Multinational Monitor

DEC 2003
VOL 24 No. 12


Multiple Corporate Personality Disorder: The 10 Worst Corporations of 2003
by Russell Mokhiber and Robert Weissman

The U.S. Meets Defeat: Thwarted in the FTAA Negotiations, The U.S. Looks to Smaller Trade Deals
by Robert Weissman


Public Employees for the Environment: Defending Principle During the Polluters’ Ball
an interview with
Jeff Ruch


Behind the Lines

2003: The Year of Corporations’ Perfect Political Storm

The Front
De-Privatizing Rail in the UK - Fishy Business in Pakistan

The Lawrence Summers Memorial Award

Names In the News

The Front

De-Privatizing Rail in the UK

London -- The non-profit company responsible for managing Britain's rail system decided in October to bring rail maintenance "in-house" by curtailing contracts with seven for-profit companies. Network Rail's decision will transfer approximately 18,500 workers out of the private sector, as the entity pledged to reduce the cost of rail maintenance by $550 million. This year, rail maintenance contracts were worth $1.65 billion.

The decision came in the wake of an announcement by one of the largest private companies, Jarvis, that it was pulling out of the rail maintenance business.

Steve Turner, a spokesperson for Network Rail, said that Jarvis had decided to end its involvement because, "it wasn't benefiting them enough. Their public image is not great and continuing maintenance was detracting from their public image."

In May 2002, a train derailed on a section of track maintained by Jarvis, killing seven people. Network Rail later investigated Jarvis for allegedly falsifying maintenance records.

"We welcome the decision strongly," says Mick Duncan, Public Transport Campaigner for Transport 2000, a non-profit environmental group. "I think it should hopefully allow much better control of costs and contracts. It should give a clearer line of sight through the delivery of those contracts, and hopefully that should bring gains in terms of safety."

The Rail Passengers Committee, an independent body set up by Parliament to protect passengers' interests, also applauded the decision.

Network Rail's Turner says that cost savings will come mainly from removing the profit margin in maintenance work. Further savings will come from eliminating the duplication of effort that existed when several companies were performing similar tasks, and by centralizing purchasing to leverage bargaining power. Under the privatized system there was a large variation in cost for the same type of work -- as much as 60 percent -- because different contractors were more or less efficient.

Turner also notes that private contracts were short-term, "so the contractors didn't feel they could invest as much in the people and plant as they would if they had limitless contracts, which obviously we can't give them."

Although these reasons for "bringing the work in-house" were the same ones given in the early 1990s for keeping the rails under public control, Network Rail, as well as the government Department of Transport, have refused to characterize the recent change as a "re-nationalization."

Turner says this is because Network Rail is not a government entity. The non-profit company was formed by the Labor government in 2002, to take over from Railtrack, the for-profit company formed in 1993 by the Tories and ultimately blamed for the failing rail system.

Rail privatization has introduced enormous inefficiencies and major safety problems into the once-proud British rail system [see "Derailed: the UK's Disastrous Experience with Rail Privatization," Multinational Monitor, January/February 2002].

Right-wing critics say Network Rail is undertaking "creeping nationalization," but the government denies this characterization. Although Network Rail's liabilities are guaranteed by the government, it is "owned" by 116 members from industry and the public with no financial interest in the company, and run by a board of directors. George O'Neill, a Department of Transport spokesperson, says that the government does not see itself as running the rail network.

The rail unions have also shied from calling the ending of maintenance outsourcing a "re-nationalization," because many components of the railroad are still run by private entities, including work on "renewing" track and equipment that needs to be replaced.

A spokesperson for the National Union of Rail, Maritime and Transport Workers (RMT) explains, "This is not really re-nationalization per se. Private entities still run renewals. Maintenance is only a part of the process. Renewals is a huge market, and Jarvis does 50 percent of it still."

Unions have argued for re-nationalization on the grounds of labor's self-interest and the public's safety.

"Renationalizing is better because you have the return of collective bargaining, and you have once again a national standard for track maintenance. Which means you're less likely to get people perishing on the railways," says the RMT spokesperson.

Under the old system, RMT could bargain with one of the seven companies with maintenance contracts, but these companies would often subcontract work to non-unionized companies, making negotiated standards irrelevant.

The RMT believes that "the arguments for privatization are collapsing rapidly," but there are few signs that the recent "re-nationalization" is the first step toward a full-scale reversal of rail privatization in the UK.

Although the Strategic Rail Authority (SRA), the public overseer of Network Rail and the private train operators, has recently taken over operation of trains formerly operated by the French company Connex, Transport Minister Dr. Kim Howells recently told Parliament that even if the SRA can run the service more efficiently than private operators, the trains would return to private hands.

The government believes that although privatization failed for maintenance work, track and equipment replacement and train operation are easier to specify and monitor. Still, despite a decade of experience, train performance is running below pre-privatization standards. Whereas more than nine out of ten services arrived on time under British Rail, fewer than eight out of ten do so now.

Meanwhile, the rail system has become symbolic of Britain's turn towards the "third way" under New Labor. David Hare, the screenwriter for The Hours, has just opened a play about rail privatization called "The Permanent Way." The play is based on dozens of interviews with train crash survivors, rail company executives, and train operators. The opening stage directions introduce "nine people, once passengers, now customers."

Hare explained in a recent interview in The Daily Telegraph, "There's an extraordinary frustration that this is a country that used to specialize in the practical, and now nothing works. It's become very difficult to do very simple things. All the concentration is on things that don't matter, while all the things that do matter are not functioning properly. It's fantastically easy to get a really good meal, for example, but it's very hard to get your child educated."

