Fatal blows to corporate power
The treaty aims to make the current arbitrariness permitted by international trade and investment agreements illegal, and to identify certain corporate operations as international crimes.
The fallout from the current phase of capitalism has become more manifest globally in 2016, provoking unexpected political responses. However, the people most severely impacted by the current economic crisis have largely chosen to support political figures and positions[i] contrary to those that have been elaborated for years by the alter-globalisation left, also known as the global justice movement. In part, this is due to the fact that in the first round of response to neoliberalism in Latin America, the progressive political forces failed,[ii] whether by weakness or design, to dismantle the mechanisms contributing to the consolidation of the "extreme capitalism" which is hegemonic globally today. This form of capitalism presents, in addition to its classic contradictions, an "extreme concentration of wealth and a tendency towards the extreme concentration of ownership of corporations"[iii], as typified in the process of monopoly via mergers and acquisitions, as we see now with the planned mergers of six of the world’s biggest seed and agro-chemical companies into just three mega-corporations (Monsanto-Bayer, Dow-Dupont, and Syngenta-ChemChina)
However, it is noteworthy that it is not the left alter-globalisation movements that have been defeated in 2016. Rather, these have transformed themselves into actual political forces in ascendency: partly converging around Bernie Saunders, Jeremy Corbyn, and Podemos who have emerged as beacons of hope. What has been definitively defeated in 2016 is what we can call ‘social-democratic neoliberalism’. As Naomi Klein has written: "It was the Democrats' embrace of neoliberalism that won it for Trump."[iv]
This new international conjuncture should encourage the re-creation of a new wave of alter-globalization, strengthened by the lessons of recent defeats, and galvanised by the hopes that are inspiring the rise of a left opposition against the emerging fascist trends globally, in both the North and the South. As William Robinson warned presciently in 2011, “the counterweight to 21st century fascism must be a coordinated fight-back by the global working class. The only real solution to the crisis of global capitalism is a massive redistribution of wealth and power - downward towards the poor majority of humanity. And the only way such redistribution can come about is through mass transnational struggle from below."[v]
The current debate at the UN Human Rights Council (UNHRC) on the creation of a Treaty addressing human rights and transnational corporations and other enterprises offers a great opportunity to confront the central actor in the global capitalist economy, what is today commonly referred to as "corporate power," and to contribute to the emergence of a new wave of anti-neoliberal activism. This opportunity has been created in part through ongoing alter-globalisation struggles, in which the "Campaign to Dismantle Corporate Power, End Impunity and Reclaim Peoples Sovereignty[vi]" is a protagonist. This global Campaign brings together affected communities, movements and social organisations from all continents. In June 2014, mobilisations by the Campaign and the Treaty Alliance[vii] at the country level and in Geneva, both within and outside the UN Human Rights Council, culminated in a successful vote to open a formal UN process to prepare a treaty.[viii]
In the current conjuncture of struggles, key areas of corporate power are vulnerable to fatal blows – which together with the UNHRC process can contribute to advancing this emerging wave of alter-globalisation struggle.
1-Ending the legal impunity of corporations
From the early 1980s, the global corporate elite began an uninterrupted assault on human rights and the public interest. This offensive has become visible in the erosion of state sovereignty, dismantling the welfare state, privatisation of public services, economic deregulation, trade and investment liberalisation and the establishment of the primacy of the rights of corporations and other investors over peoples’ rights.
At the international level, free trade and investment agreements in their various forms combine with the policies of the WTO, IMF and World Bank to provide the ultimate guarantee of protection to capital. Under these policy regimes, Transnational Corporations (TNCs) have acquired rights exceeding those of States – made possible through such punitive mechanisms as ISDS (investor-state dispute settlement) through which corporations can sue states for billions of dollars while states cannot sue or sanction corporations. The ISDS mechanism has been operative in the Americas since the early 1990s, when it was embedded in Chapter 11 of NAFTA and it is currently being aggressively pursued in TTIP, CETA and TPP as well as in other ‘new generation’ agreements.
The result of this policy framework has been the construction of a veritable architecture of legitimation and impunity, which has prioritised the rights of investors over human rights, that is, over peoples' rights. This unprecedented privilege, the guarantee that corporations' rights will be respected regardless of the effects of their operations, is one of the pillars on which ‘extreme capitalism’ is based. It is part of the foundation of the hypertrophic corporate power – the Lex Mercatoria - that rules in the world today.[ix] It is this principle of the primacy of corporate rule that the in-process UN Treaty on the regulation of TNCs could address. In proposing that human rights be put in their rightful place, above any other norm of international law,[x] such a Treaty moves to make the current arbitrariness permitted by international trade and investment agreements illegal, and to identify certain corporate operations as international crimes.
