for the wrong doings of their executives. "Behaviour emanates from individuals," he says. "Corporations merely provide identity." Corporations have "learned the hard way that they are accountable to a large array of stakeholders," Rothermund says.

"Are the codes of conduct introduced in corporations matched by similar efforts in politics and by NGOs?" The times when the responsibility of businesses was said to be business alone are long gone, he says.

Debate along such lines at the Prague conference will set the tone for discussions to follow at the meetings of the Global Social Forum in Porto Alegre (Brazil) and of the Global Economic Forum in New York early next year.

For all the differences in view between the corporate world and civil society, the growing certainty that Earth is in immediate danger has prompted the urge for a dialogue towards a strategy of survival.

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