Trends in Corporate Accountability

=======================Electronic Edition========================
. .
. RACHEL'S ENVIRONMENT & HEALTH WEEKLY #569 .
. ---October 23, 1997--- .
. HEADLINES: .
. TRENDS IN CORPORATE ACCOUNTABILITY -- WW III, Pt. 3 .
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TRENDS IN CORPORATE ACCOUNTABILITY -- WW III, Pt. 3

Most people want the same things:

** better education for their children;

** good health, especially for their children;

** a better environment (broadly defined to include housing,
recreation, and transportation, in addition to clean air, water,
and food);

** safer communities;

** more economic security;

** stronger families and family support;

** less government regulation and smaller government;

** fewer taxes;

** more local control.

Yet the American economic and political systems are not
delivering most of these things to most people:

** Many school systems are deteriorating, public library budgets
are being cut, and TV is "dumbing down" both adults and children:
by the time they are 18, American children have been in school
11,000 hours but have spent 15,000 to 18,000 hours in front of a
TV set;

** By many measures, children's health is declining --cancers are
increasing, and so are diabetes, asthma, infectious diseases,
excessive weight, and attention deficits, to name only the most
obvious problems.

** Overall, as we have documented again and again, the
environment is tending to get worse in many respects despite the
relentless barrage of corporate "greenwash" claiming the contrary
in the media;

** Many communities aren't safe and many more are not perceived
as safe (thanks to the media's obsession with murder and mayhem
in the local news);

** Most people are less well-off AND less secure today than they
were 20 years ago (see REHW #567);

** Families are having a hard time because so many family members
are working and the children are therefore somewhat neglected;
spare time is shrinking; people are demoralized and stressed out
by their lives outside the home so to numb themselves they allow
TV to dominate their living rooms; elder care is a growing
dilemma for most families; debt is growing; for many, retirement
is a fading hope;

** Government IS getting smaller but not always in ways that help
most people --for example, the Internal Revenue Service IS
getting smaller but this just means more wealthy tax evaders are
going unpunished; environment, health and social service agencies
are facing budget cuts while public subsidies to corporate
polluters are holding steady or rising;

** Taxes have been mounting for the middle class and the working
poor while corporations and the rich are paying less of their
fair share;

** And, finally, Congress SAYS it is giving more control to
people at the local level while the REAL direction is to
"globalize" decision-making, which means transferring control
from local citizens to transnational corporations that answer to
no one.

As a result of these trends, cynicism, depression and ennui are
rampant among Americans; racism is increasing (even the President
has noticed it is a problem) as more people compete for crumbs
from a shrinking slice of the pie; most people don't vote
(because candidates don't offer real alternatives --any that do
are clobbered by the money bullies); so the system is stuck in a
vicious circle in which power and wealth are relentlessly
siphoned off into the pockets of a smaller and smaller fraction
of the people. Forty percent of the people are doing well enough
to continue to support the 1% who are becoming filthy rich --and
the other 60%, who are hurting, nurse their wounds alone,
disengaged, numbed by drugs or beer or television, or simply too
tired to fight back.

Notice the key actors in the scenario just described: the media,
government officials (elected), corporate decision-makers and the
people. How are they related?

Ninety percent of the media are owned by fewer than 20
corporations that therefore dominate public discussion and
debate; these corporations determine what people will talk about
and the limits of the public discussion. The elected government
is controlled by corporations through campaign contributions
(which are required because expensive media exposure is the key
to election); the people are made insecure, discouraged and
disengaged largely because of corporate policies and practices
(downsizing, wage cuts, forced give-backs, overseas flight, union
busting --or simply the fear that any of these tactics will be
used). Corporations control government; government greases the
skids for increasing corporate control. People are disrespected
and cut out of the decision-making loop. Democracy is hollowed
out --the democratic forms remain, but the substance is missing.
We can all vote, but voting seems to change nothing, at least not
at the national level.

It is a vicious circle, self-perpetuating. BUT MAYBE THE
CORPORATIONS WILL GO TOO FAR. Despite their obvious successes in
the past decade, corporate elites seem bent on consolidating
their power even further by insulating themselves COMPLETELY from
popular control. Consider these trends:

1. SLAPP suits are increasing and have taken a new twist in
recent months. SLAPPs are lawsuits intended to frighten people,
to make them clam up. The new trend in SLAPPS is for companies
to claim tortious interference with their profits and to demand
compensation for alleged losses. Here is a typical scenario: a
corporation is planning to pollute a community and deplete its
resources (by building an incinerator, for example). A local
group opposes the corporate proposal, defending the community,
trying to maintain it as a nice place to live and work. If the
defenders succeed, the corporation sues them, claiming that it
has lost money because of the group's interference. The
corporation demands huge compensation for its alleged losses.
The defenders tend to get very quiet and focus on the struggle to
maintain their lives in the face of a corporate army of lawyers
trying to destroy them --and the next group of defenders thinks
twice before speaking out. Our First Amendment rights begin to
shrivel.

