Daniel Mittler, Greenpeace International


Twenty years ago, the power of corporations over governments was already mighty. Witness the fact that just a few months before the 1992 Rio Earth Summit, the only intergovernmental mechanism that had been monitoring transnational corporations – the UN Centre on Transnational Corporations (UNCTC) – was discontinued. Along with it went almost 15 years of work on the Code of Conduct on Transnational Corporations (TNCs), which attempted to spell out the rights and duties of TNCs and the rights of States to regulate them. While Principles 13 (Liability), 14 (Double Standards), 15 (Precautionary Principle) and 16 (Polluter Pays Principle) of the Rio Declaration all relate to corporate behaviour, governments failed to commit business to concrete actions to achieve sustainable development.

 

bull300Ten years later, corporate accountability – in the wake of the Enron scandal – became one of the issues at Rio+10. A global civil society call for true accountability led to early drafts of the Rio+10 outcome text calling for a commitment to ‘launch negotiations for a multilateral agreement on corporate accountability’. This got watered down along the way (not least by the then Bush administration). But at Johannesburg, governments at least – and at last – acknowledged the need for global rules for global business. They pledged to ‘actively promote corporate responsibility and accountability... including through the full development and effective implementation of intergovernmental agreements’.

 

May be it reflects the increasing rise of corporate power over the last twenty years (and in the wake of liberalisation), that this sort of language cannot be found in the drafts of the Rio+20 Outcome Document. The words ‘corporate accountability’ can be found in the latest Co-Chairs’ text, but in a manner that has nothing to do with holding anyone accountable for their social and environmental impact. Instead, the newest draft has even watered down the proposal for mandatory reporting by corporations.

 

But a more positive change that has occurred since 1992 is that today it is mainly progressive investors and businesses that have been calling for improvements in corporate governance. Specifically, they are calling for a convention on mandatory corporate reporting. Despite the setback of the latest Co-Chair‘s text, I wish them luck in still having their voice heard and making at least this small step forward at Rio+20.

 

But today, even more so than 20 years ago, what is really needed is a global instrument to ensure full liability for social and environmental impacts of global corporations. While some corporations are willing to act, we need clear rules and penalties for those which try to free-ride and dump external costs on society. Just as it is unacceptable for tax payers to pay for the reckless gambles of greedy banks, it is irresponsible that the people of Japan, for example, are now having to pay for the financial fall-out of TEPCO´s (Tokyo Electric Power) irresponsible behaviour. It is adding financial insult to environmental injury. And the opposite should be the case: Whoever damaged people or the environment, should at the very least know that they will be held to account – including financially.

 

With less than a month to go, it looks set that mandatory corporate reporting is the best outcome possible at Rio+20. But we as civil society, should unite once more like back in 2002 and call for “rights for people and rules for big business”.