In Petra Christmann's recent article in the business section of the Cavalier Daily ("Allow for self-regulation in business practices", Feb. 18), she argues that multinational businesses should be allowed to "self-regulate" their environmental policy. She states that such regulation, when coupled with the watchdog actions of socially benevolent non-governmental organizations, will facilitate "less costly, more flexible and more effective means to achieve environmental protection on a global scale."
Christmann supports this claim with the assertion that although companies can "take advantage of cross country differences in environmental regulations [by] relocating polluting activities to countries with lax environmental regulations," they somehow will find the wisdom not to do so. Global trade, NGOs and the environment are just happy partners working together for the benefit of all. It's a nice picture; it's also an imaginary picture.
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Let us be clear from the outset that there is no documented correlation between international free trade and improvement of environmental protection. In fact, there is quite a bit of evidence to suggest that free trade agreements have led to degradation in environmental protection.
Let us also be clear that the record to date does not show a significant amount of effectiveness on the part of NGOs in terms of regulating the excesses dealt out by corporate Manifest Destiny. Though in this regard we might ask exactly which NGOs Christmann was referring to in her article, because not all NGOs are environmentally friendly grass roots organizations.
Some NGOs, such as the Competitive Enterprise Institute or The Heritage Foundation, actively lobby for free trade, deregulation and, by extension, weaker environmental laws. Even if Christmann was referring to NGOs such as the Sierra Club or Greenpeace, the mixed track record of effectiveness on the part of these types of organizations leaves one wondering if environmentally friendly NGOs are really effective at all.
To create a clearer picture, let us examine how corporate activity actually has impacted environmental law and local communities. We do not, however, need to look to remote Third World countries with "lax environmental regulations." Instead we can begin with a situation that has been developing in California, a state in a nation with relatively strict environmental laws and a strong system of due process.
In the early 1990s the Canadian chemical corporation Methanex began selling a gasoline additive MTBE (methyl tertiary-butyl ether) to gasoline distributors in California. MTBE is a chemical which helps gasoline burn more efficiently, thus helping to clean up the state's air.
The chemical was found to cause cancer, however, and in 1995 began showing up in drinking water across the state. Even a prosperous tourist area like Lake Tahoe, known for its clean water, was forced to close three of its community wells due to contamination from local gas stations. Some 10,000 groundwater sites were contaminated. After independent laboratory tests confirmed the potential danger of MTBE, the governor ordered a ban on the chemical.
In this story, however, all is not well that ends well. Methanex, under the provisions of free trade laws (NAFTA chapter 11) has mounted a billion-dollar suit against the United States. The company is demanding either to be allowed to sell MTBE in California, or be paid $1 billionn in lost revenue. What is troubling about this lawsuit is that a closed-doors tribunal of businessmen adjudicates it. Even if an NGO like the Sierra Club wanted to weigh in on the side of California, it has no recourse in the courts to do so under NAFTA.
So here is a clear example of a multinational company taking advantage of trade laws to market a product against the wishes of the state of California. Where are the NGOs? To be fair we must applaud the efforts of the International Institute for Sustainable Development for getting the NAFTA tribunal to consider a third party brief favoring a ban on the sale of MTBE, but we must wait to see if admittance of the brief will have any effect.
Whether the IISD brief has an effect or not, however, begs the question of whether such important decisions should be made by private corporate interests. NAFTA tribunals still are closed to the public and have no obligation to ever receive a third party document again. They also are immune from U.S. court rulings and the will of the people being affected, a fact that frames the larger question, which Christmann ignores. If the California legislature cannot stop Methanex from selling MTBE, what hope do NGOs have of stopping them? To whom could NGOs turn for recourse if neither the court system of the United States nor the legislature has authority over trade disputes such as the one in California?
So it seems fair to call strike one for the effectiveness of NGOs. It also seems fair to call strike two on the idea of corporate "self-regulation." Indeed, we might well question what the motivation is for this self-regulation with regard to the environment. The fact is corporations act fundamentally for the pursuit of profit.
We have all heard of Enron, right? Well, guess what, outside of the United States Enron has been engaged in abusive and self-serving practices equivalent to what it has been doing internally, and there have been few NGOs to help regulate its activities. From John Nichols' article "Enron's Global Crusade," in the March 4, 2002 edition of The Nation, we learn that Enron continually has pushed for deregulation and privatization of essential services in foreign countries, all to generate profit at the expense of local communities.
In Dabhol, India, for example, Enron forged a contract to build a power plant despite organized local opposition. Indian locals feared Enron both would destroy their livelihood and ruin their environment, so they launched a movement to stop Enron's project.
According to Nichols, Enron's response involved beatings and was described by Human Rights Watch as "serious, sometimes brutal human rights violations carried out on behalf of the states and the company's interests." In fact, Human Rights Watch, Amnesty International, CorpWatch, Multinational Monitor and Friends of the Earth have cited Enron for human rights violations.
Now, perhaps these are the NGOs Christmann was referring to in her article. If they were, it is hard to see how they have been very effective in preventing the abuse of corporate power. Indeed, for the few cases I have mentioned here, there are many more where NGOs seemingly have either missed the boat or have been ineffective in preventing corporate excess.
Such "excess," however, should ring a loud bell of alarm in our heads given the recent Enron scandal inside the United States. Enron, which built an empire by fighting politically for deregulation, helped to write our national energy policy. If powerful corporations like Enron shape our environmental policy, environmentally friendly NGOs would seem to have very little power to foster "environmental protection on a global scale."
None of this should be surprising. Current intentional trade law does not promote corporate self-regulation or environmental protection. On the contrary, current trade law has the effect of making such protection less effective by taking power away from local and national governments. We need to remember; corporations are entities that put profits first. We also need to remember that many NGOs are supported by corporate money, which they use to lobby for corporate interests. With all this in mind, Christmann's article appears to substitute optimism for empirical analysis.
The concept of corporate self-regulation resembles a Three Card Monty game where the dealer shuffles words and ideology in a way that obscures corporate actions, leaving environmental interests as a big loser. Perhaps instead of looking for corporations to self-regulate, or for NGOs to come and save the day, we should get together as a democratic society and work to protect the environment by supporting collations and legislation that support environmental protection.
(Alan Fortescue is a doctoral student in the Curry School of Education).
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