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<nettime> Corporate Europe Observer - Issue #5


      C O R P O R A T E    E U R O P E    O B S E R V E R

             Issue 5          -        October 1999

This fifth issue of the Corporate Europe Observer brings you four indepth
articles describing different aspects of corporate power abuse. We start
with an article on the Global Compact, the new covenant between the United
Nations and major transnational corporations, through the International
Chamber of Commerce (ICC). With this agreement, which aims to counter the
backlash against trade and investment liberalisation, corporations promise
to become 'Global Corporate Citizens' and incorporate social,
environmental and human rights standards in their mission statement and
practices. The UN offers support, including a website through which
corporations can dialogue with 'civil society'.

The second article describes the attempts of the European biotech lobby
group EuropaBio to prevent another blow to the public image of genetic
engineering -- the planned European tour in May/June of 450 anti-biotech
farmers from India and other Southern countries.  EuropaBio, together with
PR company Burson-Marsteller, quickly organised its own tour of ten Indian
pro-biotech farmers.

In Issue 3 of the Corporate Europe Observer we reported about the
activities of the European Roundtable of Industrialists (ERT) to influence
the process of EU enlargement with Central and Eastern European countries.
A recent step in this strategy has been to establish close cooperation
with the Regional Environmental Centre (REC), one of the most prominent
environmental networks in Central and Eastern Europe. We report on the
joint ERT-REC seminar Industry-Government Dialogue on EU Accession. 

Finally, we continue our series on corporate think-tanks with a portrait
of the Centre for European Policy Studies (CEPS), frequently consulted by
the media, who describe CEPS as an independent expert group. In fact, CEPS
is another example of a think-tank heavily dominated by and biased towards
the interests of its corporate membership and sponsors. 

This issue of Corporate Europe Observer is brought to you by: 

Belén Balanyá , Ann Doherty, Olivier Hoedeman, Adam Ma'anit and Erik

Corporate Europe Observatory (CEO) is a research and campaign group
targeting the threats to democracy, equity, social justice and the
environment posed by the economic and political power of corporations and
their lobby groups.


New address:  

    Paulus Potterstraat 20
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                  THE GLOBAL COMPACT:

"As you know, globalisation is under intense pressure. And business is in
the line of fire, seen by many as not doing enough in the areas of
environment, labour standards and human rights.  This may not seem fair,
but it is a perception that will not go away unless business is seen to be
committed to global corporate citizenship. The Global Compact offers a
reasonable way out of this impasse."
- Kofi Annan in a speech to the American Chamber of Commerce [1]

"The Global Compact is not a code of conduct. Neither is it a disguised
effort to raise minimum standards, nor a vehicle for special interest
groups. It is a Compact to help markets deliver what they are best at --
while at the same time contributing to a more humane world."
- Kofi Annan in speech to Swedish businessmen [2]

On July 5th, following an all-day meeting with a heavyweight delegation
from the International Chamber of Commerce (ICC), United Nations
Secretary-General Kofi Annan launched the "Global Compact". Annan
described this new international covenant between the UN and business as
"the most sensible way forward to safeguard open markets while at the same
time creating a human face for the global economy." [3] Despite the flawed
social and environmental records of involved corporations including Rio
Tinto, Siemens and Norsk Hydro, this agreement on 'global corporate
citizenship' is completely non-binding, with no enforcement mechanisms
whatsoever. At a time when global economic deregulation has made mandatory
and enforceable international rules for corporate behaviour more necessary
than ever, the Global Compact is a questionable initiative. 

ICC President Adnan Kassar was accompanied by captains of industry from
Norsk Hydro, Rio Tinto, Unilever, Shell, Siemens and 22 other major
transnational corporations at the 5 July endorsement of the new
agreement.[4] Accompanying Kofi Annan were Juan Somavia (Director-General
of the International Labour Organisation), Rubens Ricupero
(Secretary-General of the UN Conference on Trade and Development, UNCTAD),
Mary Robinson (UN High Commissioner for Human Rights), and Klaus Toepfer
who leads the UN Environment Programme (UNEP).[5]

The covenant was first proposed by Kofi Annan at the January 1999 World
Economic Forum in Davos,[6] where he addressed the growing backlash
against trade and investment liberalisation and suggested the initiation
of "a global compact of shared values and principles." [7] Annan
"challenged business leaders to embrace three sets of universal principles
in the areas of human rights, core labour standards and the human
environment." [8] As Annan explained, "I choose these three areas because
they are ones where I fear that, if we do not act, there may be a threat
to the open global market, and especially to the multilateral trade
regime." [9]

