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Al-Ahram Weekly 10 - 16 June 1999 Issue No. 433 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 10 - 16 June 1999 Issue No. 433
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Features Books Living Travel Sports Time Out Chronicles Cartoons Letters The UN goes corporate
By Faiza RadyAccused by the Clinton administration of flirting dangerously with "Third Worldism" and "anti-corporatism" -- among other equally controversial "-isms" -- the UN seems to have finally succumbed to American pressure and reversed its formerly critical position on transnational companies. "The UN goes to market", "UN enters a perilous partnership with corporations", and "The UN is losing sight of its goals", headlined Corporate Watch, a US-based watchdog dedicated to documenting the transnationals' gradual destruction of the global ecosystem, gross transgressions of internationally-binding labour conventions and dismal record of human rights abuses.
Financially choked by the US, which since 1992 has consistently refused to pay its outstanding debt of $1.6 billion, the UN has been forced to look for alternative financing, and appears to have taken its first steps on the road to the effective "privatisation" of international governance.
Driven to distraction by cash-starvation, as much as it may have been seduced by the gurus of neo-liberalism, the world body is switching from its former near total reliance on public funding to seeking funds from the private corporate sector. "In the past year, UN Secretary-General Kofi Annan has positioned the UN to develop a close working relationship with the world's largest transnational corporations, via the International Chamber of Commerce (ICC) and other business associations," reported Corporate Watch.
In February, Annan and the ICC released a joint communiqué stating that "the UN and the business community should work jointly to expand economic opportunities, especially in countries which may face marginalisation." Annan then endorsed what he described as "partnerships", consisting of joint ventures between the world body and a number of transnational companies. According to these agreements, the UN would act as a "monitor" of corporate practices and "moderate" between southern governments and transnationals, providing the latter with the prestigious UN logo and reputation, local contacts and field expertise -- and charging each company $50,000 for the privilege. The corporations would, in turn, transfer more technology and investments to the South and presumably thus contribute to "alleviating poverty" by employing local labour and providing business for parts and service suppliers.
Following Annan's much-touted overtures to big business, the UN then went on to announce plans to establish a joint venture between the United Nations Development Programme (UNDP) and some 20 transnational companies. Euphemistically entitled "Global Sustainable Development Facility" (GSDF), this project is still in the planning stages, so little is known about how it will work in detail. But some of the information that has emerged is quite chilling.
Heading the list of the UNDP's new "partners in development" is Rio Tinto PLC (UK), which has been dubbed "the tainted giant". The International Federation of Chemical, Energy, Mine and General Workers' Union has accused Rio Tinto of using Namibian uranium miners throughout the 1980s as "virtual slave labour under brutal and unsafe conditions... to build the nuclear power of Apartheid South Africa". The largest uranium producer in the world, the company is notorious for having an entire international network dedicated to fighting its abuses. Other equally dubious partners for the UN include Dow Chemical Corporation -- creator of the infamous toxic defoliant Agent Orange, which the US military used to despoil Vietnam's forests and agriculture, causing damage that will continue to cripple the country until well into the next century -- and the Royal Dutch/ Shell Group, which stands accused of having destroyed the Ogoni lands in Nigeria and in particular of colluding with the government in a vicious crack-down on the Ogoni people in 1995. The most renowned of the victims of this conflict was prominent writer Ken Saro-Wiwa, who was executed after being condemned by a kangaroo court. Since then many Ogonis have fled the country in fear for their lives.
Human rights organisations, NGOs and environmentalist groups have been quick to denounce this incongruous friendship between the UNDP -- a UN development agency, set up to alleviate poverty by establishing more equitable trade relations between the North and the South -- and transnationals, which many observers believe are directly responsible for rocketing global poverty levels.
"Ostensibly aimed at eliminating poverty by fostering increased corporate investment in impoverished areas of the world, this initiative will allow these global companies to cloak themselves in the benevolent and prestigious image of the United Nations," fumed The Bridge News Forum.
While the UNDP responded to such charges by claiming that the lives of the world's two billion poor people can only be improved with the help of transnational corporations' money, critics vehemently denied that the most pressing subsistence needs of the poor -- for health, education and food -- can in fact be effectively addressed by large companies, whose agenda centres on maximising profits at the expense of meeting people's needs.
