On Saturday, August 31, I joined some thirty thousand people in the
streets of Johannesburg, South Africa to protest the corporate
globalization policies overtaking the United Nations World Summit on
Sustainable Development (WSSD). The International Forum on
Globalization (IFG) had hosted a two-day teach-in in Johannesburg a few
days earlier to raise awareness about these issues and offer
alternatives. While Saturday's march was a celebration of global
dissent, many of us marched with heavy hearts, as we had hoped that the
WSSD would be a celebration in itself. It was to mark the success of
the 1992 UN Conference on Environment and Development (UNCED), also
known as the Rio Earth Summit, and chart the way forward for global,
social, and environmental sustainability. Unfortunately, the dreams of
Rio were dashed in Johannesburg. Among the ruins, however, were born
some germs of hope, including a step forward in the fight to rein in
the world's multinational corporations through "corporate
accountability" legislation. Thanks to corporate scandals such as the
collapse of Enron, the time is ripe for a corporate accountability
movement in the United States. The potential success of such a campaign
globally is furthered by the other major victory in Johannesburg: a
newly strengthened and enlarged anti-corporate globalization movement.
The Promise of Rio

The 1992 Rio Earth Summit was a historic watershed. It placed the
environmental crisis at the top of the international agenda, and linked
environment with development in a new paradigm of sustainable
development. Governments, including the senior Bush administration,
made many commitments in Rio, including legally binding and enforceable
international agreements to protect people and the environment—known as
Multilateral Environment Agreements (MEAs), such as the Kyoto Protocol
on Climate Change and the Convention on Biodiversity; a commitment by
developed countries to provide 0.7 percent of Gross National Product in
aid to developing countries and to transfer environmentally-friendly
technologies; and the creation of an institutional structure at the
United Nations to enforce these measures based on transparency and
democratic participation of governments and civil society.

Over the past ten years admirable work has been done to fulfill these
commitments. However, far more attention has been paid to implementing
the corporate globalization agenda of liberalized trade and investment
policies enforced by the World Trade Organization (WTO), the World
Bank, the International Monetary Fund (IMF), and others. While the
agreements of Rio have floundered, the institutions of corporate
globalization have thrived with political and financial support that
has turned them into the world's dominant international institutions.
While the products of Rio focus on social and ecological
sustainability, the institutions of corporate globalization focus on
profit maximization and wealth for the few. Not surprisingly,
therefore, the world is facing even greater environmental and economic
crises today than in 1992.
The Failure of Johannesburg

Rather than use the WSSD as an opportunity to make good on his father's
commitments made in Rio, the junior President Bush, under pressure from
the right wing of the Republican Party, did not even bother to show up.
However, while his absence was an affront to democratic multilateral
cooperation among nations, it should not be mistaken for a lack of
commitment to the outcome of the Summit. On the contrary, the Bush
administration had set an aggressive agenda for the Summit that it had
been pursuing for over a year. The agenda involved halting any progress
toward the fulfillment of the commitments made by President Bush's
father at the 1992 Earth Summit in Rio, and the enactment of specific
corporate globalization policies. The Bush administration's success
lead many to describe the WSSD as "Doha + 10" instead of "Rio +10,"
referring to the dominance of the WTO agenda (the most recent WTO
ministerial meeting was held in Doha, Qatar ten months ago) over that
of the Rio agenda.

Not only did President Bush Jr. withdraw from the Kyoto Protocol on
Climate Change before the Summit began, but his administration's
refusal to negotiate any new binding multilateral agreements ensured
that no new agreements would emerge from the Summit. In addition, the
Bush administration weakened the existing MEAs by leading the push to
subordinate them to WTO rules. Several non-governmental organizations
and friendly governments stopped the worst U.S. proposal on MEAs;
however, the final Implementation Plan of the WSSD supports the
agreement made at the WTO Doha Ministerial in which the relationship
between MEAs and WTO rules would be decided by the WTO itself. The IFG
will pay close attention to this crucial fight between the environment
and trade rules that will most likely be played out at the WTO's next
ministerial meeting in Cancun, Mexico in September 2003.

The Bush administration was also successful in seeing "public-private
partnerships" emerge as an official outcome of the Summit. These
partnerships, largely between multinational corporations and
governments, are part of a broader privatization agenda that has
already turned the providing of basic services such as water and
electricity into a multibillion dollar global business performed for
profit. The Bush administration already has implemented such
public-private partnerships at the U.S. Agency for International
Development (AID). One such initiative, the U.S. Energy Assistance
Partnership Program, was established by about eighty utilities and
regulatory partnerships in thirty-two AID-assisted countries. Among
other things, it has accelerated the deregulation and privatization of
publicly owned utilities in developing countries. The experiences of
many of these countries make California's energy deregulation look like
a success story, as I describe below in the case of Enron's global
doings. In the context of the WSSD, the biggest problem with these
public-private partnerships is that they, rather than new binding
government commitments for the provision of vital human resources,
became the Summit's official outcome.

