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_________________________________________________________________ __________ CORPORATE EUROPE OBSERVER ____________ ISSUE 6 APRIL 2000 _________________________________________________________________ Welcome to the sixth issue of the Corporate Europe Observer. We open with four articles on the European Commission and its links with corporate Europe. During the negotiations on the review of the Amsterdam Treaty that will take place this year, CEO will run an 'IGC-Watch' initiative, to monitor and report on corporate lobbying activities around the treaty revision process. In this issue, we get a glimpse of corporate ambitions for the treaty revision, mainly through attempts to expand the Commission's powers to negotiate in international fora such as the WTO. We follow with an examination of the 'revolving door' phenomenon between the European Commission and the corporate world and look at a few recent cases. A short item on a special EC budget line for sponsoring and promoting the creation of international business roundtables follows. We end the EU section with an article on the recent attempts by the Commission to restrict public access to EU documents. A brief report on European corporate lobbying at the WTO Seattle Ministerial opens the following section, followed by an update on the European Commission's Investment Network initiative. Next is an article on corporate responses to the outcome, or lack thereof, of the Seattle Ministerial. We present responses by lobby groups such as UNICE and the International Chamber of Commerce (ICC) as well as European think-tanks and PR companies. The low profile business response after the ministerial obscures the development of new strategies to deal with opposition against neoliberal globalisation. Finally, we present the more sophisticated corporate reaction to Seattle, that was unveiled at the 30th world economic forum (WEF) meeting in Davos, last January. At that meeting, more than 2000 industrialists, national and international political leaders strategised how to put a 'human face' to globalisation in order to counter what is called the backlash against globalisation. In issue 5 of the Corporate Europe Observer, we wrote on the controversial Global Compact, a new partnership between the United Nations and major corporations. In this issue we report on the new UN website which was launched in Davos. We then follow with a brief review of Johann-Gunther König's book "Alle Macht den Konzerne -- das Neue Europa im Griff der Lobbyisten" ("All Power to the Corporations -- the New Europe in the Grip of the Lobbyists"), a useful guide to Germany Inc. that describes how the German corporate landscape is being transformed by economic globalisation. We finish with a report on the meeting of campaigners, researchers and journalists working on the subject of corporate political power which CEO organised in Córdoba, Spain, last October. We also reprint the Córdoba Declaration that resulted from that meeting. _________________________________________________________________ CONTENTS _________________________________________________________________ * Intergovernmental Conference 2000: Business and the Amsterdam Leftovers * Back to Business: Revolving Doors in Brussels * EC Offers Funding for International Business Roundtables * Texts, Lies & Red Tape: The EC's (Failed) Crusade For Secrecy * European Industry in Seattle * Update on the Investment Network: How the EC and Business Prepared for WTO Investment Talks in Seattle * Business Responses to Seattle * Davos 2000: 'New Beginnings' for Global Capitalism? * Toothless UN Website on Global Compact with TNCs * Guide to "Germany Inc." * CEO Hosts Meeting in Spain * The Córdoba Declaration * Disclaimer ___________________________________________________________________ This issue of the Corporate Europe Observer is brought to you by Belén Balanyá, Ann Doherty, Olivier Hoedeman, Adam Ma'anit and Erik Wesselius. Our special thanks go to Chris Grimshaw for helping out with the editing. Corporate Europe Observatory is a research and campaign group targeting the threats to democracy, equity, social justice and the environment posed by the economic and political power of corporations and their lobby groups. CEO DONORSHIP If you would like to support our work financially, we invite you to become donor of Corporate Europe Observatory. CONTACT: Corporate Europe Observatory Paulus Potterstraat 20 1071 DA Amsterdam, Netherlands tel/fax: +31-20-6127023 e-mail: <ceo@xs4all.nl> website: <http://www.xs4all.nl/~ceo/> _________________________________________________________________ INTERGOVERNMENTAL CONFERENCE 2000: BUSINESS AND THE AMSTERDAM LEFTOVERS _________________________________________________________________ To accommodate the expansion of the EU with up to thirteen new Member States, [1] the EU Treaty will be revised again this year, at the Intergovernmental Conference ('IGC 2000'). During past Treaty revisions, corporate lobbying campaigns have often successfully enshrined corporate priorities into the EU Treaty. [2] This article gives a preliminary overview of corporate ambitions for the upcoming Treaty revision. One disturbing example is the proposed expansion of the European Commission's powers in WTO negotiations. Corporate Lobbying for Amsterdam During the previous Intergovernmental Conference, which resulted in the Amsterdam Treaty (1997), corporate lobby groups mounted an active lobby campaign [3] around three main demands: - to strengthen the power and 'ability to act' of the European Union, especially the European Commission; - to stick to previously agreed schedules for Economic and Monetary Union and for enlargement of the European Union to Central and Eastern Europe; and - to avoid integrating new elements such as environmental and social clauses, which were described as threats to the competitiveness of EU business. Although industry was very pleased with the Maastricht Treaty, they wanted more. "We feel very strongly that Europe can not move at the pace of the slowest," remarked European Roundtable of Industrialists (ERT) Secretary- General Richardson in February 1997, "... the United States could do nothing if every decision had to be ratified by 52 states." [4] The Amsterdam Treaty (1997) was quite satisfactory for business, but it failed to create "a better way of managing Europe." [5] The more controversial aspects of institutional reform (streamlining the European Commission as a kind of EU management team, further limiting Member States' power of veto, and extension of qualified majority voting and reweighing votes in the Council of Ministers) were postponed for the current IGC. Institutional Reform: Business as Usual The scope of the IGC 2000 is modest compared to previous Treaty revisions. As a result, corporate lobbying has been less pronounced. So far, only the Union of Industrial and Employers' Confederations of Europe (UNICE) has issued a (preliminary) position paper. The influential EU Committee of American Chambers of Commerce, AmCham (representing 'European companies of American parentage'), is still gearing up its campaign. It has formed an IGC working group which is preparing a position paper. The European Roundtable of Industrialists (ERT), representing 47 of the largest European TNCs, has very successfully influenced previous Treaty revisions, [6] but seems less active and to have left the initiative to other business groupings this time around. Whilst the lobby groups appear relatively inactive, the role played by corporate-dominated think tanks, however, may be greater than during previous Treaty revisions. Both the European Policy Centre [7] and Friends of Europe [8] have formed IGC working groups where corporate leaders and EU representatives meet regularly. We will keep a close watch on these think tanks and report our findings in future issues of the Corporate Europe Observer. The UNICE position paper gives a good indication of the kind of demands that will be put forward by corporate lobby groups. Unsurprisingly, the IGC negotiators are asked to "take on board some key business concerns." They demand that any reforms should strengthen the EU's "capacity to take and implement decisions in its areas of competence, and to respond effectively to the global challenges it faces." Competitiveness should be strengthened and economic and monetary union and convergence of the EU's economies should be guaranteed. Existing Single Market law should not be 'diluted' by the accession of new Member States. UNICE also pleads for increased capacity for the EU to defend and promote common European interests at international level. [9] By demanding that new EU Member States must adopt all Single Market legislation, and that existing members should comply fully, UNICE aims to consolidate the neoliberal thrust of EU policies. A new target date for "completion of the Single Market" should keep things on track. However UNICE has some reservations regarding closer intergovernmental cooperation by groups of Member States -- namely 'flexibility'. A "balance between harmonisation and competition of policies in an enlarged EU" is deemed crucial. [10] Power Play in the WTO During the negotiations on the Amsterdam Treaty, business strongly pushed for new powers for the European Commission in international negotiations on trade and investment, such as in the World Trade Organisation (WTO). Both UNICE and the ERT proposed that the power of the European Commission to bargain on behalf of EU Member States should be extended to all external commercial issues, including trade in services, investment and the protection of intellectual property. This demand was backed by the President of the European Commission, Jacques Santer in a letter he sent to EU heads of state and governments a few days before the Amsterdam Summit in June 1997. But despite lobbying by business and the Commission, French President Jacques Chirac blocked the proposals for revision of the relevant Article 113 of the Maastricht Treaty during the Amsterdam Summit. Afterwards, ERT Secretary-General Keith Richardson bitterly remarked that "Europe is poorer and weaker because of this failure." [11] The WTO Ministerial Conference in Seattle showed the risks of shifting more negotiating power to the European Commission in the field of foreign economic policy. In a last- ditch attempt to launch a new Round of trade negotiations, EU Trade Commissioner Pascal Lamy conceded to US demands to set up a biotechnology working group in the WTO, despite having no mandate to do so. Such controversial deals could be blocked by representatives of Member State governments. Under the Amsterdam Treaty, WTO negotiations are a shared responsibility between the Council of Ministers and the European Commission. If the Commission had negotiated on behalf of the Member States, there would have been no delegations from Member States. In such a situation, controversial deals can only be revoked afterwards, and most probably Lamy would have gotten away with them. The campaign against the Multilateral Agreement on Investment (MAI) has clearly shown the advantage of shared responsibility (and veto powers for individual Member States). In the OECD negotiations on international investment rules, the role of the EC was limited and EU governments had a great deal of independence. In the anti- MAI campaigns, national governments were targeted, and success in one country (France) was instrumental in sinking the MAI. Unfortunately, the IGC 2000 treaty revision provides a new chance for the Commission and its business allies to extend the European Commission's powers in external commercial policy. The lobbying campaign has already begun. In one of his first acts as Commission president, Romano Prodi nominated a "High-Level Reflection Group" to "advise the Commission on the issues which the next Inter-Governmental Conference (IGC) should address." [12] By appointing Lord Simon, former BP chairman and former vice-chair of the European Roundtable of Industrialists, as one of the three members of this 'neutral expert group' [13], Commission President Prodi ensured incorporation of business concerns into the final report. Indeed the Reflection Group advised the Commission to "revisit... the question of external representation of the Union, in subjects like trade in services or international monetary matters." [14] The advice was taken further in the Commission's official Opinion on the Treaty Revision. [15] The Commission writes that it "would prefer a substantial amendment of the scope of Article 133 (Article 113 in the Maastricht Treaty) by extending it to services, investment and intellectual property rights. Article 133 EC should be redrafted accordingly." Remarkably, the Commission proposes that as a general rule, the Parliament would be consulted on the conclusion of international economic treaties, whereas assent of the EP would be needed for "the conclusion of agreements with important economic and commercial implications worldwide." It is left unclear who decides when that is the case. Also it is not clear if the assent right for the Parliament would extend to the negotiating mandate of the European Commission, which until now was decided upon by the Council of Ministers and (theoretically) assented to by national parliaments. Thus, the Commission proposal would mean removing controlling power from national parliaments while handing back only limited controlling power to the European Parliament. We will continue our reportage of the corporate lobbying around the IGC 2000 in future issues of the Corporate Europe Observer. ----- Notes ----- 1. On 31 March 1998, accession negotiations were initiated with six applicant countries: Hungary, Poland, Estonia, the Czech Republic, Slovenia and Cyprus. At the Helsinki Summit on 12 December 1999, the Member States endorsed a proposal by the European Commission to open negotiations with Romania, the Slovak Republic, Latvia, Lithuania, Bulgaria and Malta. Accession of all candidate countries to the EU would mean an area increase of 34% and a population increase of 105 million. <http://www.europa.eu.int/comm/enlargement/intro/index.htm> 2. See previous publications by Corporate Europe Observatory: - "Europe Inc.: Dangerous Liaisons Between EU Institutions and Industry", Corporate Europe Observatory, Amsterdam 1997 - "The Amsterdam Summit in Retrospect: Maastricht II and Corporate Lobby Successes", CEObserver, Zero Issue, October 1997. - "Europe Inc.: Regional & Global Restructuring and the Rise of Corporate Power", Balanyá et al., Pluto Press, London, January 2000. 3. Ibid. 4. Personal interview with Keith Richardson, Brussels, 21 February 1997. 5. Keith Richardson, "Managing Europe: the Challenge to the Institutions", February 1998. 6. See CEO publications listed in note 2. 