The Global Compact statement refers to the Universal Declaration of Human
Rights, the 1995 Social Summit in Copenhagen, and the 1992 Rio Earth
Summit, but remains very general. UN institutions are to assist business
in "incorporating these agreed values and principles into mission
statements and corporate practices... The International Labour
Organisation, the Office of the High Commissioner for Human Rights and the
UN Environmental Programme are currently joining forces under the guidance
of my Office to create the capacity to encourage global corporate
citizenship and to foster the translation of these principles into
corporate practice." [10]

"From a more narrowly self-interested point of view," Annan explained to
an audience of Swedish businessmen, "corporations which embrace these
principles are better placed to deal more constructively with pressure
from single-issue groups." [11] At the July presentation of the Global
Compact, Annan told business that the UN would help in establishing "a
dialogue between you and other social groups, to help find viable
solutions to the genuine concerns that they have raised." [12] For this
purpose, a special UN website will be launched to present "the specific
pledges made by multinational corporations and allow independent aid
groups and non-governmental organisations to publicly challenge companies
if they do not abide by the substance of these pledges." [13]

According to George Kell, an officer working directly under the
Secretary-General on this project, the new website, which is independent
from the existing UN/business website, "will be ready on a trial basis
around 1 November. We will continue to add content and actors and hope
that by early December we can go public." [14] Kell explained that the
website is "a joint effort by the Executive Office of the
Secretary-General, International Labour Organisation, United Nations
Environment Programme and Office of the High Commissioner for Human Rights
to facilitate the implementation of the Global Compact." [15]

The website is the most tangible element of the Global Compact, which made
the media ask questions about the status of the agreement. Guardian
journalist Peter Capella reported that "privately, UN officials admit that
they will not be able to check if companies do respect the voluntary
agreement on good practice." [16] A Reuters correspondent came to the same
conclusion: "Neither UN officials nor private sector leaders were able to
say how their new-found cooperation would translate into practice when
dealing with multinationals accused of degrading the environment or
working with governments violating human or labour rights." [17]

The Global Compact's joint statement includes two points that were clearly
added by the ICC. Firstly, it stressed that "companies cannot be expected
to take on responsibilities outside their own sphere of activity that are
properly the preserve of Governments." [18] Moreover, the statement says
that "the capability of companies to create wealth and to meet their
responsibilities to their customers, employees and shareholders is
indispensable to fulfilling the compact." [19] These two passages are
'safety valves' for corporations which further dilute potential positive


Readers of the Corporate Europe Observer will be familiar with Kofi
Annan's on-going efforts to build stronger relations with the ICC and
transnational corporations in general. [20] Annan is a frequent speaker at
business events around the world and makes use of every possible occasion
to 'sell' the UN. "Advocating a strong United Nations and greater
authority and resources for the UN," he told Swedish industrialists in
May, is "the most sensible way of ensuring that markets remain open and
that the benefits associated with economic interdependence can be spread
more widely." [21]

Annan stresses the role of the UN in providing the "'soft infrastructure'
of the global economy, ensuring the free flow of goods, services, finance
and ideas... The United Nations I am asking you to support is in
fundamental respects a changed organization," [22] Annan told the US
Chamber of Commerce, and renewed his request for their help in making the
US government pay its full contribution to the UN. [23] The US has US$1.6
billion worth of outstanding dues to pay, which causes serious financial
problems for the UN. [24]

As Annan puts it, "a fundamental shift has occurred in recent years in the
attitude of the United Nations towards the private sector. Confrontation
has taken a back seat to cooperation.  Polemics have given way to
partnerships." [25] In a speech to the US Chamber of Commerce, Annan
concluded that "both the business community and the United Nations are
engaged in the service of something larger than ourselves: human security
in the broadest sense." [26] Annan continued to stress the common ground: 
"Values, stability, services: it is no surprise that the United Nations
and the private sector are joining forces. The voice of business is now
heard in United Nations policy debates." [27]


