Multinational Monitor

APR 1998
VOL 19 No. 4


Big Pulp v. Zapatistas: Cellulose Dreams in Southern Mexico
by John Ross

Demanding Change in the Wood and Paper Markets
by Ned Daly

Truth Time for Corporate South Africa?
by Patrick Bond

Railroading Mexican Workers: Privatization and Rebellion in Mexico's Railyards
by Dan La Botz


Behind the Lines

Legalize Hemp

The Front
Corporate Consumer Group - Swooshed in Ottawa

The Lawrence Summers Memorial Award

Money & Politics
High Tech's Strong Suit

Their Masters' Voice
Soft on the IMF

Names In the News


The Front

Corporate Consumer Group

It used to be big corporations spoke directly through aptly named lobbying groups.

But then, about 20 years ago, corporations wised up and realized that no citizen was going to take seriously the proclamations of the Tobacco Institute, the Business Roundtable or the Chemical Manufacturers Association.

So, big corporations decided to try new ways to delude the public. They set up or helped fund think tanks (American Enterprise Institute, Hudson Institute, Heritage Foundation), they set up front groups (Citizens Against Lawsuit Abuse, Electric Consumers Association), and they funded public interest organizations (World Wildlife Federation, Environmental Defense Fund).

But never has corporate America been so bold as to take over an existing consumer group. Until now.

The National Consumers League, founded by labor and consumer activists at the turn of the century, calls itself "America's pioneer consumer advocacy organization."

While the National Consumers League continues to challenge some corporate interests through its work on child labor issues, it has been saturated in recent years with financial contributions from major U.S. corporations to the point where it is hard to consider it a legitimate independent consumer or public interest group.

While refusing to give specific numbers detailing how much money each particular corporation or industry association has contributed, League officials say that 39 percent of the group's 1997 budget of $1.3 million came from corporations and industry associations.

All indications are that a far greater percentage of the League's current 1998 budget is flooding in from business.

And the League is planning on an unprecedented shakedown of the corporate money tree for its planned upcoming hundredth anniversary bash next year.

Almost every current project, seminar, brochure, newsletter and fundraising dinner of the National Consumers League is sponsored in large part by major corporations or industry associations, with some supplemental money coming in from labor unions.

For example, a May conference, "Focus on Youth: The New Consumer Power," in Lake Buena Vista, Florida, is sponsored in large part by a coalition of major corporations that traditionally have been hostile to consumer interests, including Visa USA, the Chemical Specialties Manufacturers Association, the Chlorine Chemistry Council, Monsanto, General Motors, the public relations firm Burson-Marsteller and the National Meat Association.

An April 1997 conference titled "Health Care: How Do Consumers Manage?" was sponsored by major pharmaceutical and health care companies, including Bristol-Myers, Glaxo Wellcome, Pfizer, Wyeth-Ayerst Labs, the health maintenance organization Kaiser Permanente, Merck, PacifiCare Health Systems, SmithKline Beecham, and Pharmacia & Upjohn. Big labor unions are also listed as contributors to the conference.

An Internet Fraud Watch program is being sponsored by MasterCard and NationsBank.

The annual "NCL Trumpeter Award Reception and Dinner" brings in about 40 percent of the League's annual budget.

Last year, the League honored Carol Tucker Foreman, a public relations executive, and Liz Claiborne Inc., a clothing manufacturer that has been tied most recently to sweatshops in China (see "Behind the Lines," this issue).

One of three top contributors to the dinner was Liz Claiborne. The other two were Allstate Insurance and Wyeth-Ayerst.

The next five top contributors were AT&T, Edison Electric Institute, Monsanto Company, Schering Plough and Visa USA.

Earlier in April, the League co-sponsored with the Electric Consumers' Alliance a conference titled "Restructuring of the Electric Industry: What is the Impact?" The Alliance is a front group for the Edison Electric Institute.

The League refused to answer questions about who paid for this conference, or exactly how much money corporations are paying to sponsor the League's various conferences and programs.

The League's executive director, Linda Golodner, did not return repeated phones calls over a three-week period seeking comment related to this article.

But a walk through the League's downtown Washington, D.C. office reminds a visitor of the pervasive influence of business over the League's agenda.

Almost every consumer publication in the League's front office was paid for by a major corporation or industry group.

A "Consumer Guide to Choosing Your Telephone Service" was paid for by Ameritech.

A "Consumer Credit Series" of reports (Shopping for a Loan? How Much Is It Going to Cost?, Denied Credit? -- The Credit Report Blues) was paid for by Fleet Finance Inc, a subsidiary of Fleet Financial Group.

A brochure titled "Making Sense of Your New Communications Choices" was paid for by GTE.

A pamphlet titled "Take Care with Over the Counter Asthma Medicine" was paid for by Syntex, a pharmaceutical company.

A newsletter, "Community Credit Link," was paid for by Visa USA.

The National Consumers League refused to answer specific questions about how much money corporations are giving to support these various projects, or what percentage of the League's budget comes from non-corporate funders.

When asked why a consumer group is taking any money at all from corporations that fight consumer interests in Washington, D.C. and around the country, League spokesperson Cleo Manuel says, "I wish we didn't have to."