7. For more info on the European Policy Centre: - "The European Policy Centre", CEObserver Issue 2, October 1998 - "European Policy Centre Strikes Back", CEObserver Issue 3, June 1999 - EPC website: <http://www.theepc.be/> 8. "Friends of Europe is a non-profit organisation whose activities are directed by a Board of Trustees under the Chairmanship of Vicomte Etienne Davignon. It is an organisation without national or political bias and aims to promote discussion, research and new thinking on the issues shaping the future of European integration." Information provided by the secretariat of Friends of Europe. N.B. Former Commissioner Davignon is a prominent member of the European Roundtable of Industrialists and president of the Association for Monetary Union in Europe. 9. UNICE, "Preliminary UNICE Statement in View of the Intergovernmental Conference", Brussels, 3 December 1999. 10. Ibid. 11. Keith Richardson, "Managing Europe: the Challenge to the Institutions", February 1998. 12. "Informal meeting of designated Commission", Press Release, 27 August 1999. 13. The other members of the expert group were former Belgian Prime Minister Dehaene and former President of the German Federal Republic Von Weizsäcker. 14. Jean-Luc Dehaene, David Simon, Richard von Weizsäcker, "The Institutional Implications of Enlargement; Report to the European Commission", Brussels, 18 October 1999. 15. "Adapting the Institutions to Make a Success of Enlargement; Commission Opinion in accordance with Article 48 of the Treaty on European Union on the calling of a Conference of Representatives of the Governments of the Member States to amend the Treaties", Brussels, 26 January 2000 [COM (2000) 34]. _________________________________________________________________ BACK TO BUSINESS: REVOLVING DOORS IN BRUSSELS _________________________________________________________________ In March 1999, an independent investigative committee [1] accused the European Commission of having lost control of an increasingly corrupt bureaucracy, which led to the fall of the Santer Commission. Only three months later, acting Industry Commissioner Martin Bangemann caused another scandal by announcing that he would move to the executive board of Spanish telecommunications giant Telefónica. But indignation at these scandals turned out to be short-lived. When two of Mr. Bangemann's former colleagues also moved to the corporate world, Brussels remained silent. The revolving doors in Brussels are still wide open... The Bangemann Transfer On 1 July 1999, acting Industry Commissioner Martin Bangemann announced that he planned to join the Board of Directors of Spanish telecommunications giant Telefónica, and that he wanted to resign from his duties in the European Commission. Jubilant Telefónica chairman Juan Villalonga nicknamed Bangemann "our Ronaldo", comparing the move of the former Commissioner with the transfer of a highly praised football player. Bangemann's move was condemned by his colleagues. The Commission said the correct way to approach taking up such a job would be to resign first and to negotiate the new job afterwards. Bangemann was dismissed from his function, and his duties were taken over by Competion Commissioner Karel van Miert. Although Bangemann wanted to start at Telefónica as soon as possible, he was told to wait until the Commission had decided how to handle his 'unprecedented move'. Bangemann's move was blunt and over-hasty, but it was not at all unprecedented. The Commission has a long tradition of 'revolving doors' to top positions in the private sector and vice-versa. Examples include former Commissioners Etienne Davignon (now Société Générale), François Ortoli (afterwards CEO of Elf) and Peter Sutherland (now British Petroleum and Goldman-Sachs) or Pirelli's Ricardo Perissich who used to be Industry Director-General in his former job at the European Commission. Bangemann may have thought of these predecessors, when at a press conference a few days after announcing his move, he stated that "it would be hard to prove a conflict of interests." However, Martin Bangemann had been responsible for EU information and telecommunications policies since 1992 and his relationship with Telefónica dates back to at least 1994. In that year, he included Telefónica's then chairman, Cándido Velázques-Gastelu, in the so-called "Bangemann High Level Group on the Information Society". [2] In a quick damage-control operation, the Council of Ministers officially dismissed Mr. Bangemann from his duties as acting Commissioner on July 9th. According to the judgement of the Council, Bangemann had failed to fulfill his obligations under Article 213 of the EU Treaty, especially the obligations to "honesty and discretion"; [3] he should never have accepted a position in the Telefónica Board of Directors. In line with the provisions of the Treaty, the Council brought a case before the European Court of Justice to suspend Bangemann's pension rights if he joins the executive board of Telefónica. The court case was trumpeted loudly by the Council in July. A few months later, when the case was withdrawn on the basis of some empty promises by Bangemann, [4] the Council found it convenient not to issue any press release. A Code of Conduct for Commissioners In another attempt to save the face of the Brussels institutions, the designated Commission of Romano Prodi had published a Code of Conduct for Commissioners on 17 July 1999. [5] The most important innovations in this code are an obligation for Commissioners to declare their financial interests and assets in detail and the introduction of a 'cooling down period' of one year after the resignation of Commissioners, during which they may not engage in occupations related to issues that fell under their responsibility in the Commission. When needed, an "ad hoc ethical committee" will decide if there is a breach of the obligations under article 213(2) of the EU Treaty. This anemic Code of Conduct cannot be considered a serious attempt to close the revolving doors between the European Commission and the private sector. The one year cooling down period is too short, especially when one takes into account that Commissioners receive up to 65% of their former income over a period of five years after stepping down from their public function. [6] Furthermore, the Code of Conduct doesn't specify any new sanctions beyond those already contained in the EU Treaty (withdrawal of pension rights and transitional payments). The Code served well to take the sting out of the debate in the European Parliament on the 21st July. At this first session of the newly elected Parliament, many MEPs strongly criticised the 'Bangemann affair', [7] and the Parliament adopted a resolution condemning Bangemann's move. However, no amendmends to the draft Code of Conduct were proposed, and when the Council withdrew its case against Bangemann in December, the Parliament remained silent. Back to Business as Usual Some of Mr. Bangemann's former colleagues seem to have interpreted the mild treatment he received and the lack of will in the European Parliament to address this form of corruption as a signal to follow in his footsteps and pass through the revolving doors into the corporate sector. On October 1st 1999, US investment bank Warburg Dillon Reed (a subsidiary of Swiss megabank UBS) announced that Sir Leon Brittan (former Trade Commissioner) would soon become its vice-chairman. [8] As Trade Commissioner, Sir Leon had been responsible for negotiating the WTO agreement on financial services -- an agreement designed to improve market access for banks and other financial players in the 'emerging markets' of the South. During these negotiations, Brittan worked closely with the influential Financial Leaders Group, of which UBS is an active member. [9] More recently, it was announced that former Competition Commissioner Karel van Miert is expected to join the advisory boards of both Philips Electronics [10] and Swiss- based aviation group SairGroup [11] in the spring of 2000. When in office, Van Miert took several decisions directly affecting both companies. Considering these facts, there is a shocking lack of political will, both in the Commission and the European Parliament, to stop the blurring of borders between business and politics and to close the revolving doors once and for all. Less than a year after the fraud and corruption crash of the Santer Commission, it seems Brussels is 'back to business as usual'. ----- Notes ----- 1. Committee of Independent Experts, "First Report on Allegations Regarding Fraud, Mismanagement and Nepotism in the European Commission", 15 March 1999. 2. Members of the High-Level Group on the Information Society: Martin Bangemann (European Commission), Enrico Cabral da Fonseca (Campanhia Comunicaçaoes nacionais), Peter Davis (Reed Elsevier), Carlo de Benedetti (Olivetti / ERT), Pehr Gyllenhammar (Volvo / ERT), Lothar Hunsel (T- Mobil), Pierre Lescure (Canal+), Pascual Maragall (mayor of Barcelona), Gaston Thorn (Cie. Luxembourgeoise de Telediffusion / CLT), Cándido Velázquez-Gastelu (Telefónica / ERT), Peter Bonfield (ICL), Etienne Davignon (Société Générale de Belgique / ERT), Jean-Marie Descarpentries (Bull), Brian Ennis (IMS), Hans-Olaf Henkel (IBM Europe), Anders Knutsen (Bang & Olufsen), Constantin Makropoulos (Hellenic Information Systems), Romano Prodi (IRI), Jan Timmer (Philips Electronics / ERT ), Heinrich von Pierer (Siemens / ERT). Please note that this information relates to the year 1994. As indicated, 6 of the 20 members of the Bangemann Group also belonged to the European Roundtable of Industrialists. 3. Art 213 (2) of the "Consolidated Version of the Treaty Establishing the European Community": "The Members of the Commission may not, during their term of office, engage in any other occupation, whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. In the event of any breach of these obligations, the Court of Justice may, on application by the Council or the Commission, rule that the Member concerned be, according to the circumstances, either compulsorily retired in accordance with Article 216 or deprived of his right to a pension or other benefits in its stead." 4. The case against Bangemann was withdrawn on 17 December 1999, on condition that Bangemann would also withdraw his case against the Council. The Council justified its decision by referring to the promises that Bangemann made in a letter to the Council dated 10 December 1999, namely that he would not join the 'consejo administrativo' of Telefónica before 1 July 2000 (thus complying with the 1 year 'cooling off' period in the new Code of Conduct for Commissioners), that he would not represent the interests of third parties (including Telefónica) at the EU institutions until 31 December 2001 and not make use of any confidential information that he had access to as a Commissioner. 5. The Code of Conduct came into force when Romano Prodi's new Commission came into office (18 September 1999). The provisions of the Code of Conduct do not bind members of previous Commissions. 6. Article 7 of Regulation No 422/67/EEC, No 5/67/Euratom, amended in Regulation (ECSC, EEC, Euratom) No 1546/73 of the Council of 4 June 1973. 7. Minutes of the plenary debate in the European Parliament on the position of Mr. Bangemann, Brussels 21 July 1999. Available on the EP web site. 8. "Sir Leon Brittan to join Warburg Dillon Read as Vice Chairman", Warburg Dillon Reed press release, 1 October 1999. 9. For more info on the Financial Leaders Group, see: - "WTO Millennium Bug: TNC Control over Global Trade Politics", CEObserver, Issue 4, July 1999; - "Europe Inc.: Regional and Global Restructuring and the Rise of Corporate Power", Balanyá ... [et al], Pluto Press, London, 2000. 10. Philips press release, 17 February 2000. As Competition Commissioner, Van Miert investigated the techno-lease construction, a sophisticated construction through which Philips received massive Dutch government funding. In the end, Van Miert approved the construction. 11. SAirGroup press release, Zurich, 6 March 2000. According to the press release "Karel Van Miert is a leading authority on European market and competition issues". _________________________________________________________________ EC OFFERS FUNDING FOR INTERNATIONAL BUSINESS ROUNDTABLES _________________________________________________________________ Readers of the Corporate Europe Observer will be familiar with the Transatlantic Business Dialogue (TABD), the group of EU and US based industrialists initiated by the European Commission and the US government. The mushrooming of EU business roundtables involving CEOs from other parts of the world is facilitated by generous funding from the European Commission (EC). The EC's enterprise directorate has a special budget line for the "promotion of international business-to-business dialogue." [1] "From an EU standpoint," the announcement on the EC's website explains, "such dialogue should contribute to enhancing the global competitiveness of EU business and lead to recommendations to the public authorities of both regions on how to achieve such objectives." [2] The EC offers to pay up to 50% of the costs of "conferences, seminars and workshops as well as their preparatory or follow-up activities" and lists examples of business dialogues it already supported: EU-Japan Business Round Table, Transatlantic Business Dialogue with the United States of America, EU-Russia Business Round Table, EU-Taiwan Business Round Table, EU-ASEAN Business Round Table and Mercosur-EU Business Forum. [3] If you want to know whether the EU has funded an international business roundtable targeting a region with your particular interest, contact the civil servant responsible for the budget line: DG III/A/2 -- Jean-Pierre Bou -- fax: +32-2-296.98.52, E-mail: Jean-Pierre.Bou@dg3.cec.be ----- Notes ----- 1. DG III Grant Theme 18, in 1999 with a budget of 150.000 euro. 2. Website of the EC's DG Enterprise: <europa.eu.int/comm/dg03/directs/dg30/grants/theme18.htm> 3. Ibid. _________________________________________________________________ TEXTS, LIES & RED TAPE: THE EC'S (FAILED) CRUSADE FOR SECRECY _________________________________________________________________ Opposition from campaigners defending freedom of information may have managed to prevent European Commission (EC) attempts to further restrict public access to EU documents. The EC had hoped to rollback the scope of the existing rules, which, despite many loopholes still, are an important democratic tool. CEO, for example, makes use of this public right to information to gain access to key documents and information which exposes the links between industry and EC. [1] To counter strong public criticism of the European Union being secretive, the right of access to information was included in the 1991 Maastricht Treaty. This resulted in the various EU institutions developing rules by which citizens can apply for access to documents. [2] In practice these rules have, however, proven to be no guarantee of transparency. Statewatch, a UK-based group