2- Cutting the link between economic power and democracy
The increasing economic asymmetry between corporations and states, and between the corporate business elite and other citizens, now more extreme than at any other time in recent history, is another defining characteristic of contemporary capitalism. This asymmetry leads to, and is further perpetuated by, its political expression, the "privatisation of democracy". Mechanisms of corporate capture such as lobby organisations, revolving doors between corporations and government, election campaign financing, and other legal and illegal channels, as well as corruption operating at the executive, legislative, and judicial levels of contemporary democracies, transform the most “common good” of society into a mechanism to benefit the few. Susan George refers to this as illegitimate and unaccountable corporate power and explains that “groups of companies from, say the United States and European countries or Europe as a whole come together to obtain results they perceive as being in their collective interest. ‘Obtaining results’ includes political results and the capacity to obtain them from governments is inexorably growing. This, to me, implies a serious breakdown of democracy”.[xi]
The privatisation of democracy co-opts institutions created for the common good and the public interest, transforming them into tools to guarantee and increase the private interests of those who seize control of them. A direct or indirect plutocracy, more and more scandalous, excludes the majority of people and produces in them the growing apathy or disenchantment with democracy that we see increasingly in the world today. Incredible as it may seem, authoritarian and fascist voices (from Trump to Le Pen) have begun to emerge on the global stage and are echoed in public debate and represented in several parliaments. Cutting the link between economic power and democratic institutions is one of the objectives of the work on the UN Treaty and this is essential if popular movements are to recover the sovereignty of the people, or as W. Robinson put it, to move towards the “redistribution of power”.[xii]
Corporate capture is reproduced internationally in the institutions of so-called "global governance" - a euphemism that hides the undemocratic nature of the international system manifested in the WTO, IMF and WB. These institutions are totally captured by the current corporate economic interests that, at present, dictate their agendas and the financing of their international programmes. This overall trend is manifested in the transfer of governance of “conflicted policy area’ from intergovernmental spaces to multi-stakeholder spaces, strongly influenced, if not led, by the interests of the corporate sector. This trend is being aggressively promoted by the World Economic Forum through its "Global Re-design Initiative (GRI)," which promotes "multi-stakeholder governance" as its preferred option for governance. This is not an ad hoc strategy – it is in fact one of the main strategies put forward by the Davos class, the global economic elites, in response to the financial and other inter-related crises of 2008.[xiii]
The multi-stakeholder approach is already quite advanced, mostly in relation to the nexus of food, nutrition and health and is exemplified in the SUN (Scale Up Nutrition) initiative which has a significant concentration of business corporations and a private sector driven agenda. In addition, multi-stakeholderism excludes those who do not agree, and bypasses legitimately established intergovernmental food and nutrition policy spaces, such as the CFS, the World Health Organization (WHO) and the FAO.[xiv]
3- Ending the financial fiesta
One of the central engines of capitalism today is finance, which, in turn, is currently the most globalised dimension of the international economy. It is well known that the financial sector dominates productive capital and that there are banks and investment funds far more powerful than many UN member states. Finance imposes a logic of immediate profit, which "naturally selects" the most profitable businesses, generating standardisations of all kinds, obliterating diversity (cultural, gastronomic, etc.), and depersonalising decisions to prevent any connection with or accountability towards those impacted. As Sivanandan points out, key players in mega banking scandals refuse responsibility, as when Bob Diamond, CEO at Barclay’s Bank at the time of the manipulation of the Libor lending rates passed responsibility to ‘lower orders’ and called for a moratorium on bankers’ apologies for their role in the financial crisis.[xv]
The power of finance corporations is based on two key elements: the extreme deregulation that allowed the invention of infinite financial "products," multiplying opportunities for profit while increasing the overall risk for the system (as indicated in the financial crisis of 2008); and the ability to evade taxes and facilitate the evasion of taxes by third parties (even through criminal practices such as money laundering or tax evasion). In many countries, no taxes are levied on financial or stock exchange transactions at all, or minimal proportional fees are levied on profits generated by speculation. Tax havens and agreements to avoid double taxation, along with technological solutions, have served as central mechanisms to facilitate the movement of capital across the planet with almost complete freedom to avoid taxes, hide wealth, exploit workers, and practice ‘wage evasion’[xvi] and speculate with the assets of countries vulnerable to international financing via exorbitant interest payments and extortionate debt.
