The Corporate Capture of the Earth Summit

by Kenny Bruno

RIO DE JANEIRO - In his last press conference as Secretary-General of the United Nations Conference on Environment and Development, Maurice Strong admitted that he was "really disappointed" in the failures of the Earth Summit. But he left unanswered - and unasked - the question of why the conference had failed. As people around the world attempt to understand why their governments did not implement measures to address the environmental and development crises, they should look closely at the influence of the world's most powerful economic actors, multinational corporations (also known as transnational corporations or TNCs).

 Earth Summit negotiatiors set their goal as nothing less than moving the course of human activities onto a sustainable path. Given this lofty objective, it would have been logical to confront multinational corporations, since they are the entities primarily responsible for ozone depletion, global warming, toxic contamination, pesticide proliferation, international trade in hazards and other practices which threaten human health and the environment.

 Instead, throughout the UNCED process, corporations enjoyed special access to the Secretariat, and the final UNCED documents treat them deferentially.

 Corporate influence on the Earth Summit undermined Agenda 21, rendered the Climate Convention toothless and weakened the Biodiversity Convention, which was nonetheless rejected by the United States. In addition, through an enormous public relations drive, corporate leaders themselves attempted to take over the UNCED stage to claim that they have voluntarily turned the corner onto a new path of sustainability.

The business vision of this "new" path still centers around economic growth, with free trade and open markets as prerequisites. Meanwhile, business leaders envision linking environmental protection to profitability, through a system in which all of nature is priced and patented. This is "sustainable development" according to the global corporations. And in Rio, UNCED - made up of representatives of virtually every government in the world - came close to adopting this vision of free market environmentalism as its own.

Maurice Strong: businessman as environmentalist

 The choice of Maurice Strong - a multi-millionaire Canadian businessman with interests in oil, real estate, mining and ecotourism - as UNCED Secretary-General was an early sign that the business perspective would have extraordinary clout at UNCED. In his opening speech to an UNCED preparatory conference in New York, Strong laid his philosophy on the table and called on UNCED to be compatible with the General Agreement on Tariffs and Trade (GATT), an international trade agreement which emphasizes open markets and is strongly supported by internationally oriented companies. This emphasis on free trade is embodied in Principle 12 of the Rio Declaration and allows GATT to cast its shadow over UNCED. As Kristen Dawkins of the Minneapolis-based Institute for Agriculture and Trade Policy says, "UNCED has bought the TNCs' plan for free trade to reign supreme over environmental protection in the New World Order. Principle 12 has the power to render environmental agreements moot."

 Strong never denied close links with business during the UNCED process. At one meeting in Rio, he responded to criticism of this special relationship by saying, "How can we achieve [sustainable development] without the participation of business?"

The Business Council for Sustainable Development

 Early in the UNCED process, Strong appointed Swiss industrialist Stephan Schmidheiny as his chief advisor for business and industry. Schmidheiny in turn gathered 48 top executives from companies like Du Pont, Shell, Dow, Ciba-Geigy and Mitsubishi to form the Business Council for Sustainable Development (BCSD). The centerpiece of the BCSD's energetic effort was the book Changing Course, which lays out the multinational corporate vision of free-market environmentalism.

 Throughout the UNCED process, the BCSD had special access to Strong, access which was unavailable to non-governmental organizations, trade unions and groups representing women, youth, farmers and indigenous peoples. Strong even reported that he and Du Pont Chief Executive Officer Edgar Woolard had edited a chapter of Changing Course together.

 Strong's role as an apologist for industry intensified in the week before the official opening of UNCED. On the Friday before UNCED officially began, Strong could be found at a BCSD press conference, watching a high-tech Kodak-produced slide show of Brazilian flora, and fawning over Schmidheiny and the BCSD. "No contribution [to UNCED] has been more important than yours," he told Schmidheiny in front of scores of reporters.

ICC guts Agenda 21

 Two days earlier, with the presence of the King and Queen of Sweden drawing a flock of photographers, Strong delivered a similar paean to the plenary session of a 3-day meeting of the International Chamber of Commerce (ICC). The "deep appreciation" of the secretary-general was even more striking in this context, since the ICC has been a leading lobby against proposals to regulate the environmental practices of businesses.

 During the fourth UNCED preparatory committee meeting in New York, Sweden and Norway introduced detailed Agenda 21 proposals. Based on recommendations of the United Nations Centre on Transnational Corporations, the proposals included some of the very same measures supported by the BCSD and ICC in written policies. However, after lobbying by ICC members back in Stockholm and in New York, these proposals were dropped. The final draft of Agenda 21 contains no proposals for controlling multinational corporations. Instead, it discusses the important role business and industry have to play in environmental protection and emphasizes voluntary measures that corporations are already taking.