The San Francisco-based Transnational Resource and Action Centre (TRAC) denounced the GSDF's as a pure exercise in camouflage. "Transnational corporations have a long history of what many have referred to as 'greenwashing', whereby they wrap their destructive activities in the rhetoric of helping the environment, in order to gain public relations victories with consumers, government officials and others," TRAC explained in a statement.
Scheming to finance, coopt and ultimately control UN development agencies, which until recently functioned specifically to expose the abuses of wealthy corporations, the transnationals seem to have scored a major victory with the GSDF joint venture, and those who previously hid their heads in shame now feel able to come out of the closet. Manoeuvring behind the scenes has also enabled the multinational lobby to silence a major source of opposition within the UN by torpedoing the work of the UN Centre on Transnational Corporations (CTC).
The CTC investigated multinational corporate control over different industries, advised southern governments on ways to negotiate with multinationals, and worked on formulating a Code of Conduct for Transnational Corporations. This work has now been quietly terminated. "In another sign of the UN's transformation, the CTC has been merged into another UN agency, which tries to promote corporate investment in developing countries," reported TRAC.
While Annan and other high-level UN officials attempt to justify the world body's dramatic about-face, by claiming that increased multinational investment in the South will create jobs for the poor, voluminous reports by the UN Commission on Human Rights (UNCHR), and the Sub-Commission on Prevention of Discrimination and Protection of Minorities, precisely refute such claims. (It is no coincidence that the US is currently working to sabotage the UNCHR and undermine its effectiveness).
According to UNCHR research, multinational expansion in the South is unlikely to address the problem of poverty and unemployment. On the contrary, the recent shift of emphasis from manufacturing industry to the service sector, and the introduction of new technologies, have resulted in what has been described as "jobless growth" in both North and South alike.
"The concentration in capital- and technology-intensive production by transnationals is among the factors that limit direct employment effects. Many transnationals have been reducing their aggregate totals of employees as they become increasingly capital intensive and fire workers to minimise costs," reported the UNCHR.
Besides cutting labour costs and increasing productivity, transnationals have successfully manipulated high unemployment -- one of the main effects of "jobless growth" -- to further slash labour costs and undermine workers' livelihoods. In concerted assaults against organised labour, transnationals have engaged in large-scale union busting, which had led to workers being divested of many of their hard-gained rights. "The global strategies adopted by transnationals are motivated by the desire to maximise profits [and imply] weakening the bargaining power of workers. Transnationals are hostile to trade unions because of their potential to disrupt the production system," explains the UNCHR.
Even before the current phase of "jobless growth", transnationals never generated much employment in the South. Despite the sheer weight of their place in the global economy -- they control over 33 per cent of private global productive assets and generate 70 per cent of products traded internationally -- they only directly employ two to three per cent of the world's workforce, approximately 70 million people. In addition, since despite their name transnational corporations remain obstinately home-based, both in terms of physical plant and employment, over 70 per cent of these workers are employed in the North.
In developing countries, where production remains predominantly agricultural, transnational employment figures are insignificant, in the context of the aggregate workforce. "It has been pointed out that transnationals have made substantial investments in these countries without creating large numbers of jobs. In 1990, for instance, less than one per cent of the economically active population were directly employed by transnationals," according to the UNCHR report.
The UNCHR further noted that transnational-run agri-businesses have only served to disrupt national patterns of production and land ownership, diverting energy away from traditional food crops to more profitable commercial export crops, and displacing small farmers in the process. "An increasing number of small farmers, generally unable to compete with powerful transnationals in production and marketing, become marginalised, [and] lose their land, labour and economic functions," stated the UNCHR.
Boasting of "jobless growth" as a result of capital- and technology-intensive investments, employing on the average less than one per cent of the national workforce at subsistence wages, and destroying the livelihood of small farmers in their wake, the transnationals' contribution to increasing rather than alleviating poverty in the South has been eloquently documented -- with especial authority by the UNCHR and UNDP. If such denunciations have proved powerless to prevent their growth, it seems highly unlikely, pace Kofi Annan's assurances to the contrary, that the transnationals would change their modus operandi because the UN is now in dire need of their cash. Indeed, if there are any changes to be made, it seems more likely that it is the world body which will find its lofty principles annexed by the corporate agenda.
