Call for Corporate Accountability

   John Samuel

 In a liberal democratic framework, the sovereignty of the state is derived from the sovereignty of citizens and human rights of the people. The citizens are expected to define the boundaries of the state and the state is expected define the boundaries of the market. In the context of the ever increasing power of the transnational corporations and the free market missionaries, market increasingly reshapes  the boundaries of the state and the state in turn restrict  the boundaries of the citizens. This process of corporitisation of the state, politics and media tend to undermine the very ethics and substantive value of democracy. Citizens and the Sate have become less powerful than the big transnational corporations. Citizens are being increasing defined as consumers and the primacy of the nation state is increasing replaced by the power of the market, driven by finance capital market, powerful transnational corporations, elite policy makers and powerful media empires.

Transnational corporations have become powerful to make and unmake governments, laws and public policies. They are playing a key role in making and selling arms, perpetuating inequality, facilitating corruption, militarization and conflict. The root cause of instability and conflict in many regions and countries of the world is the aggressive quest to capture oil, natural resources and market of many countries.  Most of such transnational corporations, supported by the power governments in the North, neither show as sense of ethical, environmental or social responsibility to the people or communities nor make any substantive contribution to the long term development of the countries where they work.

One of the hallmarks of the last one hundred years of history is the unprecedented growth and influence of the transnational corporations. Transnational corporations, ever hungry for new markets, have become the key drivers of economic globalization and shaping up the agenda of the neo-liberal free market economic paradigm. While these powerful corporations, in search for profit and power, play an alarming role in shaping the economic and trade policies of most of the countries in the developing world, there is hardly any sense of corporate accountability to people, consumers or even shareholders. Such lack of corporate accountability, coupled with the immense money and power of advertising, have reached alarming dimension in terms of undermining the human rights of the people and economic sovereignty of many poor countries. The gross domestic product of most of the poor countries is less than the income of many powerful transnational corporations.

While neo-liberal orthodoxy stress on the economic growth, it also created an unprecedented growth of inequality in most of the countries in the world. The growth of transnational corporations and their subsequent strategy to create market across the world shape not only the taste of billions of people and but also create new ‘brand desires”. This has created a culture of consumerism, based on ‘credit’. The consumerist culture, perpetuated by corporate driven media and the advertising industry created a false sense of economic development and opportunities.

While a very miniscule minority of urban, articulate, upper cast and upper class derived better economic opportunities and enhanced their consumerist capacity, a vast majority of small traders, self employed, poor and excluded people lost their ability to bargain in the market and their purchasing power. Such unequal distribution of wealth, along with the new consumerist culture and growing sense of inequality and injustice are at the roots of increasing social and political conflicts in many of the countries, including India.

The unbridled thirst for market and profit at the cost of people, communities and environment pose a serious threat to social stability of many poor countries. This is because of the fact that the ruling elite and the urban middle class get a better deal and the urban poor, excluded and millions of people in rural deprivation get a bad deal. The number of mining companies in search minerals and profits displaced millions of poor, marginalized and indigenous people from the livelihood and lives. The story of deprivation, displacement and alienation is more or less same in Asia, Africa and Latin America. Such a situation of unequal and unjust power relations perpetuate poverty, inequality, social disintegration and resultant alienation. The increasing trend of privatizing basic services like water, health and education further deny the social, economic and cultural rights of people.

However, there is a new myth about “India Rising” or “India Shining”. Such myths are created by the new axis of economic policy makers, media empires and a political class, who are direct or indirect beneficiaries of the powerful transnational corporations. Using the support of such powerful axis, in many countries Transnational Corporations undermine the law of the land, economic sovereignty of a country and facilitate corruption at high places.

Though companies like the Union Carbide, responsible for the death of thousands of people during the Bhopal gas tragedy and Enron Corporation, which ended up cheating its own shareholders show the underbelly of the transnational corporations, still there is hardly an effort to seek or demand corporate accountability or a transparent governance of such huge corporations. As most of the big Transnational Corporations are based in and driven in the powerful and rich countries in the North, there is an increasing pressure by the rich countries, international financial institutions and the strategic use of trade rules to force the countries to rip open their economies and policy frame work. In many ways, one can see the politics of extractive economic and trade relationship, perpetuating the legacies of the English East India Company and other colonial legacies.

Thousands of farmers who committed suicide are in many ways victims of such unethical economic globalization. But they can also be considered as “martyrs” expressing their protest against an unjust and exploitative condition, by sacrificing their lives. This aspect of martyrdom is most eloquently expressed by the Korean Farmer who decided to commit suicide in front of the whole world, during the farmers protest against World Trade Organisation, in Cancun, Mexico.

We do need responsible enterprises and companies to strengthen the productivity, employment opportunities, quality services and economic growth. However, this requires a robust regulatory framework, and accountable corporate governance and transparency of business. Economic growth with out a sense of ethics, with out sense of fairness, will not be sustainable in the long run. Growth with inequality and unemployment is a sure recipe for political conflict based on identity, cast and class. Most of the people at the receiving end of powerful transnational corporations are poor and the excluded people, particularly women. The litmus test of the ethics of an economic growth is whether the economic growth improves the lives and livelihood of the poorest and marginalized people and communities. If such an economic growth, driven by the transnational corporations and consumerist culture, further alienate and exclude poor people, then such growth models are immoral and unethical.