11:58 AM Aug 8, 1996

A 'GREEN WASH' FOR TNCS

Geneva 7 Aug (Chakravarthi Raghavan) -- "The industry guidelines show remarkable new commitments within business to use voluntarily the most stringent national standards for their worldwide operations, to reduce natural resource use and depletion and to implement safeguards against risks and hazards."

This 'good conduct' certificate to transnational corporate industry and managements for their responses to Agenda 21 of the Earth Summit and for advancing the case of global environmental protection and sustainable development is in an UNCTAD publication "Self-Regulation of Environmental Management: An analysis of guidelines set by world industry associations for their member firms."

The publication is by UNCTAD's Division on Transnational Corporations and Investment (DTCI) which, like a neo-convert crying Allah thrice more vehemently, has become an ardent promoter of TNCs and liberalisation and deregulation, moving from a position on the extreme left during its UNCTC beginnings in New York to the right of the IMF/World Bank and the WTO in advocacy of neo-liberalism and TNC-led globalization.

As the title says the publication is no more than an analysis (against the yardstick of Agenda 21) of the guidelines issued by industry associations in the months before or immediately after the 1992 Earth Summit at Rio de Janeiro, an analysis that comes four years after the Agenda 21 guidelines -- which largely reflect the industry's success, with considerable manipulation of the UNCED process, with some assistance from its top official (Mr. Maurice Strong) to ward off any national and international regulations that might come in the way of pursuit of profit maximisation by the TNCs.

A senior DTCI official, Mr. Khalil Hamdani, who 'edited' the study prepared by Ms. Riva Krut, explained that it had not addressed the question of 'implementation' by TNCs of their guidelines and that it was UNCTAD's intention to do so in the future, in time for next year's UN General Assembly Special Session to review the Earth Summit outcome.

The publication says that before the study reached manuscript form, "relevant extracts" were sent to all industry associations.

But several of the leading international non-governmental organizations who have been tracking industry compliance with Agenda 21 said they had not been contacted or consulted.

Hamdani said that a Swiss NGO -- the Gland-based World Wide Fund for Nature (WWF) -- had been 'consulted' and that the study (by the US consultancy firm Benchmark Associates) was by an "NGO", and that UNCTAD in its future publication would address the issue of implementation and use it to promote a dialogue between TNCs and NGOs in UNCTAD.

But a WWF official said that the UNCTAD-WWF meeting was an 'information' meeting set up at WWF instance when they learnt of the forthcoming publication. He explained that WWF had originally asked Benchmark Associates to do this study, but by the time it reached them other issues had come up to top their priorities, and WWF had not been able to pursue it. And given the time elapsed between Rio and now, many of the NGOs in the CSD process felt they should now address the implementation issue -- and not how far the guidelines complied with Agenda 21.

Other NGOs, in their particular fields (pharmaceuticals, pesticides and chemical fertilizers, toxic and hazardous wastes and trade, climate change etc), have been actually monitoring the TNC behaviour and have been publicising their findings.

Greenpeace and some other Northern-based NGOs, for e.g. have been tracking and publishing the 'toxic trade' and TNC behaviour and persuaded Basel treaty member-governments to have international regulations to control such activities and ban it.

A cursory glance through the footnotes of the DTCI study contain no references to any of these.

But, in its choice of words, the study gives the impression that it has assessed implementation and that TNCs are actually implementing their guidelines.

Thus, the opening paragraph in the preface says that voluntary international industry guidelines are "crucial" in an increasingly deregulated global world, that these environmental "mission statements" are frequently incorporated in the environmental guidelines of members firms or simply adopted in their entirety and "they are therefore key indicators of industry and corporate practice."

[Emphasis has been added in the quotation above, and subsequently, from the text of the study.]

Hamdani said 'intention' might have been a better word. But there are too many words used that imply practice.

The fourth para of the preface talks of corporate discourse now integrating new terms like 'sustainable development', 'environmental management, 'life-cycle analysis' and 'environmental accounting' and says: "The industry guidelines show remarkable new commitments within business to use voluntarily the most stringent national standards for their worldwide operations, to reduce natural resource use and depletion, and to implement safeguards against risks and hazards."

The introduction says:"In all industries there is a gap between the best practices of the market leaders and the practices of market followers. Industry associations can help close that gap by encouraging the diffusion of their industry's environmental best practices."

Again, the introduction says, "public opinion, of course, is not an accurate gauge of the actual record of industry on environmental issues. Nevertheless public perception can be a powerful driving force for industry..."

The next paragraph says "This study evaluates the self-regulation efforts of industry, as exemplified in their environmental principles and codes of conduct, against the expectations of the international community as reflected in Agenda 21."

Industry associations, it says, "are anxious to influence, not to isolate, non-complying members, to 'adopt the carrot rather than the stick'."

This implies that the industry associations are tracking compliance, and using a 'carrot' to secure compliance. But the publication does not list or explain what 'carrot' any association can use to overcome the inherent tendency of corporations and their executives to maximise profits and persuade compliance.

True, the study notes the weakness of the 'guidelines' approach and points out that "most of the guidelines, including those of some of the major players, do not ask signatories to commit to the principles or activities they recommend."

An upcoming publication by the Third World Network dealing with implementation is a book by Jed Greer and Kenny Bruno, "Greenwash: The Reality Behind Corporate Environmentalism" which tracks the record of 20 leading TNCs.