There were some official victories to the Summit. One such victory was
that of the Women's Alliance of Ministers and the Women's Caucus in
preventing the removal of language relating to human rights in the
context of health. In addition, several U.S. NGOs were extremely
successful in raising awareness about the Bush administration's agenda
at the WSSD among the American public when they heckled Secretary
Powell (the head of the U.S. delegation in Johannesburg) during a
speech, receiving extensive media coverage. However, as Dr. Vandana
Shiva has written, all similar victories were "merely success in
preventing further regress." One real push forward came with the
inclusion of corporate accountability language into the Plan of
Implementation of the WSSD.
The Way Forward: Corporate Accountability

The global movement to create meaningful, binding, and enforceable
conventions on corporate accountability—a movement that has been
growing for decades—finally took shape in Johannesburg. Led by
international environmental organizations such as Friends of the Earth
and Greenpeace, activists called for a UN Convention on Corporate
Accountability. While a full convention was neither expected nor
achieved, they did succeed in having the following language included in
the Plan of Implementation:

    [Countries will] 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 and public-private
partnerships, and appropriate national regulations, and support
continuous improvement in corporate practices in all countries.

While not perfect, this language does open the door to new
international agreements on corporate accountability.

As outlined in a report by Friends of the Earth International, such a
convention would establish checks and balances on corporate behavior
and ensure that companies must earn a "license to operate." It would
require governments to impose the following duties on publicly traded
companies, their directors, and board-level officers:

• report fully on their environmental and social impacts;

• ensure effective prior consultation with affected communities,
including the preparation of Environmental Impact Assessments (EIA) and
full public access to all relevant documentation; and

• take the negative environmental and social impacts of their
activities fully into account in their corporate decision making.

It would guarantee legal rights of redress for citizens and communities
adversely affected by corporate activities, including:

• access for affected people anywhere in the world to pursue litigation
where parent corporations claim a "home," are domiciled, or listed;

• provision for legal challenge to company decisions by those with an
interest; and

• a legal aid mechanism to provide public funds to support such
challenges.

It would establish human and community rights of access to and control
over the resources needed to enjoy a healthy and sustainable life,
including rights over common property resources and global commons such
as forests, water, fisheries, generic resources, and minerals for
indigenous peoples and local communities; and rights to prior
consultation and veto over corporate projects, against displacement,
and to compensation or reparation for resources expropriated by or for
corporations.

It would establish (and enforce) high minimum environmental, social,
labor, and human rights standards for corporate activities—based, for
example, on existing international agreements and reflecting the
desirability of special and differential treatment for developing
countries. It would establish national legal provisions for suitable
sanctions for companies in breach of these new duties, rights, and
liabilities. It would extend the jurisdiction of the international
criminal court to try directors and corporations for environmental,
social, and human rights crimes and establish international controls
over mergers and monopolistic behavior of corporations. Finally, it
would establish a continuing structure and process to monitor and
review the implementation and effectiveness of the convention.

These principals are equally applicable at the local, state, national,
or international level. The inclusion of language referencing corporate
accountability in the WSSD Plan of Implementation opens the door for an
international movement. Thanks to a rash of corporate bankruptcies and
scandals, the time is ripe for such a movement, even in the United
States. But we need to act quickly before the door closes.
A Door Opens in the United States

On July 30, 2002, President Bush signed the Sarbanes-Oxley Act into
law, saying that "the era of low standards and false profits is over;
no board room in America is above or beyond the law." While the
legislation itself is not monumental, the fact that this president
signed it is. An administration that until this point had done nothing
but preach the dogma that corporations must be given as much freedom
from government regulation and oversight as possible was establishing
new corporate regulations.

The president's signature on the Sarbanes-Oxley Act was a clear sign of
how far the corporate globalization model has fallen. With the collapse
of Enron and Worldcom, with the innumerable corporate scandals
implicating the likes of Citigroup and Anderson Consulting, and with
the ravages to individual savings and the economy as a whole that have
followed, even the Bush administration could no longer make the case
that we can trust corporations to do what is right either for society
or for themselves. The president had no choice but to act.

The Rise and Fall of Enron

The failure of the corporate globalization model and the need for
corporate accountability legislation is best depicted by the rise and
fall of the Enron Corporation. In a March 22, 2002, report titled
"Enron's Pawns," the Sustainable Energy & Economy Network and the
Institute for Policy Studies (SEE/IPS) demonstrate how Enron became a
global giant as a consequence of corporate globalization
policies—particularly the systematic dismantling of regulatory systems
in the United States and abroad. Prodded by the Reagan administration
in the 1980s, the World Bank and IMF have been pursuing deregulation
and privatization of the power and energy sectors for two decades.
Enron has been one of the leading beneficiaries of this
process—acquiring pipelines, transmission lines, and power plants all
over the world. From 1992 to 2001, Enron received $761 million from the
World Bank and $4.68 billion from U.S. taxpayers through institutions
such as the Export/Import Bank for risky overseas project it might not
otherwise have undertaken.

