by Sheldon Rampton This year marks the tenth anniversary of the Rio Summit--an international conference organized by the United Nations in Rio de Janeiro, Brazil to address the world's growing environmental problems, ranging from depletion of resources to species extinction and global warming. The collusion of western nations and major corporations undermined the effectiveness of the Rio Summit, which issued a number of lofty-sounding proclamations but steadfastly avoided meaningful commitments to real change. Now, a decade later, the consequences of that failure are becoming increasingly evident as the UN organizes a follow-up conference, dubbed "Rio+10," which is being held from August 26-September 4 in Johannesburg, South Africa.
"There is undoubtedly a gap in implementation. In some respects conditions are actually worse than they were 10 years ago," said UN Secretary-General Kofi Annan in his report on Agenda 21, the plan for sustainable development in the 21st century that emerged from Rio.
"Clearly, whichever way you look at it, our performance in implementing what came out of the Rio Conference is inadequate," admitted Nitin Desai, the UN Under-Secretary General in charge of the Johannesburg summit. "If we think in terms of our success in meeting needs--surely we have not done that," Desai wrote in a March 19, 2002 essay in the Earth Times. "Look at the persistence of poverty, hunger, disease and malnutrition. In terms of the second half of the standard definition--our capacity and ability to meet such needs in the future--we have not been able to halt the deterioration and loss of our natural resources or the accumulation of risks." The summit at Johannesburg, he said, "must reflect a sense of urgency, for the time available for us to change course is getting shorter."
The solutions that Desai and other UN officials are promoting, however, merely continue the empty rhetoric of the past--high-sounding talk that ignores demands by nongovernmental organizations (NGOs) for binding international rules on corporate behavior. In place of enforceable standards and accountability, UN officials have adopted the corporate sector's call for "voluntary initiatives" and "partnerships." Activists critical of this trend have begun using the term "bluewash," which the New York Times describes as "allowing some of the largest and richest corporations to wrap themselves in the United Nations' blue flag without requiring them to do anything new."
Howdy, Partner
In place of binding, enforceable commitments, the United Nations is putting its prestige behind what UN jargon calls "Type II outcomes"--voluntary projects carried out in partnership between different "stakeholders" such as governments, nongovernmental organizations and business.
The Bush administration has been pushing for this approach, as have international corporate lobbies including the International Chamber of Commerce (ICC), the World Business Council for Sustainable Development (WBCSD) and Business Action for Sustainable Development (BASD). In the months leading up to the Johannesburg, these groups have been busily highlighting case studies of environmental, human rights or social initiatives conducted by member corporations as proof of their good "corporate citizenship."
In April, for example, BASD and the United Nations Development Programme (UNDP) unveiled the Virtual Exhibition (www.virtualexhibit.net), which calls itself a "multi-media showcase of sustainable development initiatives." According to Desai, the Virtual Exhibition "is all about making the summit accessible and open. We are inviting people from all over the world to tell us what they have achieved in the last ten years since (the first Earth Summit in) Rio, tell us what lessons they have learnt and share with us the experience they have had pursuing sustainable development objectives."
The Virtual Exhibition is sponsored by British Telecommunications, Shell, and the Rio Tinto mining company. Curiously, however, none of these companies appear to be actually sponsoring any sustainable development initiatives themselves -- at least, none that have shown up yet on the web site. When I visited the "Virtual Exhibition" on July 5, BP Solar was the only major corporation participating in any of the partnerships listed--and BP's involvement consisted primarily of selling solar panels for an energy project in the Philippines funded by the government of Australia.
If, as Desai says, the Virtual Exhibition shares the achievements and lessons of the past decade, real achievements have been few and far between. Some 35 projects were profiled in the exhibition when I visited, ranging from geothermal power plants to an "encyclopedia of life support systems," an AIDS education effort, a community school, and Greenstar, a project that has built "self-contained, solar-powered community centers" in four communities around the world--the Palestinian West Bank, Jamaica, India and Ghana. Greenstar's web site is attempting to support these initiatives through "ecocommerce in native cultural products"--sales of digital music and art from the communities where the centers operate. It is hard to imagine that selling downloads of children's paintings offers a realistic funding mechanism for sustainable development on anything more than a very tiny scale, and Greenstar has yet to become financially self-sustaining.
Some of these "Type II" initiatives may be individually admirable, but they are piecemeal and largely disconnected from the major developmental trends that are driving environmental destruction and economic instability throughout the world. Moreover, they do not begin to address the issues of corporate responsibility and accountability. Most of the projects profiled in the Virtual Exhibition are either government-funded initiatives or nonprofit ventures like Greenstar, with corporations participating merely as vendors of products and services.
For corporations, there are two PR advantages to participating in "Type II" initiatives. The first and most obvious advantage is that that corporations can improve their own images by "partnering" with NGOs and governments on beneficial social projects.
