Category Archives: TNCs and Accountability

Christine Bader on ‘The Evolution of a Corporate Idealist’

Christine Bader spoke at the Carnegie Council earlier this month about her book, The Evolution of a Corporate Idealist: When GIrl Meets Oil. Essentially, the book is her attempt to reconcile her own time working in corporate social responsibility for BP and feeling like the company was doing all the right things out of a genuine desire to get it right, with the fallout from the Deepwater Horizon disaster.

I was investing in the health and well-being of communities, living around big BP projects, because everybody in the company who I worked with understood that what was good for those communities was good for business.

It was fascinating work. I was going to West Papua, at the remote tip of Indonesia. Then I was working in China on a chemicals joint venture, where we were going to be bringing 15,000 migrant workers into a town of about 30,000 people, again ensuring that we could mitigate the risks and the upheaval to communities there. It was fascinating, amazing work [full transcript here].

Bader concludes, later, that those projects were model projects because there was so much potential for things to go horribly wrong: an enormous amount of political and social risk – and international attention – that made the corporate social responsibility environment there different, perhaps, from that of other projects.

So there were all these factors that created this perfect storm for senior management to basically give us whatever we wanted that we thought was necessary to mitigate the risks.

I didn’t realize at the time that that was so unique, that I could call up headquarters and be like, “Hi. Could I have $100,000 to do a human rights impact assessment?” “Sure. Take whatever you need.”

That’s part of the journey of the book, actually—years later, wondering what happened with the Deepwater Horizon disaster, actually going back and thinking, “What was so special, what was so unique about my time there?”

So that’s what I think happened there. There was a sort of perfect storm of factors that made the company throw whatever we needed behind trying to get this project right.

The whole talk is very interesting. Bader argues from the assumption that development is inevitable, but that companies have a responsibility to mitigate the externalities on local communities. She further argues that the corporate philanthropy model is flawed, and that the proper social role of the corporation must be constantly kept in mind: i.e. companies shouldn’t play a large political role or step into positions of governance or governance training.

Bader’s views are very similar to my own, but I found it refreshing to hear a former insider’s perspective, and to be reminded that corporations are on the whole made up of good people who want to do the right thing, or at least not the blatantly wrong and abusive thing. The challenge is to create a regulatory framework that aligns these largely decent instincts with the legal purpose of a corporation: to make profits.

Advertisements

Holding Economic Power to Account: Toward the meaningful accountability of transnational capital (ABSTRACT)

The paper I’ll be presenting at the G20 Youth Conference in May. There’s a little more on the direction I’m approaching from here(This was updated 2 March 2014 as a later draft saw me head off in a slightly different direction; below is the abstract for the paper I’ll actually be taking to the conference. Original is at end of post).

From ‘Gift’ to ‘Right’: Moving beyond corporate social responsibility to corporate accountability

Multinational enterprises stride across the international stage, rivaling states in their economic size and power but only subject to international laws via the laws of individual states. These entities have enormous capacity to affect the lives and livelihoods of individuals and communities worldwide, and an international community that professes democratic values must provide mechanisms by which MNEs can be held directly accountable to the communities in which they operate.

Adequate mechanisms must provide for three stages of accountability: provision of information, discussion and explanation, and rectification. Furthermore, they must be based on clear accountability rights rather than voluntary compliance by MNEs, and significant barriers to access must not exist. Measured against these standards, existing international mechanisms for accountability are found lacking, for when we consider access, power, and the importance of accountability rights, the dominant rhetoric of corporate social responsibility (CSR) becomes rather unhelpful. The challenge is to move beyond CSR to a global accountability regime that challenges existing inequalities of power.

(Following is the abstract from a previous draft, initially published here on 3 Feb 2014).

Holding Economic Power to Account:  Toward the meaningful accountability of transnational capital

Multinational enterprises stride across the international stage, rivaling states in their economic size and power but only subject to international laws via the laws of individual states. These entities have enormous capacity to affect the lives and livelihoods of individuals and communities worldwide, and an international community that professes democratic values must provide mechanisms by which MNEs can be held directly accountable to the communities in which they operate.

Adequate mechanisms must provide for three stages of accountability: provision of information, discussion and explanation, and rectification. Furthermore, they must be based on clear accountability rights rather than voluntary compliance by MNEs, and significant barriers to access must not exist. Measured against these standards, existing international mechanisms for accountability are found lacking. While the G20’s embracing of the transparency agenda is commendable, more action must be taken to move from voluntary to mandatory compliance and enable meaningful access to rectification.

El Perro del Hortelano: Transnational Capital, Human Rights, & Sustainable Development

I’ve been thinking about this film a lot recently. It made a huge impression on me when I saw it for the first time in Peru: I find the imbalances of power created by hyper-mobile capital and global inequality very troubling, and this film paints quite a devastating picture of the negative side effects.

I’m very excited, then, to be able to present a paper on the topic of holding transnational corporations (TNCs) accountable for their actions within local communities at the 2014 G20 Youth Conference in May. I believe TNCs can be a very effective and beneficial driver of growth and technology transfer, but I’m concerned by the lack of meaningful mechanisms by which individuals and communities can successfully defend their rights, especially in the Global South. My jumping off point was Kate Macdonald’s 2008 report The Reality of Rights: Barriers to accessing remedies when business operates beyond borders and the philosophic basis to my argument, if you will, is that the protection of rights should not lie with consumer boycott or shareholder advocacy in the North, but with the provision of meaningful opportunity and sufficient voice and power to communities in the South, such that they can demand for themselves the responsible, sustainable, and rights-respecting action of TNCs, in accordance with local priorities and cultural preferences.

I’ve been thinking of this film because it’s an excellent example of the difficulty of holding capital to account when it operates in a distant corner of a youthful democracy, with the greatest impact falling on minority indigenous groups.

Holding Economic Power to Account:  Toward the meaningful accountability of transnational capital (ABSTRACT)