monitoring civil liberties in the EU, took seven cases to the European Ombudsman after the European Council had rejected access to documents, and won six of them. Heidi Hautala, Finnish member of the European Parliament, had to go to the European Court of Justice to force the Council to give her access to sensitive documents on nuclear issues. A review of the existing rules is scheduled in the 1997 Amsterdam Treaty, which describes itself as "a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen." [3] The European Commission was given the mandate to make a proposal for new rules which are to be approved before May 2000 (two years after the treaty entered into force). However, rather than removing the loopholes in the current rules, the EC drew up a proposal that would seriously restrict access to documents. It is normal practice that a discussion paper is circulated for public consultation before the process of drafting new regulations start, but ironically the discussion paper on access to information (drafted by officials from the three institutions -- Commission, Parliament and Council of Ministers) was not made public by the Commission. Statewatch obtained a leaked copy in April 1999 and revealed a very restrictive proposal which "would set the clock back and reimpose the secrecy of the pre-Maastricht days." [4] The proposal would practically have forbidden public access to internal documents relevant for ongoing policy discussions. [5] The text also suggested to create a more 'flexible system', which would have limited the right to appeal rejections. After having faced heavy critique, also from the European Parliament, the proposal, was withdrawn in June 1999. The Commission continued its remarkable authoritarian approach and did not write a new discussion paper, but instead released a draft regulation, excluding civil society from any input in the process. The draft legislation paid lip service to transparency, but included even more restrictions to the right of access which had been in the discussion paper. Working papers, for instance, were only to be released after the legislation is approved. Reproduction of any documents released would be forbidden. Moreover, the proposal suggested that Member States would have to apply the same principles and limitations. It would, in other words, force national governments to become as closed as EU institutions. A new wave of critique forced the Commission to rewrite the proposed legislation. On January 26th, the Commission approved a final version which expands the right to access to cover not only documents produced by the three institutions, but also documents by third parties which are in the possession of the EU institutions. [6] The new rules will apply only for documents received by the institutions after the new legislation is in place and a further limitation is that those who produced the document can ask for confidentiality. If for instance CEO would apply for the documents given to the EC by a corporate lobby group, one can expect that these groupings will request confidentiality. The draft approved by the Commission restricts the current rules for access to information by substantially narrowing the definition of "documents". For instance, it excludes documents reflecting free and frank discussions or advice as part of internal consultations or deliberations as well as informal messages. This is a bottomless bag which can be used to refuse many requests for access to documents. The Commission argues that it needs the "space to think" to formulate policy before it enters the public domain. Policy made in the glare of publicity "is often poor policy," the EC argues. Moreover, the proposal substantially increases the number of "exceptions", cases in which requests can be refused. [7] The proposal now has to be approved by the European Parliament and the Council, which have the right to amend the text. Public pressure might result in improvements, but the EC proposal is a very weak basis for realising the lofty promises of the Amsterdam Treaty. ----- Notes ----- 1. As reported in previous issues of the Corporate Europe Observer (Issues 2 and 3), CEO has in the last two years been engaged in a systematic attempt to gain access to documents regarding the contacts between the Commission and corporate lobby groups. Despite the simple procedure described in the law, reality learns that one has to arm oneself with large doses of patience and perseverance to deal with rejections on weak grounds, long delays and/or complete silence. But after many appeals, we have succeeded in getting access to some revealing documents. It was through an Access to Information request that we learnt about the Investment Network (IN), the EC's process of consultation with industry on international investment issues (related to the proposed WTO Millennium Round) -- a 'dialogue' the EC failed to inform NGOs about. 2. The Council's rules go back to 1993 (Council Decision 93/731/EC of 20 December 1993 on public access to Council documents), the Commission's to 1994 (Commission Decision 94/90/ECSC, EC, Euratom of 8 February 1994 on public access to Commission documents), whereas the European Parliament adopted its current rules in 1997 (European Parliament Decision on public access to Parliament documents of 10 July 1997). 3. The quote is from article A of the Amsterdam Treaty. The review is outlined in article 255 of the Amsterdam Treaty. 4. Tony Bunyan, Statewatch editor, quoted in press release 26 April 1999, "EU Plans to Undermine Citizens Right of Access to Documents". 5. The draft proposed to exclude working documents intended as contributions to internal deliberations from the scope of the right of access. That would mean that minutes of meetings, briefings, reflection notes, mission reports, etc., would be excluded. It is precisely these documents which are usually the subject of the requests, not the official documents which are the end result of policy making. 6. European Commission, proposal for a regulation of the European Parliament and of the Council regarding public access to documents of the European Parliament, the Council and the Commission, Explanatory Memorandum. 7. Ibid. _________________________________________________________________ EUROPEAN INDUSTRY IN SEATTLE _________________________________________________________________ While tens of thousands of protestors were jamming the streets of Seattle during the WTO Ministerial Conference last year, up in the conference rooms and luxury suites of many four star hotels, business carried on as usual. Insulated from the sounds of protest and the clouds of tear gas, lobby teams from the major industry groups met daily to coordinate their strategies and update each other with the latest information. Almost all of the major European and international lobby groups had a presence in Seattle, including UNICE (the Union of Industrial and Employers' Confederations of Europe), the ESN (European Services Network) and the TABD (Transatlantic Business Dialogue). UNICE in Seattle: An Opportunity Not Missed "By being present in Seattle, European business wants to make its views heard and listened to. UNICE, together with its national member organisations from across Europe and representatives of European business sectoral organisations will not miss such an opportunity." -- Dirk Hudig, Secretary General of UNICE [1] By far the most visible European lobby group in Seattle was the employers confederation- UNICE. Often sighted with European delegates and other officials, its team of over 20 lobbyists were hard at work championing the cause of industry. One of the chief reasons UNICE committed to getting such a strong presence in Seattle was "linked to the strong lobby of labour, consumer, environmental and development non-governmental organisation (NGOs) in the trade policy debate", said UNICE head, Hudig. [2] Citing the failure of the MAI as an example why business should be more proactive in its lobbying efforts, Hudig called for increased cooperation among business groupings and a more coordinated lobbying strategy: "The objective is also to join forces to counteract with the impressive media campaign launched around the world by many activist NGOs to denounce globalisation and block the start of any negotiations." [3] UNICE's sixty-six page lobby document "UNICE and the WTO Millennium Round" details European industry's priorities for a new 'Round' of multilateral trade negotiations. Items covered, include the 'Singapore issues' of investment, market access, government procurement, trade facilitation and competition policy. Other issues include electronic commerce, services, agriculture, and intellectual property as well as environment and labour. With regards to investment, UNICE calls for "a new approach and not an attempted second-coming of the MAI," deeming it as one of its "highest priorities." [4] However, the "new approach" is not new at all. Instead of demanding a comprehensive agreement on investment in one fell swoop, they call for an entry-level agreement on foreign direct investment, with full liberalisation of investment as the long term goal. [5] Elsewhere, UNICE calls for, among other things, increased cooperation between the World Bank and the IMF, a European Union "offensive" position on agriculture, and rejection of core labour and environmental standards in the WTO. While the position paper states that it is not realistic to undergo further negotiations on the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), a joint press release by UNICE and Keidanren (the largest Japanese corporate lobby group) in October contradicts this by demanding full implementation of the TRIPs agreement and calling for new negotiations to begin with a "single undertaking" in a new round. [6] By far one of the biggest initiatives of UNICE is in the promotion of comprehensive services liberalisation through its work in the founding of the European Services Network. European Services Network "I am very pleased to see how quickly and enthusiastically the different services sectors have organised themselves to provide business input for the GATS 2000 negotiations. Our negotiating priorities need to be rooted in the real concerns of business and we will be paying very close attention indeed to the negotiating priorities that the ESN identifies." -- Former Trade Commissioner Sir Leon Brittan [7] Claiming to be responding to the request by the European Commission and the Member States for more contributions from business with regards to trade policy, Barclays Bank Chairman, Andrew Buxton with the aid of UNICE and other European services firms and associations as well as enthusiastic support from the Commission, formed the European Services Network. [8] The ESN's primary purpose is to lobby for services liberalisation during the negotiations on the General Agreement on Trade in Services (GATS) in 2000, but that didn't stop the ESN, with the help of UNICE and others to champion their cause in Seattle. Currently, services agreements in the WTO are varied and have different members and different levels of commitments by Members States. The ESN, and other services lobbies such as the US Coalition of Services Industries, and the Global Services Network umbrella group, are pushing for a comprehensive services agreement stringing together all the existing WTO agreements as well as further liberalisation of the services sector as a whole. In a policy document distributed to the Seattle delegates, the ESN praised bilateral and regional initiatives such as the Transatlantic Economic Partnership (TEP) for their achievements in services liberalisation, but stressed the need for a 'firm' and 'comprehensive' multilateral agreement on services to be part of any new round in the WTO. [9] The elements of such an agreement, as outlined in the ESN document, include many of the elements we've come to be familiar with from the MAI, such as standstill and rollback of national legislation regulating trade and investment in services, broad coverage and definition of services with minimal exceptions, a concept of investor 'rights', national treatment and most favoured nation status, and severe restrictions on a Member State's ability to apply 'emergency safeguards' for example to protect public health. [10] With the upcoming services negotiations on the minds of many of the Seattle delegates at the time, such demands may not have fallen on deaf ears. The majority of corporate sponsors of the WTO Ministerial itself through the Seattle Host Organisation, were major players in services industries, such as air transport services (Boeing, Lufthansa, and Northwest), telecommunications and postal services (US West, AT&T, UPS, FedEx), financial services (Chase Manhattan Bank, Bank of America, Deloitte & Touche), and information technologies (Microsoft, IBM, Hewlett Packard, Intel), among others. [11] TABD in Seattle? As we reported in our briefing "Transatlantic Business Dialogue (TABD): Putting the Business Horse Before the Government Cart", the TABD claims to set the agenda for the EU and US negotiators in the WTO. [12] At their Berlin summit in October of last year, over 120 Chief Executive Officers (CEOs) of EU-US TNCs met with their trade representatives and WTO officials, to do just that. As such, the main thrust and substance of TABD influence is largely in the runup to WTO negotiations rather than direct involvement. Therefore, it came as some surprise to see that the TABD was holding private meetings in the Madison hotel in Seattle during the Ministerial Conference. Normally, the CEOs hold two official meetings a year, and the rest of the time they work within various working groups. An official TABD presence at a WTO meeting therefore, is something quite new. All attempts to get information about the TABD in Seattle, were met with stiff resistance. The WTO refused to publish information on who is registered as an NGO, despite not being able to provide any plausible reason why the information should be kept confidential. Nor were they willing to provide contact details for any TABD personnel or pass on a journalist's contact details to a TABD official, although they did confirm their presence there. No press releases were issued or any other visible presence of the TABD. Any presence in Seattle would have likely involved members of the Global Issues group of the TABD which focuses primarily on the WTO. Singing in the Corporate Choir UNICE, the ESN, and the TABD, represented some of the most significant European corporate lobby groups active in and around the 3rd Ministerial Meeting of the WTO. Others, such as the European Chemical Industry Council (CEFIC), also threw their voices in support of a comprehensive new round. [13] The International Chamber of Commerce (ICC), the International Council on Metals and the Environment (ICME -- representing the mining industry), Information Technology Industry Council, the Pacific Economic Cooperation Council and the International Federation of Pharmaceutical Manufacturers Associations, also urged the Ministers to begin new negotiations in a comprehensive round. The US industry groups with a visible presence in Seattle included the US Grains Council, the Alliance for Better Foods, the National Food Processors Association, the Farm Bureau, US Chamber of Commerce, the US Council for International Business ("Giving business a seat at the table in promoting an open system of world trade, finance, and investment.") and the Biotechnology Industry Organization. To Be Continued... As reported in previous issues of the Corporate Europe Observer, [14] much of the corporate lobbying activity in the runup to a WTO Ministerial takes place months and sometimes years before official negotiations commence. While this continues to be the case, the rallying cry of UNICE to better coordinate corporate lobby efforts in order to 'counteract' the efforts of NGOs did not go unheard. Industry groups were present in full force, clamouring for attention, meeting with delegates, exchanging information, and working with the media. Critique of the corporate influence over WTO negotiations was central in the mass protests which took place all over the world. With the failure of the MAI and now Seattle hanging over their heads, industry will be stepping up its efforts even more as services and agriculture, together representing over 80% of total global economic activity, will be negotiated in the WTO in 2000. [15] ----- Notes ----- 1. Hudig, Dirk. "Seattle: an opportunity not to be missed" article appearing in "The European Union in 2000", published by the European Voice in association with Adamson BSMG Worldwide. Page 30. 