 This type of tactic was typical of the strategies used by the BCSD and ICC throughout the UNCED. While the slick and highly visible BCSD publicized its commitment to full environmental cost accounting, the ICC lobbied to remove such accounting measures from Agenda 21. While the BCSD touted the "changing course" of industry, the ICC systematically made sure that no changes harmful to its interests were made. About half of the BCSD companies are on the board of the ICC.

The Climate Convention

 Three hundred scientists from 40 countries make up the International Panel on Climate Change (IPCC). Their report "Climate Change: The IPCC Scientific Assessment," states explicitly that the only hope for avoiding unprecedented and ecologically disastrous global warming is to make deep cuts in carbon dioxide emissions. The Climate Convention, which does not obligate any country to emissions reductions, therefore ranks as one of UNCED's most devastating failures.

 In part, the weakness of the Convention represents the payoff of the work of the Global Climate Coalition, an industry lobby which was active throughout the two-year negotiating process. At the last session of the pre-conference negotiations, the Coalition passed out fliers which claimed, contrary to all the evidence amassed by the IPCC, that no environmental benefit will be achieved by stabilizing carbon dioxide emissions.

 Shell and Du Pont, both members of the Coalition, are also members of the BCSD, and claim to embrace the "precautionary approach" to global warming. But a look underneath the fancy green language of "eco-efficiency," "no-regrets," and "precautionary principles," reveals that the oil industry still plans to burn "all the oil" it can find. After the BCSD press conference in Rio, Italian oil giant ENI President Gabriele Cagliari was asked if the world can burn all the oil on the planet and call it sustainable. Cagliari, who is also a BCSD member, squirmed slightly and answered, "Yes."

The Biodiversity Convention

 On June 7, with the Rio conference less than half over, Schmidheiny, Cagliari and the other BCSD executives who had come to Rio left town, saying their work was done. Indeed it was. Two days earlier, the New York Times printed a leaked memo revealing that the White House had rejected the recommendation of William Reilly, chief administrator of the Environmental Protection Agency and the leader of the U.S. delegation in Rio, to allow Brazil to try to renegotiate the biodiversity treaty, preferring to reject the treaty outright. Pointing out that he is "the president of the United States, not president of the world," President Bush explained that "in biodiversity it is important to protect our rights, our business rights."

The BCSD may have left town, but Bush was watching out for business interests. It was the corporations involved in biotechnology, including BCSD member companies like Du Pont and Ciba-Geigy, whose concerns about profits from intellectual property rights had prompted Bush to sabotage the Biodiversity Convention.

Business sponsorship of UNCED

 Business influence was pervasive at UNCED in subtler ways as well. A handful of big companies, including Ashai Glass, Atlantic Richfield, ICI, Swatch and 3M, were major funders of Ecofund, a Washington, D.C.-based non-profit group set up to help finance the conference.

 Business sponsorship extended to the Global Forum, the huge alternative summit for non-governmental organizations. A report released by a group of student activists during UNCED detailed the environmentally destructive practices of Global Forum sponsors Petrobras, the Brazilian oil company, Companhia Vale Do Rio Doce, a major Brazilian mining company.

Whether companies knew it or not, big business even had a man working for its interests in one of the more remote corners of the Rio meetings, the non-governmental organizations' negotiations of a treaty on TNCs [see "Citizen Summit"]. But the negotiations coordinator for the TNC treaty turned out to be Patrick McNamara, a representative of a group called "Business Transformations." This group is dedicated to working "with business" to help industries incorporate values such as "love, compassion [and] environmental protection," into their operations. After a struggle with others interested more in how to control TNCs than in how to raise the consciousness of business executives, McNamara agreed to relinquish his role as coordinator, but continued to attend meetings of the group.

TNCs, development and Rocinha

 UNCED's official pro-multinational corporation rationale is that these companies are the engines of economic growth which will provide resources for environmental protection and jobs for eliminating poverty. Rio was an interesting site for UNCED, because the poverty which "development" is meant to eradicate is on grotesque display. On their way to and from the conference each day, thousands of delegates and journalists passed through a tunnel underneath Rocinha, Latin America's largest favela, or shantytown, which is built on one of Rio's dramatic limestone hills.

 On the first Saturday during the conference, NGO representatives and reporters gathered in Rocinha, high above the Hotel Intercontinental, where a week earlier, ICC executives had expressed pious concern for the world's poor. In a neighborhood Samba school, the NGO members listened to community leaders describe what UNCED had meant to them- tanks, soldiers, one disappearance and two killings since the Brazilian government increased security for the conference.

