CORPORATE CLUSTERS
Published by MAC on 2001-10-15CORPORATE CLUSTERS
Control Risks Group
Based in London the CRG is the world’s biggest private consultancy promoting the concept of corporate "accommodation" to its critics, and offering advice on how to change aspects of their operations, without essentially altering their corporate culture or programmes.
Founded in 1975, bought out by a management team in 1981, and with a new investigative division added in 1995, CRG claims to have worked for 91 of the Fortune 100 companies, in particular to counteract kidnapping and extortion [Financial Times April 10 2001]. It first came to public attention with its 1997 publication, "No Hiding Place" which argued that companies could reconcile a basic observance of human rights and environmental protection with business interests, so long as they took heed of the most obvious abuses – citing the Freeport-Rio Tinto Grasberg mine in West Papua as a key example. CRG is closely associated with a number of individuals and agencies involved in supplying mercenary assistance to governments and mining companies.
Despite its respectable "sheen", CRG’s operational motives were spelled out in a lecture by CRG’s Head of Research, John Bray, in 1998: Andy Rowell summarised his key points:
"Companies must operate and be seen to be operating to global best practice world-wide, to a uniform set of international standards. Many local groups are linked to international pressure groups in the US and Europe (author’s italics),"
[Andy Rowell, Delta newsletter number 4, Leicester, 1998]
Almost inevitably, CRG has linked up with the MMSD (see below) and Royal Institute of international Affairs (see below) to host a conference on "corporate social responsibility issues" at Chatham House, London in October 2001
European Roundtable (ERT)
Set up in 1983, by the CEO of car-maker Volvo, along with the heads of ICI, Unilever, Nestle, Philips and Fiat, the ERT mission was to influence the European Union into taking decisions which benefit European business interests. It has succeeded in getting bureaucrats in the EU to regularly take decisions prompted by the ERT and its members, without any real transparency or democratic accountability. [Corporate Watch, Oxford, Autumn 2000]. In particular the ERT has sought to influence EU policies of employment, enabling companies to impose "flexible" working hours and (reduce) wages. In a recent critique of the ERT, George Monbiot declared:
"[The ERT] has little need to call on governments, for governments call on the round table. For 17 years it has been the principal architect of European integration and expansionism" [Guardian June 20 2001].
Monbiot goes on to claim that the ERT pioneered the Single European Act, going on to become its "enforcer". and key proponent of the Channel tunnel between England and France (a key British advocate for which was Alistair Frame of Rio Tinto), a European high-speed rail system (underway), and a European-wide road rebuilding scheme – all grist to the mill of the construction industry.
The ERT is associated with the European Employers Federation, the WTO, the European Business Summit, the European Small and Medium Size Business Group (UEASPME) and the US Council for International Business (USCIB).
Key people in the ERT include its chair, Baron Daniel Janssen (CEO of Solvay), Lord David Simon of Highbury (formerly with BP-Amoco), Viscount Etienne Davignon and Cor Boomstra (CEO of Philips the Dutch electronics company), as well as Jacques Monra of the Suez Compagnie des Eaux, one of the world’s thirstiest companies trying to privatise global fresh water resources: he is also co-chair of TABD (qv).
Then there’s Andrew Buxton, a former director of Rio Tinto and Barclay’s Bank, who helped formulate a European Services Forum of 40 CEO’s aimed at pushing the EU into promoting GATS (the General Agreement on Trade in Services, which is partially aimed at replacing the discredited Multilateral Agreement on Investment – or MAI). According to Observer columnist Nick Cohen, Buxton also founded LOTIS (Liberalisation of Trade in Services) – and handed its ruddership to a grateful Leon Brittan, the EU trade minister, in early 2001 [Observer April 1 2001]
ICC (International Chamber of Commerce)
The ICC is claimed as "the only organisation qualified to speak for every business sector in the world" by former ICC chair, Helmut Maucher of Nestle,[ FT December 6 1997] who has also recently been head of the ERT and one of the founders of the World Economic Forum.. Maucher once stated that the ICC was "the only economic voice without any special interests" [New Internationalist March 2001] , In 1998, during a private session with British Prime Minister Tony Blair, Maucher urged the "weeding out" of "more troublesome NGO’s" – by which presumably he meant their public banning [New Internationalist op cit].
