But what about the poor?

Posted: 18 July 2001

Author: John Madeley

So the environment has been "discovered" by transitional corporations. Some TNCs are making the right noises about not degrading the environment with their activities, about using natural resources in a sustainable way and so on. This is good news. There is of course a huge gap between words and action, and TNCs will now be watched very carefully to see if they translate their words into action. John Madeley reports.

The corporations are very good at public relations ­ capable of persuading some people perhaps that more is happening than really is happening. But on the whole the public will not be fooled. We are looking for real change. Not much change on the ground has happened yet ­ it is surely too early to talk of a "sea change" ­ but hope springs eternal.

But there is something that concerns me in all this. When TNCs talk of "corporate social responsibility" they seem to think only about the environment. There is one rather large issue over which they show very little awareness ­ the impact of their activities on the world's poor.

I have just spent five years researching a book on this and what i found is alarming. In every sector where they operate ­ agriculture, forestry, fishing, foodstuffs, mining, manufacturing, energy, tourism, and medicinal drugs ­ TNCs have a remarkably similar effect. The larger corporations, especially, are causing hardship for millions of the poor in developing countries. And they have scarcely begun to admit to what they are doing.

This matters even more today because with the march of privatisation, liberalisation and globalisation, power is moving from elected governments to unelected corporations: control over human and natural resources is becoming inexorably ceded to TNCs. Gm demonstrationProtest against GM crops© ISF/Environmental Images In agriculture, some of the large corporations are moving to control every part of the food chain, creating a curious capitalist mirror-image of former Soviet state farms. But where stands the poor farmer in all this? Take Monsanto, for example. It has applied for patents on its 'Terminator technology', or suicide seeds, in over 70 countries. This could oblige farmers to buy their seeds from the company each year. In India, especially, poor farmers are rising in revolt. Patents ­ gaining control over a technology ­ hardly squares with 'corporate social responsibility'.

Tobacco companies are trying to make up for declining sales in the West by selling more cigarettes in the developing world. This hits the poor in a number of ways. Low income people in Bangladesh, for example, who had been persuaded to smoke five cigarettes a day, had to cut food purchases by 15 per cent which reduced their daily calorific intake by 300 from an already low 2000. Poor farmers often work for a pittance to produce tobacco. If tobacco companies want to act responsibly, they should cease all advertising and promotional activity, increase prices they pay to Third World farmers and print health warnings on packets irrespective of what the law requires.

In the mining sector, much TNC activity is not only damaging local environments, it is creating havoc with the economies and cultures of the poor. Mining is being done with little regard for the people who live in the immediate area. Often it takes over land where people once lived and farmed, and produces huge waste dumps, which are often health hazards, contaminating water sources sometimes far beyond the immediate area. In the manufacturing sector, low wages ­ often lower than a country's minimum level ­ and long hours and poor working conditions, are common in the factories in developing countries that have been sub-contracted to make toys, garments and footwear for TNCs.

One of the most flagrant abuses of TNC power, and arguably the one with the most serious effects on millions of the poor, concerns drugs. The corporations have tried to block efforts towards national drugs policies ­ which means the poor are denied access to low cost, locally-made drugs. Susan George is right to point out, "the drug scene (the legal drug scene, that is) is nothing short of scandalous."

Do the corporations want to stop such abuses of power? Do they even recognise what they're doing? Is the public aware of what is going on? Public concern over the environment has awakened corporate concern. Consumers can make choices and decisions which influence TNC policies ­ this has been clearly seen over genetically modified foods. If the public now shows its concern over the world's poor, then there is hope.

John Madeley is the author of Big Business, Poor Peoples, published by Zed Books, June 1999, £13.95 hardback.