A look at the social and environmental records of the companies that have
been most actively involved in developing the Global Compact is cause for
concern. Present at the July 5th launch of the Global Compact in Geneva
were, for instance, the CEOs of Rio Tinto (formerly RTZ), a company
involved in massively destructive opencast mining projects in the
rainforests of West Papua (Irian Jaya), [28] and Siemens, a major arms
producer and the only German company still involved in nuclear power plant
construction. Also present were Norsk Hydro, whose drilling operations
continue to cause serious environmental damage and repeated human rights
abuses, [29] and Unilever, an aggressive promoter of biotechnology in food
production and a company with a poor record of compliance with
environmental regulations.[30] The destructive social and environmental
record of the Shell oil company needs no further elaboration. [31] The
reality of corporate behaviour leaves no doubt that, rather than "human
security in the broadest sense," the corporations with which Annan has
engaged in the Global Compact are primarily interested in the pursuit of
profit and returns for their shareholders.  Indeed the discourse of
'global corporate citizenship' is deeply flawed as it implies that the
social and ecological problems caused by corporate-led globalisation can
be solved by appealing to the moral consciousness of these corporations.


The corporations involved in the Global Compact continue to do everything
in their powers to avoid the imposition of binding rules - and
particularly international standards - upon their activities.  Instead,
they promote 'self-regulation' as the solution. Even when the proposed
Multilateral Agreement on Investment (MAI) ran into strong opposition in
1998, business groupings like the International Chamber of Commerce (ICC) 
refused the OECD's proposals to include some rules for corporate
behaviour. The ICC has campaigned vigorously against binding regulations
in numerous multilateral environmental treaties, including those on
climate change, biodiversity and ozone-depleting chemicals (the Montreal
Protocol), promoting self-regulation instead. The US Council on
International Business (USCIB), the US affiliate of the ICC, fiercely
resists corporate codes of conduct promoted by trade unions and
environmental and human rights organizations. [32] In December 1998, the
USCIB issued a statement saying that "such externally imposed codes are
unacceptable to the business community, are unworkable, and would be
ineffective in resolving labour and environmental problems."  [33] The
USCIB calls the demands made on business by NGOs "unrealistic,
contradictory, and counter-productive" and rejects "the notion that
companies can be held responsible for the overall behaviour and policies
of their subcontractors and suppliers throughout the supply chain." [34]
The USCIB furthermore rejects the desirability of standardising corporate
codes of conduct, and is vehemently opposed to the independent auditing
and verification of "these imposed codes," warning against "the hazards of
accepting such an intrusion." [35]


The USCIB and the ICC are no doubt satisfied that binding standards for
corporate behaviour are not part of the Global Compact. From a
non-business perspective however, this absence is a missed opportunity
given the valuable work which has been carried out within the UN,
particularly until the early '90s.

Until 1993, the UN had a Centre on Transnational Corporations (UNCTC)
which carried out research and worked with the Commission on Transnational
Corporations, an intergovernmental body with the mandate of developing a
code of conduct for TNCs. The 1986 draft UN Code of Conduct on
Transnational Corporations, according to Friends of the Earth, "would have
required not only compliance with host countries' laws and respect for
human rights and fundamental freedoms, but also adherence to economic
goals, development policies and socio-cultural objectives and values of
the host country." [36] Although the draft Code of Conduct would not have
been binding, it included important elements such as "placing prohibitions
on TNCs interfering with host country politics" and on "TNCs lobbying home
country governments to influence host country politics in their favour."
[37] Unfortunately, the draft code was increasingly watered down and a
final version was never approved, mainly due to pressure from industry and
the US government. In 1993, the UNCTC was dismantled as part of an
internal 'reorganisation', and UNCTAD became the new UN focal point for
work on TNCs. UNCTAD, however, has not addressed the regulation of TNC
activities, but rather works closely with businesses in order to stimulate
foreign investment flows to the Third World.

There are, however, still people within the UN institutions who have not
been convinced by industry's gospel of self-regulation.  In fact, in its
latest Human Development Report, the UN Development Programme (UNDP) came
to conclusions that contradict the voluntary approach underlying the
Global Compact. The 1999 Human Development Report, launched in June,
concludes that "the new rules of globalisation - and the players writing
them - focus on integrating global markets, neglecting the needs of people
that markets cannot meet. The process is concentrating power and
marginalising the poor, both countries and people." [38] The UNDP leaves
no doubt about the need for binding international rules for TNC
activities, considering the dominance of corporations in the global
economy too great for voluntary codes to suffice.  "Tougher rules on
global governance, including principles of performance for multinationals
on labour standards, fair trade and environmental protection, are needed
to counter the negative effects of globalisation on the poorest nations."

