Multinational Monitor

MAR 2000
VOL 21 No. 3


George W. Bush: How Money Grows on the "Shrub"
by Andrew Wheat

Financing Disaster:
Canada's Export Development Corporation

by Aaron Freeman

Perlious Partnership:
The UN's Corporate Outreach Program

by Kenny Bruno

Top Political Party and Candidate Patrons
CRP and the Center for Public Integrity


The Buying of the President
An Interview with Charles Lewis


Behind the Lines

End Legalized Bribery

The Front
Biosafety Truce Reached - Big Tobacco Goes on Offense

The Lawrence Summers Memorial Award

Book Review
Pandora's Posion

Names In the News


The Front

Biosafety Truce Reached

After five years of deadlocked negotiations and intense haggling lasting through the final night of a week of negotiations in Montreal, 131 countries including the United States finally agreed on a Biosafety Protocol in February.

Most countries were happy that some kind of agreement was reached. The Protocol allows countries to ban the import of genetically modified organisms (GMOs) based on the precautionary principle, though it places the burden on importing countries to monitor a newly established biosafety clearinghouse and conduct a risk assessment before taking such measures against GMO food commodities. The agreement also leaves unclear the relationship between the World Trade Organization and the Protocol.

The Protocol, which is set to be signed in Nairobi in May, will go into effect after 50 countries ratify it, a process that may take as long as two years.

The United States and other "Miami Group" members (Canada, Argentina, Australia, Uruguay and Chile) blocked an agreement at the last round of negotiations a year ago in Cartagena, Venezuela by refusing to allow inclusion of any provision that would impede their free export of genetically modified commodities [See "Unsafe in Any Seed: U.S. Obstructionism Defeats Adoption of An International Biotechnology Safety Agreement," Multinational Monitor, March 1999].

This time delegates were under immense political and public pressure to reach agreement on the draft text. Approximately 40 environmental ministers arrived mid-week, providing an extra political push towards agreement.

Officials from both the EU and the United States have warned that a dispute over genetically modified foods could cause a trade war between the two economic powerhouses. Under consumer pressure stemming from fears about biotech foods, the European Union has not approved any new genetically modified crops since April 1998. Genetically engineered varieties accounted for about 25 percent of corn and 40 percent of soybeans planted in the United States in 1999.

The failure of the WTO meeting in Seattle -- where the United States sought to create a special WTO working group on biotechnology -- left Montreal to resolve the differences. [See "The International Food Fight: From Seattle to Montreal," Multinational Monitor, January/February 2000]. Although the United States is not a party to the Convention because the U.S. Senate has not yet ratified the treaty, it was a major player in the negotiations, acting through its surrogates in the Miami Group, especially Canada.

When the dust finally settled after six furious hours of last-night bargaining, the rules for the identification of living modified organisms for direct use as food, feed or for processing were weakened to accommodate the Miami Group's position.

Under the Protocol, exporters will be required to apply the label "may contain living modified organisms" to all shipments containing genetically altered commodities, a provision which allows for continued co-mingling of GMO and non-GMO commodities. The Protocol also allows for a conference of the parties to revise that labeling policy after two years.

In addition, less direct notification to importing countries is required for living modified organisms intended for direct use in food, feed or for processing than for those produced for release into the environment.

The National Corn Growers Association (NCGA), whose representatives advised U.S. negotiators in Montreal, put a positive spin on the outcome. "We can trade [GMO] corn under this protocol today," says Susan Keith, NCGA senior director of public policy. "Nothing in this agreement should dissuade U.S. farmers from using biotechnology."

Others contend that the Protocol permits countries to ban GMO imports, posing the prospect that countries will block grain shipments where GMOs are co-mingled with non-GMOs.

The Protocol, which is intended to protect the environment from damage due to genetically modified organisms, also received support from environmentalists, who worry that, like exotic species, bioengineered plants, animals and bacteria could wipe out native strains.

The Protocol will enable importing countries to limit the import of genetically modified organisms intended for direct release into the environment, even when there is a lack of scientific certainty that such releases could prove dangerous. For this reason it was greeted by supporters as the most extensive application yet in international law of the precautionary principle as defined in the 1992 Rio Earth Summit Declaration.

Dozens of organizations demonstrated their support for the completion of the Protocol in freezing temperatures.