2. Ibid. 3. Ibid. 4. "European business is aware that free access to markets for investment is not a realistic short-term objective for WTO. The investment agreement envisaged should nevertheless introduce the first welcome steps in this direction." UNICE and the WTO Millennium Round, Page 15. 5. "Like other WTO agreements, the agreement on treatment of foreign direct investment should not only be accepted by all WTO members (with any necessary derogations for less/least developed countries), but also provide for periodic review and the possibility of negotiations on future liberalisation as and when this can be sustained by WTO members." UNICE and the WTO Millennium Round, Page 16. 6. "Joint Statement by UNICE and Keidanren," Brussels, November 9, 1999. 7. Sir Leon Brittan, address to the US Coalition of Service Industries on European strategy for GATS 2000, Washington DC, September 24th, 1999. 8. "I have been struck by the highly positive response of CEOs and European services federations and the strong UNICE support for Sir Leon's call for them to work together to press the case for further liberalisation in international trade in services." Andrew Buxton, Chairman Barclays Bank in an address to the US Coalition of Service Industries on European strategy for GATS 2000, Washington DC, September 24th, 1999. 9. European Services Network Set of Principles, 26 January 1999. 10. ESN Position Paper on GATS 2000 and Emergency Safeguard Measures, 23 April 1999. 11. The Seattle Host Organisation was the primary sponsor of the event and included some of the largest Fortune 500 companies, and chaired by Microsoft's Bill Gates, and Boeing's Phil Condit. Major sponsors included Boeing, Microsoft, Allied Signal, Honeywell, Deloitte & Touche, US West, General Motors, Nextel, UPS, Ford, Hewlett Packard, Lucent Technologies, Motorola, United Technologies, Weyerhauser, AT&T, Bank of America, Proctor & Gamble, Fed Ex, IBM, Intel, and Chase Manhattan Bank. 12. See "Transatlantic Business Dialogue (TABD): Putting the Business Horse Before the Government Cart". Published by CEO, October 1999. 13. See "CEFIC Comments on a New Multilateral Trade Round", <http://www.cefic.org/activities/trade/> 14. See CEObserver, Issue 4, "The WTO Millennium Bug: TNC Control Over Global Trade Politics", July 1999. 15. See "Business Responses to Seattle" in this issue. _________________________________________________________________ UPDATE ON THE INVESTMENT NETWORK HOW THE EC AND BUSINESS PREPARED FOR WTO INVESTMENT TALKS IN SEATTLE _________________________________________________________________ In the runup to Seattle, the European Commission coordinated its campaign for investment negotiations in the WTO with the Investment Network, an "informal network" of business representatives initiated by the EC in 1998. [1] Two detailed surveys were carried out. One among a group of 10,000 EU companies to identify business expectations of "what international investment rules should contain." The minutes of its meetings with the Investment Network (now on the EC's trade website) leave little doubt about what steers the Commission in its push for WTO investment negotiations. [2] To "assist the Commission in tentatively identifying business priorities" for a WTO investment agreement, the Commission, in the Spring of 1999, first carried out a questionnaire among the 50 or so large transnational corporations in the Investment Network. [2] The results of the questionnaire were discussed in detail with the Investment Network at a meeting on June 23rd. The EC concluded from the business replies that in comparison with the OECD's stranded Multilateral Agreement on Investment (MAI), the aims of a WTO investment agreement would be less ambitious. [3] The EC distilled from the questionnaire that accelerated investment liberalisation and removing performance requirements (conditions on employing locals, transferring technology, environmental regulations, etc.), key elements of the MAI, were no longer such urgent priorities. [4] During the discussion, members of the Investment Network, however, distanced themselves from several of the EC's interpretations and argued for WTO rules with clear MAI features. "Limitations to the free movement of capital" (such as transfer of profits) and "discrimination and instability of rules" were considered problematic, as were limits to foreign ownership and screening of new investors. [5] Also the EC's conclusion that "labour and environment standards are not a key factor in a company's decision to invest" was questioned. Apart from revealing the EC's eagerness to let business priorities define its WTO strategies, the minutes also make clear how the Commission sees business as a key campaign ally. At the Investment Network meeting last October, the EC complained about the continued lack of US government support for WTO investment negotiations. As this 'problem' is mainly due to lack of enthusiasm by US business, the EC "pointed to the vital need for increased informal contacts between the EU and US business in order to push for an investment agenda in Seattle." [6] The Commission also briefed the Investment Network on the latest developments in the OECD's review of its "Guidelines on Multinational Corporations". The Commission wants to keep these guidelines voluntary, but seems to believe that the process of revising them can win over some of the NGOs that opposed that MAI. [7] Apart from the questionnaire within the Investment Network, the EC has also commissioned a much bigger so-called 'business survey' among 10,000 companies. The aim of the business survey is to "determine the hurdles hindering European companies' investments outside the EU and to gather their expectations in terms of what international investment rules should contain." [8] The results of this survey, carried about by the consultancy SOFRES, were to be ready just before the Seattle Ministerial, but have still not been released. It is high time for Commissioner Lamy to explain how the reality of EC-initiated business groupings and expensive surveys for identifying corporate priorities fits with the lofty claims of a WTO Millennium Round being about 'sustainable development' and the concerns of the worlds' poorest. ----- Notes ----- 1. For background information, see CEObserver, Issue 4, "The WTO Millennium Bug: TNC Control over Global Trade Politics", CEO, July 1999. 2. The two last meetings of the Investment Network before the Seattle Ministerial Conference (23 June and 25 October 1999) were attended by between 25 and 35 representatives of major EU based corporations (including BP, Elf Aquitaine, ICI, Pechiney, SmithKline Beecham and Unilever). A post- Seattle meeting of the Investment Network was announced for early 2000, but does not seem to have taken place yet. The minutes were only put on the website after repeated critique from CEO and others: the EC consultations with NGOs feature prominently on the site, whereas the parallel process of meetings with the Investment Network, the European Services Forum and other corporate structures was largely invisible. The documents related to the Investment Network are hard to find on the website, but they are worth looking for: <http://europa.eu.int/comm/trade/miti/invest/civil.htm> Note that the minutes are not logically placed in the section dealing with the "Millennium Round", but elsewhere on the website. Visitors of the website looking for information on how the EC is preparing its WTO agenda will, at the time of this writing, still only see information about meetings with NGOs. 3. "Short Minutes of the 4th Investment network meeting", Brussels, 5 October 1999. 4. While the aims would be "very different than those of the draft MAI," the essential target would however still be to safeguard and expand investors' 'rights'. Discussion Paper "Preliminary results of the Business Investment Network questionnaire", EC, Brussels 23 June 1999. 5. Concerning investment liberalisation, the EC concluded that the wave of economic deregulation has already done away with almost all barriers for foreign investors. As for performance requirements, the WTO TRIMs agreement already limits the use of such measures and "governments are gradually dismantling" these measures anyhow, "in their efforts to attract FDI." 6. "Civil society Consultation on Trade and Investment: Report," Brussels, 23 June 1999. 7. UNICE replied that parts of US business were already supporting investment talks to start in Seattle. This discussion followed after the EC had briefed business on its meetings with the negotiators from the rest of the Quad countries (US, Japan and Canada). "Short Minutes of the 4th Investment Network meeting," Brussels, 5 October 1999. 8. The Commission stressed the role they see for the revised guidelines "in the prospect of establishing binding rules on investment in the WTO." Symptomatically, UNICE used the occasion to protest against one OECD country having proposed to move away from the purely non-binding status of the guidelines, which could result in "companies being dragged in the future in front of quasi-juridical panels of the OECD." This resistance against binding guidelines or a 'naming and shaming' approach stands in stark contrast to the lofty claims about their social and environmental behaviour made by UNICE and European TNCs in general. "Short Minutes of the 4th Investment Network meeting," Brussels, 5 October 1999. 9. "Short Minutes of the 4th Investment Network meeting," Brussels, 5 October 1999. _________________________________________________________________ BUSINESS RESPONSES TO SEATTLE _________________________________________________________________ "The business community, uncharacteristically silent for much of the week, was clearly unhappy... My feeling is that, collectively, you thought that to intervene would be to convince the world of what the more extreme representatives of civil society were saying: that business interest amounted to proof positive that the WTO is a capitalist plot." -- European Trade Commissioner, Pascal Lamy about Seattle [1] Business kept a low public profile during the WTO summit in Seattle and even more so in the months after, despite their deep disappointment. Those business groupings that have spoken out have done their best to downplay the impacts of the failed WTO Ministerial. While waiting for the troubled waters to get quieter, business is developing new strategies against the movements criticising neoliberal globalisation. Think tanks and the PR industry have stepped in to play a major role in the first months of post-Seattle corporate politics. While US industry groups attacked President Clinton for the Seattle "PR disaster," [2] European business continues to build its cosy relations with the European Commission. Straight after Seattle, George Jacobs, President of the European employers confederation, UNICE, praised Commissioner Lamy for his "leadership role to build bridges between different WTO member views and ensure transparency by involving representatives of civil society in the EU delegation." [3] UNICE, which has seven working groups on the WTO, continues to work in tandem with the EC to garner support for a WTO Millennium Round. Nothing less than a comprehensive round, including new issues like investment and government procurement, is acceptable to UNICE, stating that "a limited package is not worth it for European business." [4] In contrast to UNICE, the International Chamber of Commerce's (ICC) post-Seattle strategy remains opposed to addressing environment and labour issues in the WTO. [5] The ICC has been the international business group responding most prominently after Seattle, vehemently downplaying the importance of the failed summit. The group´s claims that the failed Ministerial has not brought trade liberalisation to a halt. Emphasising that trade negotiations in the past have often survived temporary setbacks, the ICC believes that a comprehensive round is still possible, "as negotiations resume next year in a more serene atmosphere in Geneva." [6] The ICC wants business to take a lead in convincing public opinion to support trade liberalisation and sees a role for itself in the offensive against WTO critics, who they describe as "highly organised and sophisticated groups that for many different reasons are hostile to trade." [7] Far more conciliatory were the post-Seattle sound-bytes coming out of the World Economic Forum [8] in January. From the Davos podium, influential leaders and prominent speakers expressed their understanding for the concerns of WTO critics and argued for reforms and more inclusive forms of 'global governance'. The European Policy Centre, an influential Brussels-based think tank, provided a forum for industry to debate and reflect on their failings in Seattle. [9] During a number of meetings for EPC members, the Seattle events were evaluated and plans were made to bring the Millennium Round back on track. According to Craig Burchell, from Philips and also chairing the EPC's WTO Forum, the anti- WTO campaigns are ignorant and media exaggerates their importance. [10] The EPC's main advice to the corporate world is to improve communication strategies. Corporations should "take a more proactive position in relation to trade liberalisation" and find better ways of "dealing with the new breed of NGOs." [11] The EPC recommends business to "provide funding" for organising public debates to improve public perception of globalisation and transnational corporations and to "curb the activities of extremist NGOs." [12] That happens to be exactly the kind of services offered by the European Policy Centre, which has already grown out to be one of the most active corporate think-tanks currently operating in Brussels. The public affairs industry is also eager to assist in communicating the corporate trade and investment agenda. Global PR giant, Edelman, offers to assist corporations with "EU and WTO Public Affairs, Media Relations and Crisis Preparedness." [13] Washington-based PR company Black, Kelly, Scruggs & Healy recently sent its corporate clients a "Guide to the Seattle Meltdown: A Compendium of Activists at the WTO Ministerial." [14] In an accompanying letter, the companies managing director warns against the "potential ability of the emerging coalition of these groups to seriously impact broader, longer-term corporate interests." The director ends his introduction of the report, that describes 48 WTO-critical groups, with advertising his company's capability "to defend clients against attacks" from these groups. [15] ----- Notes ----- 1. Speech at the European Institute, Washington, 17 February 2000 2. According to Harry L Freeman (Coalition of Service Industries) Clinton had not been vocal enough in his support for trade liberalisation. "US Business See Ministerial as a Setback for Trade Liberalisation", International Trade Reporter, 9 December 1999. 