When the People Speak, the Corporations Squeak

Having learned from the South African divestment movement that local actions can help stop egregious human rights abuses and bring democracy to countries around the world, citizens across the United States are increasingly mobilizing in support of state and local sanctions against countries such as Burma, Nigeria and Indonesia, all of which are ruled by brutal dictatorships.
These sanctions typically leverage the power of government agencies as consumer, using "selective purchasing" laws to bar the government from doing business with companies that do business in the targeted country. Massachusetts and more than a dozen cities have adopted such laws.
The idea is to encourage corporations to stop doing business in dictatorial countries, on the theory that income from their investments help prop up autocratic regimes. The South African example -- where state and local sanctions, along with university and private divestment campaigns and national sanctions unquestionably helped speed the end of apartheid -- lends strong credence to the theory.
Facing a rising tide of state and local sanctions, Big Business has banded together into an outfit called USA*Engage to defeat and roll back grassroots efforts to influence where multinationals do business. USA*Engage has more than 600 members, including Aetna, Bechtel, Cargill, Caterpillar, Exxon, Mobil, Monsanto, Pepsi, TRW and United Technologies.
In March, the state of Maryland was on the verge of enacting a selective purchasing law that targeted Nigeria. Nigeria is ruled by a military government that feeds of oil money (provided by companies like Shell and Mobil) and drug money. The government annulled a democratic election held in 1993, has jailed the victor in that election, allegedly killed his wife, executed Ken Saro-Wiwa, a leader of the Ogoni people, murdered and tortured thousands of citizens and jailed the nation's trade union leadership. All in all, Nigeria is an excellent candidate for sanctions.
But not in the eyes of Big Business. It launched a furious campaign to defeat the selective purchasing proposal, arguing that sanctions are ineffective, unfairly disadvantage U.S. companies and undermine federal authority to make foreign policy. At the last minute, the Clinton administration intervened, saying Maryland's proposed law would violate U.S. trade treaty obligations. This tipped the balance against the bill. Big Business's lobbyists were smiling when they left Maryland.
Now, the same band of companies is seeking to roll back Massachusetts's selective purchasing law which targets Burma, another military dictatorship which has killed thousands, jailed the nation's rightfully elected leader and thrives on oil money (especially from Unocal) and drug money.
Late last month, the National Foreign Trade Council, another business coalition, with 550 U.S. manufacturing company members, filed suit against Massachusetts, claiming the state's selective purchasing law infringes on the federal government's foreign policymaking power.
The lawsuit faces significant hurdles. It is not clear that the Trade Council has legal standing to bring the suit, nor that local and state sanctions interfere with federal powers in any constitutionally significant way.
But while the suits winds its way through the federal courts, it sends a powerful, chilling message to state and local officials considering responding to citizen campaigns to adopt sanctions. The message: States and localities that seek to enact selective purchasing proposals will face unremitting pressure from politically powerful multinational corporations. They should expect massive corporate lobbying campaigns, threats of lawsuits, pressure from a federal government which is choosing to ally itself with business interests on sanctions and the threat of suit at the World Trade Organization and other trade bodies (indeed, the European Union and Japan have both threatened to call for the formation of penalty-wielding WTO dispute settlement panels to rule against Massachusetts's Burma law).
The purpose of this corporate campaign of intimidation is clear: While multinationals may or may not prefer to do business with dictators, they certainly do not want citizens interfering with their commercial operations in authoritarian countries -- even if those operations help prop up dictatorships.
At root, the suit over Massachusetts's Burma law is a clash between corporate internationalism and citizen internationalism.
The outcome of the clash will have huge consequences. As citizen internationalists like to point out, if the corporate internationalists' argument had prevailed in the case of South Africa, Nelson Mandela might still be in jail.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter.
Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor.


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