According to Walden Bello it has taken the global financial crisis to deal another blow to neoliberalism “with its sweeping away of the Rational Choice Theory and the Efficient Markets Hypothesis that had been the cutting edge of the globalisation of finance.”[xvii] However, up to the present, the Banking corporations have succeeded in resisting serious re-structuring and substantive regulation.
If financial institutions are to work for the benefit of the entire population, it is urgent to insist on diminishing the entrenched structural power of the finance establishment in the framework of global corporate power by, among other solutions, promoting strict financial regulation, abolishing tax havens, eliminating double taxation agreements, and limiting the size of banks and funds.
4- Stopping the commodification of knowledge
Industrial patents – particularly in pharmaceuticals - are a favoured strategy of global capitalism for the savage appropriation of enormous portions of the wealth produced by human beings. Corporations, especially over the last 40 years, have taken on this role of establishing a structure of national and international laws that guarantee the control of patents on scientific and technological discoveries. Such corporate patent holders generally enjoy many years of exclusive use, that is, the sole right to produce and sell their products, at a price they consider ‘fair’ - a price that will allow them to earn as much profit as possible.
The linking of Intellectual Property Rights (IPRs) and trade regimes within the World Trade Organisation was first proposed by the US government at the behest of US corporations and strongly opposed by developing country governments.[xviii]
In the context of this international regime governing patents (further expanded in new generation FTAs) corporations do not take into account whether drug prices, for example, deprive poor and low-income patients of access to life-saving hepatitis C treatments or anti-viral AIDS drugs; whether peasants are robbed of the possibility to reproduce their own seeds; or whether access to technologies that could contribute to solving problems like climate change and hunger remain in the control of corporations.
The patent regime, as in the commodification of knowhow and knowledge, forms the basis for capital accumulation in many economic sectors today: communications, energy, health, medicine, food, transport and many others. Interrupting this commodification of knowledge as a collective human activity, would not only contribute to the dismantling of corporate power in many sectors, but would also be instrumental in enhancing human well-being. If the corporate patent regime did, at any moment in history, play a role in accelerating the development of technological knowledge and inventions, this is no longer the case today.[xix] Instead, as a rule, the state through its public institutions invests more heavily than the private sector, generating the conditions that make scientific and technological progress possible. There are no valid reasons why public resources should be transformed so absurdly into private profit.
5- Cutting off decisively corporate access to the common goods of nature
Definitively establishing the public character of nature and administering its use for the common good by cutting off unrestricted access and exploitation by mining, energy and agricultural corporations seems like an obvious goal. However, in practice, the artifices of propaganda and the co-optation of common sense by economic interests transform this into something which is not obvious, something for which we must fight.
A world at imminent risk of climate and environmental disaster requires urgent decisions to end the wild extractivism behind many current environmental crises – toxification or devastation of the oceans, seas and rivers; land, soil, forests; and biodiversity. The solution to these crises cannot be in the hands of those who, instead of the logic of the common good, are acting out of the logic of profit. Thomas Berry called for “legal structures and political establishments that will know our way into the future is not through relentless industrial development”.[xx] As the broad range of climate justice movements emphasise, market solutions are false solutions which cannot provide a response to the current devastated environment.
Only an entirely public and participative administrative protection of nature can reverse the path towards collapse on which humanity currently finds itself. It is only this that can impose a real limit on, for example, the oil companies, and international food and mining corporations that have accumulated sufficient economic and political power to block civilizational advances indispensable for the survival of our species. Such an approach is outlined in the Marrakech Declaration developed by La Via Campesina and other social and democratic movements on the occasion of COP 22 which sees that “the implementation of those alternatives as well as other solutions aiming at putting an end to the greedy dominating capitalist logic, can become true only by united international and national struggles which make the power balance in favour of the peoples”.[xxi]
Ending the (mis)appropriation of nature can be another fatal blow which can be delivered to corporate power.
At least 5 hits: tactics and strategy for a second round of anti-globalization.
There are signs that, increasingly, the people of the world are exasperated with the violations of corporate power, and with the impunity and arrogance with which they have appropriated democratic instruments of national government and global governance. The challenge of this second wave of alter-globalisation is to organise and converge the strategies that can deliver at least these five fatal blows against the power of the corporations, and to turn resistances into the practice of alternatives. Significantly, the road to the first blow is already open with the binding Treaty process on Transnational Corporations at the UNHRC. This is the best opportunity we have currently to take a step towards realising the vision of a fair and sustainable world.