3. UNICE press release, George Jacobs, UNICE President, "UNICE Reacts on WTO Seattle Deadlock: No Results Better Than Bad Result", Brussels, 7 December 1999. 4. Ibid. 5. Drawing lessons from the lost battle around the Multilateral Agreement on Investment (MAI), UNICE is willing to accept social and environmental clauses in the WTO in the hope to get NGOs to agree on a WTO Millennium Round. See "The WTO Millennium Bug", CEObserver Issue 4, June 1999. 6. ICC President Adnan Kassar, "Seattle setback will not hit trade liberalisation", The Hindu Business Line, 10 December 1999. 7. See also "Davos 2000: 'New Beginnings' for Global Capitalism?" in this issue. 8. See also CEObserver, Issues 2 and 3. 9. "They know how to exploit the internet to coordinate their lobbying and are adept at winning media attention." 10. A personal report on the Seattle Ministerial by Craig Burchell (Senior Trade Representative of Philips Electronics, and Chairman of the EPC's WTO Forum): "The Seattle Ministerial: What Happened", 30 Nov - 3 Dec 1999. Posted on EPC website: <www.theepc.be/Challenge_Europe/Forums_Notes/WTO/Seattle.htm> N.B. In 1997, when Philips CEO Jan Timmer was TABD EU chair, his sherpa, Craig Burchell, was co-chair of the TABD Steering Committee. 11. Ibid. 12. Stanley Crossick, EPC Chairman, "Seattle: The Business Fall-Out", 23 December 1999. <www.theepc.be/Challenge_Europe/Communications/Seattle2.htm> 13. Edelman Europe advertisement in the European Voice, 24 February - 1 March 2000, page 26. 14. This guide by Black, Kelly, Scruggs & Healy, cover letter dated January 14 2000 was leaked to activists and posted on the "N30" anti-WTO email list. The report seems the result of a few hours of visiting websites of a fairly random selection of groups that campaigned against the WTO Millennium Round. 15. Ibid. _________________________________________________________________ DAVOS 2000: 'NEW BEGINNINGS' FOR GLOBAL CAPITALISM? _________________________________________________________________ The air was full of 'Seattle' when some 2,000 industrialists, politicians and other self-proclaimed 'global leaders' met for the 30th World Economic Forum (WEF), in the Swiss ski resort, Davos, in January. The international media eagerly speculated whether the anti-WEF demonstration organised by Swiss anti-WTO activists would turn into a 'second Seattle'. The perceived backlash against globalisation and how to respond to it was one of the main themes of this years' forum, along with the internet 'e-conomy'. As neoliberal economist and WEF veteran, Paul Krugman, recently put it, the 'Davos Man' has "an image problem. One that threatens the process of the globalisation for which they stand." [1] Conveniently, the WEF is all about promoting new common discourses for the global elite, including joint responses to whatever challenges they might face. Not only to give the assembled politicians and corporate elite a pleasant feeling of common direction, [2] but also to get the message distributed around the world through the international mega-media which was well represented in Davos. The discourse emanating from the carefully orchestrated debates and workshops of this year's WEF is that globalisation is the only viable strategy, but needs a 'human face'. Markets should be liberalised and globalised, but this should be combined with self-regulation and philanthropy by business and a more consensus-seeking model of 'global governance', including developing country governments and 'constructive' NGOs. This, in short, is the WEF's post-Seattle recipe to make neoliberal globalisation a more palatable development model. [3] The WEF organisers, lead by Klaus Schwab, showed how experienced they are in selling new images to the world. In the days before the start of the Davos events, articles by Schwab and WEF Director Schmadja appeared in international newspapers and magazines warning against the backlash caused by "globalization running amok." [4] After the internal disputes between North and South at the WTO Ministerial in Seattle, Schwab and Smadja called for a more inclusive approach and for "new multilateral structures for global governance" with enough credibility and legitimacy." [5] Schwab proposed "close cooperation between government, business and civil society" and for "flexible networks, where you put together governments, international organizations and business to look at the new issues on the global agenda." [6] Smadja in another article argued that in order to prevent the backlash, "social, psychological and ethical dimensions must be integrated into the globalization process." [7] After last year's slogan, 'Responsible Globality', the organisers must have really stretched their minds to come up with the even more feel-good title "New Beginnings: Making a Difference" -- quite a jump from the undiluted neoliberal slogans of earlier years, like the 1996 slogan -- "Strengthening Globalisation." 'Davos Men' About 'Seattle People' Political leaders like Tony Blair and Bill Clinton in their WEF speeches, paid lip- service to what they generously described as legitimate concerns of the Seattle demonstrators, but continued to defend the launch of a new WTO round to achieve further trade liberalisation. [8] Clinton stated that "trade can no longer be the private province of politicians, CEOs and trade experts," an ironic message in light of the elitist audience he was addressing. 1,200 business leaders were present there, all from companies with a minimum turnover of US$1 billion and each having paid a personal entry fee of typically US$20,000. Clinton asked the business leaders to "develop a joint vision for the next 10-20 years," but not to "leave the little people out." [9] Mexican president Zedillo launched a fierce attack on the WTO-critics, who he accused of suffering from "globaphobia" and only wanting to prevent economic development in the South. [10] Among the speakers from business, some played 'good cop', others 'bad cop'. Louis Schweitzer of Renault warned that " a purely free-market economy is like allowing a fox free into the henhouse." [11] Lewis B. Campbell, CEO of Textron, called "supporters of free trade" to build an international coalition sufficient to push the cause of globalisation," in order not to loose "the propaganda war... The international business community must take the lead,", said Campbell, who referred to NAFTA, which happened because business mobilised for it. [12] Also a part of the post-Seattle image-building was the handful of workshops on corporate social and environmental accountability that took place during the WEF. Time Magazine and Newsweek (with strong financial links to the WEF) in their previews on Davos focused on how corporations respond to consumer pressure and want to be seen as 'good global citizens'. [13] Time Magazine printed a full-page appeal by ABB's CEO Goran Lindahl, prominent WEF participant but himself responsible for serious corporate abuses, for TNCs to "make protecting human rights a priority." [14] Journalist Will Hutton of the London Observer who attended the WEF was not impressed, noting that the workshops on business ethics tended to be poorly attended. "The 'hard' conversations are about how to maximise shareholder value and how to be a winner in the new economy," he concluded. [15] Despite the many gestures to signal change (like planting trees to compensate for the CO2 emissions involved in flying the 'Davos Men' in) Hutton saw little real change. "The balloon of complacency and belief that the Davos consensus is almost unimprovable is so huge that it would take an intellectual atom bomb along with gigantic riots to effect any change." [16] The messages from the WEF were transmitted to the outside world through the 650 journalists that were allowed to cover the event. WEF media participants are not only meticulously selected (alternative media is not welcome and journalists who have criticised the WEF are rarely invited again), most of them only have restricted access and base their reports on "reams of handouts, session summaries and the snatches of the proceedings they watched on live, closed-circuit TV," in the words of Danny Schlechter of the media-critical Media Channel. [17] Luxurious dinners paid for by Coca-Cola were to keep these media workers happy. [18] A Seat at the Table in Davos? Another move to improve the image of the 'Davos Man' was to invite NGO representatives, some of which are known as 'Seattle people'. While Schwab has already for some years handpicked a handful of leaders of mainstream global NGOs such as Greenpeace and Amnesty International, the presence of Martin Khor and Vandana Shiva of Third World Network was the result of demands by the NGO initiative 'Public Eye on Davos'. This project to "monitor the World Economic Forum" was setup by the Swiss Berne Declaration and supported by over 150 NGOs who signed a joint statement. [19] 'Public Eye on Davos' demanded the WEF to "radically change its perspectives, rules and proceedings," improve transparency and increase NGO participation. [20] WEF boss Klaus Schwab responded by inviting six NGO people from a list of 20 candidates and accepting an invitation for a public debate. [21] In the debate, Schwab was full of praise for the NGOs, stating that "dialogue is what Davos is all about." [22] The WEF, Schwab claimed, is "the only platform in the world that can look at all challenges and ensure an integrated view." Not everybody is welcome, however. When asked about the demands made by 'Public Eye on Davos' and whether he would double the number of NGO participants next year, Schwab replied that only "people who can make a conceptual presentation" and have "capacity for dialogue" would be invited. [23] These are the kinds of people which Schwab sees playing a role in the "global policy networks" between governments, business and NGOs he envisages can deliver legitimacy and consensus for 'responsible globalisation' and 'global governance'. Inside the WEF, there were several workshops looking at the role of NGOs and how business should respond to the increased scrutiny from campaign groups. [24] Several journalists at the press conference of the 'Public Eye on Davos' asked critical questions about the 'Public Eye on Davos' strategy of reforming and democratising the WEF. Is a democratic WEF imaginable? Were the NGOs taking part in the WEF not being co-opted and did their participation not dilute the critical message? Walden Bello, one of the NGO representatives who experienced the WEF from the inside, afterwards concluded, "we should not try to reform Davos, but we should expose and ridicule and challenge the dangerous and undemocratic self-importance of Davos and the people who go there." [25] This mirrors the opinion of the estimated 2,000 demonstrators, mainly from Switzerland, France and Italy, who managed to take over the central streets of Davos for most of an afternoon despite a massive police and military presence. [26] Their protest was not for increased NGO participation but against global elites meeting to chart out the future for the rest of the world -- regardless of how "committed to improving the state of the world" these 'global leaders' claim to be. [27] ----- Notes ----- 1. "'Davos Man' Needs to Resolve an Image Problem", International Herald Tribune, January 24th, 2000. Krugman's 'Davos Man' image captures very well the extreme gender bias of the event: this year more than 90% of the participants were men. The Swiss Wochenzeitung noted that also the group of six NGO participants at the WEF selected by 'Public Eye on Davos' was male dominated, with five men and one woman. "Wirtschaftsforum: Es geht nicht nur um Oekonomie", Wochenzeitung 3 February 2000. 2. For many participants, an important part of going to Davos is the informal talks and the deal-making which takes place elsewhere in the conference centre and in hotel lobbies. A Swiss CEO claimed to have planned more than twenty smaller meetings in the three days he was in Davos. Being able to meet so many corporate and political leaders in such a short time saves weeks of travel time. One of the reasons for corporations to pay the additional US$200,000 and become "WEF Partners" is to be the first to receive the full final list of WEF participants: crucial privilege for the intense race of making the most worthwhile appointments for the 5-day event. "Scharf Beobachtete Begegnungen", Wochenzeitung, 30 January 2000. 3. The five days of World Economic Forum featured some 350 workshops, including titles such as: - "Is Globalisation for Everybody?", - "Strategies to Fight the Globalisation Trap", - "It's Not the Economy, It's the Society", - "Global governance in the 21st Century". 4. "We Need Structures to Help Steer Globalization", Klaus Schwab and Claude Smadja, International Herald Tribune, 24 January 2000. 5. Ibid. 6. "The world is so complex that we cannot create some kind of all-encompassing business-government organization. It would lack democratic legitimacy." WEF website: <http://worldeconomicforum.org/> 7. Tony Blair stressed the need to win over "the sincere and well-motivated opponents of the WTO agenda." Source: "That's snowbizz", Financial Times, 29 January 2000. 