NGOs call for stricter corporate accountability rules

Source:, 22 April 2002

On 18 April, as part of the ‘Green Week’, a seminar was held on global governance and corporate accountability. A number of NGOs called on the EU to promote legally binding instruments for corporate accountability to be introduced at the Johannesburg summit.
From 15-19 April, the Commission is hosting "Green Week" in Brussels. One of the main topics for the week is governance, including local, regional, national and international aspects This will also be one of the EU’s main priorities for the Johannesburg summit. Authorities’ relation to the private sector is an important part of governance.
The seminar, organised by the Commission, was mainly frequented by NGOs. It focused on the following issues:

governance and its importance for a good investment climate, anti-corruption and public participation;
the role of voluntary initiatives stemming from industry;
how to ensure that the whole supply chain can use best available technologies and environmentally and socially responsible processes.
Craig Bennett from Friends of the Earth proposed mandatory global rules for corporations on issues such as human rights and reporting. He claimed that the voluntary initiatives were not credible, and that governments should focus on the large amount of companies that have not signed up to a voluntary initiative, instead of highlighting the few that have.

Hillary French from the World Watch Institute, USA, pointed out that lots has changed from Rio, that should be mirrored in the global way of regulating companies, for example the setting up of the WTO and the anti-globalisation moves. Voluntary initiatives might no longer be enough, because of the difficulties to differ between ‘green-washing’ and genuine initiatives.

Industry was not represented in the panel at the seminar, which made the debate less diverse. Mr Fussler from the World Business Council for Sustainable Development later stated that what a sustainable world need is innovation, which mainly stems from business. Technology as such is rarely the barrier for innovation, but the institutional environment often is. Good governance must support innovation, to make the market forces work for sustainable development. Binding accountability regulations at a global level would not be a fruitful way forward, since it would be an inflexible mechanism.

The Commissioner for Trade, Pascal Lamy, stated that many of the demands for corporate accountability already are included in international conventions, or are part of present negotiations. The ILO convention e.g. includes regulations for minimum standards for human rights, even though they are very limited. Control of monopolies is part of the negotiations in the Doha Round. However, he agreed that there is room for stricter rules both in the social and environmental field in e.g. the WTO framework. He also asked for better links between the different international institutions.