- Brid Brennan and Gonzalo Berron are members of the Corporate Power project team of the Transnational Institute (TNI).
Thanks for translation and comments to Jordan Bishop (ALAI) and Katie Sandwell (TNI).
The original Spanish version of this article forms the introduction to edition 520 (December 2016) of ALAI’s Spanish language magazine América Latina en Movimiento, titled “Transnacionales y Derechos Humanos” (transnationals and human rights), published in co-edition with the Transnational Institute (TNI). This English version of the article has some additional observations and expanded endnotes.
[ii] Sader, Emir (2011) The New Mole: Paths of the Latin American Left , Verso New Delhi – “the right recovered its capacity for counter-offensive to the spread of the progressive governments rejection of free trade and other policies of neoliberalism” p.147
See also reference to Vitali S, Glattfelder, JB, Battiston, S (2011) The Network of Global Corporate Control
[iv] Klein, Naiomi https://www.theguardian.com/commentisfree/2016/nov/09/rise-of-the-davos-class-sealed-americas-fate, the Guardian, November 9, 2016.
[v] See Robinson, William I (2011) http://www.aljazeera.com/indepth/opinion/2011/04/201142612714539672.html
[viii] The Open Ended Intergovernmental Working Group (OEIGWG) was mandated on June 24, 2014 in a vote at the United Nations Human Rights Council (UNHRC) to develop an internationally binding legal instrument on Transnational Corporations and other enterprises with respect to human rights http://www.ohchr.org/EN/HRBodies/HRC/WGTransCorp/Pages/IGWGOnTNC.aspx
[ix] See Chapter 1: The International Peoples Treaty on the control of Transnational Corporations http://www.stopcorporateimpunity.org/wp-content/uploads/2016/11/PeoplesT...
[x] De Zayas, Maurice (2016) Report of the Independent Expert on the promotion of a democratic and equitable international order – see Chapter IV-Primacy of the International Human Rights Treaty regime
[xi] George, Susan (2014)The State of Corporations – The rise of illegitimate power and the threat to democracy https://www.tni.org/sites/www.tni.org/files/download/state_of_corporatio...
[xii] Ibid Robinson
[xiii] See Harris Gleckman “Multi-stakeholderism: a corporate push for a new form of global governance ” 2016 https://www.tni.org/en/publication/multi-stakeholderism-a-corporate-push-for-a-new-form-of-global-governance
[xv] Sivanandan, A (2013) The market state vs the good society, Race and Class Institute of Race Relations, Vol.54(3): 1-9 London http://journals.sagepub.com/doi/pdf/10.1177/0306396812464009
[xvi] The report "The Bermuda Connection: Profit Shifting, Inequality, Unaffordability at Lonmin 1999-2012" (Forslund, Dick AIDC, 2015) exposes the role of mining company Lonmin in wage evasion, ie how the company stopped Responding to salary demands from miners alleging economic problems that in fact hindered irregular transfers of profits abroad. http://aidc.org.za/download/Illicit-capital-flows/BermudaLonmin04low.pdf
[xvii] Bello, Walden (2016) Revisiting the Lessons of the Battle of Seattle and its aftermath
[xviii] Correa, C.M. (2016) Innovation and the Global Expansion of Intellectual Propoerty Rights: Unfulfilled Promises southcentre.int/wp-content/uploads/2016/08/RP70_Innovation-and-IP-Unfulfilled-Promises_EN.pdf
[xix] Ibid p. 26 Correa cites research that indicates the problems that arise with the IPR regime in developed countries and makes the argument that “If intellectual property does not work in developed countries as generally described by their proponents, the situation can only be worse in developing countries with weak science and technological infrastructures, scarcity of risk capital and unsophisticated production profiles. These countries are currently paying the price of a system which primarily serves as a platform to extract rents (in the form of royalty payments and high prices) and which does little to promote local innovation and economic development”.
[xx] Berry, Thomas In Introduction, Cullinan Cormac Wild Law, (2001) 2nd edition Siber Ink, Capetown
[xxi] See Marrakech declaration against the Summit of false solutions and for a fair and sustainable future for all peoples Nov 2016) https://viacampesina.org/en/index.php/actions-and-events-mainmenu-26/-climate-change-and-agrofuels-mainmenu-75/2213-marrakech-declaration-against-the-summit-of-false-solutions
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