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February 27, 2003
International Right to Know Campaign Promotes Disclosure of Global Corporate Impacts
    by William Baue

In a recent report, the International Right to Know Campaign outlines the benefits of corporate disclosure of global environmental and social policies and practices.


In response to the 1984 toxic gas leak from a Union Carbide (ticker: UK) pesticide plant in Bhopal, India, the U.S. Congress passed the Emergency Planning and Community Right to Know Act (EPCRA) in 1986. This law established the Toxic Release Inventory (TRI), a publicly accessible database that discloses corporate chemical releases. Within its first decade, the TRI almost halved industrial toxic chemical releases, according to the U.S. Environmental Protection Agency (EPA).

However, as effective as these disclosure regulations are in the U.S., they do not apply to overseas operations. The regulations, therefore, do nothing toward preventing another Bhopal. This fact was highlighted in a report recently released by the International Right to Know Campaign.

The International Right to Know (IRTK) Campaign is a coalition of more than 200 environmental, labor, social justice, and human rights organizations that have joined together to support international right to know legislation. IRKT is establishing guidelines that encourage companies to disclose their global policies and practices. The guidelines cover not only environmental impacts but also social impacts such as labor standards and human rights standards.

The report was written by IRTK Campaign member-organizations including Amnesty International USA, Friends of the Earth, Oxfam America, the Sierra Club, and Working Group on Community Right to Know. It outlines the positive effects such disclosure would create for companies as well as for investors, consumers, communities, and workers.

"Globalization has brought a 'race to the bottom,' as U.S. businesses scramble to relocate to countries with the weakest environmental and labor standards," said Jason Mark of Global Exchange, another member of the IRTK Campaign. "We need to ensure that when companies choose to take the low road, they can't hide."

The report presents seven case studies of such egregious behavior in international operations. The McDonald's (MCD) case study illustrates the use of child labor in China to produce its Happy Meal toys, the Nike (NKE) case study focuses on labor rights abuses in Indonesia, and the Unocal (UCL) case study discusses human rights abuses in its use of security forces in Burma. The ExxonMobil (XOM) case study alone illustrates several of the environmental as well as human rights abuses that the IRTK guidelines are meant to expose.

Enron, which is now a poster child for the dangers of corporate secrecy, is currently under federal investigation under the 1977 Foreign Corrupt Practices Act. This law, which prohibits U.S. companies from bribing foreign government officials, encourages compliance by requiring companies to disclose all expenses and payments to foreign officials. However, even this law does not cover all of Enron's transgressions; Human Rights Watch and Amnesty International have documented human rights violations committed by private security forces hired to protect an Enron-owned power plant in Dabhol, India.

"IRTK would close this loophole, ensuring that companies like Enron cannot keep their misdeeds from the surface," the report states.

Independent commentators on the IRTK place it in a larger context.

"The corporate governance scandals of the past 12 to 18 months have created real momentum toward disclosure and transparency," said Bennett Freeman, principal of Washington, DC-based Sustainable Investment Strategies and former Deputy Assistant Secretary of State for Democracy, Human Rights and Labor in the Clinton Administration. "The International Right to Know guidelines further advance the disclosure momentum created by the Global Reporting Initiative and the Publish What You Pay campaign."

The Global Reporting Initiative (GRI) provides companies a framework for disclosing their environmental and social practices, and the Publish What You Pay (PWYP) campaign presses companies in the extractive sector to disclose their payments to governments where they operate.

Mr. Freeman pointed out that it may take years to mandate the IRTK guidelines. However, this does not necessarily diminish the significance of the IRTK campaign.

"Now that the campaign is out here in the world, it has started to do its work," Mr. Freeman told SocialFunds.com. "It's already driving best practice by companies that want to create competitive advantage through transparency and disclosure."

 

 
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