Greenpeace, which constructed a giant monster corn outside the convention center where the negotiations were taking place, responded to the final Protocol with cautious approval. Greenpeace campaigners suggest that the advanced informed procedures which would require countries to register any new GMOs and notify countries before exporting them there, might prove satisfactory provided critical elements of notification, information and explicit consent are included.

But Greenpeace campaigners said the Protocol suffers from other, less curable, flaws.

"Distinguishing between procedures for living modified organisms that are intended for intentional release into the environment, such as seed, and another procedure for living modified organisms that are intended for direct use as food, feed or for processing is not ideal since grain can be used interchangeably as seed or for food, feed or processing," explains Beverley Thorpe, a Greenpeace genetic engineering campaigner.

Another concern for many environmental and consumer groups is that WTO rules do not recognize the precautionary principle -- which allows regulatory action for public health and environmental purposes even in the face of scientific uncertainty over risk -- and countries adopting rules based on the precautionary principle are vulnerable to trade sanction-authorizing challenges at the WTO.

The U.S.-led Miami Group failed to get explicit language into the agreement which would have subordinated the Protocol to the WTO. Instead, compromise language was inserted into the preamble. This provision emphasizes that the Protocol should not be interpreted as implying a change in the rights and obligations of countries under any existing agreements, but also says the Protocol should not be subordinated to other international agreements.

Yet international agreement preambles are not generally considered to be binding.

Lim Li Lin of the Third World Network reported from Montreal that any trade restrictions on GMO foods will probably still be tested through the WTO dispute settlement process. "Given the difficulties that developing countries will face in assembling and conducting scientific assessments of their own" to satisfy WTO requirements, "they may find their particular individual measures easily declared illegal by the WTO panel system which is weighted against the developing world."

Greenpeace pointed out that under customary international law, the Biosafety Protocol would be considered the most recent and the most relevant international rules dealing with biotechnology and biodiversity, and should therefore be the legal instrument that applies in cases of conflict between the Protocol and other international agreements.

But "the protocol emphasizes there aren't changes to the rights and obligations under existing international agreements such as the World Trade Organization," NCGA's Keith emphasizes.

In addition, the United States not ratified the biodiversity treaty that oversees the new Protocol, and is therefore not bound to honor it. And it does not appear the United States is on track to ratify either the treaty or the Protocol soon.

U.S. politicians such as Senator Richard Lugar, R-Indiana, an outspoken proponent of biotechnology, have already attacked the labeling provisions of the Protocol even though they require no segregation.

-- Charlie Cray

Big Tobacco Goes on Offense

Emerging from its defensive posture of recent years, Big Tobacco, with industry leader Philip Morris at the forefront, is launching a major initiative to bolster its image in the United States.

Not coincidentally, the industry has simultaneously made a major and apparently successful push to block the showing of aggressive new television advertisements that would negatively portray the tobacco companies.

Smoke Signals

In February, Philip Morris announced "a new long-term effort" to "open a dialogue with the American people about issues that impact our business," in the words of Ellen Merlo, senior vice president of corporate affairs for Philip Morris USA. The dialogue is to feature a series of newspaper advertisements addressing issues of youth smoking and non-smokers' rights.

This new "dialogue" complements the company's high-profile television advertising campaign on the people of Philip Morris and the company's charitable contributions to hurricane relief, anti-hunger and other beneficent causes.

In its first newspaper advertisement, "Change and tobacco," Philip Morris highlights its 1998 settlement with the U.S. state attorneys general of their suits seeking reimbursement for tobacco-related medical costs.

"The changes brought about by the agreement are consistent with our goal to responsibly market our products to adults who choose to smoke," the ad says. "You've probably noticed some of the more visible changes, like the removal of our tobacco advertising on billboards; but there have also been other significant changes."

The settlement, the ad emphasizes, marks the start of a new era. "One thing is clear: the changes brought about by the Master Settlement Agreement -- as well as other initiatives we are undertaking that go beyond that agreement -- provide us with an opportunity to move forward and resolve tobacco-related issues."

What Kind Of Legacy?

But for all its praise of the settlement with the attorneys general, the industry has sought to stifle effective action by perhaps the most important public health component of the agreement.

The settlement agreement created a new organization, the American Legacy Foundation, to carry out tobacco control efforts, including producing anti-smoking television advertisements. The Foundation, which is chaired by Washington State Attorney General Christine Gregoire, is very well funded: the settlement requires the industry to put more than $1.5 billion into the Foundation over a 5-year period.