The UNDP's new proposal for binding rules provoked a prompt and furious
reaction from ICC Secretary-General Maria Cattaui. In an open letter
printed in the Financial Times, Cattaui claimed that the Human Development
Report "is on the wrong track in calling for a mandatory code of conduct
for multinationals." Such binding rules, she argued, "would put the clock
back to a bygone era...  Governments in the poorer countries now compete
to create a hospitable climate for foreign direct investment," she
concluded and referred to the ICC's cooperation with Annan and the UN as
an example that "times and perceptions have changed." [40]


The Global Compact deals with more than only 'global corporate
citizenship'. The joint ICC-UN statement of July 5th expresses strong
support for "a new round of trade negotiations that is expected to be
launched at the end of the year." [41] According to the statement, "The
early and successful conclusion of a new trade round would contribute to
reinforcing the economic momentum generated by trade liberalisation." By
embracing the corporate trade and investment agenda, Annan has clearly
taken sides in one of the most heated issues in the current debate about
the global economy. He not only alienates himself from a very large part
of the 'civil society' he otherwise speaks so positively of, but also from
the large number of Southern governments which oppose the idea of a
comprehensive round of liberalisation negotiations that would include new
issues not previously part of the WTO.  More than 1,200 groups from over
80 countries have signed a joint statement against the proposed WTO
Millennium Round and for "a comprehensive and in-depth review and
assessment of existing agreements" as well as effective steps to change
them. [42] Many of these groups and networks such as the Peoples' Global
Action (PGA) maintain that the WTO is flawed beyond reform.

Other NGOs and many trade unions are campaigning for social and
environmental clauses to be added to the WTO's rules. Annan warns against
this "enormous pressure from various interest groups to load the trade
regime and investment agreements with restrictions aimed at preserving
standards in the three areas (human rights, labour standards and
environmental practices)," and the UN-ICC statement mirrors this by saying
that "the rules-based multilateral trading system was not designed to
address these non- trade issues. To call on it to do so would expose the
trading system to great strain and the risk of increased protectionism,
while failing to produce the desired results." 

At the press launch of the Global Compact, ICC vice-president Richard
McCormick described the multilateral trading system as very fragile "to
the degree that its link with labour, its link with environment could
cause a disaster in that trading system."  [43] McCormick said that
instead of embroiling labour and environment issues in the new round of
global trade talks expected to be launched in Seattle, the ICC would try
to convince the U.S.  government to address these issues through side
agreements as was done for the North American Free Trade Agreement. [44]
Instead, "enhancing the authority, effectiveness and the resource base of
these UN bodies is the most productive way forward," the statement
concludes. [45] There is no mention of even the most moderate of NGO
demands, for example that multilateral environmental treaties should not
be undermined by WTO rules.


While at first glance Annan's Global Compact initiative might appear to be
a praiseworthy step to improve corporate behaviour in the global economy,
its vague and voluntary character means that it will likely do more harm
than good. In an analysis of the history of the regulation of TNCs,
Friends of the Earth concludes that "non- binding agreements are less
effective than mandatory ones and in many cases can actually delay the
introduction of strong agreements."46 Annan has made it no secret that the
Global Compact is a chance for corporations to improve their public image
and counter the backlash against trade and investment liberalisation.
Disturbingly, it is certain that through the Global Compact the UN will
contribute to the largely incorrect impression that corporations are on
the way to becoming socially and environmentally responsible actors. The
Compact raises a number of important questions. For starters, why has
Annan not at any stage of developing this covenant consulted with the many
public interest groups involved in campaigns against corporate power abuse
around the world? The big question for Kofi Annan, however, is why
business should not simply be forced to follow mandatory international
standards for corporate behaviour.

Campaign groups around the world have presented very detailed proposals
for how an international framework of binding rules for TNCs could look.
[47] An international NGO statement on the global economic crisis from
earlier this year stressed that "corporations must be held accountable to
standards through effective binding mechanisms for monitoring and
enforcement, such as international courts with citizen standing, access to
local courts, standing to pursue justice in the home country courts of
TNCs, and financial sanctions for non-observance." [48] The UK- based
World Development Movement (WDM) proposes an international Core Standards
Commission to which citizens groups could submit complaints about
corporations failing to live up to a set of enforceable global minimum
standards, based on a wide range of existing UN agreements (on human
rights, working conditions, equality, consumer protection, environment,
local communities, business practices and sovereignty). [49] The victory
over the Multilateral Agreement on Investment (MAI) and the generally
increased awareness about the role of transnational corporations in the
globalising economy could give new momentum to the necessary move away
from Global Compact-style corporate self-regulation and towards
international rules through which corporations can be held accountable.

