8:22 PM Dec 15, 1995

TNCS ENVIRONMENT FRIENDLY?

Geneva 15 Dec (Chakravarthi Raghavan) -- Transnational Corporations are increasingly taking a more strategic approach towards environmental management issues, tending to view costs associated with environmental management as long term investment central to successful business venture, according to the World Investment Report.

The WIR puts a positive gloss on TNC efforts for protecting the environment -- establishing targets for performance, creating internal structures to supervise and ensure observance.

The WIR cites in this regard a report of a benchmark survey of environmental management practices of TNCs conducted by the UNCTAD Division and published in 1993.

But the predecessor of the division, when it was the UNCTC presented quite a different picture in the runup to the preparations for UNCED, which involved a massive participation of NGOs in the preparatory process, as also businesses. The Third World Network was among the leading NGO participants from the South, and provided support and help to Southern NGOs through information about the preparatory committee activities and helping put together a coalition of South-North public interest NGOs.

According to Martin Khor of the TWN, in internal notes of the prepcom process for other NGOs and the network, during the UNCED process two approaches came to the fore.

There was an approach favoured by UNCED Secretary-General Maurice Strong and the Business Council for Sustainable Development which was created under his inspiration. This was an approach that TNCs should be trusted to self-regulate themselves and they would somehow improve environmental performance through self-enlightenment. But the hundreds of NGOs did not accept this and called for increased regulation of TNCs on pollution, product safety and resource use patterns.

The then UNCTC, Khor notes, conducted several studies, including the Benchmark Corporate Environment Survey of 250 TNCs -- looking at their environment management and practices. The UNCTC head, Peter Hansen, reported on these in his speech at Prepcom 3.

According to this, internal self-regulation was found inadequate as an approach and that both national regulations and international legal instruments were found to be required to improve corporate practice.

The CTC survey, as Hansen reported to the Prepcom 3 at Geneva on 29 August 1991 (and CTC officials briefed NGOs in their gatherings at Prepcom 3 and 4), showed that although 83% of TNCs identified management of toxic substances and waste as a major environment issue, only three percent reported monitoring the disposal of their hazardous wastes by their developing country affiliates.

Hansen cited this to call for an intergovernment agency to ensure TNCs have equivalent levels of environmental safety at home and host country operations.

The CTC survey, surprisingly, also found that most TNCs in fact favoured strong UN international guidelines to discipline the corporate sector.

According to Hansen, "contrary to popular belief, over 60% of corporate respondents expressed a strong interest in having the UN system help reduce differences in environmental rules and regulations, and most of them requested also a strong UN role in setting international policy guidelines". Hansen said that conventional wisdom would have us believe that TNCs would oppose the notion of having to observe international standards, "whereas in fact integrating and rationalising environment policies and standards on a worldwide basis is more efficient and less costly" and environmentally progressive TNCs believe in this area "a level playing field to be in their interest".

Subsequently, the UNCTC prepared a report for UNCED, at the instance of the ECOSOC which mandated it. This draft said that while a number of corporations have taken steps to be more environmentally sound, recent studies show that many basic areas remain unaddressed.

The draft report, though, was never tabled by the UNCED secretariat at Prepcom 4 (though some NGOs got around to see it). The report provided some detailed proposals, including through stricter national laws and international rules and their enforcement, to encourage TNCs to improve their ecological behaviour in the areas of global corporate environment management, risk and hazard minimisation, better consumption patterns, environmental accounting and environmental conventions, standards and guidelines.

Post-UNCED experience also have brought out that TNCs need to be strictly regulated and disciplined, nationally and internationally.

A number of studies and reports, by reputed NGOs and academics associated with them, have brought out examples of Biotech companies conducting genetic engineering experiments in the South -- without the knowledge and approval of host governments, and some times against the local laws. This was a major factor that prompted the G77 countries to seek a biosafety protocol to the UN Biodiversity Convention and, despite strong arguments of Japan and the US on behalf of their TNCs, the recent Jakarta meeting of the Contracting Parties decided to negotiate a biosafety protocol. Its proponents strongly argued, and succeeded, against voluntary guidelines and self-regulation by TNCs, showing that this had failed and in fact had resulted in transfer of toxic wastes, chemicals and other hazardous substances and their dumping in the countries of the South.