Academic journal article Forum for Applied Research and Public Policy

Road from Rio: The Battle Lines Are Drawn between Multinational Corporations and Nongovernmental Organizations at the Upcoming Johannesburg World Summit on Sustainable Development

Academic journal article Forum for Applied Research and Public Policy

Road from Rio: The Battle Lines Are Drawn between Multinational Corporations and Nongovernmental Organizations at the Upcoming Johannesburg World Summit on Sustainable Development

Article excerpt

The United Nations Conference on Environment and Development -- the Rio Earth Summit of 1992 -- was to be the moment in which states would cooperate for the protection of the global environment. More heads of state than had ever come together to discuss any issue would meet to sign conventions on global climate change and biological diversity, to forge principles on environment and development and sustainable forestry, and to chart a course for a sustainable future. With its emphasis on development, the Earth Summit was supposed to heal the 20-year rift between Northern and Southern countries and to dispel the notion that Northern environmental concern was a ruse to slow Southern progress.

Yet this confluence of state power was not satisfying to the environmental activists who had hoped that states would finally contend with the role of multinational corporations in the devastation of the environment. They left Rio with the feeling that they had been cheated. Multinationals, they argued, had much more access and influence at the conference than these corporations should have had. Corporate preferences were clearly articulated in conference conventions, declarations of principles, and Agenda 21. (1) Multinational corporations, they claimed, had successfully precluded stronger statements about the need to make serious changes for the environment while promoting free trade.

Thanks to these companies, lamented the activists, there was no action on the regulation of multinational corporations across borders. The UN Centre on Transnational Corporations, which had been working on a code of conduct for multi-nationals, was relieved of its independent status just before the Earth Summit, and the critical report that it had prepared for Agenda 21 was not accepted by the Earth Summit Secretariat in time for inclusion. (2)

Changing Course

Instead, the secretary general of the Earth Summit, Maurice Strong, invited a Swiss businessman, Stephen Schmidheiny, to be his principal advisor for business and industry. (3) Schmidheiny accepted the offer and gathered together about 50 executives to create the Business Council for Sustainable Development. Participating executives represented Dow Chemical, DuPont, 3M, Mitsubishi, and Chevron, among others. In preparation for the Earth Summit, the council prepared a manifesto: Changing Course.

In Changing Course, the council agreed with the authors of the 1987 Brundtland Report that sustainable development could be achieved only through economic growth. The council argued that this growth could be realized through open international trade. Although the report recognized that some government regulation would be necessary to shape sustainable development, particularly by harmonizing patchwork environmental regulations, it argued that much of this change should take place through market mechanisms and the voluntary efforts of firms and industries. Smart, strategic firms would demonstrate their ability to protect the environment and make profits at the same time.

Despite the report's fears that the GATT and NAFTA talks would fall through, significant trade barriers were down by 1995. These barriers were removed, in part, because multinational corporations and industry organizations convincingly made the case that they could protect the environment through the implementation of corporate voluntarism.

Summit Failures

Many environmental nongovernmental organizations--popularly known as NGOs--still feel the sting of multinational corporate victories at the Earth Summit. That sting, along with a variety of state efforts to deregulate international trade since, has galvanized them. So, while multinational corporations have been enjoying the fruits of free trade--despite painful competition and consolidation--they have been under attack from a nascent but growing anti-globalization movement.4 Increasingly, over the past 10 years, multinational corporations have struggled to maintain dominance in a turbulent global economy while defending themselves against the argument that they want to eat the world's cake and save it for tomorrow, too. …

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