The ICC is arguably the most influential non-governmental pressure group on the planet, with direct liens of influence to – among others – the UN, the WTO, the World Water Commission (through Societe Lyonnaise des Eaux) and the WBCSD. Its members include CEO’s of the most powerful corporations on the planet, such as Shell, Nestle, Monsanto, Microsoft, BP-Amoco and Macdonalds. It was the ICC which, in 1998, handed to the OECD a document headed "Multilateral Rules for Investment" that became the draft Multilateral Agreement on Investment (MAI), later transmuted into GATs, after international NGO protests shipwrecked the MAI.
The chair of the ICC'S Environmental Commission is Lord Richard Holme, who is also co-chair of the World Business Council for Sustainable Development. He was a director of Rio Tinto at the same time as he chaired the Liberal Democrat party’s election campaign for the 1997 British general election. Holme was one of two keynote speakers at the "Biodiversity and Business: Putting Principles into Action" conference at Chatham House in April 2000 (the latest in a recent series held by the Royal Insritute of International Affairs aimed at forging greater links between business and its critics.)
ICME
(Not to be confused with either the International Federation of Chemical, Energy Mine and General Workers Union – ICEM, or the planned International Council on Metals and Mining - ICMM)
The International Council on Metals and the Environment has a mandate to "promote appropriate (sic) health and environment policies and practices" in mining. It works closely with UNEP (with whom it organised a steering committee to devise a voluntary "Cyanide Management Code" for the mining industry), the World Bank, and similar agencies. It has performed out work on tailings containment, risk assessment and management, and guidelines for foreign direct investment in mining.
The ICME is wholly industry based, and its participants - though initially Canadian - now include most major mining companies. Recently appointed chairman of the ICME is Hugh Morgan the notoriously chauvinist Managing Director of Western Mining Corporation (WMC).
At the UN Environment Conference held in Rio de Janeiro in 1992, the ICME circulated a paper by Philip Crowson, then chief economist for Rio Tinto. Titled "The Infinitely Finite" this purported to show that metallic deposits could support human demand virtually indefinitely. It was in effect a plea for "business as usual – and more of it" and the point was revived in July 2001 by Robert Wilson of Rio Tinto in an article lauding the MMSD (see below) [The Observer, London, July 8 2001]
The GLOBAL MINING INITIATIVE
…was set up in late 1998 by ten global mining companies . In October 2000, Hugh Morgan announced that the GMI would soon establish an HQ in Brussels, with an eight member elected board of CEOs, four of which would come from national associations and at least three from commodity associations. . The GMI would strive to "…OPENLY ENGAGE WITH ENVIRONMENT GROUPS, HUMAN RIGHTS GROUPS AND GOVERNMENT'. In particular, GMI would "enact the conclusions of the MMSD study [Release from Mineaction October 30 2000].
Robert Wilson, chair of Rio Tinto, declared in 1999 that the GMI, would "arrive at a shared understanding of the role that the mining and minerals industry should play in the global transition to sustainable development". However, as MPI (Mineral Policy Institute) commented (Mining Monitor, September 2000) this "shared understanding" would, as Wilson himself pointed out, extend only to "some" of the industry's critics: "As far as possible we need to come to an understanding with non mining stakeholders such as governments, international organisations and some of our critics in civil society" Central to the GMI process having credibility with broad society, he said, was that the project be seen as "manifestly independent and transparent". If it was, GMI "promises to build a fresh relationship between the minerals industry and some of its severest critics". However he did not outline in detail what would happen if the GMI failed to be seen as credible or independent, as currently seems to be the case. [Robert Wilson "The Mining Industry: In Recuperation or Remission?" Securities Institute of Australia, Grand Hyatt Hotel, Melbourne, 7 December 1999].
MMSD
Though presented as an NGO-led venture, and managed by the International Institute for Environment and Development (IIED) in London, the Mines, Minerals and Sustainable Development (MMSD) project was initially proposed early in 1999 by Rio Tinto and Anglo American, supported by Western Mining Corporation (WMC) [see Mining Monitor Sydney June 1999], just after the setting up of the GMI. Formally the project was commissioned by the WBCSD, but it rapidly appointed Richard Sandbrook, former Executive Director of IIED to head the study - not surprisingly IIED then became the lead manager of the project.