2. The Securities and Exchange Commission --a federal agency --is
trying to insulate corporations from shareholders who might bring
shareholder resolutions to change corporate behavior. In the
recent past, such resolutions have changed corporate behavior in
regard to apartheid, child labor and prison labor. Even though
the vast majority of shareholder resolutions fail to gain a
majority vote, they create a platform from which to expose and
criticize corporate policies and practices. Now --this month
--the SEC has proposed to modify SEC Rule 14(a)(8), to make it
much more difficult (in many instances impossible) for
shareholders to bring resolutions for a vote. If the SEC
succeeds, it will further insulate corporate managers from
influence by shareholders.

3. As we saw last week, the Clinton administration (with strong
bipartisan support) is trying to lock the U.S. into a new "free
trade" agreement --the Multilateral Agreement on Investment
(MAI). The MAI would:

--Allow corporations to sue municipal, state and federal
governments in an international tribunal, whose decision would be
binding, with no possibility of appeal;

--Compensate investors in full when their assets are appropriated
through "unreasonable" regulation;

--Limit or eliminate performance requirements (laws that require
corporations to meet certain environmental standards if they want
tax incentives or low-interest development loans, for example)
--thus reducing (or eliminating) the possibility that communities
might impose their values on corporate behavior;

--Remove all restrictions on international movement of capital,
and disallow local laws favoring locally-controlled capital (such
as a community-controlled redevelopment bank).

4. We saw earlier (REHW #552) that 19 states have now passed
"audit privilege" laws. As the NEW YORK TIMES describes the
trend, "Urged on by a coalition of big industries, one state
after another is adopting legislation to protect companies from
disclosure or punishment when they discover environmental
offenses at their own plants." In essence, state laws are
giving corporations immunity from punishment if they self-report
violations of environmental laws. Furthermore, any documents
related to the self-reporting become official secrets, cannot be
divulged to the public, and cannot become evidence in any legal
proceedings.

If a murderer confesses, he or she still faces prosecution. But
these new "audit privilege" laws insulate corporate outlaws and
polluters from accountability to governments and citizens. Under
these laws, confession exonerates a corporation, and any
documents related to the confession become secret and privileged,
hidden from citizens who might seek redress for harms they
suffered from the pollution. Further insulation from
accountability.

5. Corporations are rolling back the system of environmental
regulations at the federal and state levels. A tidal wave of
regulatory reform is sweeping through every legislative body in
the nation. These roll-backs have many different names: Project
XL and the Common Sense Initiative (both Clinton proposals); ISO
14000; the Environmental Leadership Program; brownfields; air
pollutant and water pollutant trading schemes; expansion of
risk-assessment-based standard-setting procedures; new
federal-state "partnership" agreements; and proposed new
definitions of what constitutes solid and hazardous wastes.

All of these alternative proposals have a few common elements.
They allow corporations to negotiate their own performance and
pollution standards with governments. Because these negotiated
standards are unique in each case, citizens have to understand
each agreement on a case-by-case basis --and so do the government
regulators. At a time when regulatory budgets are declining, the
resources needed to negotiate with the polluters (and enforce
agreements) are growing. Citizens can barely understand the
present system of uniform standards. The new system is much more
complicated, so citizens are effectively be cut out of the
oversight process. In many instances, citizen lawsuits are
specifically prohibited by these new arrangements. Thus the
corporations are further insulated from citizens.

Today, corporate and government policies are working relentlessly
to put more and more people out of work, substituting energy and
materials for human labor (and in the process depleting natural
resources and polluting the planet). For a long time such
policies seemed to make sense. But today these policies are
enriching the top 5%, creating the good life for the wealthiest
40% (at least in the short term) and destroying the future for
the remaining 60%. THE ENVIRONMENT, DEMOCRACY, CIVIL SOCIETY,
AND THE ECONOMY ARE THE SAME PROBLEM even though we (mistakenly)
consider each separately.

As Paul Hawken said recently, "We can't --whether through
monetary means, government programs, or charity --create a sense
of value and dignity in people's lives when we're simultaneously
developing a society that doesn't need them."[1] As the U.S.
Conference of Catholic Bishops said in 1986, "Full employment is
the foundation of a just society." Environmental justice will
only be achieved when we have a semblance of economic justice.

Hawken says the solution is to "fire the unproductive kilowatts,
barrels of oil, tons of material, and pulp from old-growth
forests --and hire more people to do so." He says drastically
reducing resource use will dramatically diminish our impact on
the environment and create a multitude of new jobs. But will the
big corporations allow the needed changes to occur? And what
will happen if they don't? In the meantime, there's lots WE COULD
BE DOING.
--Peter Montague
(National Writers Union, UAW Local 1981/AFL-CIO)

===============
[1] Paul Hawken, "Natural Capitalism," MOTHER JONES (March/April,
1997), pgs. 40-53.

Descriptor terms: corporations; economic redevelopment;
children; taxation; education; television; crime; racism; slapp
suits; securities and exchange commission; sec; mai; multilateral
agreement on investment; regulation; regulatory reform; audit
privilege laws;

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