Influencing Government The private sector and

intergovernmental negotiations – the good, the bad and the ugly

Simon McRae Corporate Accountability Campaigner, Friends of the Earth

What is Corporate Social Responsibility (CSR)?

Depends on who you talk to

For Government and businesses it is companies taking voluntary action beyond compliance with minimum legal standards to improve the social and environmental performance of their business

What is Corporate Social Responsibility (CSR)?

Depends on who you talk to

For many NGOs they see companies use CSR cynically as a smokescreen (or greenwash) to avoid having to

• take serious action to improve the social and environmental performance of their operations and

• mask their lobbying activities

What CSR is not?

1. Its not a substitute for the regulation of companies!

2. Its not a substitute for how companies should manage their social ethical and environmental impacts!

3. It won’t save the world!

What are limitations of CSR – the ‘accountability gap’

• No incentives, either legal or financial (eg carbon tax), to go more than marginally beyond competitors

• Doesn’t address those who breach principles or repeat offenders

• Doesn’t give stakeholders the right of redress

• Does address the fundamentals problems of unsustainable trading system and market economy

So what are the challenges for 21st century

1. Stop breaching environmental limits

2. Resolve the international democratic deficit of how corporations are regulated

3. Make world trade rules fair

Stop breaching environmental limits

Extinction of species- Over 12,500 species are

under threat primarily as a result of human activities including 1 in 4 mammals and 1 in 8 bird species

- current rate of extinction is between 1000 to 10,000 times faster than natural background levels

(Ref: IUCN ‘species extinction’ briefing)

Stop breaching environmental limits

Forests disappearing- On average during the 1990’s

14.6 million hectares of forests a year were cut down despite increasing reforestation

- 50% of all biodiversity is contained within rainforests which make of 7% all forests

- Only 10% of forests protected

(Ref: IUCN ‘forests under fire’ briefing)

Stop breaching environmental limits

Water wars?- Although only 1% of all water

on earth is freshwater it essential for life on earth

- In 20 years its expected that nearly half the world will either have difficulty accessing clean water or their supplies will be under severe stress

(Ref: IUCN ‘water and wetlands’ briefing)

Resolve the international democratic deficit of corporations

How do we get democratic control over companies who act globally but are only regulated at national level by Governments?

Global action – UN Norms on the Responsibilities of Trans national Corporations with regard to human rights and an international treaty on corporate accountability

National action – CORE and UK company law reform

Resolve the international democratic deficit of corporations

Global action

Extract from World Summit on Sustainable Development (WSSD) joint plan of implementation paragraph 49 which encourages governments to

“Actively promote corporate responsibility and accountability, based on the Rio principles, including through the full development and effective implementation of intergovernmental agreements and measures, international initiatives …appropriate national regulations…”

Resolve the international democratic deficit of corporations

Global action

Develop international treaty or convention that covered corporate accountability

- the treaty could be built up using UN Norms on the Responsibilities of Trans national Corporations with regard to human rights as starting point

Resolve the international democratic deficit of corporations

Global action

Make sure treaty can be enforced by extending role of International Criminal Court

- The International Criminal Court could provide an independent forum for hearing cases, perhaps including a special tribunal for environmental abuses. Eligibility for hearing or referral to this court would need to be defined.

Resolve the international democratic deficit

National actionReform national company law so that companies responsible for social and environmental impacts overseas

Resolve the international democratic deficit

National actionCORE coalition of environment and development NGOs, unions and faith groups are campaigning to reform company law so that UK companies are responsible for their social and environmental impacts where ever they operate in the world

CORE demands • Duty of care for environment • Mandatory sustainability reporting• Foreign Direct Liability

see www.corporate-responsibility.org

So what are the challenges for 21st century

Make world trade rules fairMany developing countries are trapped in poverty by unfair trade rules which favour the rich primarily in Europe and North America. In 2005 UK NGO’s are calling for action through

TRADE JUSTICE. DROP THE DEBT. MORE AND BETTER AID

See www.makepovertyhistory.org

So how can CSR help deliver on these challenges?