By early 2001, nearly thirty mining companies had signed up to the GMI/MMSD. These are:
Acan, Alcoa, Anglo-American (AAC), Barrick Gold, BHP, Billiton, Codelco (Chile), De Beers, EDM/Somincor (Portugal), Freeport Mc-Moran, Gold Fields Ltd, Lonmin, MIM (Mount Isa Mines), Noranda, Mitsubishi Materials/Mitsubishi Corporation, Mitsui Mining and Smelting, Newmont, Nippon Mining and Metals Norsk Hydro, North Ltd. (taken over by Rio Tinto in 2000), Phelps Dodge, Placer Dome, Rio TInto, Sibirksy Alumininum, Sumitomo Metal Mining, and Western Mining Corp (WMC).
Agencies that have cooperated with MMSD to date include the World Bank and UNEP (co-sponsors of the conference "Finance, Mining and Sustainability" held in Washington DC in April 2001; public bodies include the prestigious London School of Hygiene and Tropical Medicine and the Royal Institute of International Affairs; while private bodies include the Control Risks Group.
IIED’s brief is to run the MMSD research study, develop the broad consultation processes, and come up with implementation strategies. The GMI partners give no guarantees that such strategies will actually be implemented. The outcome is intended to be "a consensus-based programme for voluntary implementation of the project results by a variety of stakeholders" [IIED, "What is MMSD doing?", www.iied.org, undated.]
In fact, MMSD documents show that the sponsoring group has "overall project stewardship and supervision, raising finance, approving the budget and work programme , exercising budgetary control and supervising the conduct of the project". [IIED, "Sponsoring Group", www.iied.org, undated].
MMSD claims that the "independence" of the project will be ensured by gaining 40% of funding "from non-business sources" including foundations and multi-lateral banks. To date none have contributed to the project – though several have co-sponsored various meetings and forums. The industry sponsors also claim that the establishment of an "assurance group", will ensure independent oversight of the project by undertaking "adequate peer review of all project outputs". The assurance group, they say, "will be made up of individuals who are acknowledged as authorities in the various subjects related to the project objectives". [IIED, Assurance Group of the MMSD Charter 2nd draft", undated, www.iied.org].
While this has broadly been the pattern of recruitment so far, none of the assurance group carry with them a true mandate, even from their own organisations, let alone other NGO's in their field or country.
In 2000, in a letter to IIED, a coalition of many of the main NGO groups working on mining issues (but with a sad absence of South-based signatories) expressed their scepticism about the role and composition of the assurance group. "There have been serious problems with the process that has been used to select assurance group members and there are underlying structural issues that mean the assurance group has no authority or power" [Letter to IIED from Stephen D'Esposito, Mineral Policy Center, Washington D. C, Alan Young, MiningWatch Canada, Geoff Evans, Mineral Policy Institute, Australia, Geoff Nettleton, Philippine Indigenous Peoples Links, England, 2 August 2000.]
The "show case" for the first part of the MMSD process is to be a major industry conference in Toronto in 2002, "as part of the run up to the inter-governmental events marking the tenth anniversary of the Earth Summit in Rio". However, timetables are already slipping. In Australia, IIED commissioned CSIRO Minerals, a government offshoot, to spend a month preparing a Draft Action Plan by 31 August 2001. While Australian mining companies are embroiled in a host of controversies through-out the region, CSIRO is wary of the project being broader than Australia. "While there are significant issues around mining and sustainable development in Asia and PNG, the Pacific, New Zealand and Antarctica, and the impacts should be acknowledged, it would be impossible to co-ordinate a genuine regional process for people in these areas, from Australia", wrote CSIRO Research Fellow, Dr Fiona Solomon [CSIRO Minerals Division, Mining, Minerals and Sustainable Development (MMSD) Project, Regional Information Sheet Two, 16 August 2000]
Luke Danielson, the manager of the MMSD project at IIED last year visited Australia and met with MPI staff. Before the meeting MPI consulted broadly with partner organisations throughout the Australasian region. MPI told Danielson that the flawed process and the likelihood of little progress on major issues led them to believe that, while a watching brief will be maintained, the MMSD process should not be a major focus for community organisations:
"We expect that, despite the flawed process, some organisations may decide to participate in the process. MPI has taken the view that it is important to maximise dialogue and coordination among Australian environment and human rights NGOs regarding the issues involved. We have insisted that the project, if it is to have any credibility, must engage with critics in Papua New Guinea, Indonesia, and the Philippines. We believe that unless those who do engage actively consult with, and are accountable to, affected communities and the movement, they can have little legitimacy in or outside the process"
While criticising the MMSD process for lacking binding implementation processes, MPI. and other NGO's urged, not that it should be reformed, but discounted: "the project should be identified solely as an industry-managed research project, and not purport to be anything more, and certainly not include implementation of any recommendations (which MMSD says should all be voluntary only)."
