12 ways to reform global Goliaths
Modern life is now so dominated by global corporations that it is difficult for many people to imagine how the world might go on without them. But business has been with us since the dawn of civilization and it can assume many other forms. Transition to a more democratic economy becomes easier to visualize once we recognize how many human-scale, locally owned enterprises already exist. They include virtually all of the millions of local, independent businesses now organized as sole proprietorships, partnerships, and cooperatives, as well as worker-owned businesses. They include family businesses, small farms, artisans, independent stores, small factories, farmers’ markets, community banks, and so on. In fact, even though these kinds of businesses get very little government support, they are the primary sources of livelihood for most of the world’s people.
Very few of our daily needs cannot be met by small and medium-size enterprises cooperating within a market economy. But this economy would be characterized by a multitude of small players rather than a handful of giant, absentee owners. And these stable businesses can operate without anonymous stock market investors, limited liability schemes, and the bizarre legal status of corporations as human beings that prop up large companies today.
From the point of view of environmental health and democracy, there is no reason why giant transnational corporations are needed to run hamburger stands, produce clothing and toys, publish books and magazines, grow and process and distribute food, make the goods we need, or provide most of the things that contribute to a satisfying existence.
The following ideas—reasonable, not radical—show how visions of an efficient, fair, and community-minded economic system could become a reality. The following practical steps are all that are needed to wrest some of our power back from corporations.
1. Promote Corporate Responsibility
The corporate responsibility movement mobilizes consumers and shareholders to encourage companies to act in a more socially conscious manner on issues like the environment, labor rights, and human rights. This approach was effectively used during the 1980s in pressing investors to withdraw economic support from the apartheid regime in South Africa. Corporate responsibility activists also pursue legal action as a tactic to reform corporations’ policies and press for voluntary codes of conduct, such as those negotiated with the Gap and Levi Strauss to improve working conditions in Central American factories.
While calls for social responsibility may not ultimately solve the problem, efforts such as consumer boycotts and shareholder actions can temporarily reduce some of the damage being done and raise public consciousness of the realities of corporate wrongdoing.
2. Require Corporate Accountability
Voters in Arcata, California, passed a referendum in 1994 ensuring democratic oversight of all companies conducting business in the city. It’s just one example of how local communities can establish legally enforceable standards for corporate behavior. Living-wage measures, ensuring that companies with municipal contracts pay a decent wage, have been implemented in dozens of cities around the country, along with legislative initiatives on public health and safety issues, the environment, financial transactions, and political campaign contributions. While such efforts go further than voluntary codes of conduct, they saddle governments with the task of enforcing the law against institutions that are able to spend millions of dollars on lawyers, lobbyists, and politicians to weaken the rules and thwart enforcement.
3. Take Action Against Predatory Corporations
When DuPont announced plans to build a hazardous nylon manufacturing factory in the Indian state of Goa during the 1990s, villagers rose up and refused to accept the plant. They organized a blockade of the site and resisted armed police. The local government eventually overturned the planning permit, an act later upheld by India’s highest court.
In the United States, many communities have successfully mobilized to exclude Wal-Mart, Rite Aid, and other large retailers. Applying the “three strikes, you’re out” principle to corporate crime, Pennsylvania’s Wayne Township passed a law in 1998 stating that any firm with three or more regulatory violations over 15 years is forbidden to establish operations in the community.
Although these are basically “not-in-my-backyard” initiatives, they raise public consciousness about the destructive impact of global corporations on people, communities, and the environment, and, even more importantly, show that corporate domination is not inevitable if citizens organize to take a stand.
4. Revoke or Revise Corporate Charters
Without a charter granted by a government body, a corporation does not exist as a legal entity and therefore cannot own property, borrow money, sign contracts, or accumulate assets or debts. Throughout the United States, citizens are reclaiming the right to participate in government decisions about whether specific corporations should be granted a license to operate. In Pennsylvania, for example, citizen groups are backing an amendment to the state’s code calling for corporate charters to be limited to 30 years. A charter could be renewed, but only after successful completion of a review process during which the corporation must prove that it is operating in the public interest. In California, a coalition of justice and environmental organizations petitioned the attorney general to revoke the Union Oil Corporation charter, citing evidence of the company’s record on environmental devastation, exploitation of workers, and gross violation of human rights. Revoking a charter—the corporate equivalent of a death sentence—begins to put some teeth into the idea of accountability.
5. Make Investors Responsible for Damage Done on Their Behalf
Changing the rules to make investors liable for harm done to others in their name would make them pay far more attention to the conduct of the companies they back and would greatly change financial calculations made by corporative executives deciding what sort of actions to take to protect people and nature. Some environmental and justice activists are developing legal strategies to change the limited liability laws that shield corporate shareholders from responsibility for the damage done on their economic behalf.
6. Eliminate Corporations’ Legal Status as Human Beings
Significant democratic and economic gains would come from overturning the bizarre legal doctrine that corporations qualify for all the same rights as human beings. As author Thom Hartmann argues in his book Unequal Protection, few judicial pronouncements have dealt democracy and human rights a more bitter blow than the 1886 Supreme Court ruling establishing this special and unprecedented legal status, which has been used ever since to remove corporations from public acountability for their actions. Hartmann’s Web site, www.ThomHartmann.com, offers a history of the corporate personhood debate and resources for citizen activists.