-- David Tannenbaum

Fishy Business in Pakistan

Islamabad, Pakistan -- The livelihood and jobs of as many as two million Pakistani fisherfolk and their families are at stake as a result of a government experiment to permit corporate fishing, charge fisherfolk advocacy groups here.

The government says its permission is based on the assumption that foreign trawlers will push up revenues in terms of exports, levies on catch and utilization of harbor services. Pakistan's average annual fish exports currently stand at US$150 million. Under this "experiment," the government has so far issued licenses to 15 medium-size Chinese, Taiwanese and Korean factory trawlers to fish in Pakistan's deep seas. The foreign boats have capacities of 100 to 250 gross tonnage.

The government allowed corporate fishing in 2001 under its new fishing policy, but it was only in September 2002 that it started to issue licenses, officials say. "The policy allows us to issue licenses to 20 medium-sized and 10 large-sized trawlers," explains a spokesperson for the Karachi Fisheries Harbor Authority. These trawlers have exclusive rights to operate in a specially demarcated fishing zone that extends from 12 to 35 nautical miles off the coast.

Pakistani fishing boats have been barred from fishing in this zone. Mohammad Ali Shah, director of Pakistan Fisherfolk Forum (PFF), which works with marginalized fishing communities along the country's 1,100-kilometer coastline, foresees a "great social and environmental catastrophe" for local fishers if the government does not withdraw the foreign trawler licenses.

"In addition to rendering the local fishermen jobless, the foreign trawlers are destroying the marine environment through their unsustainable, corporate-styled fishing methods," says Shah.

Pakistani fishers say the foreign trawlers use up to three-kilometer long nets that catch practically every marine creature. But commercial trawlers only keep the species that are commercially viable on the international market. The unwanted dead catch -- which may range as high as 90 percent -- is thrown back in the open sea.

"This not only pollutes the sea, and causes wastage and damage to marine life, but also denies prized catches to the smaller, local fishermen," says Shah. Local fishers share Shah's arguments, saying they have been dependent on the sea for centuries.

"We know how to protect the sea and its marvels as it gives us food and living and we know how to co-exist," said Shah Bijran, a small-scale fisher who attended a recent protest outside the Press Club in the southern port city of Karachi organized by the PFF. The rally demanded the withdrawal of licenses to foreign trawlers. Similar rallies were held in the past, but have been becoming more frequent recently.

"Unless the government moves urgently, the foreign trawlers will disturb the delicate aquatic balance that exists and sustains life in the sea and outside of the millions of fishermen," says Shoaib Raza, who owns three small fishing boats.

The overfishing in the country's territorial waters, on the one hand, is depriving the local fishermen of their share, and on the other, causing a decline in the seafood landing at Karachi fish harbor.

According to the Fishermen Cooperative Society (FCS), during 2002 total seafood landing at the harbor was 7.2 million kilograms, down from more than 9 million kilograms in 2001.

"The reason for this decline is simple. It is all due to fishing by illegal nets, which is really hurting the growth of seafood in the Arabian Sea. The biggest culprits are the foreign trawlers which have boosted their commercially motivated activities over the past few months," says a spokesperson for FCS, the oldest fisherfolk welfare organization.

Officials at the Karachi Fisheries Harbor Authority privately admit that foreign trawlers do not bring their entire catch to the Pakistani harbor, which is mandatory under the license issued to them by the Pakistani government.

"We have reports that these foreign trawlers have been offloading their catch at ports along the Persian Gulf, where they get a better price," says an official who requested anonymity.

But the Deep-Sea Fishing Trawler Operators' Association denies the accusation, saying that its members are abiding by all government rules and conditions.

"The government has adequate mechanisms to track the movement of foreign trawlers and it is impossible for them to leave Pakistani waters and return without official permission," says the association's president, Kamran Hameed.

However, Hameed's clarification does not bring any solace to fisherfolk whose woes have got them many friends. The Pakistan Network of Rivers, Dams and People, for instance, has taken up their case with the federal government, highlighting the need for sustainable fishing to protect the local people and marine environment.

"These small fishermen have been contributing millions of dollars to the country's export earnings for decades," says a spokesperson for the group. "The government must invest in the welfare and basic needs of fishermen rather than extending facilities to foreigners who have no stake in local economy and who only eye profits."

-- Muddassir Rizvi
Third World Network Features
African Agenda


The December 2003 Lawrence Summers Memorial Award* goes to Dow Chemical.

With the chemical industry under fire for failing to take appropriate measures to protect vulnerable chemical plants from terrorist attack, Dow in December conducted a "terrorist drill" at its Piscataway, New Jersey facility.

As reported by the New Jersey Star-Ledger, the drill, conducted in conjunction with the Piscataway Police Department's SWAT team, commenced "peacefully with five demonstrators marching outside a gate at the River Road plant. They were protesting against Warren Anderson, who was the CEO of the Dow subsidiary Union Carbide during one of the world's worst industrial disasters in Bhopal, India, in 1984. The tragedy claimed more than 20,000 lives."

In the drill, the protesters turn out to be terrorists.

After they stormed the chemical plant -- which proved in the drill to be vulnerable to attack -- the SWAT team ultimately "killed" the protester terrorists.

Source: Chandra M. Hayslett, "Drill at Dow Plant Prepares for Terrorism," New Jersey Star-Ledger, December 15, 2003.

*In a 1991 internal memorandum, then-World Bank economist 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)?" wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration. "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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