For more information on the liaisons between corporations and the United
Nations, see the special website maintained by Corporate Watch US:


1. Secretary-General, addressing United States Chamber of
   Commerce, highlights fundamental shift of United Nations
   attitude towards private sector, text of the address by
   Secretary-General Kofi Annan to the United States Chamber of
   Commerce, in Washington, D.C., 8 June 1999, UN Press Release

2. The Secretary-General Address to Svenska Dagblates Executive
   Club, Stockholm, 25 May 1999 - Issued by the United Nations
   Department of Public Information, originally as Press Release

3. Businesses Promise UN Boss to be Good Citizens.
   Reuters, Geneva, 5 July 1999. 

4. World Business Responds to Kofi Annan's Challenge on Shared
   Goals with UN, ICC press release, Geneva, 5 July 1999. 

5. Ibid.

6. The World Economic Forum (WEF) is a major forum for
   international elite consensus-building and strategizing which
   holds its annual meeting in Davos, Switzerland. According to
   the Forum itself, each year "1,000 top business leaders, 250
   political leaders, 250 foremost academic experts in every
   domain and some 250 media leaders come together to shape the
   global agenda." Source: WEF, "Annual Meeting in Davos". 

7. Secretary-General Proposes Global Compact on Human Rights,
   Labour, Environment in Address to World Economic Forum in
   Davos. UN Press Release SG/SM/6881. 

8. The Secretary-General Address to Svenska Dagblates Executive
   Club.  Stockholm, 25 May 1999 - Issued by the United Nations
   Department of Public Information, originally as Press Release

9. Secretary-General Proposes Global Compact on Human Rights,
   Labour, Environment in Address to World Economic Forum in
   Davos. UN Press Release SG/SM/6881. 

10. The Secretary-General Address to Svenska Dagblates Executive
    Club. Stockholm, 25 May 1999 - Issued by the United Nations
    Department of Public Information, originally as Press Release

11. Ibid.

12. Business Backs Trade Role for UN. The Guardian 6 July 1999.

13. Ibid.

14. Letter from Jessica Jiji, UN Information Officer, Monday
    September 20th, 1999. 
15. Ibid.

16. Business Backs Trade Role for UN. The Guardian, 6 July 1999.

17. Businesses Promise UN Boss to be Good Citizens.
    Geneva, Reuters, 5 July 1999.

18. Joint Statement on the Global Compact Proposed by the
    Secretary-General of the United Nation,
    Geneva, July 5th, 1999. 

19. Ibid.

20. See for instance, Issue 3 of the Corporate Europe Observer,
    "UNDP and TNCs: Integrating Two Billion People into the
    Global Economy". 

21. The Secretary-General Address to Svenska Dagblates Executive
    Club. Stockholm, 25 May 1999 - Issued by the United Nations
    Department of Public Information, originally as Press Release

22. "New management structures are in place as a result of a
    comprehensive reform effort. New leaders have taken the reins
    in the fields of human rights, health, development and the
    fight against crime and drugs. We even have a new web page
    designed to help business do business with the United
    Nations." Source: "Secretary-General, addressing United
    States Chamber of Commerce, highlights fundamental shift of
    United Nations attitude towards private sector", text of the
    address by Secretary-General Kofi Annan to the United States
    Chamber of Commerce, in Washington, D.C., June 8th 1999, UN
    Press Release SG/SM/7022.

23. "The United Nations would also like to enlist your help in
    breaking another logjam. The United States has now been in
    arrears in its payments to the United Nations for 13 years." 
    Source: Ibid. 

24. A Perilous Partnership: The United Nations Development
    Programme's Flirtation With Corporate Collaboration.
    TRAC, 1999. 

25. Secretary-General, addressing United States Chamber of
    Commerce, highlights fundamental shift of United Nations
    attitude towards private sector. Text of the address by
    Secretary-General Kofi Annan to the United States Chamber of
    Commerce, in Washington, D.C., June 8th 1999, UN Press
    Release SG/SM/7022. 