Enron's overseas operations rewarded shareholders temporarily but often
punished the people and governments of foreign countries with price
hikes and blackouts. The SEE/IPS report provides the following
examples, among others. In 2001, eight people were killed when police
were brought in to quell riots in the Dominican Republic after
blackouts lasting up to twenty hours followed a power price hike that
Enron and other private firms initiated. In 1993, the president of
Guatemala tried to dissolve his country's Congress and declare martial
law after rioting ensued following a price hike that the government
deemed necessary after selling the power sector to Enron. In India in
1997, police hired by the power consortium of which Enron was a part
beat nonviolent protestors who challenged the $30 billion agreement—the
largest deal in Indian history—struck between local politicians and
Enron. Global energy deregulation has resulted in the energy needs of
the vast majority of people affected—from the poorest to those in need
of power for businesses, hospitals, schools, and other public services
to function—being routinely sacrificed for Enron's gain.

Enron thrived and fell under corporate globalization's rules. At the
time of its collapse—then the largest bankruptcy in U.S. history—it was
the seventh largest corporation in the United States and the sixteenth
largest corporation in the world. In the last quarter of 2000, Enron
made $377 million in profits. Enron Chairman and CEO Kenneth Lay netted
$123 million in 2000, ten times his 1998 figure. Lay has made
additional gains this year as he cashed in options and sold shares to
net nearly $23 million since November 2002 (as recorded by Darren
Puscas in his A Guide to the Enron Collapse, published by the Polaris
Institute, February, 2002). Not only did this wealth not trickle down,
but much of the most recent gains were stolen from ordinary citizens.
Enron's corporate muscle enabled it to gain control over what were
supposed to be its government regulators, allowing it to act
potentially outside of the law and certainly to the detriment of
society. While government regulators stood silent, California taxpayers
lost at least $30 billion in an energy fiasco in which the massive rise
in costs of energy, which may well have been falsely generated by Enron
and its ilk, translated into massive profits for those same companies.
Again, the government stood silent as Enron executives cashed in on
their stock options, while their employees—who had earlier been
encouraged to tie their retirement savings to stock—were unable to sell
due to a lockdown on selling that Enron defended as a normal function
of a pension "management change." They had to sit by helpless and watch
as the value of their stock plummeted.

As the tangled web of Enron's corporate schemes unfolds, it becomes
increasingly clear that Enron benefited from the widespread reliance on
the market to perform the functions of government oversight and
regulation and from policies shifting government spending to subsidize
corporations rather than publicly provided services. Indeed, it
benefited so well from these polices of corporate globalization that it
literally imploded upon its own greed, taking the incomes of people
around the world with it. The need to regulate corporate activity could
not be made more clear.
The "Corporate President" Acts

The Enron scandal and the flood of corporate bankruptcies and scandals
that soon followed cost millions of jobs, billions of life savings, and
devastated whole economies. In response, in a speech on July 9, 2002,
President Bush outlined both the need for new legislation and described
new executive orders he had written for increased regulations,
oversight, and enforcement of corporate behavior. In this speech, the
president made several important statements that we must hold him
accountable for and use in a campaign for real corporate accountability
legislation. In the speech, the president said that strict new laws are
needed to hold corporations to higher ethical standards. He stated that
"self-regulation is important, but it's not enough." He called on
government to "do more to promote transparency and ensure that risks
are honest" and to "ensure that those who breach the trust of the
American people are punished." He created a new Corporate Fraud Task
Force, headed by the deputy attorney general, which will target major
accounting fraud and other criminal activity in corporate finance and
suggested several measures to strengthen the regulatory abilities of
the Securities and Exchange Commission (SEC).

The president's closing words, however, demonstrate the limits of his
proposals: "Tougher laws and stricter requirements will help. Yet the
American system of enterprise has not failed us. Some dishonest
individuals have failed our system. Now comes the urgent work of
enforcement and reform, driven by a new ethic of responsibility."
Ultimately, the president blames unethical corporate leaders rather
than innately flawed policies. Anyone who has taken a high school
economics course, however, understands that it is the nature of
corporations to operate in a manner that maximizes their profits and
returns to shareholders. It is the job of governments to make
corporations act ethically and in ways that benefit society as a whole.
While the president's proposals are but minor steps in the right
direction, his calls for increased regulation to hold corporations
accountable cannot go unnoticed. We must use these words, and the
realization that this president would not utter them if he did not
believe that the American public was demanding real change, to ignite a
campaign for meaningful, binding and enforceable corporate
accountability legislation.
Our Time To Act

In Johannesburg, thirty thousand people—lead by the people of South
Africa—joined in protest. It was a moment of North-South unity in the
anti-corporate globalization movement that is becoming increasingly
more common. We marched, among other things, against the corporate
globalization policies overtaking the WSSD, against water and
electricity privatization, and against the policies of Bush
administration. However, we also marched in favor of the hope of Rio.
One embodiment of that hope is the united call for corporate
accountability legislation at the UN and around the world in local,
state, and national governments. For a movement that is often defined
by what we are against, this is a clear example of what we are for. It
is time to make this vision a global reality.

Antonia Juhasz is the project director of the International Forum on
Globalization.