 Compared to other similar places, Rocinha is a success story. After a tough struggle over the last few years, the shantytown's residents have seen some improvements in living conditions: it is no longer run by drug dealers, some of the neighborhoods are prospering and a leading candidate for mayor is from the favela. Nevertheless, the entire economy of Rocinha, including its schools, hospitals and sewage systems, is outside the official economy, and the signs of poverty are everywhere. It is a giant reminder of how growth and development, anachronistically peddled by multinational corporations and the World Bank at Rio, have failed to trickle even a minimal portion of wealth down to millions of people in Brazil and around the world.

Next on the TNC agenda: GATT vs. UNCED

 But UN and government officials seem to have ignored the failure of the market era and economic growth to provide environmental protection and eradicate poverty. By the time UNCED was over, multinational corporate executives could happily note that they had prevented international governmental meddling in corporate affairs and ushered in the era of free market environmentalism. Big business will now be relatively free to pursue its full agenda in the current GATT negotiations.

 Judging from Rio, there will be opposition. Before the conference, non- governmental organizations aggressively challenged the role of multinational corporations in UNCED, starting with the release of a pamphlet called the "Greenpeace Book on Greenwash," an exposé of the BCSD and the environmental records of nine prominent companies. Two days later, when the BCSD began its meeting in Copacabana, the Greenpeace ship Rainbow Warrior blockaded the port of BCSD member Aracruz Celulosa and a coalition of indigenous people and Aracruz workers protested company policies. Almost every day saw a new counterattack against multinationals, and skeptics of corporate environmentalism from North and South sprouted up everywhere in the Global Forum.

 The world's governments let corporate greenwash taint UNCED, but the thousands of NGOs gathered in Rio were resentful of the special influence corporations grabbed for themselves at the conference. The move into the era of free trade and free market environmentalism will only intensify the battle between environmentalists and multinational corporations. As Indian ecologist and feminist Vandana Shiva told a group discussing multinationals' role at UNCED, "Governments have abdicated their responsibilities; now it's between TNCs and citizens to fight it out directly."



The Merchants of UNCED

"The environment is not going to be saved by environmentalists. Environmentalists do not hold the levers of economic power."

-Maurice Strong, UNCED Secretary-General

"We believe there must be further development in the whole world. We need growth to overcome inefficient behavior. It is an apparent paradox but I think once you understand what it means, you'll find out that it's true."

 -Stephan Schmidheiny, chair of the Business Council for Sustainable Development

RIO DE JANEIRO - Confronted with the avalanche of green rhetoric that fell upon the Earth Summit, it was easy to lose sight of the fact that United Nations Conference on Environment and Development (UNCED) Secretary-General Maurice Strong and his leading collaborator, Stephan Schmidheiny, chair of the Business Council for Sustainable Development, are businessmen first, environmentalists second. Their grip on the helm of the UNCED process culminated a decades-long evolution in their careers, a path that led through such grimy industrial landscapes as the oil fields of Canada, chemical waste sites in Nova Scotia and the steel mills of Chile. It included tenure in the executive suites and boardrooms of some of the world's largest banks and corporations.

 These two merchants have left an unmistakable philosophical mark on the UNCED process, one that transcends both logic and the historical record. Despite its leading role in trashing the natural environment, big business, Strong and Schmidheiny insist, will prove the earth's salvation. And despite the fact that two of the only hedges against corporate rapaciousness have been national borders and government regulation, they claim it is precisely the elimination of these battered bulwarks that will lead to the garden of Eden. Skepticism, it seems clear, is warranted.

 A classic rags-to-riches story (he left his home in Manitoba at age 14 and rode the rails to British Columbia), Maurice Strong's path to Rio began with a series of successful investments in Western Canada's mines and oil fields. In 1954, he became vice-president and treasurer of Dome Petroleum Ltd. He quickly established his reputation as a financial wizard with a particular talent for making corporations grow. After a stint as chief executive officer of one of the country's leading investment firms, Power Corporation of Canada, Strong accepted an invitation to run PetroCanada, then-Prime Minister Pierre Trudeau's foray into nationalizing part of Canada's oil industry.

 Since then, Strong has aggressively mixed corporate activity with public service, at one time heading Canada's federal foreign aid agency. He has held various positions at the United Nations, serving as chair of the 1972 United Nations Conference on the Human Environment in Stockholm and adviser to the 1987 World Commission on Environment and Development, which produced the Brundtland Report.

