questions about corporations

what's wrong with big business?

do corporations behave in a responsible way?
what kind of impacts are corporate activities having on the world?
how many multinational corporations are there and where are they based?
what is 'ecological debt'?
how do Governments and the public view corporations?
do corporations have political power?
what economic power do corporations have?
what is the effect of corporate lobbying?
surely corporations are regulated?
are voluntary corporate regulations effective?
does corporate privatisation of public utilities work?
who are corporations accountable to?
who subsidises corporations?
what are those unhappy with corporate behaviour doing?

do corporations behave in a responsible way?

Corporations are not behaving responsibly. For example more than half the tropical timber entering the EU may be illegally-sourced. Premier Oil plans to exploit reserves in Pakistan's oldest National Park, Kirthar. Barclay's Bank is funding rainforest destruction. Scotts exploits "protected" peatlands in Britain. Exxon lobbies against action on climate change. The list is endless.

what kind of impacts are corporate activities having on the world?

Corporations continue to log ancient tropical forests. Globally natural and agricultural biodiversity continues to decline. 1.2 billion people live on less than $1 a day. Around the world the growing impacts of corporate mismanagement of the world's resources are being felt - 20 per cent of the population, driven by corporate marketing activity, consume 80 per cent of the world's exploited resources.

how many multinational corporations are there and where are they based?

There are now 40,000 multinationals with 280,000 affiliates. Most are domiciled in the EU or US where the big decisions are made. Yet the people most affected by these decisions may be far away in the developing world.

  what is 'ecological debt'?

The South owes a financial debt to the North. But the consumerism of the North - driven in part by the marketing arms of corporations - means resources are taken from the South. Most corporations are based in the North, but Southern citizens face the consequences of their activities. This is an ecological debt.

how do governments and the public view corporations?

Governments can decide the climate within which corporations operate. But they are reluctant to constrain corporate behaviour because corporations are powerful, effective lobbyists and dominate the political and media elite. The result is that the policies on corporations of many political parties are hard to distinguish. The 'neo-liberal' consensus has gripped the political elite, but not the public. In the for example, UK 92% of the public believe that multinational companies should meet the highest human health, animal welfare and environment standards wherever they operate. 58% of the public think that 'what's good for business is not good for most people in developing, poorer countries.' 71% reject the idea that global business is good for most people in developing, poorer countries.

do corporations have political power?

Corporations and business leaders are in power. They even fund political parties. Directors past and present are in Governments and Parliaments and run initiatives and agencies. Their narrow view of the world which puts economic values before all else has come to dominate the political elite presently in power and running international bodies such as the World Trade Organisation. One of the world's leading corporate lobbyists, Lord Holme of Business Action for Sustainable Development (BASD), is actually a legislator sitting in the UK's House of Lords.

what economic power do corporations have?

51 of the world's top 100 economies are corporations giving them enormous economic power. Yet the power brokers are in boardrooms and therefore are not accountable to the people affected by their decisions and activities. The top 200 multinationals have sales equivalent to 26% of Global GDP, but employ just 0.74% of the World' workforce. The 1999 sales of each of the top five corporations (General Motors, Wal-Mart, Exxon Mobil, Ford Motor, and Daimler Chrysler) were bigger than the GDPs of 182 countries.

The assets of the world's three richest people are greater than the combined GDP of the 48 least developed countries. The 475 riches people are worth more than the combined incomes of the poorest 50 percent of the world's people.

what is the effect of corporate lobbying?

Corporations lobby Governments extremely effectively. This means they are not neutral players allowing Governments to put public interest before theirs, rather they use their massive resources to change Government policies in their favour. One Corporate lobby group, the Trans Atlantic Business Dialogue, claims that the EU and US Governments adopt 50% to 80% of its policy proposals. Parliaments are crammed with hundreds of corporate lobbyists. Big Business has the ear of senior Ministers - Tony Blair recently toured South America with a plane-load of chief executives to lobby South American Governments on a new trade round.

surely corporations are regulated?

Recent decades have seen a rolling back of the laws regulating companies. This is a major drive within the WTO, for example where regulations on environmental or social standards are seen as 'barriers' to trade. Constraints on corporate behaviour have been relaxed. What is more, corporations often threaten to relocate to press governments not to regulate them.

are voluntary corporate regulations effective?

Corporations argue they should regulate themselves. There are hundreds of voluntary codes and guidelines invented to help them do so. Yet these are clearly not working. They are generally not independently verified and they do not provide incentives for good behaviour. Above all they are 'top down' with corporations regulating themselves and deciding priorities - rather than citizens being empowered to act.

does corporate privatisation of public utilities work?

 The trend towards privatisation has taken services and industries out of public hands. Yet private companies running these services do not have to take account of wider public interest concerns as Governments must. The UK pioneered privatisation in the 1980s, but in the case of Railtrack, for example, this failure to take proper account of public interest matters led to a transport crisis that has now resulted in the company being taken over by the Government again.

who are corporations accountable to?

The main duty of publicly traded corporations is to maximise profits for shareholders. So corporations are accountable - but only to shareholders. Other stakeholders such as customers, ordinary people, unions or NGOs may have an influence, but few rights to challenge corporate behaviour. These other stakeholders are affected by the decisions corporations take. In contrast, the public have given corporations many rights - for example the right to limit their liability.

  who subsidises corporations?

Corporations pass many of their costs on to society. For example, pollution clean up, transport impacts and degradation of common resources. Trends favour more of such 'externalisation' of costs. This is a citizens' subsidy of corporations.

what are those unhappy with corporate behaviour doing?

There is a growing discontent with corporate power. Voter-turnout in many parts of the world is in decline as people increasingly feel out of touch with the forces affecting their lives and with the political elite. Communities around the world are challenging corporate power and a growing protest movement has shone the spotlight on corporate globalisation. Citizens are demanding renewed democracy and a democratic balance to the power of the unaccountable.