USA: Corporate Responsibility vs. Accountability

The world has moved backward on environment and development since Rio. Governments surely bear primary responsibility for this failure. However, global corporations are at the root of many of the most intractable problems and have hamstrung governments preparing for Earth Summit II in Johannesburg, South Africa.

The stinging reality is that in the 10 years since Rio, sustainable development has languished on the margins of an international politics dominated by institutions such as the World Trade Organization. This has coincided with the emergence of an age of global corporate environmentalism that began in earnest at the first Earth Summit.

Governments in Rio embraced big business, allowing corporations to avoid a binding legal framework on their activities, opting instead for a voluntary approach to sustainable development. As a result, the first Earth Summit failed to confront the central corporate role in environment and development problems in any meaningful way. Instead, some of the worlds worst corporate polluters were given special access to the Earth Summit process, establishing a trend of UN-corporate collaboration that has intensified since that time.

At the core of this issue is a conflict between two approaches to sustainable development. The first approach, favored in the Earth Summit processes, the UN Global Compact and the International Chamber of Commerce, is corporate responsibility. Corporate responsibility refers to any attempt to get corporations to behave responsibly on a voluntary basis, out of either ethical or bottom-line considerations. The second approach is corporate accountability (or compliance), which refers to requiring corporations to behave according to societal norms or face consequences.

Corporate responsibility and corporate accountability may be mutually supportive in some circumstances. But in critical moments, the purpose of corporate responsibility is often to avoid accountability mechanisms that would be more difficult for corporations to control. In the Earth Summit negotiations, corporate responsibility has won out.

The records of leading corporate environmentalists in the energy, chemicals, agriculture, extractive, technology and transportation sectors over the past decade show that there needs to be more democratic control over corporate activity not less. Shell, for example, appeared to take its global responsibilities very seriously at the first Earth Summit in 1992. But by the mid-1990s the global oil giant was embroiled in human rights and environmental scandals in the Niger Delta. This controversy continues today in the form of a pending lawsuit in a U.S. federal court concerning the death of Nigerian environmental leader Ken Saro-Wiwa.

Shells high-profile sustainable development advocacy in Rio also evolved into a major environmental public relations campaign on climate change. Yet, despite its recent efforts, as the 21st century begins, Shell remains one of the worlds leading climate offenders. Based on an analysis we published in 1999 using data from leading scientific organizations, as well as environmental groups such as Greenpeace and the Natural Resources Defense Council, it is clear that today, oil produced by Shell emits about the same amount of CO as all of Britain. Given Shells and other self-proclaimed corporate environmentalists record post-Earth Summit I, it makes their rhetoric ring somewhat hollow on the eve of Earth Summit II.

The Enron debacle and all its consequences make it patently obvious that something is terribly wrong with the self-regulatory route (albeit Enrons case is much broader in scope than just environment and development). Voluntary measures, best-practices case studies, wishy-washy partnerships and multistakeholder dialogues are not the solution.

In many respects, the worldwide movement challenging corporate-driven globalization has generated the most clarity on this issue. Part of the vision of this movement is for the UN to become home to a binding legal framework to hold corporations accountable across the globe. In this way, the UN could begin to fulfill its potential to serve as a counterbalance to corporate globalization and help move the world forward toward truly sustainable development.

• 101 Alliance for a Corporate-Free UN