26. Ibid.

27. Ibid.

28. Local people's lands have been confiscated and their sacred
    mountain ravaged. The World Development Movement writes:
    "Each day 110,000 tonnes of waste from the mine is dumped
    into the local river. Local people had not been consulted or
    given adequate compensation. The protests of the Amungme and
    other tribal peoples have been met with torture and murder by
    the Indonesian army. In May 1995, 11 unarmed villagers were
    massacred." From the WDM website:

29. Subsidiary Utkal Alumina has been associated with human
    rights violations against local people in India, according to
    Norwegian NGO Norwatch. Norsk Hydro is responsible for
    environmental damage related to oil drilling in northern
    Norway and Northwest Russia. The company is also the world's
    foremost manufacturer of PVCs. 

30. Unilever subsidiary Crosfield was fined œ7,500 in 1993 and
    its UML and Vinamul subsidiaries fined œ35,000 and œ19,000 in
    1995; Unilever was fined œ30,000 in 1996 after spilling seven
    tonnes of oil in Cheshire, UK. The company has admitted that
    it has no regulations against the use of child labour, and
    that it cannot guarantee equal opportunities for women. 

31. Royal Dutch/Shell was involved in the crimes against the
    Ogoni people in Nigeria through its funding of the former
    Nigerian military regime. Despite plenty of green rhetoric,
    Shell's investment in solar energy does not exceed the amount
    that the company recently invested in a single coal-fuelled
    power plant in Australia. 

32. USCIB Rejects Efforts to Impose and Monitor Standardised
    Codes on Multinational Corporations. New York, 21 December
    1998, PRNewswire. 

33. Ibid.

34. Ibid.

35. Ibid.

36. FDI Regulation and Corporate Accountability: A Discussion of
    Policy Options. Discussion paper by Friends of the Earth US,
    November 1998. 

37. Ibid.

38. The report points to job losses and job insecurity as major
    causes for the growing social inequality between and within
    countries, fuelled in part by a growing trend towards large
    cross-border mergers and acquisitions -- which accounted for
    58 percent of all foreign direct investment in 1998. 

39. The report also calls for international rules to limit
    corporate concentration: "the mandate of the WTO needs to be
    expanded to give it anti-monopoly functions over the
    activities of multinational corporations, including
    production, working in close collaboration with national
    competition and antitrust agencies." Please note that this
    proposal is different from the EU's suggestion to expand the
    WTO's powers to cover competition policies, which would give
    TNCs a new instrument for removing barriers to market access,
    for instance in countries where distribution rights are
    granted to local companies. The Human Development Report is
    concerned about the fact that TNCs are involved in more than
    60 percent of world trade and dominate the production,
    distribution, and sale of many goods from developing 
    countries, especially in the cereals, mining, and tobacco
    sectors. "About a third of world trade is conducted as
    intra-firm trade within multinational corporations, bypassing
    altogether the free play of genuine market competition," the
    UNDP argues. Source: Call for Rules on Global Integration.
    Financial Times, 12 July 1999. 

40. Code of Conduct will Turn Clock Back.
    Financial Times 21 July 1999. 

41. Joint Statement on the Global Compact Proposed by the
    Secretary-General of the United Nations. 

42. See Corporate Europe Observer Issue 4.

43. Businesses Promise UN Boss to be Good Citizens.
    Geneva, 5 July 1999, Reuters. 

44. U.N. Chief, International Chamber Oppose Linking Labour,
    Environment in WTO System. International Trade Reporter,
    Volume 16 Number 27, Wednesday, 7 July 1999. 

45. World Business Responds to Kofi Annan's Challenge on Shared
    Goals with UN.  ICC press release, Geneva, 5 July 1999. 

46. A History of Attempts to Control the Activities of
    Transnational Corporations: What Lessons Can Be Learned.
    Discussion paper by Friends of the Earth England, Wales and
    Northern Ireland, November 1998. 

47. See for instance, Making Investment Work for People: an
    International Framework for Regulating Corporations. the
    World Development Movement's People Before Profits campaign,
    December 1998. 

48. A Call to Action: A Citizen's Agenda for Reform of the Global
    Economic System. The statement was endorsed by the conference
    "Towards a Progressive Global Economy", organised by Friends
    of the Earth, the Third World Network and the International
    Forum on Globalisation, December 1998, Washington D.C. 