"The most vocal supporters of the partnership approach are generally corporations from some of the most environmental and socially dubious industries--namely oil, gas, chemicals and mining," notes the Corporate Europe Observatory (CEO). "For them, 'Type II' outcomes represent an ideal marketing opportunity for their maligned industries. By committing to a few select projects in partnership with 'pragmatic' NGOs and UN agencies, these corporations are now being held up as shining examples of corporate social responsibility. Official endorsement of what are, at best, tokenistic contributions by business, is the ultimate seal of approval for the greenwashing efforts of business."
A second, less obvious advantage for corporate interests is that the rhetoric of "partnerships between stakeholders" obscures the unequal power that corporations possess, by virtue of their enormous wealth, in their dealings with the other "stakeholders." These days a multinational corporation often has more wealth at its disposal than many governments, and certainly more than NGOs. "How can we be partners on an equal footing?" asks the Women's Caucus, one of the NGOs involved in preparatory planning for the Johannesburg summit.
Beyond the PR advantages that public-private partnerships offer, there is also the profit motive, as corporations seek to siphon revenues from public funds ostensibly dedicated to serving the public interest. "The 'Type-II' approach is essentially the privatization of implementation," wrote the Corporate Europe Observatory in May 2002. "The job of ensuring 'sustainable development' will be outsourced to various NGO and corporate actors, while governments look on approvingly and compare verbiage."
One of the most spectacular examples of a public-private "partnership," in fact, is Enron, whose rise to global prominence depended upon close financial relationships with U.S. agencies, the World Bank, and other government institutions. Researchers from the Institute for Policy Studies have documented the details of this partnership in a report titled Enron's Pawns: How Public Institutions Bankrolled Enron's Globalization Game, which shows how these institutions helped leverage Enron's global reach with $7.2 billion in public financing approved for 38 projects in 29 countries.
Happy Talk
In a January 2002 speech to the World Economic Forum, the UN's Nitin Desai praised the International Chamber of Commerce (ICC) and the World Business Council on Sustainable Development (WBCSD) as having "embraced the issue" of sustainable development. A more sobering assessment came from a coalition of NGOs including CorpWatch USA and the Corporate Europe Observatory, which responded that Desai's "conclusion is premature and gives these groups an undeserved seal of approval," adding that there is a "risk of assuming that certain corporate lobby groups are truly committed to sustainable development, when in fact they have failed to 'walk the talk.' . . . These assumptions send out the message that big business has proven itself as an ally and partner and that there is no need for further action by the world's governments to prevent corporations from damaging the environment and sustainable development."
The NGOs pointed to a "disturbing gap" between the ICC's " self-proclaimed commitment and the reality of a consistent record of lobbying to block, postpone or weaken progress in international negotiations on issues of crucial importance to sustainable development. Examples include the Basel Convention on trade in toxic waste, the Kyoto Protocol and the Convention on Biodiversity. . . . The credibility of the ICC`s claimed commitment to sustainable development is furthermore seriously undermined by its opposition to binding corporate accountability mechanisms. The ICC continues to promote an unbalanced and unsustainable economic model of global market deregulation in which corporate rights are carved in stone while corporate responsibilities remain voluntary. This approach has proven entirely insufficient in the decade since the Rio summit."
"In most industry sectors, only a small number of companies are actively striving for sustainability," admitted an assessment by the UN itself, in a report released in June from the United Nations Environment Project (UNEP). "Most voluntary initiatives are still characterized by problems of effective implementation, monitoring, transparency, and free-riders," the UNEP report stated, pointing also to "a global shift of manufacturing production towards poorer countries that often do not have the resources or capacity to manage the accompanying environmental, health, and safety impacts."
As Few Rules as Possible
Environmental and human rights groups insist that while voluntary projects may be worthwhile, they are not a satisfactory alternative to enforceable outcomes negotiated by governments. During the four preparatory meetings leading up to the summit, however, corporate lobbies and the U.S. government worked actively to sabotage meaningful targets and timetables.
"The US, Canada, Australia and the OPEC countries must also take most of the blame for two weeks of chaotic negotiations resulting in a long document, strong on platitudes but weak on substance," stated Friends of the Earth International following the third preparatory meeting. "All they are willing to offer on corporate accountability are voluntary initiatives, which fail to establish rights for the communities affected by corporate abuses."
During the preparatory meetings, U.S. government negotiators joined oil-exporting nations in questioning language on such issues as the Kyoto Protocol on global warming and in opposing a global target on the percentage of the world's energy that should be generated from renewable sources. They opposed international legal measures to reduce the risks posed by heavy metals and to reverse the the loss of biodiversity.
"We are seeing a very direct diplomatic campaign to destroy 30 years of efforts to govern environmental restoration and leadership towards sustainable development," said Remi Parmentier, director of Greenpeace International. "If they think they are going to get away with it, they are wrong. If we see only cosmetic words at Johannesburg, real people will be very upset."
