Making Transnationals Accountable: A Significant Step for Britain

ers wronged by managers, we see the significance of corporate governance very R. () Making Transnationals Accountable: A Significant Step for Britain.
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Damage on the US is clearly taken more seriously than damage in Bhopal. Share the Worlds Resources. The Case against Corporate Social Responsibility August 23, Corporate Social Responsibility, or CSR, is frequently put forward by transnational corporations and governments as a way of altering corporate behavior and improving records on such issues as human rights, labor standards, and the environment. CSR favors voluntary codes of conduct and emphasizes a "double bottom line," which supposedly creates a dual mandate for firms to pursue both profits and social well-being.

Ultimately, the only way to protect the public from inevitable corporate abuses is legislating government regulation that places people ahead of profits. The Wall Street Journal. Voluntary codes of conduct are not enough to stop large transnational corporations from abusing the environment and human rights. Crimes committed by TNCs often go unpunished since the concept of economic crimes has no international legal definition.


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To get past this problem, the Enlazando Alternativas network calls for the creation of an international tribunal on economic crimes. The network wants this sort of abuse labeled as "crimes against humanity. At the "Green Week" annual European Union conference, Coca-Cola was a sponsor, presented itself as a champion of environmental protection a. Coca-Cola, however, causes serious damage to water supplies and soil as a result of its bottling operations in India.

This raises questions about the ability of polluting companies to influence the environmental debate in Europe.

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According to the UN, most global trade is controlled by a few hundred corporations. Many of these mega-corporations are economically larger than some nations and thus it is difficult for developing countries to regulate them. Since the United State is home to many of the world's largest TNCs, stronger regulation in the US is key in enforcing international standards that promote the social and economic rights of those in developing countries.

The country's main political parties have all introduced a version of a bill that regulates the operations of mining companies abroad. This is in response to allegations that Canadian mining firms have been complicit in recent criminal acts and serious violations of international norms.

Ironically, Canada is not even a party to the agreement. In , El Salvador refused PacRim's environmental impact statement denying the company the opportunity to mine for gold. Critics argue that investment rules should allow nations the flexibility to protect their environment. If instead, investment groups can sue to override domestic laws, sovereignty has little meaning. TNCs often ignore and abuse human rights, labor laws and environmental regulations especially in developing countries.

The author of this article proposes an international tribunal that will oversee TNCs and insure that they act responsibly.

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Growing pressure from NGOs and some governments is forcing transnational corporations to become environmentally responsible. Coca-Cola, which uses 2. 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. 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.

This Global Research article discusses the triangular relationship between water, food and fuel: 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. 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.

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.

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 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. 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. O ne World Trust. The relations between governments and multinational companies are quickly changing in Latin America. 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.

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.

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. 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.

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.


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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.

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.

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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. 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. 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. 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 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.

Thus impeding domestic consumption, China has chosen breakneck growth feeding the spending appetite of US consumers over domestic and global stability, argues Bello.

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. 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.

This Latin America in Movement article tells the story of farmers' struggle against dependence in a settlement in southern Brazil. When authorities gave landless families access to 6, hectare land in , 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. As Dutch trading company Trafigura Beheer offloaded tons of toxic waste at a landfill near the Ivorian capital of Abidjan in August , the generated fumes killed six people and forced 15, 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. 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.

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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. 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.

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 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. 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. 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. 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. 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 nature of the transnational firm 2, , International Review of Applied Economics 23 6 , , Articles 1—20 Show more. The governance of networks and economic power: The essence of the modern corporation: Electronic commerce and the future for SMEs in a global market-place: The wealth of localities, regions and nations: A New Economic Policy for Britain: Economic development in the shadow of the consensus: The organization of production and its publics: The internationalisation of production systems: Clusters, governance and the development of local economies: Market exchange and the concept of a transnational corporation: Strategic trade policy reconsidered: