Taming Transnationals: TNC exploitation of local communities around the world.

This week's Article of the Week by Mr. Michael Gibb, describes the complex relationship between transnational corporations and indigenous inhabitants of the regions in which they work.
By: UNPO
 
April 7, 2009 - PRLog -- When philosophers need data they sometimes conduct ‘thought experiments.' Here is one such thought experiment.
Imagine you are the (democratic and accountable) leader of an indigenous people or minority deprived either of a state of your own or international recognition of your state. In other words, imagine you are a member of the Unrepresented Nations and Peoples Organization (UNPO). Given the primary objective of ensuring your culture, language, customs, (etc.) survive under some degree of autonomy, would it be better to live in an area rich with natural resources or one entirely without?

If the answer is not obviously in favour of the resource-rich land, one concern might be the number of wars that have been fought over resources such as oil and diamonds. Living atop such coveted resources might introduce the standing threat of war, further compounding your already difficult living conditions. Assuming however that a combination of skilful diplomacy and non-violent activism has successfully overcome the threat of war, at least for some time, the resources are undoubtedly a tempting option.

I think there are some good questions to ask about what exactly is meant by ‘resources' in this context, as well as who gets to cast the deciding vote in cases of disagreement. Who, for example, is to say that the oil underground is a resource that should be extracted and shared, but that the land, scenery, or eco-system that sits on top of it is not? Value can be attached to the features of a land for many different reasons. Consequently, there may be different and competing ways of appreciating or respecting this value. When such conflicts arise, it is not clear in all cases that one party is correct in their evaluation and that all other parties are simply wrong. There is a substantive discussion to be had about how these values can best be reconciled and respected. However, such discussions require the participation of representatives from both perspectives. The frequent exclusion of, for example, indigenous groups from decisions about their land and resources is therefore not only a violation of their rights, but also fails to take seriously the complexity of identifying resources and their values.

Returning however to our thought experiment, resources such as rivers, coal, or oil successfully support vibrant local economies around the world. A viable local economy is clearly a pre-requisite for meaningful local autonomy, and so the argument in favour of taking the resources is short. However, creating a resource based local economy requires a great deal of investment, knowledge, and experience.

Resources must be found, holes must be drilled or mines constructed, and organisations must be put in place to run the extraction industry. In many developing states, including many that are home to UNPO members, these human and technological resources are absent. Without them, no resource-led development is possible.

Increased globalisation has however brought what is perhaps an obvious solution to this problem. Trans-National Corporations (TNCs), usually based in the developed world, have all the requisite skills and resources. For a share of the resources the TNC can assist in their extraction and production, creating both some profit for their investors (in return for taking some risk) and beginning the development of your local economy. In 2007 foreign direct investment of this kind totalling $53 billion reached Africa alone, a number that has been growing rapidly since the early 1990s.1 In Kurdistan-Iraq a process is underway to develop new oil fields with precisely this kind of foreign investment and assistance in exchange for a share of the eventual oil revenue.

Despite their apparent promise, TNCs have frequently brought disaster to the local communities in whose regions they invest. So disastrous in some cases that once paradoxical phrases such as ‘the curse of gold' (‘oil', ‘resources', etc.) have gained a foothold in academic parlance.

The Niger Delta is home to the Ogoni people, but also Africa's largest oil and gas industry, as developed by large TNCs such as Shell. Although the Nigerian government makes approximately $42 billion annually from its resources, the unemployment rate in Ogoniland is around 90%.2 Severe environmental degradation has also devastated once fertile land. From 1976 to 1991 oil spills numbered around 3,000 at an average of 600 barrels per spill.

Gas flaring, a practice widely recognised as the cause of both acid rain and respiratory problems, has been in effect 24 hours a day across the Delta, with some flares now having burnt continuously for 30 years.3 Since the early 1970s there have been complaints about Shell's slow an ineffectual response, leading eventually to the current climate of conflict and violence. Oil spills linked to poor maintenance have also destroyed fish-stocks in other hydrocarbon rich areas such as the enclave of Cabinda, and Human Rights Watch and UNPO have reported extensively on similar environmental destruction in Chile, West Papua, Malaysia, and Bougainville. TNC led logging, mining, and farming have frequently destroyed land that have supported local communities for centuries or displaced the local population by force and intimidation.

These experiences suggest at best that engagement with a TNC can be something of a gamble. It is not that such companies do not have the potential to contribute to the development of local economies, the argument above seems sound. Some broader considerations are however worth bearing in mind before turning to the more specific role of TNCs.

The combination of a weak government, a poor population, and valuable resources is a volatile mix. The prospect of wealth not only gives government officials considerable incentives for corruption and autocratic behaviour, but also gives opposition groups an added financial incentive to seek power by any means possible. As economists have also argued for some time, resource extraction in general provides a poor basis for broader economic growth, limiting its effectiveness as a vehicle for sustainable economic development.

Unsurprisingly then, not all problems can be blamed on TNCs. As the examples above suggest though, their business practices appear frequently to exacerbate rather than ameliorate these potential problems. Now it seems perfectly possible that a TNC could enter a community and behave just as a responsible local business would. What these experiences suggest however is that there are some features of TNCs that make them prone to fail in living up to this possibility. A few thoughts come to mind.

[...]

UNPO should work with these companies to ensure such wilful complicity in the violation of human rights remains uncommon, and work with its members to ensure they are able to take full advantage of a private sector that is increasingly operating independently of the international state system that has traditionally isolated them. This should include in particular the many de facto states of the world. Abkhazia and Somaliland both suffer from the fact that the institutions they are struggling to establish are prevented from engaging and learning from other governmental and international institutions, both financial and political. Constrained by less diplomatic and political protocol, TNCs might however be able to interact directly with their governments, facilitating both important economic opportunities and also valuable political exposure and experience that can strengthen democratic and reform-oriented movements within these territories.

So to my imaginary local leader: resources can be a good thing, as can international assistance. They do however make exceptional demands on local leadership, as managing resources well is a challenge equal almost to having none at all.

[ABRIDGED ARTICLE. To see full article, click here: http://www.unpo.org/content/view/9436/262/ ]

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The Unrepresented Nations and Peoples Organization (UNPO) is an international, nonviolent, and democratic membership organisation. Its members are indigenous peoples, minorities, and unrecognised or occupied territories who have joined together to protect and promote their human and cultural rights, to preserve their environments, and to find nonviolent solutions to conflicts which affect them.

Although the aspirations of UNPO Members differ greatly, they are all united by one shared condition – they are not adequately represented at major international fora, such as the United Nations. As a consequence, their opportunity to participate on the international stage is significantly limited, as is their ability to access and draw upon the support of the global bodies mandated to defend their rights, protect their environments, and mitigate the effects of conflict.
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Source:UNPO
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Tags:Exploitation, Oil, Transnational Corporations, Business
Industry:Consumer, Environment, Non-profit
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