8. As the last speaker in a plenary debate about international trade, Zedillo was given three times as long to speak as the other speakers and his speech was distributed in printed format by WEF hostesses. Die Weltwoche, 3 Feb 2000. 9. WEF press release 29 January 2000. 10. Clinton responded to Schwab's question on what he most wanted to ask the 1,000 most powerful CEOs who were in the room. Clinton also told the business leaders that "when good people have a shared vision, all works well. Collectively, you can change the world." 11. Ibid. 12. "It's the Society, Stupid," Time Magazine, 31 January 2000. 13. "Ubiquity and its Burdens," Newsweek, 31 January 2000. 14. "A New Role for Global Businesses," Time Magazine, 31 January 2000. ABB specialises in building and running nuclear, fossil fuel and hydroelectric power plants around the world. Particularly controversial is ABB's involvement in the planned Three Gorges Project in China and the Bakun Dam in Malaysia (now postponed), both of which would result in massive forced resettlement of local people. 15. According to Hutton, "the voices arguing that corporations need to behave ethically, and socially responsible and with an eye on environmental sustainability are the weakest in the weakest in the 11 years I have been coming here." Source: "Greed is Good, Too Good to be True", Will Hutton, The Observer, 30 January 2000. 16. Ibid. 17. The WEF has a strict hierarchy of badges and only few correspondents with a name get the 'all access' white badges and are full participants of the Forum. A category higher is the group of editors and columnists with the label "media leaders" who take part in panel debates. Finally, a whole different clan are Rupert Murdoch, Michael Bloomberg and other CEOs of media corporations who were in Davos to promote their business. "At the Top Of the World: Covering the World Economic Forum -- How the Goliaths of Globalization Groom the Media", Danny Schechter, 3 February 2000, <www.mediachannel.org> 18. Ibid. There was also a special media dinner with US trade negotiator Charlene Barshefsky and US Treasury Secretary Larry Summers. 19. See website of the 'Public Eye on Davos' <http://www.evb.ch/> 20. The 'Public Eye on Davos' NGO Statement. 21. The other four were Walden Bello, Victoria Tauli-Corpuz, Brent Blackwelder and Manuel Chiriboga. Other NGO representatives at this year's WEF included David Bryer of Oxfam, Ed Mayo of the New Economics Foundation, Kenneth Roth of Human Rights Watch and Pierre Sane of Amnesty International. Trade unions were represented by John J. Sweeney (AFL-CIO), Bill Jordan (ICFTU), John Monks (TUC), Emilio Gabaglio (ETUC) and others. 22. Public debate organised by 'Public Eye on Davos', 29 January 2000. 23. Ibid. Some of the NGOs invited for the WEF seem to have strong confidence in Schwab's capacity to select. Greenpeace CEO Thilo Bode, who spoke at four WEF panels, even distanced himself from the Public Eye initiative. "People who have something to say will also be invited," Bode told a Swiss newspaper. "Draussen, drinnen, auf der Strasse," Die Weltwoche, 3 February 2000. 24. Including workshops titled: - "In Search of Robin Hood", - "NGO: Foes or Partners in the Global Agenda?", - "A New Big Brother is Watching You: What the Grassroots NGO is Thinking". 25. Focus on Trade, Number 45, February 2000. 26. The regional authorities had banned the demonstration and only few had expected that the police would let people move away from the station square. After walking a kilometre or so down the main street the police blocked the street with their vans and fences. On the way, a McDonalds branch had its windows smashed and a huge McDonalds banner was taken down from a wall and burned. It had an image of a hamburger and the provoking slogan: "Think Globally, Eat Locally". 27. "The World Economic Forum is an independent organization committed to improving the state of the world." The WEF about itself on <http://www.worldeconomicforum.org/> _________________________________________________________________ TOOTHLESS UN WEBSITE ON GLOBAL COMPACT WITH TNCS _________________________________________________________________ On the 28th of January, the UN launched a website on its controversial 'Global Compact' with major transnational corporations. [1] Since its launch last year, the Global Compact has been criticised for giving corporations a free ride, by being able to use this UN seal of approval to improve their public image, without corresponding tangible changes in their overall corporate social, environmental or human rights behaviour. The new website confirms this picture. Even the previously announced pledges by corporations, which were to be posted on the website to allow monitoring by NGOs, are absent. The Global Compact consists of a list of very general principles for corporate social, environmental and human rights behaviour. The UN in return commits to support the business agenda for continued moves towards global "free trade". The Compact is not binding and lacks any real enforcement and monitoring mechanisms. In July 1999, the UN told the international media that a UN-sponsored website would be launched to present "the specific pledges made by multinational corporations and allow independent aid groups and non-governmental organisations to publicly challenge companies if they do not abide by the substance of these pledges." [2] The launch of the website -- the only concrete element of the Global Compact -- was to happen in the Autumn (an ILO conference in early November was one of the missed deadlines), but it was postponed time and again. [3] When the website was launched in January, the promised references to individual corporations or pledges they have made were painfully absent. This undoubtedly has to do with the fact that as of this writing, no individual corporation has committed itself to the Global Compact, despite its non- binding character. The corporate partners mentioned on the website are all business associations, such as the International Chamber of Commerce (ICC) and the World Business Council for Sustainable Development (WBCSD). Their 'partnership' has no binding effects for the individual corporations which are members of these groupings. [4] NGO partners include Amnesty International, World Wide Fund for Nature , Human Rights Watch, the World Resources Institute and three other lesser known groups. [5] The International Confederation of Free Trade Union's (ICFTU) is also involved, representing labour. For the rest, the website consists of the text of the Global Compact, a selective overview of academic literature on globalisation and on industry self-regulation as well as a news section with media reports on corporate accountability issues. The UN website was launched at the occasion of the World Economic Forum (WEF), the annual gathering of the global business and political elite in Davos, Switzerland where UN Secretary General Annan also first proposed the Global Compact a year earlier. [6] This year, UN High Commissioner for Human Rights Mary Robinson was present at the WEF, taking part in a debate about business and human rights. [7] The UN website came almost three months after the International Chamber of Commerce (ICC) launched its own website on the Global Compact. The ICC website consists of a collection of reports on various isolated environmental and human rights initiatives by the likes of BP-Amoco, Fiat, Unilever and other corporations that are involved in the ICC. While the ICC is eagerly using the Global Compact to promote a positive image of transnational corporate behaviour, it remains strongly opposed to enforceable rules, claiming that self-regulation will make its members responsible 'global corporate citizens'. 'Citizens Compact': Enforceable UN Rules for Corporate Behaviour On the same day as the UN Global Compact website was announced, a "Citizens Compact on the UN and Corporations" was launched. More than 100 organisations from North and South have signed on to this statement, which is a fundamental critique of the Global Compact. Instead of 'partnership' between the UN and corporations (among which many have controversial social and environmental records) the Citizens Compact demands that the UN develops internationally enforceable rules for corporate behaviour. To sign on to the Citizens Compact on the UN and Corporations, please visit <http://www.corpwatch.org/> The UN's website on the Global Compact can be found at <http://www.unglobalcompact.org/> For the ICC's Global Compact website, go to <http://www.iccwbo.org/> ----- Notes ----- 1. See Corporate Europe Observer, Issue 5 for background. 2. Business Backs Trade Role for UN. The Guardian, 6 July 1999. 3. 4 November 1999 in Geneva at the International Labour Organisation (ILO) Enterprise Forum. Letter from Jessica Jiji, UN Information Officer, 24 September 1999. 4. Apart from the ICC and the WBCSD, also the International Organisation of Employers (IOE) and eight other business associations are official Global Compact partners. Other business partners include Business for Social Responsibility (BSR), the Conference Board, the Prince of Wales Business Leaders Forum (PWBLF), the European Business Network for Social Cohesion (EBNSC), the International Petroleum Industry Environmental Conservation Agency (IPIECA), Enterprises pour l'Environnement, the International Federation of Consulting Engineers (FIDIC) and the International Fertiliser Industry Association (IFA). 5. Lawyers Committee for Human Rights, Ethod and Fundaçăo Abrinq pelos Direitos da Criança. 6. For more on the World Economic Forum, see the article "Davos 2000: 'New Beginnings' for Global Capitalism?", elsewhere in this issue. 7. UNHCR used the WEF to present its new paper "Business and Human Rights: A Progress Report", see <http://www.unchr.ch/> UN-BUSINESS 'PARTNERSHIPS' UPDATE The Citizens' Compact on the UN and Corporations rejects the idea of 'partnership' between UN agencies and corporations and outlines some strict criteria to avoid inappropriate joint projects between the UN and business. The need for such rules once again became clear when the news broke about a new UN-business body called the Business Humanitarian Forum (BHF). The Geneva-based BHF brings together UN institutions and corporations, many with a poor social and environmental record. Its first meeting in January 1999, in a luxury hotel in Geneva, was "to focus on ways to improve communication and cooperation between global corporations and humanitarian organisations in their common efforts to promote the stability and well-being of countries likely to be affected or affected by conflict and natural disaster." [1] The BHF is co-chaired by UN High Commissioner for Refugees (UNHCR) Sadako Ogata and John Imle President of UNOCAL, an oil company known for human rights violations in Burma. Also UNICEF is in the BHF, with Nestlé, a company stubbornly continuing to violate the UN's code of conduct on infant formula -- the International Code of Marketing of Breast-milk Substitutes. Suez-Lyonnnaise des Eaux, Rio Tinto and ICI are other controversial corporate members, not to speak of United Technologies Corporation, the largest military contractor in the world. This did not seem to disturb Kofi Annan, who sent an encouraging message to the founding meeting of the BHF, stressing the UN's newly found positive attitude to business. [2] NGOs involved in the BHF include the International Rescue Committee, Save the Children, Care USA and the Red Cross. [3] In September, the Transnational Resource and Action Centre (TRAC) and numerous other groups called on UN High Commissioner for Refugees Sadako Ogata and UNICEF Executive Director Carol Bellamy to resign from the BHF. [4] Protests against joint UN-business projects can be effective, as was shown when the UNDP put its Global Sustainable Development Facility (GSDF) in the freezer. [5] The UNDP decided for 'a review' of the project after continued critique by a global coalition of groups led by TRAC. For more information, check TRAC's Corporate Watch website: <http://www.corpwatch.org/> ----- Notes ----- 1. UN press release "Business-Humanitarian Forum holds first meeting," Geneva, Switzerland, 27 January 1999. 2. "The United Nations has developed a profound appreciation for the role of the private sector: its expertise, its innovative spirit, its unparalleled ability to create jobs and wealth," Annan wrote. The Secretary-General, Message to the Business Humanitarian Forum, Geneva, 27 January 1999. 3. BHF participants' list. 4. TRAC press release, 23 September 1999, "Groups Expose More United Nations Affiliations with Corporate Predators." 5. See CEObserver, Issue 3 for background on the GDSF. _________________________________________________________________ GUIDE TO 'GERMANY, INC.' _________________________________________________________________ "Germany Inc., the protective net of cross-shareholdings and government regulations that has long shielded the country from the cruel tide of globalisation, is dead." [1] Business Week, 21 February 2000 Relations between business and politics in Germany has been international news in the last months. This is not only because of the illegal business donations which have brought the Christian Democratic party into a deep crisis, but also the political controversy around the hostile take-over of Mannesmann AG by UK-based Vodaphone and the government rescue plan for the crisis-ridden Holzmann corporation. [2] The Financial Times describes the hostile take-over of Mannesmann AG (the first of its kind in Germany and much criticised by German trade unions, politicians and media) as "a landmark in Germany's momentous journey towards a different model of capitalism." [3] Due to economic globalisation and the single currency, "the rules of the post-war German settlement between capital and labour are being radically rewritten from the outside," the newspaper continued, "to the advantage of shareholders." [4] Wim Duisenberg, president of the European Central Bank, lead the choir criticising the Schröder government's rescue of Holzmann AG (and thousands of jobs) as the last twitching of old-fashioned government interference in the workings of global market forces. Duisenberg even accused Schröder of being co- responsible for the declining rate of the euro as the government intervention "does not enhance the image that we want to have of being an increasingly market-driven economy across the euro area." [5] A timely and illuminating guide to "Germany, Inc." and the social and political impacts of its ongoing transformation is Johann-Gunther König's book "Alle Macht den Konzerne -- Das neue Europa im Griff der Lobbyisten" ("All Power to the Corporations -- the New Europe in the Grip of the Lobbyists"), released in April 1999 by the German publisher Rowohlt. While focusing on the recent changes, König's book is far from nostalgic. It starts with an overview of the history of corporate Germany, including the support of German industry (but also US