Brussels, July 3, 2002 – The European Commission has missed a huge opportunity to stop big business scandals by producing a White Paper on Corporate Social Responsibility that advocates leaving big business to regulate itself. The proposal comes just days after the Worldcom scandal provided the latest example of corporate mismanagement and corruption.

The Commission’s paper ignores calls from Friends of the Earth and others for binding rules to regulate multi-national companies world-wide. FOE has called for the paper to address binding corporate accountability including key measures such as, at the very least, mandatory social and environmental reporting.

But big business has been in Brussels arguing against regulation, and the White Paper now contains only voluntary measures. This will put Anna Diamantopoulou, Commissioner for Employment and Social Affairs at odds with the European Parliament, which, for example, recently voted in favour of mandatory social and environmental reporting.

New alliances are being formed between environment, human rights, development groups and trade unions to fight for global rules for multinational companies, which civil societies sees as a prerequisite for sustainable development. The groups are determined to make it a key issue at this year’s Earth Summit in Johannesburg and demand from the EU to start a process at the World Summit which will result in a legally binding convention on corporate accountability.

A recent report by UNEP reviewed progress by big business on social and environmental issues since the 1992 Rio Earth Summit. The report entitled “Industry and Environment – Achievements, Unfinished Business and Future Challenges” concluded that, despite a plethora of voluntary
initiatives, “there is a growing gap between the efforts of business and industry to reduce their impact on the environment and the worsening state of the planet”. This gap, say UNEP, “is due to the fact that in most industry sectors, only a small number of companies are actively striving
for sustainability”. At the report launch, Klaus Toepfer, Executive Director of UNEP noted that “the majority of companies are still doing business as usual” (report available at

Craig Bennett, Corporates Campaigner at Friends of the Earth said: “When shareholders and financial institutions are hurt by dodgy corporate dealings – as in the case of Enron and now Worldcom – politicians rush to intervene, demanding prosecutions and tougher laws. But when it is ordinary people or the environment that suffer, politicians and the European Commission go for the ‘voluntary approach’, allowing corporations to continue with business as usual.

Today’s announcement by the Commission suggests that it is now the corporations that are regulating governments – rather than the other way round. The European Commission has shown itself to be on the side of big business. It’s now over to MEPs and the Danish EU Presidency, to put people and the planet before profits”.

Craig Bennett, Corporates Campaigner, Friends of the Earth England,
Wales and Northern Ireland, Tel +44 20 7566 1667, Mob +44 7747 123567, Pgr +44 7654 588862 or Matt Phillips, FoE EWNI, Tel +44-20 7566 1660, Mob +44 7817 314706