The Front

Empty Promises at the UN Summit

COPENHAGEN - THIRTY PERCENT of the global labor force - 820 million people - were unemployed in 1994, according to the World Employment 1995 report, issued by the International Labor Organization (ILO). The study outlines what has become the worst unemployment problem the world has faced since the Great Depression.

The ILO prepared the report for the United Nations' Summit for Social Development that took place here March 6 to 12. The Summit brought together delegates from 182 countries to address the global crisis of unemployment and poverty.

The resulting Copenhagen Declaration, signed by 117 heads of state, urged improvements in health care, sanitation, food production and literacy. But the Declaration failed to suggest how these global needs might be addressed.

The Summit's much-touted and hotly-debated 20/20 resolution had similar limitations. Wealthy countries agreed to earmark 20 percent of their development assistance for "basic social programs," while recipient nations pledged to spend 20 percent of their national budgets on such programs. But signatory nations refused to define what they meant by "basic social programs."

Nor did wealthy countries rush to pledge new development assistance or forgive loans to poorer countries. Only Denmark, the Netherlands and Austria announced that they would cancel a portion of Third World debt. Other wealthy countries instead preached discipline. It is up to poorer countries to "assume their own responsibilities," said Ruth Dreifuss, head of the Swiss delegation.

"Let us not get hung up on debt alone," advised Rattan Bhatia, the International Monetary Fund (IMF) representative to the United Nations, at a meeting with non-governmental organizations. "The greater problem is how to raise the resources for economic growth."

While the Declaration says structural adjustment programs advocated by the World Bank and the IMF should encourage "people- centered sustainable development," it embraces "a more favorable climate for trade and investment" as a key to solving the global social crisis.

"We believe that permanent gains can occur only if we encourage free markets and individual initiative," U.S. Vice President Al Gore, head of the U.S. delegation, told delegates. "The market system unlocks a higher fraction of the human potential than any other form of economic organization, and has the demonstrated potential to create broadly distributed new wealth."

Developing countries were not satisfied with that solution. "All we've heard is free trade in one big integrated hemisphere," Guyana's President Cheddi Jagan complained to delegates.

Absent from the Declaration was any recognition of the role of multinational corporations in the social crisis. French President François Mitterrand did call for implementation of a so-called Tobin Tax, initially proposed by Nobel prize-winning economist James Tobin. Under this proposal, international financial transactions would be taxed at 0.5 percent to raise $1.5 billion to fund social development. While the tax garnered some support from the Canadian and German delegations, the proposal did not appear in any form in the Declaration.

"Given the huge concentration of resources controlled by [multinational corporations], the notion that it would be possible to achieve the summit goals without their active involvement is ridiculous," says Ward Morehouse, president of the New York- based Council on International and Public Affairs.

Across town from the official Summit, more than 2,000 non-governmental organizations (NGOs) also met to discuss the world's pressing social issues. They criticized the official Summit for neglecting the root causes of the social crisis, particularly deregulation and structural adjustment programs.

"The concept of structural adjustment assumes that the people and the government don't know what's good for themselves, and that someone who comes in from outside knows what is," says Hazel Brown, assistant coordinator of the Trinidad and Tobago Network of NGOs. "Whatever money the World Bank gets back through structural adjustment comes at an enormous price of pain in the people."

More than 600 NGOs signed an Alternative Copenhagen Declaration, berating the official Summit declaration's overreliance on "unaccountable Šopen, free-market forces' as a basis for organizing national and international economies [that] aggravate, rather than alleviate, the current global crisis."

"Structural adjustment programs imposed by the International Monetary Fund and the World Bank," the Alternative Declaration noted, "have consistently undermined economic and social progress by suppressing wages, undermining the contributions and livelihoods of small producers, and placing social services, particularly health care and education, out of reach of the poor."

The document also criticized the official Summit's endorsement of the World Trade Organization, stating that under the new trade agreement, "The interests of local producers, in particular, are undermined in the areas of foreign investment, biodiversity and intellectual property rights."

"We've clearly tapped into serious and widespread discontent with the refusal of the Summit to deal with the underlying economic and political causes of poverty, unemployment and social disintegration," says one of the Alternative Declaration's drafters, Vegard Bye of the Norwegian Forum for Environment and Development.

Many at the official Summit, including the Chilean president of the conference, Juan Somavia, credited the NGOs for pushing the Summit to deal with the structural issues behind social disintegration.

With more than 100 world leaders given the stage to make speeches, the Summit provided an opportunity for Third World despots such as H.E. Brigadier-General Thaung Mynt, of Burma 's ruling State Law and Order Restoration Council (SLORC), to espouse their achievements and commitment on the social development front. The officer explained SLORC's achievements in the areas of agriculture, health and education since "being compelled to assume the responsibilities of the State in 1988."

Widely seen as one of the most brutal and least legitimate governments in the world today, the SLORC refused to respect 1990 elections in which the National League for Democracy, headed by Aung San Suu Kyi, won 82 percent of the seats in government. Since then, the junta has waged war on its own citizens, recently wiping out rebel Mon indigenous groups who were in the way of infrastructure projects for an oil pipeline being built by Unocal and Total [See Blood in the Pipeline," Multinational Monitor, January/February 1995 ]. "The government of [Burma], while devoting tremendous efforts to alleviate and reduce poverty, is well aware that much remains to be done," Mynt concluded.