corporations) for the nazi regime. [7] In his portrait of post-war German industry, König describes the outrageous degree of concentration of economic power in the hands of a small number of corporations and individuals. Major German corporations and banks own large blocks of each others shares and it is common for German industrialists to be in the advisory boards of a number of other, 'competing' corporations. Particularly the powerful role of Deutsche Bank through its ownership of large parts of many of the largest German corporations is astonishing. Economic globalisation has made the concept of 'German' companies a more and more diffuse one. Companies headquartered in Germany, such as DaimlerChrysler, BASF, Bayer, have grown out to be some of the largest 'global players'. [8] Production and sales in Germany is becoming less and less important for these corporations, who can shift production from one place to another in search for the most profitable investment climate and access new markets around the world. Ownership is internationalising rapidly too, as particularly US and UK investors buy up shares. The growing power of US and UK investors increases the pressure for higher and higher returns to shareholders. [9] The pursuit of 'shareholder value', König shows, has made German corporations accelerate downsizing and relocation to lower-cost countries and led to worsened working conditions (longer working hours, increased work pressure, etc.). König strongly warns against the new corporate culture and its ideal of the 'flexible' (but essentially conformist) human being, always ready to adapt to the demands of both the markets and those holding political power (captured well by König in the untranslatable German term "leistungsbewuste mitlaufer"). König describes how the empowerment of the markets has caused a growing social crisis in Germany. Profits and CEO salaries are skyrocketing, while the pressure on wages is downwards. [10] The employees' share of total income has never been lower in the history of the German federal republic, while capital has increased its share from 24% in 1980 to 40% in 1997. Because of business-friendly tax policies and tax evasion, corporations bring in only 15% of the total tax income, against 25% 20 years ago. One of the main causes behind the accelerated competition and downwards pressure on corporate taxes, working conditions and social protection in Germany and the rest of the EU, König argues, is the European single market. König describes the increased concentration of economic power in virtually all sectors of the new European economy (supermarkets, tourism, media, banking, computers, etc.). A result of the intense race to attract foreign investments is the emergence of free trade zones (such as New Park near Munich), a phenomena until recently known mainly from Central America and East Asia. König concludes that corporate political power has reached unprecedented levels, both in Germany and on the European Union level. Almost 1,700 professional lobbyists are registered in the German capital Bonn (now Berlin), but their activities are only the tip of the iceberg of corporate involvement in German politics. One third of all German MPs have side jobs with interest groups and 'revolving doors' between politics and industry is commonplace in Germany. The ongoing transfer of decision-making to Brussels does not make things better, König argues. He presents numerous examples of how German industry has promoted its interests through the 'bureaucratic-industrial complex' in Brussels, in which the European Commission plays a key role and particularly the extremely industry-friendly Directorate- General III (previously industry, now enterprise). König sees the lack of critical media monitoring Brussels, the absence of a European public debate and the understaffed European Commission as the main reasons for the excessive power of lobbyists in EU decision-making. While it would not in itself be a problem if the old nation states would disappear, the way it happens is disastrous. Democratic decision-making is increasingly crowded out by market forces and governments face growing problems with regulating corporations. The crucial question, König concludes, is how to re-empower social movements. He calls for a 'second struggle for democracy', this time on the global level, but has most of his hopes set on the revival of the trade union movement on the European level. In light of his sharp critique of corporate power in Germany and Europe, König is surprisingly uncritical of the euro-corporatist European Trade Union Confederation (ETUC) which has failed to confront neoliberal policies of the EU throughout the 90's. König also fails to mention more inspiring new initiatives like the European marches against unemployment and poverty and other international activist solidarity networks. König's book contains a wealth of essential analysis, but a comprehensive agenda for rolling back corporate power is unfortunately lacking. ----- Notes ----- 1. "Auf Wiedersehen, Germany Inc.", Business Week, 21 February 2000. 2. Bankruptcy seemed unavoidable for the large construction company Holzmann AG, but the Schröder government saved it in November 1999 with a rescue package of DM 2.3 billion. UK-based Vodafone took over the high-tech company Mannesmann AG in order to get its profitable D-2 cell-phone network, while planning to sell off the rest off the company. German newspapers protested that "thousands of jobs are destroyed, just because international investors want to make a short-term profit" (Die Welt, quoted in Wall Street Journal Europe, 22 November 1999). Chancellor Schröder stated that "hostile take-overs are never helpful," but the take-over proceeded (Wall Street Journal Europe, 22 November 1999). 3. "Whirlwinds of change," February 2000. 4. Ibid. 5. Wall Street Journal Europe, 7 December 1999. 6. "Auf Wiedersehen, Germany Inc.", Business Week, 21 February 2000. "German companies now have to compete in Europe's huge, single capital market," increasing the "pressure to maximise returns." 7. Ford and General Motors gave financial and technological support to the Nazis and continued producing from factories in Germany during the Second World War. 8. Siemens is active in over 150 countries and has German- speaking staff in more countries than there are German embassies and consulates. 9. In the Anglo-Saxon countries, shareholders returns are traditionally substantially higher than in Germany and other European countries. 10. Whereas corporate profits doubled between 1980 and 1997, the net income of German employees grew only 1.5%. _________________________________________________________________ CEO HOSTS MEETING IN SPAIN _________________________________________________________________ Corporate Europe Observatory hosted its first-ever gathering of campaigners, researchers and journalists working on the subject of corporate power from the 15th to the 17th of October 1999. Most of the participants were interested not only in the economic impacts of large corporations, but also in political power and access to various national and international decision-makers and institutions by TNCs. The meeting, entitled 'European Strategy Session on Corporate Power', was organised by the Spanish contingent of CEO and took place in the beautiful Andalusian city of Córdoba. Kicking Off The first day of the meeting was spent setting up a framework for discussions with examples of various manifestations of corporate power, in particular in the political realm. Several case studies on the role of large corporations in different European countries were presented. Axel Koehler-Schnura from the German Critical Shareholders organisation and Coordination Against Bayer-Dangers explained the sordid history of the German chemical industry and its current intimate relationship with the government. Tarjei Leer-Salvesen from Norwatch described the situation in Norway, where a large percentage of industry is state-owned and corporate CEOs are often appointed by the government. Juraj Zamokovsky from the Centre for Environmental Public Advocacy/Friends of the Earth Slovakia related the polarisation in his country between old-style communists and free-market supporters, who are associated with democracy and have greater public support. Corporate power on the European Union level was the next subject taken up. Mikael Nyberg from Sweden provided a history of corporate lobby groups in the EU, beginning with the influential European Roundtable of Industrialists (ERT), and described the intimate relationship between corporate CEOs and Brussels decision-makers. In the following discussion, examples were given of lobby efforts conducted by industrial sectors including the automobile, pharmaceutical, fisheries and oil industries, and the work of the public relations sector on their behalf. CEO's own Erik Wesselius delved into the Transatlantic Business Dialogue as an example of an influential corporate- state alliance. This alliance between EU and US industries and governments is geared towards the creation of a transatlantic marketplace by the elimination of barriers to trade. Juan López de Uralde of Greenpeace International pointed out that the TABD was responsible for killing an EU directive on the banning of toys made of toxic PVC materials, and that the Business Dialogue is interested not only in defeating technical measures but also in eliminating pro- environment guidelines such as the precautionary principle. Tony Clarke from the Polaris Institute in Canada and Antonio Tujan from the IBON Foundation in the Philippines presented the World Trade Organisation as an example of an institution that reinforces corporate power. Tony explained how the WTO is a corporate-driven process, with a strong symbiosis between business and state in each of the four main driving political blocs behind the institution (the EU, the US, Japan and Canada). The defeated Multilateral Agreement on Investment was given as another example of a corporate-led initiative to secure investment rights for TNCs in developing countries. Antonio exploded some of the myths surrounding free trade, pointing out that two-thirds of world trade is between corporations. The ensuing discussion covered issues ranging from the attachment of social and environmental clauses to trade agreements (it was felt that this only enhances corporate power) and corporate codes of conduct (which are often only 'window dressing' for TNCs to appear more responsible). Ramón Fernández Durán from the Spanish Ecologistas in Acción provided an explanation of how markets are deregulated via the International Monetary Fund and how financial institutions and TNCs profit from this arrangement. The ensuing discussion touched on issues including the proposed creation of a private sector advisory board to the IMF and the importance of targeting investment and pension funds in our campaigns. Next, Judith Richter, Claudia Peter and Eveline Lubbers addressed the subject of corporate public relations. Claudia amplified on the recent emergence of 'astroturf' lobbying, artificial grassroots campaigns waged by TNCs, often with deceptive titles such as the incineration-promoting 'Waste Watchers' group in Germany. Eveline presented some examples of counter-strategies by corporations, including co- optation, greenwashing, divide-and-rule and dialogue. The latter, initiated by companies with the advice of external PR consultants, is a corporate strategy to avoid embarrassing conflict and unflattering media coverage. The 'dialogue' issue re-emerged throughout the meeting. During the following discussion, several participants mentioned that certain PR companies, including Burson-Marsteller, are already being targeted by activist groups. Moving Ahead The second day of the meeting was partially devoted to sharing strategies for challenging corporate power. A number of participants provided presentations on their campaigning against specific TNCs and corporate lobby groups. Tarjei Leer- Salvesen of Norwatch described how his organisation is a corporate watchdog, keeping tabs on the activities of Norwegian-based TNCs and publicising any negative or destructive practices to the media and the public. Axel Koehler-Schnura of the Critical Shareholders Association in Germany described the strategy of purchasing shares in order to gain access to corporate decision-making processes. He warned that this form of pressure has its limitations -- fundamental change is not possible as the underlying principle of profit-making can not be changed by shareholder actions. Marc Gavaldá of Red Petrolera in Spain spoke about campaigning on oil companies active in the Amazon. He explained how international financial institutions including the World Bank and Inter-American Development Bank pave the way for corporate penetration by promoting neoliberal legal systems and privatisation. Antonio Tujan from the IBON Foundation in the Philippines discussed the Asia Pacific Research Network, which organises conferences and trainings and puts out publications on various trade-related issues for groups in the region. In the following discussions, several other examples of strategies were presented and critiqued. It was pointed out that although consumer action is important, public confusion can also be created between mainstream businesses like the Body Shop and true fair trade products. The effects of a Northern-based consumer boycott on child labour in Bangladesh was also described -- children were forced out of the factories and into prostitution, as the fundamental problem of families needing income was not resolved. The importance and difficulty of building alliances with the labour movement was also discussed. In a second round of presentations, Greg Muttitt of Corporate Watch in the UK spoke about the use of non-violent direct action to challenge corporate power, giving the examples of the massive resistance against road-building schemes in the UK and campaigns against genetic engineering which range from approaching shoppers in supermarkets to uprooting genetically-manipulated crops. He also mentioned some of the drawbacks of this type of campaigning, including unpredictability, heavy dependence on large numbers of activists and the media, and the tendency for the movement to be largely white and middle class. Tarjei mentioned that the success of the UK anti-GE food campaigns had spilled over to Norway, where the government was scared off from introducing test fields. Eveline Lubbers of Jansen & Jansen in the Netherlands gave a presentation on net activism and tactical media. She present the McSpotlight website (an anti-McDonald's site) [1] as a good example of this type of campaigning. For activists, the Internet has opened up many possibilities due to freedom of information and the ease with which information can be spread. It was pointed out however that the Internet is not without faults, ranging