The United Nations has also avoided enforceability and accountability in its two flagship sustainable development initiatives--the "Global Compact" and the "Global Reporting Initiative."
The Global Compact, which asks businesses to adhere to nine principles derived from key UN agreements, has become a general framework for UN cooperation with the private sector. However, critics of the Global Compact point to the absence of any mechanisms to monitor or enforce it and note that the 44 companies which initially supported the Compact included several companies with controversial environmental and human rights records. Members include Aventis, a leading purveyor of genetically modified crops; Nike, whose labor practices in its Asian factories have been roundly condemned by international labor and human rights groups; Rio Tinto, a mining company notorious for both human rights problems and environmental despoilation; and Unilever, which has been dumping toxic waste at Kodaikanal in southern India.
"The motivation of the Secretary-General is to bring corporate behavior in line with universal values," says Kenny Bruno of CorpWatch USA. "However, business influence over its design has riddled the Global Compact with weaknesses and contradictions. In the first 18 months of the Global Compact, we have seen a growing but secret membership, heavy influence by the International Chamber of Commerce, and a failure to publish even a single case study of sustainable practices. The Global Compact logo has been used without attribution by DaimlerChrysler, even as Global Compact officials insist that use of the general UN logo is strictly controlled. . . . The Global Compact represents a smuggling of a business agenda into the United Nations," Bruno says, warning that this trend is leading to a "partial privatization of the UN," and "globalization of greenwash."
Voluntary and "Creative" Reporting
The Global Reporting Initiative (GRI) was formally launched in April 2002 by the UN Environment Program (UNEP) and the Boston-based Coalition for Environmentally Responsible Economies (CERES). They describe the GRI as an "international clearinghouse for voluntary disclosure by corporations on social and environmental issues." Initiated in 1997 by CERES and UNEP, the GRI was hailed upon its release by Business Action for Sustainable Development as a "milestone for corporate disclosure and transparency." U.N. Deputy Secretary-General Louise Frechette commended the initiative, saying it "has a unique contribution to make in fostering corporate transparency and accountability far beyond financial matters."
Basically, GRI establishes a number of guidelines for "sustainability reporting," similar to the rules used by accountants when producing corporate balance sheets, income-and-expense statements and other standard instruments of financial reporting. Its stated purpose is to make sustainability reporting as routine and credible as standard financial reporting.
Conventional financial reporting, however, is accompanied by a government-enforced regulatory framework that is supposed to ensure full and objective disclosure. Recent scandals involving Enron, Global Crossing, WorldCom and the Arthur Andersen all stem from failures by these companies to observe those standards, and the corporate officials responsible for those failures may face penalties including jail time if regulators prove in court that they broke laws requiring disclosure. (It is also possible, of course, that the guilty may escape punishment, which demonstrates that even existing mandatory standards are insufficiently enforced.)
The GRI, by contrast with conventional financial reporting, is intended to be completely voluntary. In a February 26, 2002 speech at the Business in Environment Conference, Rio Tinto's Lord Richard Holme of Cheltenham, a veteran of the ICC, the WBCSD and BASD, argued that "voluntary action and initiative" is an "infinitely more powerful force" than binding government regulations. To illustrate the superiority of the voluntary approach, Holme cited the Global Reporting Initiative as a case in point--even though the GRI has yet to accomplish anything by way of encouraging open, objective disclosure.
In Europe, Amnesty International, Friends of the Earth and Save the Children have launched a drive for compulsory reporting on corporate social and environmental performance. According to the Financial Times, however, "The idea is anathema to business organizations, which say corporate social responsibility should remain the voluntary preserve of companies, free from government diktat."
UNICE, a European business federation, says mandatory reporting standards would turn "voluntary initiatives into a pro forma exercise" and "kill creativity." The US Council for International Business also objects to mandatory standards, saying a "one-size-fits-all reporting standard is not appropriate."
A recent social responsibility report issued by McDonald's illustrates how the GRI's "voluntary" approach works in practice. McDonald's says it followed the GRI guidelines, yet the report has not been subject to independent verification, is short on numbers and contains almost no data that allow comparison with past performance.
According to author Paul Hawken, a leading advocate of genuine corporate responsibility, the McDonald's social responsibility report is "a low water mark for the concept of sustainability and the promise of corporate social responsibility. It is a melange of homilies, generalities, and soft assurances that do not provide hard metrics of the company, its activities, or its impacts on society and the environment. . . . The McDonald's Social Responsibility Report is like Ronald McDonald--a fantasy. It presupposes that we can continue to have a global chain of restaurants that serves fried, sugary junk food that is produced by an agricultural system of monocultures, monopolies, standardization and destruction, and at the same time find a path to sustainability. . . . Nothing could be further from the idea of sustainability than the McDonald's Corporation."
