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Our corporate interest

Posted in the database on Wednesday, July 13th, 2005 @ 13:19:09 MST (1792 views)
by Lucy Michaels    SpinWatch  

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Lucy Michaels of Corporate Watch describes how the G8 summit was spiked by big business before it had even begun.

Business is pleased with the proposals of Our Common Interest, the report of Blair’s Commission for Africa. Haiko Alfeld, director of the group ‘Africa at the World Economic Forum’, put it this way: ‘Business has an enormous interest if $25bn per year is to flow into Africa... clearly, that will unleash enormous potential and business opportunities.’ The $25bn is a reference to addition annual aid the commission recommends rich countries give to Africa by 2010, with the proviso that most of it is used to build necessary infrastructure to liberalise Africa’s economies and create an environment conducive to private investment.

Of course, business could play an important part in overcoming poverty in Africa – socially responsible local business, that is. But central to the Africa Commission’s blueprint is the role of public-private partnerships (PPP), in which the private sector is contracted to build and operate basic infrastructure like roads and ports, or provide basic essential services like water and electricity, for profit. We are talking here about multinational companies; local businesses get the small sub-contracting jobs. Ten years ago when the UK government pushed PPPs as a solution to the global water crisis, it was UK utility companies that picked up contracts across Africa. For instance, the Dorking-based company BiWater was part-running the water system in Dar es Salaam, Tanzania, until the project collapsed in late May.

The argument for PPP is that because private companies are more efficient these schemes will cost governments less. However, a report by the South African Institute of International Affairs assessing PPPs across Africa over the past 15 years finds the opposite: the private sector is not always more efficient; service provision is often more expensive; big government contracts are complex, demanding and open to corruption; and energy and water have been the least successful examples of PPP. And the almost universal experience is that the poor are excluded from water networks as prices soar. Guinea water rates increased 500 per cent over five years.

Promotion of PPP by Blair’s commissioners should not surprise us. One of the report’s main authors, Myles Wickstead, is head of the UK government’s Department for International Development, and thus responsible for channelling large sums of aid to UK management consultancies such as Adam Smith International and private sector infrastructure specialists like Jacobs Babtie and Halcrow, to provide ‘technical assistance’ to African countries.

When you consider that the commission also ignored long-standing calls for international regulation of multinational companies, it’s hard not to conclude that big business couldn’t have got a better deal if it had written the report itself. But then that’s actually not far from the truth.

Corporate Watch can reveal that international business was party to every stage of the Africa Commission’s work, thanks personally to Gordon Brown. In July 2004 Brown worked with Reuters chairman Niall Fitzgerald to establish the Business Contact Group, which would involve corporations in the commission’s consultation process. After the report was published last March, the group evolved into Business Action for Africa, a well-coordinated platform for multinational interests.

The corporations involved in the Business Contact Group form a roll-call of some of the most destructive, exploitative and despised names operating across the continent. While the reputation of companies like De Beers and Shell – who co-managed the Business Contact Group with the Commonwealth Business Council – precedes them in Africa, equally destructive are oil giants ChevronTexaco and ExxonMobil.

Chevron and Exxon are key members of the Corporate Council on Africa, a US lobby group representing 85 per cent of all US private sector investment in Africa. Their many crimes in Africa come no greater than the $3.7bn Chad-Cameroon pipeline. Part-funded by the World Bank, the project involved drilling 300 oil wells in southern Chad and constructing a 1,070 km pipeline through rainforest, Pygmy communities, major food and cotton-producing areas and a region of extreme political instability in west Africa to an offshore loading facility on the Atlantic. The project is not only a social and environmental disaster, it is also mired in corruption with $4.5m diverted by the Chad government to buy arms.

UK drinks giant Diageo gets the prize for working the revolving doors between business, the G8 and UK government’s plans for Africa. Famous for Smirnoff, Guinness and Johnny Walker, Diageo lobbies OECD and G8 countries to push for greater investment liberalisation in developing countries. It is also one of the biggest and most controversial companies operating in Africa.

Diageo aggressively promotes its products in Africa by attacking a key micro-scale industry: home brewing. Its recent Corporate Citizenship Report for East Africa painted the unbranded alcohol as a severe ‘health and social risk’, despite evidence from the International Centre of Alcohol Policies, incidentally funded by Diageo, that ‘illicit brew’ is generally of good quality and is vital to the household and local economy. Diageo will have unrivalled lobbying access to put across its vision for Africa at the G8 summit: it owns the Gleneagles Hotel. The only conclusion to draw from Our Common Interest is that it should really be called ‘Our Corporate Interest’.

Corporate influence in the G8 is, of course, nothing new. Since 1995 corporate executives have been directly involved in G8 governance, working with governments, NGOs, multilateral organisations and others to mount and manage the Digital Opportunities Task Force, the Renewable Energy Task Force and the Global Health Fund, which works with the UN to fight HIV/Aids, malaria and tuberculosis.

Within these task forces we see a familiar pattern of corporate influence. In 2002 the Global Health Fund was accused of only offering to finance corporate-patented drugs instead of cheaper generic alternatives. The Renewables Task Force, which reported in 2002, was co-chaired by then chairman of Shell, Sir Mark Moody-Stuart, who is best known among environmentalists for his successful attempts to wreck the 2002 World Summit on Sustainable Development in Johannesburg through the lobbying group Business Action for Sustainable Development, which successfully pressured against any regulation on business behaviour.

Moody-Stewart is the corporate statesman of the G8. He is chairman of the mining company Anglo American, which in early June co-chaired the World Economic Forum’s Africa summit focusing on the commission’s report, and currently stands accused of making payments to a warlord in the Democratic Republic of Congo in order to gain access to rich gold reserves. He is also co-chair of the Global Business Coalition on HIV/Aids, which includes the main pharmaceutical giants that in 2001 accused the South African government of violating patent rules over legislation that sought cheaper generic versions of branded Aids drugs. Moody-Stewart will chair the G8 Business Action for Africa summit in London on the eve of Gleneagles.

But what makes Gleneagles unique is New Labour’s determination to ensure the UK hosts the most business-friendly summit in G8 history. Corporate America is particularly impressed. In January the US Corporate Council on Africa gushed: ‘This is the first time a G8 president has formally sought ideas from the US private sector to shape discussion at a G8 summit.’

The Foreign and Commonwealth Office, which is organising the summit, employed London-based Lexis PR to secure corporate sponsorship. According to a freedom of information request obtained by Corporate Watch, Lexis was tasked with finding corporate service providers for transport, IT and telecommunications, and up to eight ‘partner’ corporations to contribute £250k-£300k each in return for ‘branding credits’ on G8 and EU conference materials and access to meetings and networking opportunities.

The centrality of global corporate capital to the policy-making fora behind the Africa Commission and the G8 makes a mockery of their self-proclaimed goal to eradicate poverty in Africa and the rest of the so called developing world. For the very agencies through which they propose to make Africa rich are central to the reasons why Africa is poor: the dominance of multinational corporations within a grossly unfair trading system.



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