-- Russell Mokhiber

Swooshed In Ottawa

Under fire for its treatment of workers in Asia, athletic footwear giant Nike has pulled the plug on its proposed sponsorship deal with the City of Ottawa to build a $50,000 rubberized gym floor for a local community center.

"We will rescind our offer to build this floor," Nike's Director of Global Community Affairs Doug Stamm told a stunned Ottawa City Council Committee on March 11.

The company announced it would instead build a floor for the Ottawa Boys and Girls Club in another part of the city.

The rubberized floor would have replaced the existing concrete floor at the Carlingwood Community Center, and is part of Nike's ongoing programs aimed at benefitting low-income communities in North America.

"I wish we had the Nike floor," says 15-year-old Wayde Richer, one of the youths who uses the Carlingwood gym. "Our gym floor is very slippery [and] uneven."

Ottawa passed a policy last year that states that all its sponsorship arrangements "will reflect its recognition of, belief in and commitment to human rights and each person's right to be treated with fairness, respect and dignity."

In March, Councillor Richard Cannings revealed that the City's Community and Social Services Committee was considering the Nike sponsorship at in camera meetings. Referring to the sponsorship deal as "blood money," Cannings argued that given Nike's treatment of workers abroad, the deal breached the City's human rights policy.

Nike has been scrutinized in recent years for alleged abuses of workers' rights at the company's subcontractors in Asia. In 1996, CBS news reported that at a Nike factory in Vietnam, workers earned an average of 20 cents per hour, and a Korean supervisor fled the country after accusations that he sexually molested female workers.

Following the CBS report, a study done for Nike by Ernst & Young, and later leaked to a San-Francisco-based group, found that at another Vietnamese Nike subcontractor, workers were exposed to carcinogens that exceeded local legal standards by 177 times and that more than 100 workers at one section of the plant had respiratory ailments.

Other reports by Vietnamese labor groups in 1997 documented low wages, unsafe working conditions, labor law violations and sexual harassment at various Nike subcontractors.

Workers in other Asian countries have documented similar abuses at Nike factories. In Indonesia, workers have repeatedly charged that Nike fails to pay even the legal minimum wage, which is arguably below subsistence levels.

"In a way I'm happy [Nike rescinded the Ottawa offer], because it was dirty money," says Carl HŽtu, of the Montreal-based Development & Peace, which is campaigning to improve Nike's human rights practices.

However, Nike's Doug Stamm defended Nike's human rights record. "We're an innovator in protecting worker rights around the world," he told the councillors. He outlined Nike's various human rights measures, including its code of conduct, and studies it had commissioned exonerating company practices.

Some councillors responded favorably to Stamm's presentations. "I'm satisfied that the jobs in Vietnam are good jobs [and] that they are meeting local concerns," says Deputy Mayor Allan Higdon.

"We should have, in Nike's words, 'Just done it,'" adds fellow Councillor Shawn Little, sporting a Nike baseball cap.

Others were less impressed with Nike's abrupt pull-out so quickly after the company's practices were challenged. Councillor Diane Deans was "appalled" by what she termed "a pre-emptive strike" by the company. "Nike is sending a strong message saying 'How dare you question our company.'"

Duff Conacher, coordinator of the Ottawa-based corporate accountability watchdog Democracy Watch, agrees, suggesting that the company's move was "an effort to pit the councillors against the kids" in an attempt to divert attention from the human rights issue.

If this was the company's intention, it succeeded with at least one of the councillors. Karen Howard represents the ward where the gym floor was to be built. When Mike Desautels, a presenter at the meeting from the Canadian Labour Congress raised criticisms about Nike such as the lack of systematic monitoring and enforcement of the company's code of conduct, she asked him dismissively, "Who do you care more about, workers in Asia or children in our community?"

"It's not an answerable question," he responded. "Who do you care more about, your children or your neighbor's children?"

Stamm says Nike did not make the decision to pull out to upstage the Council. "I didn't do it to spite anybody."

But he earlier complained of the "unfair" process adopted by Council in putting the issue of whether to accept the Nike deal to a public hearing. Arguing that Nike did not want to be used as a "political football," Stamm told the councillors, "I do not believe that this is a wise way to resolve as heavy an issue as the treatment of foreign workers."

Overall, the Council Committee members seemed split on Nike's human rights record and whether they should have accepted the sponsorship. In any case, many councillors vowed to consider having the City pay for the floor on its own, Councillor Cannings suggesting it be given "the highest priority."

-- Aaron Freeman

The Lawrence Summers Memorial Award

The April 1998 Lawrence Summers Memorial Award* goes to Jim Brown, Oregon state forester.

"The Oregon Department of Forestry wants to give up its authority to halt clear-cutting on landslide-prone slopes above homes because it does not think protecting the public's safety is its job," the Portland Oregonian reported in April 1998. "The way the statutes are constructed, our role is environmental protection," state forester Jim Brown told the Oregonian. "The role of public safety falls on local governments." The forestry department also recommended against renewing a current state ban on clearcuts on slopes above homes -- a position at odds with the Oregon Forest Industries Council. ("Forestry Agency Says Its Concern is Trees, Not People," by Jonathan Brinckman, Portland Oregonian, April 16, 1998, courtesy of the Native Forest Council).

*In a 1991 internal memorandum, then-World Bank economist and current Deputy Secretary of Treasury Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?" Summers wrote. "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I've always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City." Summers later said the memo was meant to be ironic.



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