49. Rather than through national governments, the corporations
    would be directly responsible for complying with these
    standards and sanctioned if they failed to do so. The WDM
    suggests the establishment of an international Core Standards
    Commission (CSC), with representatives from trade unions,
    governments, business and courts. The CSC would hear
    complaints against companies accused of breaching
    internationally agreed core standards, complaints that could
    also be submitted by citizens groups. The CSC would then
    decide whether to transfer the complaint to a local court.
    Governments signing the core standards would agree that TNCs
    registered in their countries would have to respect home
    country standards, as well as host country standards, in
    their operations around the world. "Making Investment Work
    for People: An International Framework for Regulating
    Corporations," WDM People Before Profits Campaign,
    December 1998. 



In January 2000, Pluto Press will publish "Europe, Inc. - Regional &
Global Restructuring and the Rise of Corporate Power", a new book written
by Corporate Europe Observatory (CEO). The book is currently being
translated into Spanish and French as well.

George Monbiot (The Guardian) wrote: 

"This new edition, updated and expanded, will prove to be one of the most
useful guides to the murky world of international corporate politics ever
published. It exposes the colonisation of Europe's public institutions by
bodies seeking to run them for strictly private purposes."


Pluto Press
345 Archway Road
London N6 5AA, UK
Tel (+44) (0)181 348 2724  
Fax (+44) (0)181 348 9133
email: <>



A growing public backlash against genetically modified food and 450
anti-biotech farmers from India on the way to Europe to protest was the
nightmare scenario that made the industry lobby group EuropaBio and PR
company Burson-Marsteller decide to hastily organise a speakers tour of 10
Indian pro-biotech farmers in May this year. The Indian pro-biotech
farmers travelled through five countries launching fierce attacks against
environmentalists and progressive farmers movements. The tour, however,
attracted very limited media attention. 

After years of smooth sailing, the biotech industry has recently suffered
one blow after the other, particularly in Europe.  Distrust of genetically
engineered food is growing rapidly among Europeans, and public outrage
expresses itself in the uprooting of test fields and other direct actions.
Industry attempts to counter this adverse tide with expensive PR campaigns
have so far failed. The political climate is slowly starting to reflect
public opinion on biotechnology, with many EU governments toughening their
approach to the approval of genetically modified seeds and food products.

The backlash against genetically manipulated agriculture and food is by no
means limited to Europe. India is the scene of major popular opposition to
genetic engineering, particularly against the attempts of Monsanto and
other biotech giants to enter the country promoting genetically modified
seeds. Indian small farmers perceive this invasion as a threat to their
survival.  Knowing that Monsanto and other Western seed companies strive
to monopolise the seed market and force farmers to buy genetically
modified seeds each year, Indian farmers defend the practice of saving
seeds for the next crop. Not long ago, the European press reported about
the actions of farmers organisations burning Monsanto's genetically
modified cotton plants as part of their 'Cremate Monsanto' campaign.

Against this backdrop, the biotech industry was not amused when it learned
that several hundred radical Indian farmer activists were planning to tour
Europe in May/June 1999. The Indian farmers, many of them from the
anti-biotech farmers' union Karnataka Rajya Ryota Sangha (KRRS), were to
travel around Europe as part of the Inter-Continental Caravan for
Solidarity and Resistance, also called ICC-99 (see below). The ICC-99
brought 450 representatives of Southern people's movements to Brussels,
Cologne, London, Amsterdam and many other cities to protest against
biotech agriculture and the unjust global economic model constructed by
Northern corporations and governments, for instance through the World
Trade Organisation (WTO). 

In an attempt to limit the impact of the ICC-99 tour, the European biotech
industry hastily organised a counter-tour, with ten pro- biotech Indian
farmers and agricultural experts visiting five European countries. The
main speakers during the tour were Sharad Joshi and Manvendra Kachole,
both leading figures in the Indian farmers' union Shetkari Sanghatna and
the umbrella organisation Kisan Coordination Committee (KCC).

This speakers tour was coordinated by EuropaBio, the main lobby group of
the biotech industry in Europe, and co-organised by a number of major
'life science' corporations- including Novartis and Monsanto.[1] To assist
with the promotion of the tour, the infamous PR company,
Burson-Marsteller, was called in.  Burson-Marsteller, the world's largest
PR agency with 60 offices in 32 countries, specialises in what it calls
'perception management'. [2] The agency has in the last year been
responsible for developing the PR strategy of the European biotech
industry, aimed at allaying public fears about biotechnologies and at
manipulating political sympathies in Brussels. [3]

The French part of the tour was hosted by Novartis, a company with major
interests in genetically modified seeds, such as the controversial Bt
cotton and Bt maize. The Swiss part of the tour was organised by Jäggi
Burson-Marsteller, the Swiss subsidiary of the PR giant. [4] It is very
probable that the whole idea for the tour and plan was developed by
Burson-Marsteller themselves.

