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The Need
for Accountability:
Three Case Studies
The Other Side
of the Coin
At this year's CSD we can expect
to see a series of what is being called "Best Practices" from
business and industry. These are examples or models of how a company or
industry can become both ecologically sustainable and profitable at the
same time. This effort to highlight the positive practices of business
and industry -- the focus on corporate responsibility -- is extremely
important. It is not enough to simply criticize the weaknesses and failures
of the global economic system or individual enterprises; there must also
be solutions -- alternative visions, concrete examples and models, vigorous
dialogue and sharing of perspectives, inspiration and strategies for realizing
our visions for creating a just and sustainable world.
On the other hand, to ignore the "worst practices"
is extremely dangerous. While we can admire and applaud the wisdom and
courage of those individuals and companies committed to social and environmental
responsibility, we must also address the dilemma of those who deliberately,
unwittingly or reluctantly take advantage of and abuse society and environment.
This focus on "the other side of the coin" is especially important
in light of high-budget public relations practices, or "greenwashing,"
covering up or distracting attention away from bad company decisions and
immoral conduct and the heart-breaking tragedies which continue to plague
communities around the planet.
A Corporate Hall of Shame
As explained in the ToBI Statement
on Corporate Accountability, there remains a critical need for governments
and communities to hold corporations accountable for their impacts on
society and environment. This Statement offers a series of steps which
government and UN agencies can take, in partnership with civil society
organizations, to address this need. The present section gives some concrete
examples of why this need exists. Here we identify a small handful of
cases - what might be called a "corporate hall of shame" --
in which NGOs and community-based groups call for accountability from
companies which made the mistake of putting profit-margins ahead of moral
integrity. Some of these cases, such as the Union Carbide/Bhopal disaster
and the Nestle Boycott, are well-known. The case of ITT's involvement
in the overthrow of the Allende government in Chile (not included in this
report) was a global scandal, helping initiate work to create a UN Code
of Conduct for TNCs. Most cases of corporate irresponsibility are not
so well-known; they are, however, quite widespread. Paul Hawken points
out that two-thirds of Fortune 500 companies were involved in illegal
behavior between 1975 and 1985, with 115 of the 500 convicted of a serious
crime during the 1980s. In the United States, white-collar fraud costs
the country $200 billion -- compared to the $4 billion cost of burglary
and robbery. Less clear are
those situations in which companies legally engage in destructive or immoral
acts, such as in the collusions between corporations and military dictatorships,
or when using contractors practicing "modern slavery" on their
workers/3 or company downsizing while giving huge CEO pay increases. In
most of these cases, corporate managers are required to ignore their personal
feelings about the moral implications of their decisions; their chief
responsibility is making sure the company remains financially healthy
and competitive. As David Korten points out,
The problem is not business or the market per se but
a badly corrupted global economic system that is gyrating far beyond
human control. The dynamics of this system have become so powerful and
perverse that it is becoming increasingly difficult for corporate managers
to manage in the public interest, no matter how strong their moral values
and commitment.
How then to ensure business and industry is accountable
to society -- especially considering the enormous influence which the
corporate world has over government policy and elections and mass media?
NGO and Grassroots Engagement
The image of NGOs and grassroots
citizens groups protesting abuses by "big business" is imprinted
in public perceptions. NGOs and grassroots activists claim an important
history confronting corporations with the social and environmental implications
of their behavior. From Greenpeace's Rainbow Warrior to the Chipko movement
in India to the daily struggles of neighborhood groups around the world
fighting to preserve the integrity of their communities, civil society
continues to provide a moral force working between the state and market
to keep humanity headed in the right direction.
Many of the NGOs involved in the NGO Taskforce on
Business and Industry are actively engaged in such public campaigns. Some
NGOs are specifically committed to addressing corporate misconduct. Overall,
the examples of NGO and grassroots actions challenging corporations or
trying to convince government to play a stronger role are too numerous
to list here. This section is not a survey of NGO campaigns nor of corporate
wrong-doings but a simple glimpse into why governments need to hold corporations
accountable for their actions.
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