from surveillance possibilities and its misuse by fascist and other groups, to the elitist and exclusive nature of the technology itself. Amit Srivastava from TRAC in the US talked about campaigns challenging corporate power in the United States and the need to be inclusive. One of the biggest challenges is making the link between community organising and global campaigns; whereas grassroots organisers and affected communities tend to be people of colour, anti-globalisation activists are generally white, middle-class men. Tony Juniper of Friends of the Earth gave an example of campaigning for environmental justice in the UK through FoE's FactoryWatch website which allows people to identify sources of pollution close to their homes. Juraj Zamkovsky of FoE Slovakia spoke about campaigning against dam building in Central and Eastern Europe, where more than 40 villages inhabited by some 25,000 people have been forcibly relocated in the past decades. Corporate tactics to promote the dams have included manipulating the public through media campaigns, public meetings where false compensation promises were given, manipulative public opinion polls, and various tactics to weaken the resistance of affected communities. FoE Slovakia provides communities with the tools to identify and fight against these corporate tactics. Tony Clarke from the Polaris Institute and the International Forum on Globalization related some experiences from the MAI campaigns which ended in success. From the beginning, the MAI was clearly defined as a corporate rule treaty, which helped when presenting arguments to the press and public. Campaigns were built country-by-country, and the Internet was a very useful tool for spreading information. Finally, alternatives to the MAI were defined by campaigners. Helen Holder of A SEED Europe spoke about campaigning against the biotech industry, and provided several parallels to the anti-MAI campaign. Again, the opposition was clear and had consensus on the undesirability of GM food, action methods spread quickly from the UK to other countries and media interest followed, and there was a clear alternative in organic agriculture. Tony Juniper of Friends of the Earth presented the campaign against the Global Climate Coalition (GCC), a front group of oil, automobile and energy companies that lobbied the Kyoto climate negotiations. The strategy involved pressuring one member company, in this case Shell, to step out of the GCC. In the campaign, "Shell" was transformed into "hell", Shell "demons" stood at gas stations with placards, and there was a large demonstration outside of Shell's 100th anniversary celebration in 1997. In the end, Shell did leave the GCC, and public awareness about the GCC was raised. Olivier Hoedeman relayed the example of how CEO targeted corporate lobby groups by writing to companies active in groups like the European Roundtable of Industrialists and the International Chamber of Commerce and requesting information about their political activities. [2] Of those that responded, most companies denied having political activities, or highlighted only their activities in so-called "green" industry lobby groups. The following discussion resulted in several ideas to clarify the membership of companies in political lobby groups, including a directory of corporate membership in lobby groups, and Tony Clarke provided an example of a poster made about the Canadian Business Council on National Issues with photos of all of the corporate CEOs. It was wondered whether or not it was strategic to target individual CEOs rather than simply corporations. Several people felt that particular CEOs should not be personalised. The need to be very clear about our partners and our goals, to be clearly distinguished from right-wing forces, was stressed by many. The following session dealt with a strategically important, worrying trend -- dialoguing between NGOs and industry. For companies, it was pointed out, initiating dialogue is a way of staving off criticism. Dialogue, some felt, delegitimises any forms of engagement other than consensus and cooperation, thus effectively disempowering NGOs. Tony Juniper stated that dialogue should not be ruled out as a useful strategy in some circumstances. CEOs can change their opinions when points are powerfully made and profit is still possible. When companies don't respond to demands made during dialogue, this can be used against them in the press. Finally, dialoguing with the better companies, e.g. those involved in solar and wind power, sends a powerful message to other companies. Gregg Muttitt of Corporate Watch in the UK cited research he had carried out indicating that most mainstream NGOs in the UK are engaged in dialogue, and that this can be seen as a real threat to groups engaging in confrontation with TNCs. Dialogue is an extremely long and time- consuming effort for NGOs, and diverts their attention from other tasks. Furthermore, groups in the developing world tend to view dialoguing as extremely negative. In the discussion that followed, it was pointed out that dialoguing tends to legitimise corporate voluntary agreements. The need to make a distinction between TNCs that should be dismantled and those that need only to be reformed -- and thus are good targets for dialogue -- was mentioned. The vast disparity in resources between corporations and NGOs was also mentioned, as was a general feeling that dialoguing tends to accomplish little in the end. The positive example of the Forest Stewardship Council -- set up by NGOs with companies invited to join -- was cited. Gregg ended the discussion by saying that it is important to avoid divisiveness in discussions like this one, as that is exactly what the corporate world is hoping to create with their invitations to dialogue. Winding Down One of the meeting's hosts in Córdoba, Carola Reintjes, gave a short presentation on the socio-economic situation in Andalucía. The region, with 8 million inhabitants, is very poor, with employment reaching up to 45% in some regions. People have a love-hate relationship with the EU. There has been lots of financial input, but it mostly benefits large landholders and most of the population feels forgotten by the EU. 90% of the region's agriculture is exported and there is an invasion of large supermarkets, yet there are still strong ties with traditional and local food and culture. Finally, there were reports given from the small working groups on joint future projects and campaigns. The group discussing general strategies agreed that it is essential to link struggles in the North and South without repeating neo- colonial patterns, and to make our movement more inclusive. The results of working group meetings on the PR industry, on international trade policies and on regulation of TNCs are summarised in the 'Córdoba Declaration' which was agreed upon by the participants and is included below. ----- Notes ----- 1. <http://www.mcspotlight.org/> 2. See CEObserver, Issue 3 for the full story. _________________________________________________________________ "CHALLENGING CORPORATE POWER" THE CÓRDOBA DECLARATION _________________________________________________________________ From October 14 - 17, 1999, thirty progressive activists and researchers assembled in Córdoba, Spain, for a European strategy session, solidifying an international network and movement challenging the increasing power of corporations. While corporate power is not a new phenomenon, in the last decade, the political activities and influence of corporations have reached new levels -- threatening the pursuit of democracy and social and environmental standards. The growing gap between rich and poor, loss of livelihood, cuts in social services, mass unemployment and the scapegoating of immigrants are some glaring examples of this trend. In addition the privatisation of essential services such as health care, housing, education and utilities prioritises the realisation of profits over public interests. Important factors contributing to the rise of corporate power include the process of globalisation and the rise of neoliberalism. Following trade and investment liberalisation, mega-corporations operating on a global scale increasingly dominate economies. In the pursuit of international competitiveness, governments adopt regulations and free-up economic resources to serve the needs of corporations to the detriment of people and the environment around the world. Corporations have organised themselves in a web of lobby groups on the national, regional and global level, such as the European Roundtable of Industrialists and the International Chamber of Commerce. They have benefited from the ongoing transfer of political power to anti-democratic international structures such as the European Union and the World Trade Organisation (WTO). Far reaching corporate-state alliances have emerged in the last few years, such as the Transatlantic Business Dialogue (TABD). They show a chilling reality of how far policies are being shaped around corporate priorities. Also, the increasingly close liaisons between the United Nations and business is an unacceptable trend. Another central element of corporate political power is the rise of a multi-billion euro public relations (PR) industry and media corporations which work with business in manipulating public perception on a wide range of issues where commercial interests are at stake. Campaigns on climate change and international trade and investment treaties -- such as the Multilateral Agreement on Investment (MAI) and the World Trade Organisation -- as well as the growing revolt against genetically modified foods and movements against privatisation and deregulation in the South provide inspiring examples of how diverse social movements are challenging corporate power. The time has come to intensify our efforts to structurally challenge the political activities and power exercised by corporations and their lobby groups. This means rejecting the current agenda-setting role of business and anti-democratic alliances between corporations and states. Limiting economic concentration and dependency on mega-corporations is a necessary part of any attempt to roll back corporate political power, and allows the social and environmental agenda to reclaim political space. Codes of Conduct and other voluntary initiatives have proven to be insufficient and to be primarily corporate strategies to protect and further their own interests. Enforceable standards for corporate social and environmental behaviour are imperative. As the next steps in our efforts to roll back corporate power, we have agreed to work together to: - Work to share information and strategies to challenge corporate power (direct action, critical shareholder campaigns, corporate watchdog activities, etc.) - Expose and challenge the major corporations involved in the public relations industry. - Expose the impact of the Transatlantic Business Dialogue on government regulations and institutions and the political influence gained by large companies through this anti-democratic corporate-state alliance. - Prevent WTO negotiations on new issues and demand a full independent review of the impact of the Uruguay Round agreements on people and environment. - Reject the "Global Compact" between the United Nations and international business as it is based on the flawed concept of self regulation by "corporate global citizens". Córdoba, 17 October 1999 _________________________________________________________________ DISCLAIMER _________________________________________________________________ The magazine Nexus has, in its latest issue, reprinted our report "WTO Millennium Bug: TNC Control over Global Trade Politics" (July 1999), despite the fact that CEO explicitly refused Nexus permission to do so. The editorial of the magazine mentions our rejection and ends with a provoking "so here it is, but without their blessing!" In the Spring of 1998, after Nexus had reprinted our report "MAIgalomania" we discovered the problematic character of this magazine. We found "MAIgalomania" next to articles on UFOs and dubious conspiracy theories and decided not to allow them to reprint our material in the future. Nexus -- published monthly from Australia, distributed worldwide -- covers "the fields of health alternatives; suppressed science; Earth's ancient past; UFOs & the unexplained; and government cover-ups." [1] Articles with titles like "Mind Control Slavery and the New World Order", "Meetings With Remarkable Aliens" and "UK Crop Circles of 1999" are illustrative for the content of Nexus. More seriously is the fact that the magazine has repeatedly printed texts by authors belonging to the far right, which has resulted in Nexus being listed in the Tel Aviv University archive of anti-Semitic literature. [2] Its website has links to the homepages of the controversial new age icon David Icke as well as to websites with telling titles like "The Ashes of Waco" and "The Militia of Montana". When Nexus wrote us to ask if they could reprint our WTO report, we explained them that we disagree with Nexus "promoting a vision of a world governed by conspiracies, publishing any story that fits the image of shady, secretive political, religious and even extraterrestrial (?) groups pursuing terrible scenarios." [3] We told the editor that "both in target group and in our political goals, we see no basis for cooperation with NEXUS magazine." Nexus wrote back saying that they "simply publish unusual and hard to get information" and that they would publish the article anyway. We have done our best, but in vain, to explain the editors of Nexus that our reports on the MAI and the WTO are not describing conspiracies, but examples of undemocratic international treaty making. We explicitly distance ourselves from conspiracy theories, as these completely miss the point. The power of corporations is not based on secretive dealings. Most of the information we use is freely and easily accessible, often also through the internet. Journalists could dive into these issues and get the information without any serious obstacles. When news featuring examples of corporate political power are not mainstream news, this is due to the reality of corporate mass media today, not because of conspiracies. ----- Notes ----- 1. According to the Nexus website: <http://www.nexusmagazine.com/> 2. In the report "Anti-Semitism Worldwide 1997/8", Nexus is listed for printing anti-Semitic texts. The report can be found on the website of the Tel Aviv University's Stephen Roth Institute for the Study of Contemporary Anti-Semitism and Racism : <http://www.tau.ac.il/Anti-Semitism/> 3. Letter to Duncan Roads, Nexus editor, 21 October 1999. ---------------------------------------------------------------- # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: majordomo@bbs.thing.net and "info nettime-l" in the msg body # archive: http://www.nettime.org contact: nettime@bbs.thing.net