From Control of TNCs to Enhancement of their Role

New York, 1 April 1992(TWN) -- Two key sets of proposals obliging corporations to be made more accountable to governments and the public were withdrawn from Agenda-21 documents at the Prepcom plenary Wednesday and instead new proposals enhancing their role were introduced.

The reversal came at the session dealing with the issues of 'integration of environment and development in decision-making'.

The new proposals will give the large enterprises a greater role in developing economic policy and environment education.

"It is like setting the cat to watch the milk," one Third World delegate privately commented complaining of the reversal and the way despite their record of ecological depredations, TNCs were being wooed and given a free hand.

When the plenary opened Wednesday morning, the Agenda-21 text on this issue contained two major sets of proposals calling on the one hand for corporations to rapidly adapt full-cost environmental accounting (proposed by Sweden) and on the other for establishing a framework for global corporate environmental management (proposed by the G77 and China).

If they had been adopted these proposals, which originated from proposals made by the UN Centre for TNCs (abolished under Boutros Ghalis's reorganisation of the UN Secretariat) would have led to the establishment of comprehensive guidelines for corporations to follow on integrating environmental and health considerations in their activities, and for governments and international organisations to improve their monitoring of the activities of large enterprises including the TNCs.

However at the start of the plenary, the Chairman of the contact group on environment-development integration announced that Sweden had agreed to withdraw its proposals for Section E (full cost environmental accounting) and the G77 and China had withdraw their proposals for Section F (Global corporate environmental management).

In place of the withdrawn comprehensive sections, Sweden had proposed a weak sentence, asking governments to encourage corporations to provide relevant environmental informal to shareholders, creditors, employees, governments and consumers; and to develop methods and rules for accounting for sustainable development. The substitution of the two major sections with this sentence was approved by the plenary.

The plenary also approved newly added proposals that would strengthen the role of "large industrial enterprises including TNCs", for instance:

* seeking their cooperation to explore the use of market mechanisms in energy, transport, health, forestry and other sectors;

* inviting them to participate in examining the implications for internalising environmental costs;

* encouraging them to conduct training programmes on sustainable development programmes;

Over 50 NGOs in a joint open letter to government delegates, UN Secretary-General Boutros Ghali, UNCED Secretary-general Maurice Strong and Prepcom Chairman Tommy Koh expressed their extreme concern over the exclusion of the proposals for international monitoring and regulation of TNCs from the Agenda 21 of UNCED.

This gap, the NGOs said, was very serious in the light of moves to enhance the powers and rights of TNCs, while correspondingly diminishing the rights of states to monitor and regulate TNCs. The closure of the UN Center on TNCs which took place a few weeks ago "is shocking and constitutes a major setback in the history of the UN," they said.

"We believe that the TNCs, the largest economic actors in the world, are mainly responsible for many environmental crises, accounting for instance, for half of all greenhouse gas emissions. Past and current TNC conduct shows clearly that self-regulation by industry has not worked.

"It is therefore imperative that the UNCED process results in multilateral agreement to monitor and regulate TNCs, to control and reduce their adverse environmental, health and safety effects".

The NGOs called on the delegates to adopt among other proposals:

* for a full chapter in Agenda 21 dealing with activities and effects of TNCs and big enterprises, with action proposals for

public regulation and monitoring, in relation to such aspects as public disclosure of information, health and safety, environmental effects and social and developmental implications;

* for the establishment of coordinated international and multilateral mechanisms and institutions to monitor, analyze, develop criteria and principles for ethical and environmentally sound behaviour, and regulate the activities of TNCs including in the areas of environmental, health and safety aspects; social and development aspects; and restrictive trade and business practices that deprive states and the public from their full benefits;

* reaffirm that states, especially developing countries, have the right to regulate he entry, establishment and operations of TNCs and that TNCs have the duty to respect national sovereignty, respect and health and environmental rights of the public and refrain from financial, pricing or technological activities that cause socioeconomic difficulties to host countries - principles already contained in the draft code of conduct on TNCs.

* UNCED must send a clear message to other fora such as GATT that to make possible the protection of the environment, the promotion of sustainable development and indeed the future of Earth and humanity, the rights and freedoms of TNCs and other business enterprises are secondary compared to the primary rights of the public and of states to subject their operations and behaviour to regulations, laws and guidelines that can ensure the reduction of environmental and development problems that threaten to engulf both Earth and humanity.

The NGOs also called on the international community to strengthen the institutions and mechanisms that can play the role of monitoring the surveillance and of developing regulatory instruments on TNCs. As an initial measure they called for the UNCTC to be restored fully and strengthened in terms of resources and functions.

National governments should be helped to improve their capacity and capability to understand, monitor and regulate the activities of corporations, especially the TNCs. Financial and technical resources to this end should be allocated as part of Agenda 21 activities.

International mechanisms should be developed to make TNCs liable for compensation and other payments for the harmful effects caused by their operations on environment, safety and health. (ends)

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