 At the same time, Strong presided over a variety of business ventures, including controversial efforts to mine the water in an aquifer at the base of the Colorado Rockies, and to build a resort hotel on the Atlantic Coast of Costa Rica. Mining the water locked in the rock beneath the high plains of Colorado could have made Strong and his fellow investors billions of dollars; Coloradans who opposed the scheme on environmental grounds accused Strong of attempting to profit at the expense of the delicate hydrological balance of the region. "In our valley," said activist Greg Gosak, "he's been up to no good." When called to testify before the Water Court in Denver, Strong invoked diplomatic immunity to avoid answering questions. He has since distanced himself from the project.

 In Costa Rica, Strong built a luxury "ecotourism" hotel on land that later became part of an officially designated Indian Reserve. Although Strong has claimed that indigenous people have no interest in the area, indigenous leaders have declared otherwise. The case may end up in court.

 Once co-director of Canada's largest waste-handling company and chair of the Canada Development Investment Corporation, Strong has been accused several times of shady financial dealings, including illegally profiting from his relationship with PetroCanada and taking advantage of an insider trading scheme that netted him several million dollars. None of the accusations have stuck.

 The other merchant at the helm of UNCED is Swiss industrialist Stephan Schmidheiny. One of the world's wealthiest men, Schmidheiny presides over a personal fortune estimated at more than $3 billion. He sits on the board of the Union Bank of Switzerland (his brother Thomas and cousin Jakob hold seats on the boards of Switzerland's two other major banks), and on the boards of Switzerland's two largest corporations, Nestle and Asea Brown Boveri. His holdings include major investments in nuclear power, chemical manufacturing, electronics and mining.

 Chile's leading steel concern, in which Schmidheiny has a 30 percent stake, was paralyzed by the longest labor-management dispute of post-dictatorship Chile, which ended only with the defeat of union demands last December. When workers at his Everite factory in South Africa went on strike, demonstrators burned an effigy of Schmidheiny in the center of Zurich's financial district.

 Despite this background, Schmidheiny is considered a "softy" when compared to the average Swiss industrialist. When Schmidheiny announced the transfer of 600 jobs from his scientific instruments concern in Switzerland to Singapore, the Swiss press reacted with uncharacteristic calm. Said one Swiss journalist, "Tough measures tend to be accepted when the man announcing them is Schmidheiny."

 Schmidheiny and Strong are long-time friends. Strong's personal wealth includes holdings based in Switzerland, and both are members of the super-exclusive World Economic Forum, an organization of political leaders, leading scientists and CEOs of the world's largest corporations, which meets each February at a discreet Swiss hideaway in Davos.

 Two years ago, Strong recruited Schmidheiny to marshal "the perspective of business" for inclusion in the UNCED debate. Schmidheiny delivered. Gathering together the leaders of 48 major multinationals, including such world-class environmental criminals as Du Pont, Ciba-Geigy, Mitsubishi, Con- Agra and Rhone-Poulenc, Schmidheiny formed the Business Council for Sustainable Development (BCSD). The BCSD claims no official status. "I don't have a UN mandate," says Schmidheiny. "We are not even a legal entity." However, the organization's influence at UNCED was formidable. The four dozen corporations also wield considerable financial clout, representing some four percent of world trade.

 BCSD's most visible effort has been the publication of Changing Course, a book that outlines the environmental rationale for permitting multinational corporations to ignore national borders, accountability and all forms of regulation. Ostensibly authored by Schmidheiny himself, the book is actually a collaborative effort, representing the consensus of a group that presumably represents the most enlightened portion of multinationals.

 The book traverses the glaring inconsistencies of its thesis with apparently little discomfort, blithely making the case that secrecy and minimal regulation (or "self- regulation," as the industrialists prefer to call it), will save more trees than the patchwork of regulations that exist today. In tandem with promoting a free rein for industry, Changing Course gamely attempts to argue that only further economic growth can reverse the adverse impacts that the unhindered growth of the last four decades has had on the environment.

 Strong and Schmidheiny are not criminals by the standards of global commerce. Indeed, in comparison to many of their colleagues, they are paragons of virtue. But they are voluntary captives of the world from which they have emerged, representing to perfection the new notion of "commerce with a human face." No amount of window dressing, however, can reconcile the fundamental disparity between the business paradigm of growth and exploitation and the preservation of the environment. It is important that, when sorting through the blinding green rhetoric that came out of the Earth Summit, citizens draw careful distinctions between the environment's true allies and those that merely declare themselves so.

 - Andre Carrothers/NGONet

 Andre Carrothers is editor of Greenpeace Magazine in the United States.