By ROBERT WEISSMAN /
By most accounts, UK Prime Minister Gordon Brown is genuinely
passionate about reducing global poverty.
But he is not willing to challenge the structures of the global
economy that generate poverty, or the corporations that build, benefit
from and maintain those structures.
Nor, apparently, is he immune to gimmicky notions of corporate
leadership to support development, or the lure of high-profile summits
to shed light on new plans to do -- very little.
Thus, earlier this week the UK was treated to the spectacle of the
Business Call to Action summit, which Brown's office co-sponsored with
the UN Development Program. More than 80 CEOs of large companies
gathered with Brown and other luminaries to discuss how they could
help meet the Millennium Development Goals, which aspire to reduce
global poverty by half by 2015. Roughly two dozen of these CEOs --
from Anglo American, Bechtel, Citigroup, Coca-Cola, De Beers, Diageo,
FedEx, Goldman Sachs, GE, Merck, Microsoft, SAB Miller, Wal-Mart and
others -- have signed the Business Call to Action, which states, "as
leaders from the private sector, we declare our commitment to meet
this development emergency."
The premise of the event, as Gordon Brown said, was to advance "a new
approach -- moving beyond minimum standards, beyond philanthropy and
beyond traditional corporate social responsibility -- important though
they are -- to develop long-term business initiatives that mobilize
the resources and talents that are the central strengths of global
business."
The mantra of the event was for corporations to "explore new business
opportunities that use their core business expertise" and that also
help spur development.
Taken at its face value, this was, um, not exactly inspiring. Says
Peter Hardstaff of the UK-based World Development Movement, the CEOs
"have all agreed -- to do more business."
But the problem goes way beyond the fact that business as usual -- or
even a little bit of new business initiative with a development-
conscious orientation -- is not going to do much to reduce global
poverty. The real problem is that business as usual is a central part
the problem.
"Instead of holding these companies to account for their actions,"
says John Hilary, executive director of War on Want, a UK-based anti-
poverty group. "Gordon Brown has allowed them to portray themselves as
allies in the fight against poverty. The prime minister should be
working to address the poverty and human rights problems caused by
business, not giving the companies a free ride.=94
War on Want focused attention on the harmful development impacts of
many of the corporations signing the Business Call to Action. The
group has campaigned against mining giant Anglo American. It has
documented how Anglo American has benefited from human rights abuses
associated with civil wars in Colombia and the Democratic Republic of
Congo (DRC). Local mining communities in Ghana and Mali have seen
little economic benefit from Anglo American's operations (or the spike
in the price of gold); instead, says War on Want, the company's mines
harm their environment, health and livelihoods.
Other corporate signatories to the Business Call to Action have
directly hurt poor people through their "core business" more than can
be offset by development-tinged ventures (even assuming such ventures
succeed). Wal-Mart contracts with sweatshops. Bechtel tried to price-
gouge and rip-off Bolivian consumers and the Bolivian state through
control of the country's privatized water system. Merck refuses to
license life-saving medicines for cheap generic production.
Simultaneous with Brown's business summit, Action Aid UK pointed to a
major systemic abuse by multinational corporations that undermines
development: They don't pay their taxes. The group released a report
looking at tax payments of 14 corporate signers of the Business Call
to Action. It found that these companies combined are underpaying
taxes by more than $6 billion a year, as compared to what they would
pay if they paid at the statutory rate in the United States and UK.
The group did not suggest any illegal activities by the companies --
there are plenty enough legal tax avoidance strategies.
Money lost to developing countries through capital flight and tax
avoidance is many times greater than aid flows into poor countries,
says Jesse Griffith, the lead author of the Action Aid UK report.
Tax avoidance is a key issue because it strips money from national
treasuries that would otherwise be available for social investment,
and because it reflects structural problems that could and should be
cured without any need for global philanthropy or aid.
But tax avoidance is only one of many ways that corporations exploit
and perpetuate economic policies and institutional arrangements that
contribute to poverty or inhibit authentic development.
The World Development Movement issued a 10-point challenge to
corporations that claim an interest in promoting global development.
It called on companies to stop using their political influence to
promote policies that undermine development. It urged companies to:
stop lobbying to open up developing country markets, and let
developing countries "use the same trade policy tools industrialized
countries used to get rich;" stop demanding rich country-style patent
rules for the poor; support radical government action, starting in
rich countries, to address climate change; support binding codes of
conduct for multinationals, including respect for labor rights; end
support for privatization and deregulation, including particularly
financial deregulation; stop lobbying for and exploiting tax
loopholes; and other measures.
This is not exactly an agenda that global business leaders are likely
to take up soon.
On the other hand, it's not exactly likely that global business
leaders are going to lead the way to end global poverty.
Among other things, that's going to take a global movement, led from
the Global South, to implement the policies implicit in the World
Development Movement call.
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Robert Weissman is editor of the Washington, D.C.-based Multinational
Monitor and director of Essential Action.
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