1. Socially Responsible lobbying

• Align company position on public policy with private lobbying • Withdraw from lobby groups or funding of think tanks which

misrepresent your lobbying position in key public policy issues (e.g. climate change) as well as

• Supporting lobby groups or funding of think tanks which represent your lobbying position in key public policy issues

2 Direct investment and influence

• Use own purchasing power to invest in eco –efficient operations and renewable energy and influence supply chains to do same

Need to align company position on public policy with private lobbying

• Where they got it wrong!

• Exxon and climate change• Exxon has a infamous history

of funding lobby groups and lobbying politicians that oppose mandatory action on climate change

Need to align company position on public policy with private lobbying

Where they got it wrong!

• Shell and UN Norms on human rights responsibility of companies

• Shell have been active as the chair of the ICC lobbying against the implementation of UN Norms

Need to align company position on public policy with private lobbying

Where they got it right!

• The Co-operative Financial Services (CFS) and disclosure of lobbying on public policy in their CSR report

• The report details the response of CFS in terms of using their lobbying influence with regard to social and environmental reporting and sustainable development

Need to align company position on public policy with private lobbying

Where they got it right!

• The Co-operative Financial Services and disclosure of lobbying on public policy in their CSR report

• What did they disclose

• Influence and action

• Mandatory reporting lobbied for mandatory reporting of social and environmental impacts of companies

• Project SIGMA  working with the British Standards Institute and others to develop a British Standard in Sustainable Development Management Systems.

• BitC indices  lobbied for increased transparency for stakeholders in the Business in Community indexes

Need to align company position on public policy with private lobbying

Where they got it right!

• Disclose lobbying position and activities on key public policy issues that affect your

business

• CFS sustainability report 2003

• Influence and action

• What is missing?

• No disclosure of membership of lobby groups such as CBI

• No disclosure of where CFS policy differs significantly from lobby groups

So how can CSR help deliver on these challenges?

Withdraw from lobby groups or funding of think tanks which misrepresent your lobbying position in key public policy issues

(eg. climate change)

ExampleShell and BP withdrawing from anti climate change lobby group the ‘Global Climate Coalition’

So how can CSR help deliver on these challenges?

Support lobby groups or funding of think tanks which represent your lobbying position in key public policy issues (eg. climate change)

Example CFS have publicly supported CORE coalition campaign to get mandatory reporting of social and environmental impacts

Direct investment and influence

• There is a global market for environmental goods and services worth over US$500 billion and growing at 10% per year

• The UK has only 5% share and is already falling behind its competitors

What’s been happening on CSR?

UK Government action

Internationally • Support UN Global compact- European Union have published Communication on Corporate

Social Responsibility

UK approach Proposed international framework strategy on CSR based on

- raising awareness of CSR- encouraging best practice (ie. OECD Guidelines for Multinationals)- improving existing process BUT not regulation

What’s not been happening on CSR!

Government inaction - all carrot no stick

Effectively most Governments including the UK have abandoned commitments made at World Summit on Sustainable Development (WSSD) on corporate accountability, to look beyond just voluntary measures, and consider how we can use regulation to promote corporate accountability.

Instead they have surrendered control of the CSR agenda to corporations who favour self regulation and are openly hostile to regulatory action

Where to next?

3 demands of UK Govt on CSR

• Lobby UN to hold international conference on corporate accountability that’s focused on regulatory initiatives

• Stop relying on voluntary initiatives only like Global Compact and OECD Guidelines for Multinationals to address corporate abuse and power

• Support demands of CORE coalition on reform of UK company law

Where to next?

3 demands of business on CSR

• Disclose lobbying position on key public policy issues as well as member ship of trade associations and lobby groups

• Lobby to support the UN Norms on the Responsibilities of Trans national Corporations with regard to human rights

• Support demands of CORE coalition on reform of company law

Where to next?

Further reading on socially responsible lobbying

• Green Alliance, The private life of public affairs, 2003

• International Chemical Secretariat, Cry Wolf: predicted costs in industry in the face of new regulations, April 2004

• Fanny Calder, Following up the World Summit on Sustainable Development Commitments on Corporate Social Responsibility: Options for action by Governments, Chatham House, February 2005

• Sustainability & GPC, Politics and Persuasion: Corporate Influence on Sustainable Development Policy, 2001