Anti-smoking television advertisements have proven very effective in reducing smoking rates, especially among teens, in California, Florida and Massachusetts.

Ads that have portrayed the industry as manipulative, deceitful and ruthless have generally been most effective. Although evidence is mixed, pure health messages ("smoking gives you cancer") tend to do poorly, especially among teens.

The American Legacy Foundation is modeling its efforts on the Florida campaign, which showed remarkable success in a single year.

Two of the first four advertisements in the Foundation's "Truth" campaign were hard hitting spots that targeted the industry directly. One of the ads showed kids piling up body bags outside of a tobacco company's building. The other showed lie-detector-equipped teens trying to ask questions of tobacco executives. The ads were filmed in and near Philip Morris headquarters, but did not show the company name.

CBS refused to air the ads, with a CBS spokesperson saying "they crossed the line." This refusal to air the ads, notes Richard Daynard of the Tobacco Products Liability Project at Northeastern University, contrasts sharply with the networks' willingness to air Big Tobacco's ads.

Meanwhile, the tobacco companies denounced the advertisements which ran directly counter to their image enhancement efforts. The companies charged that the ads violated a term of the settlement agreement which prohibits the Foundation from "vilifying" the industry.

In a February letter to Gregoire, North Carolina Attorney General Michael Easley wrote that airing the ads "will jeopardize continued funding of the very important anti-youth smoking goals" of the Foundation.

Rather than resist the industry and its allies, the Foundation decided to pull the ads.

Tobacco control advocates fear the decision foreshadows a well-funded but toothless and ineffectual campaign by the Foundation.

Taking on the tobacco industry, says Julia Carol, executive director of the Berkeley, California-based Americans for Nonsmoker Rights, requires a readiness to withstand bullying tactics. "In those places where agencies stand up to bullying tactics, the tobacco industry backs down," she wrote in a letter to Gregoire. "In those that do not, the resulting campaigns have been weakened by self-censorship and are rendered ineffectual."

Image Is Everything

Many tobacco control advocates are greatly worried by the recent turn of events.

They note the potential effect of Big Tobacco's charm offensive on the juries that will hear many important cases in coming years. If people look more kindly on the companies as responsible members of the community, as jurors they will be less prone to hand out big punitive verdicts.

The image enhancement campaign may also dampen support for national and state legislation that would meaningfully affect the industry's operations -- through higher taxes, penalties for failing to reduce youth smoking rates or stringent Food and Drug Administration (FDA) regulation. If the tobacco companies can make a plausible case that they are regulating themselves, then they are better positioned to resist new legislation.

Tobacco control advocates' concerns about the American Legacy Foundation are equally grave. Besides fearing the Foundation may waste a unique opportunity to run an effective public health campaign, some advocates believe that a failed effort by the Foundation will discredit the idea of "counteradvertising" in particular and tobacco control initiatives in general -- even though such efforts have had great success in individual states.

Finally, as in all tobacco disputes in the United States, there is the looming question of international consequences. Philip Morris's charm offensive is being conducted worldwide -- with many cash strapped public health officials or organizations willing to consider assistance from the tobacco industry. How tobacco control forces in the United States respond to the industry's velvet glove -- its peace offerings as well as its intimidation tactics -- may well affect the tobacco terrain internationally.

-- Robert Weissman

The Lawrence Summers Memorial Award

The March 2000 Lawrence Summers Memorial Award* goes to Robin Cushman, CEO of NBC.

Responding to a question at the National Press Club on whether NBC News might air a segment on the giveaway of the digital spectrum to broadcasters at no cost (the answer is "no"), he offered the following:

"And then the concept of coming along and somebody saying, 'Well, you guys have a pretty good business there, we're basically going to sell your business to somebody else and you're going to get nothing,' because that's really what was implied in the issue of 'Cancel your license, I'm going to issue you a new digital license, and you're going to have to go and buy it at auction,' which is basically, you know, that's not too different from what Fidel Castro did in his land management program in Cuba, where he said, 'Listen, you people enjoyed these estates, you had fun, but now it's mine and we're going to do something else with it."

(National Press Club luncheon speech, January 24, 2000. Thanks to Sam Husseini for sending the transcript.)

*In a 1991 internal memorandum, then-World Bank economist and current 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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