7. Devolve Mammoth Corporations
Some thoughtful observers call for breaking up large corporations and spinning off their different businesses for sale to workers, customers, suppliers, and community members. This would remedy the well-documented problems of absentee ownership as well as the harmful concentrations of power that distort our economic and political systems. An added benefit is that smaller companies are typically more efficient and create more jobs. Vigorous enforcement of existing antitrust measures would be a start. Creation of new taxes on corporate assets and total sales—with larger corporations paying a sharply graduated rate—would make size an economic disadvantage, thus creating an incentive for larger enterprises to become more efficient or break themselves up voluntarily.
8. Get Corporations Out of Politics
Corporations should be prohibited from contributing funds or in-kind support to political candidates, public officials, political action committees, political parties, lobbyists, ballot initiatives, political conventions, meetings of public officials, issue-oriented advertising, policy institutes, or any organization that engages in public education or advocacy on matters of public policy. Corporate officials should participate only as private citizens.
9. End Corporate Welfare
Many people, many progressive/liberal people, don’t realize what corporate subsidies are. In order to survive and make profits, most corporations depend on a complex regime of public subsidies, exemptions, and externalized costs, including the indirect subsidies they gain when allowed to pay less than a living wage, maintain substandard working conditions, market hazardous products, dump untreated wastes into the environment, and extract natural resources from public lands at below-market rates.
10. Give Preference to Independent Enterprises
To build sustainable communities, it is imperative that local citizens exercise some control over the work and the goods on which their livelihoods depend. This means reforming tax and economic policies—from the global level to the local—to favor ownership of enterprises and resources by local hands-on stakeholders such as workers, community members, customers, and suppliers. Community boards composed of elected citizen representatives ought to review, approve, and monitor the local operations and investment plans of absentee-owned corporations.
11. Reregulate Corporate Investment
Many cities require that businesses receiving public investment provide living-wage jobs, but we should challenge our leaders to broaden these requirements to include certain levels of environmental protection, food safety, employee and community ownership, and other socially responsible goals. Similarly, governments must reassert control over corporate fiscal policies by reregulating the securities and banking industries.
12. Democratize or Dump Free Trade Deals
The new mechanisms pushing economic globalization—the World Trade Organization, the North American Free Trade Agreement, and the proposed Free Trade Area of the Americas—are, in effect, the constitution of the new world order, designed to protect the rights and freedoms of global corporations. These treaties need either to be reconfigured to promote the economic, social, environmental, and cultural interests of all citizens or to be scrapped. Fair trade, not free trade, must be the centerpiece of a global economy.
Adapted from the book Alternatives to Economic Globalization: A Report of the International Forum on Globalization (Berrett-Koehler Publishers, $15.95).
In January 1994, champions of corporate globalization seemed on top of the world. Congress had passed the North American Free Trade Agreement (NAFTA), beating back and disillusioning a broad movement of progressives and unions. A new round of corporate-friendly measures was being negotiated worldwide through the General Agreement on Tariffs and Trade (GATT). The World Bank and the International Monetary Fund were building an economic framework for the world that prescribed free markets and privatization as the cure for nearly all social and economic problems.
At that somber moment, a dispirited collection of environmental and social justice activists convened in San Francisco to examine the consequences of globalization. The group—convened by Jerry Mander of the Deep Ecology Foundation, included veteran strategists such as Vandana Shiva, John Cavanagh, Helena Norberg-Hodge, Martin Khor, Tony Clarke, David Korten, Lori Wallach, Andrew Kimbrell, Maude Barlow, Mark Ritchie, David Morris, and Edward Goldsmith—decided to keep the conversation going on a broader scale by creating a new organization devoted to economic and environmental sustainability: the International Forum on Globalization (IFG).
Conceived as a think tank to develop strategies for revitalizing local economies and reversing corporate globalization, the IFG soon became an advocacy organization with a powerful message about what happens when corporations rule the world. Through the ’90s, it sponsored a series of teach-ins, issued numerous publications, produced full-page ads in major newspapers, and organized strategy and alliance-building meetings that helped give birth to the anti-globalization movement in the United States. It continues to research and discuss global issues ranging from human rights to food safety, giving a strong voice to ideas usually missing in mainstream debates. The group’s latest report is Alternatives to Globalization—A Better World Is Possible, which marks a turning point for the movement from being “anti” to being proactive and visionary. The publication envisions new fundamental principles for economic models, alternative international structures, and corporate reform and emphasizes local economies and new operating systems for energy, transportation, and agriculture. This excerpt is from the chapter on corporations. For more information, write to IFG at 1009 General Kennedy Ave. #2, San Francisco, CA 94129; phone: 415/561-7650; e-mail: email@example.com; Web site: www.ifg.org.
A watchdog group to “hold corporations accountable”
Corporate Accountability Project
Home of the “Corporate Dirt Archives”
Program on Corporations, Law, and Democracy (POCLAD)
Researches corporate, labor, and legal issues with a pro-democracy bent
Works to restore citizen authority over corporations; publishes quarterly newsletter, The Insurgent
Publishes boycott news, company ratings, green pages, responsible investing guides, and fair-trade information
Prominent advocates for global fair trade
Global Trade Watch
Public Citizen’s program promoting “government and corporate accountability in the globalization and trade arena”
Coalition committed to eliminating sweatshop conditions in the global garment industry
Resources to fight corporations’ unfair legal status as human beings.
—Craig Cox and Chris Dodge