 - Aaron Freeman


Selling the Seven Seas

THE RECENT ARMED BOARDING of a Spanish trawler by Canadian officials - and the resulting exchange of diplomatic salvos - illustrates the mounting tension over the world's diminishing fish stocks.

 To address overfishing problems, the U.S. Department of Commerce, through its National Marine Fisheries Service (NMFS), is planning to revamp regulations governing fishing rights in U.S. waters. NMFS would like to resort to individual transferable quotas (ITQs) that give fishers and large corporations property rights to fishery stocks in U.S. waters - at no cost. Proponents of the idea include big fishing companies and some environmental groups, such as the Environmental Defense Fund (EDF). An EDF report, "Creating Incentives for Ending Overfishing," says ITQs "create incentives for conservation by giving quota holders a direct stake in the long term health of the fishery."

Fishing companies, the EDF and the NMFS argue that ITQs will conserve fisheries efficiently and with minimal government regulation. Critics say ITQs mean the public will forfeit its ownership of fisheries for, at best, speculative conservation gains.

 U.S. fisheries management has historically subjected otherwise open access to fisheries to such regulatory limits as time and area closures, gear restrictions, size limits and quotas. Under this system, fishing rights are nontransferable and non-exclusive and "ownership" is public. "Under open access regimes, in contrast, any fisherman can freely try his luck at making a living from the fishery," says a 1992 NMFS report. In contrast, ITQs "create groups of haves and have nots."

Under an ITQ scheme, the new "owner" of a portion of the available fish stock can sell, trade, lease or give away his or her portion of the fishery. ITQs are allotted as a percentage of the total allowable catch (TAC). Usually, the entire TAC is allotted, so new fishery entrants must buy their way in.

 Three small ocean ITQ management programs have been instituted in the United States since 1990. NMFS is considering ITQs for four larger fisheries: the North Pacific Groundfish Trawl Fishery, the Gulf of Mexico Shrimp Fishery, the Atlantic Scallop Fishery and the South Atlantic King and Spanish Mackerel Fishery.

 Critics such as Greenpeace fear that transferable fishing rights may consolidate fisheries in the hands of industry giants such as Arkansas-based Tyson Foods, owner of Arctic Alaska Fisheries Corporation. Some charge that Tyson, which has close ties to President Clinton, lobbied for ITQs. Tyson officials decline to comment on the matter.

 Fishery competition often leads to over harvesting, so industry consolidation is not necessarily bad. If a company has an effective fishery monopoly, it has an incentive to conserve. But if pollution depletes a fishery or fish prices are reduced as a result of advances in fish farming or increases in the fish population outside of the ITQ, profit and conservation interests could clash.

 Industry consolidation combined with fishery property rights may create special dangers. ITQs are usually granted on the basis of historical catch levels. Some say this will reward the most wasteful operations. "ITQs will allow the owners of the largest vessels in the fleet, who have caused the most damage, to squeeze out the sustainable coastal fishermen, who will be unable to compete," says Greenpeace's Gerry Leape. "If ITQs go forward, the coastal fisherman will go the way of the family farm."

 ITQs are attractively simple. But New Zealand's experience with them suggests that simpler management is not always better. A Greenpeace report by Leith Duncan documents problems New Zealand has had with the extensive ITQ program it adopted in the mid-1980s.

 o Industry, the New Zealand Cabinet and the Ministry of Commerce all lobbied the Ministry of Agriculture and Fisheries for the highest possible quotas as short-term profit motives quickly outstripped stewardship concerns among most fishers.

 o Proponents believed that ITQs would eliminate a rush to catch fish, since quota holders had a year to reach their limit. But once fishers exhausted their quotas, they hurried to lease more harvest rights from a quota broker. Transferable quotas diminished the feeling of ownership of a scarce resource and fishers continue to focus on the profit margin.

 o The new system sparked increased "highgrading," keeping only the best fish to maximize profit on a quota. Fishers could lease snapper quotas for just under $2.00 per kilogram, but the New Zealand market price was only $2.31. This margin was not enough to cover expenses. However, a higher quality snapper known as iki jimi fetched $5.94 per kilogram in the Japanese market. This provided an incentive to highgrade. Lower quality fish were either dumped at sea or sold on the black market, depleting stocks. New Zealand Minister of Fisheries Doug Kidd estimated that in some areas 80 percent of domestic fish were sold on the black market.

 Despite ITQ's poor track record in New Zealand, the NMFS plans to give away U.S. fishing quotas, a public asset, for free. How this property right is defined will significantly determine what the cost will be to the taxpayer and the environment.

 "It is the position of NOAA that ITQs are not compensable under the Fifth Amendment," says Maggie Hayes, general counsel for the National Oceanic and Atmospheric Administration (NOAA). If this view were upheld in court, owners of ITQs would not be eligible for compensation in the event that government action - such as reducing the total allowable catch -diminished the value of an ITQ property.

Since the original entrants into the fishery do not pay for their quota, they are less likely to pursue such a so-called regulatory takings claim. But later entrants will have to pay to acquire ITQs. Caterpillar Tractor, for example, just bought 6,000 shares of the Halibut/Sablefish ITQ in Alaska. Those who pay for their fishing rights are more likely to demand compensation for government actions that diminish the value of their property.

 -Ned Daly