29 may 2002
Corporate Accountability and Liability
Background statement from Friends of the
Earth International
Why is Corporate Accountability Needed?
Global and regional trade agreements are
granting multinational corporations
far?reaching rights. Yet there is currently
no international mechanism in place to hold
corporations accountable to the citizens and
communities affected by their activities.
This is most evident in the extractive
industries where communities have been
devastated by poor corporate practices.
Freeport in West Papua, Newmont Mining in
Peru, Premier and TotalElfFina in Burma to
name a few of the numerous examples where
extractive industries have exploited
resources without assuming the social and
environmental duties that are required if
sustainable development is to be
realized.
What will Corporate Accountability Look
Like?
A corporate accountability convention
would establish rights for citizens and
communities affected by corporate activities;
duties for corporations with respect to
social and environmental matters; rules to
ensure better practices wherever corporations
operate and most importantly, liability
clauses including financial and legal
liability for companies and company
directors.
Where are the WSSD negotiations headed on
corporate accountability?
"FoEI is very concerned that some
governments may move today to delete all
references to corporate accountability from
the Vice?Chair's paper," said Matt Phillips
of Friends of the Earth International.
"Delivering sustainable development will
require governments to ensure corporations
conduct their activities in a responsible
manner," Matt added.
"Bali is the last stop before
Johannesburg. Governments must negotiate a
legally binding framework for corporate
accountability and liability. The WSSD
provides a critical opportunity to reverse
the current destructive model and establish
innovative policy solutions to achieve
sustainable development."
Contact: Matt Phillips at +44 7810 558
246
FoEI's position paper for Prepcom 4,
"Towards Binding Corporate Accountability,"
is available in hard?copy or online at
www.foei.org
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