Notwithstanding this stricture, "...We have also told them there is no reason
why the industry could not demonstrate its bona fides by taking some immediate steps on current issues such as:
-cease dumping tailings in rivers and developing new mines with ocean disposal of wastes;
- cease mining and exploration in national parks and other protected areas;
- end involvement with corrupt and repressive regimes;
- cease advocating the weakening of environmental regulations (e.g. on greenhouse gases), labour and indigenous rights as they currently do through both the direct advocacy of individual companies, as well as through industry associations such as the Minerals Council of Australia;
- support workers' rights to collectively bargain through independent trade unions;
- commit to mineral resource conservation measures (which would reduce mineral
demand and the need for new mines) rather than promoting increased production and resource consumption.
"If the industry cannot take any steps in these directions now, there is little reason why we should believe our concerns will be any further advanced by the end of a lowest common denominator process. MPI and our partners have made it clear that we will put our scarce resources where we can have the greatest impact. The Global Mining Initiative, and its subsidiary processes, seems unlikely to help achieve more effective regulation and accountability of mining corporations It is far better, we think, to identify our own visions and strategies for the future of the minerals industry".
[Geoff Evans, Director, MPI in Mining Monitor, MPI Sydney September 2000].
See also: IIED, "What is MMSD", www.iied.org, undated Assurance Group, Minutes of first meeting 21-23 May 2000; www.iied.org, EarthRights International, www.earthrights.org, May 2000,: "Group calls for 3 oil companies to leave Myanmar", Reuters, 23 May 2000, EarthRights International; "Government members budget briefing kit: possible questions and answers", unpublished memo, April 2000,]
By the second half of 2000, the resistance of key "civil society" groups (especially Indigenous ones) to joining MSSD, began to concern the leadership. A policy paper on "stakeholder engagement" issued last year declared that "Participating in, or contributing to, workshops or other events, commenting on documents produced, suggesting participants for meetings and other interactions with the Project are not and will not be portrayed as an endorsement of MMSD"
One may well ask how it is possible to associate in any of these ways with the MMSD process, without implicitly endorsing its purpose?
The Assurance Group
As of late 2000, the Assurance Group included: Jay Hair of the World Resources Institute, Kathryn McPhail of the World Bank, a former Under Secretary of the Philippine DENR, Manuel Pulgar-Vidal of the Peruvian Society for Environmental Law, Maria Ligia Noronha of the Tata Energy Reseach Institute in India, Damien Roland of the mine and energy trade union confederation, ICEM (not to be confused with the ICME) Doug Yearley of the Phelps Dodge mining corporation, Charles Secrett, director of FOE England, Scotland and Northern Ireland.
Transatlantic Business Dialogue (TABD)I
Established in 1995 as a "unique business-driven process" to ensure a European and US policy against "barriers to business", TABD operates at the highest formal levels with CEO’s holding biennial summits – most of whose recommendations are then adopted into policy [George Draffan "The Corporate Consensus: A Guide to the institutions of Global Power", Blue Mountains Diversity Project, Oregon, November 2000]. Although it has no formal HQ, the EU section operates out of the offices of LaFarge, the cement company in Brussels, and of United Technologies in the US Mining companies – apart from LaFarge do not appear to play a major role in its policy-making; among its prominent membership is ABB, Bayer, Bertlesmann, ICI, Ericsson, Siemens, Unilever, Boeing, Enron and IBM. In 1999 the TABD launched an attack on the "precautionary principle" [Corporate European Observatory report on TABD, Annual Conference 1999] And the next year it envisaged setting up a Transatlantic Consumers and environmental TABD dialogue (TACD and TAEFD) in order to ward off opposition by environmental groups. [Corporate European Observer ibid.]
World Business Council for Sustainable Development
"I think that industry needs to do many things which government regulates. If you talk about introducing better, more environmentally friendly technologies, who else would develop them if not industry."