In their book, Greer and Bruno have looked at 20 "leaders" and how they have performed. The 'greenwash snapshots' cover the activities of: The Royal Dutch/Shell Group, The Mobil Corporation, Dow Chemical Company, DuPont De Nemours and Company, Solvay & CIE S.A., Imperial Chemical Industries PLC and Zeneca Group PLC, Rhone-Poulene SA, Norsk Hydro A.S., Sandoz Ltd, Monsanto Corporation, Ciba Ltd, General Motors Corporation, Aluminium Company of America, Mitzubishi Group, Aracruz Cellulose SA, the International Paper Co., Asea Brown Boveri Ltd, Westinghouse Electric Corporation,, Heinz Company/Starkist, and Browning Ferries Industries Inc.

The introduction to 'Greenwash' begins with two quotations.

Mr. Edgar S. Woolard Jr, DuPont Chairman, says: "Industry will have the primary role in making sustainable development work. We are experts at development".

The response of Indian ecologist Vandana Shiva says: "The leadership of the North in the generation of environmentally unsound technologies does not automatically translate into a leadership to generate environmentally sound technologies."

The introduction says: "A corporate leader in ozone destruction takes credit for being a leader in ozone protection. A giant oil TNC embraces the 'precautionary approach' to global warming. A major agrochemical manufacturer trades in a pesticide so hazardous it has been banned in many countries, while implying that it is helping to feed the hungry. A petrochemical firm uses waste from one polluting process as raw material for another, and boasts this is an important recycling initiative. A logging company cuts timber from natural rainforest, replaces it with plantations of a single exotic species, and calls the project 'sustainable forest development'. and these corporations, with the help of their business associations and public relations firms, help set the agenda for global negotiations on the crises of environment and development...

"This book provides evidence that despite the rhetoric, TNCs have not substantially changed their environmental behaviour in this new era. We trace the phenomenon of greenwash, examine corporate 'self-regulation', detail the activities of corporate lobbying groups in the UNCED process, and profile the words and deeds of the 20 large corporations which proclaim their environmentalism...

"The reality is that TNCs are not saviours of the environment or of the world's poor, but remain the primary creators and peddlers of dirty, dangerous, and unsuitable technologies. The claims of these companies must be scrutinised very carefully and their activities and products regulated for the good of the planet and its people. This book starts such scrutiny by examining 20 greenwashing corporations headquartered in nine countries on four continents, with operations in almost every part of the world, and which profit from major dirty and destructive industrial sectors..."

The International Chamber of Commerce and its guidelines are among those rated by the UNCTAD publication in relation to Agenda 21, with ratings of a star (distinguished contribution) for establishing environmental management systems, including environmental auditing of production or distribution sites. The ICC also gets a solid circle (full commitment) on five other grounds, and gets a 'no mention' (in its guidelines) on strengthening the partnerships to implement the principles and criteria for sustainable development, and a solid triangle (partial commitment) for reporting annually on environment record as well as on use of energy and natural resources.

The ICC's Charter has a precautionary approach which says "To modify the manufacture, marketing or use of products or services or the conduct of activities, consistent with scientific and technical understanding, to prevent serious or irreversible environmental degradation."

But the ICC's definition of 'precautionary approach', Greenwash points out, is precisely the opposite of what the principle originally intended, that is, action can and should be taken to protect the environment even in the absence of scientific proof.

In the DTCI study, the Canadian and American Chemical Associations receive some gushing ratings. All members of the US Chemical Manufacturers Association have to sign on to its Responsible Care guidelines.

According to Greenwash, a US Public Interest Research Group survey of 'Responsible Care' (the US Chemical Industry guidelines) showed that it has failed to take root in much of the chemical industry, that 42% of the companies were unreachable by phone, and 27% of those contacted refused or were unable to answer any questions about chemical use, storage, shipments, and related matters, and only 10% of the 192 facilities surveyed answered all the questions. The Chemical Manufacturers Association found in its own survey that relatively few chemical industry employees had heard of Responsible Care.

The ICC in its publication (from Ideas to Actions) has picked DuPont to illustrate corporate precautionary approach and to claim that DuPont's actions "enabled the Montreal Protocol to be ratified."

To put the record straight, Greenwash points out that DuPont manufactured the chlorofluorocarbons (CFCs) and because of its surplus capacity created many end-uses. It waited for 14 years after scientists first linked CFCs to ozone destruction before it agreed to stop making them. It was only in 1992, as Greenwash points out, when governments and corporate scientists fully "understood" the CFC-ozone layer depletion link in 1992 -- long after the public reached such an understanding -- did DuPont agree to "modify" production, and only then did it replace CFCs with another proven hazardous substance: hydrochlorofluorocarbons (HCFCs).

Apart from the precautionary principle, the polluter-pays is another important principle for environment protection. But DuPont instead of paying for the severe damage caused to the environment by its product, is among the US corporations now trying to collect full rentier incomes on its ownership of some patents on substitutes, by refusing to license it (without majority equity ownership rights) to a consortium of Indian enterprises trying to come up with ozone-friendly substitutes.

So much for Agenda 21 principles or Montreal Protocol provisions about technology transfer.

The DTCI publication says that its rating scale "provides an overview of the extent of industry conformity with Agenda 21, showing areas of industry consensus, areas of diverse views and areas where there is a lag behind Agenda 21". It also cites from a Keidanren (Japanese Federation of Economic Organizations) document that a corporation should strive to obtain full understanding about the importance of environmental protection to its affiliates in the host country.... and that "a corporation should be careful to track a record of achievements, amass data, and conduct impact studies as required after the commencement of corporate activities."

The DTCI publication notes that in the various guidelines, "there are fewer commitments to reporting or to public disclosure", both vital if self-regulation is to carry credence.

"Without reporting and disclosure, self-regulation is an oxymoron," the DTCI study adds.

But the UNCTAD study as a whole needs a stronger word than oxymoron.

And intended or not, such an impression of evaluation of self-regulatory efforts of TNCs detracts from UNCTAD's credibility.