Stephen Schmidheiny quoted in "Tomorrow" – the magazine for business and the environment, vol. 1 no.2, 1999
The Business Council for Sustainable Development was set up prior to the 1992 UNCED (United Nations Conference on Environment and Development) in Rio ide Janeiro by Stephen Schmidheiny, at the initiative of his close associate, Maurice Strong ("Czar" of UNCED), and later converted into the WBCCD. Not to be left behind – or outdone by NGO’s – the Council has now set up a "Rio plus Ten Taskforce" in preparation for the 2002 World Environment and Sustainable Development conference. Along with the ICC (qv) it has also initiated a "Business Action for Sustainable Development" group [information from Laurraine Lotter of Chemical and Allied Industries Association of Sough Africa, representing WBSCD at the UNEP preparatory meeting for Rio Plus 10, quoted in "Civil Society Consultation on International Environmental Governance" Nairobi, May 2000].
Its president, Bjorn Stigson has been associated with, among others, the World Bank, OECD, ABB and Unilever. In his view the WBCSD is a "global corporation" [Frontline, Delhi, March 16 2001]
The WBCSD comprises over 120 companies, from thirty countries and more than 20 industrial sectors. However its "philosophy" appears to be dominated by heads of extractive industries. Strong had interests in oil and mining (ie through Ontario Hydro and PetroCanada), while Schmidheiny is a member of the eponymous clan that controls Holderbank - now the world’s second largest cement producer [FT April 16 2001]. Schmidheiny is also on the boards of Nestle and the Union Bank of Switzerland.
In 1999 a "unique" report by the WBCSD ("Meeting Changing Expectations") came out of "dialogue" between business and "stakeholders" – including labour, church, academic, Indigenous Peoples and Human Rights groups. It claimed to present case studies of how industry is engaged in "corporate social responsibility" (CSR). This report was authored by Phil Watts of Shell International, and Lord Richard Holme, then a director of Rio Tinto - later recruited to the ICC.
In 2000, the WBCSD announced a project of collaboration with the cement industry (surprise, surprise!) to "create environmentally sound cement operations that will both sustain a prosperous cement industry and a sustainable global economy" (no - not "sustainable development") - under the auspices of the Battelle Memorial Institute (see PDF document on www.wbcsd.org/sectoral/cement/Subsidy-EOI-REVO5.PDF) [Gallon Newsletter, October 30 2000]
Prince of Wales Business Forum
Set up (as might be gathered from its title) by the heir to the British monarchy, the Forum counts 60 corporate members including "some of the world’s leading multinational companies". These include: ABB, BP-Amoco, Coca-Cola, Mitsubishi Corp, Shell-Transport, Chevron, Enron, Nestle (of course!), Norsk Hydro and – not surprisingly – Rio Tinto. In pursuing its aim to get business devoted to "development", the Forum has – inter alia – sponsored workshops with Amnesty International based on the primer "Human Rights: is it any of your business?" It also set up a regional initiative in East Asia; launched the website www.csrforum.com; and initiated a "Human Capitalism" campaign. In 2000 the P0WBF also entered a partnership with the world’s biggest public relations firm, Burston Marsteller, which purportedly showed that 100 of Europe’s leading businesses and opinion makers rated corporate social responsibility as "imperative" for corporate Chief Executive Officers [Financial Times survey on "Responsible Business in the Global Economy", November 8 2000]
World Economic Forum
Called by the Financial Times "the planet’s most exclusive gathering of business and political leaders", the WEF meets annually in Davos – where, over the past few years, it has been subjected to massive protests by anti-globalisatiion activists. Its most recent meeting, held in January 2001, was dominated by formulae for overcoming the "trade gap" fostered by tariff barriers against poorer nations, projecting the concept of a government-business "global compact" and protecting the reputations of international finance institutions against continued public attack.
It was in Davos, during the WEF’s 1999 session that Robert Wilson of Rio Tinto officially launched the GMI (qv) [Mining Environmental Management March 2000].
(See also World Social Forum in NGO section of this paper)
SLAPPING EACH OTHER ON THE BACK
The most respected "natural resource" companies in the world (according to a survey by PricewaterhouseCoopers of the opinions of 720 global CEOs, in late 2000) are:
Rank 2000 Rank 1999 Company1
1 ALCOA US 2 2 NUCOR US 3 = 4 RIO TINTO UK/AUSTRALIA = 4NIPPON STEEL JAPAN
= 4ALCAN CANADA
=6 USS-POSCO US =6 AHOLD NETHERLANDS =6 STORA ENSOR (FINLAND 9 ANGLO AMERICAN UK/SOUTH AFRICA 10 UPM KYMMENE FINLAND