The main mission of the tour was to counter the image that Indian farmers
oppose biotech agriculture. Dr. Manvendra Kachole, one of spokesmen of the
tour, told the press, "in order to feed our rapidly growing population
(soon 1 billion people), we will have to increase our yields, while
reducing the use of fertilisers and pesticides, and this is only possible
with modern biotechnology."  [5]

"Anti-technology propaganda," was Kachole's response to a recent Christian
Aid report which concluded that biotechnology endangers global food
security and the environment. [6] "India today cannot afford to listen to
pseudo-scientific rhetoric from NGO activists who think that they know
what is good for Indian farmers,"  Kachole continued. The Christian Aid
report points to the fact that there is no lack of food in the world, but
that unequal distribution and poverty is the reason why 800 million people
worldwide are living in hunger. United Nations estimates that the food
produced in the world today could feed 11/2 times the current population
if these fundamental problems were addressed.  [7]

The speakers tour attracted very limited media coverage -- far less than
the anti-biotech Intercontinental Caravan (ICC-99).  French journalist
Catherine Coroller from the daily Liberation comments that, "this pro-GMO
(genetically modified organism) tour in France has had absolutely no
impact among the public or the media." [8] The biotech industry seems
somewhat intimidated by the negative press of the last years. In France,
press conferences were avoided and instead hand-picked journalists were
invited to meet the Indians. As Catherine Coroller explains, "Christian
Morin (communications manager of Novartis, ed.) called me some day and
asked if I wanted to interview some pro-GMO Indian farmers. I said yes of
course but I asked him why he did not organise a press conference, it's
always interesting to hear the questions of the other journalists, but he
said that they preferred every journalist to meet the Indians alone." [9]
Arnaud Apotheker of Greenpeace France commented, "I think it was not a big
success for Novartis, as there was very little in the press about it. It
was only mentioned a few times and one of the articles criticised Novartis
reacting to four hundred angry Indian farmers coming to Europe by bringing
only a few farmers to give the other side of the story." [10] The media
impact in Switzerland was also minimal. As Ursula Eggenberger of Jäggi
Burson-Marsteller wrote about the Swiss part of the tour, "regarding the
media, we have had the same situation as in Germany: no interest in the
subject respectively, organisation at too short notice." [11]

In Bern, Switzerland, the tour turned out counterproductive for its
organisers when it was welcomed by Greenpeace activists, who denounced the
tour as a "PR event... for a technology that has been proven to threaten
biological diversity and... leading farmers into dependency on large
corporations." [12] The NGOs attacked "the tactics of EuropaBio... using
so-called Indian "farmers" to confuse the public and discredit the
upcoming Intercontinental Caravan from India." [13]

The Greenpeace critique of the character of the Indian delegation was not
unfounded. A EuropaBio press release describes Shetkari Sanghatna (SS) as
"the mainstream farmers' movement in India,"  [14] and claims that the
"umbrella organisation," Kisan Coordination Committee (KCC), which
Shetkari Sanghatna is part of, "represents several million farmers' from
14 Indian states."  [15] Kavaljit Singh of the Delhi-based Public Interest
Research Group (PIRG) presents a very different reality. The membership of
Shetkari Sanghatna, he explains, has dropped from around 80,000 in the
1980s to an estimated 5,000 today- very little for a country with almost 1
billion inhabitants. [16]

SS is largely confined to the state of Maharashtra and represents medium
and large-scale farmers, many producing sugar cane and other cash crops-
large landowners rather than subsistence farmers. Kisan Coordination
Committee (KCC), Singh explains, is "a very small group," a "paper tiger"
coalition of small organisations which was established by SS leader Joshi
when his organisation started losing support in Maharashtra. Moreover,
both organisations politically are by no means representative of the
average Indian farmer. Joshi and the organisations he has set up are not
only pro-biotech agriculture but also generally opposed to any controls on
the economy.

Joshi is also the leader of a grouping called Farmers for Freedom, [17]
which is "fighting for freeing the economy of all state interventions."
Mr. Kachole is the international contact person for this ultra free market
organisation, with claims the roots of poverty are "distortions in
economic progress... due to malicious interference with the process of
capital accumulation... If the governments of the Third World countries
would give up their efforts to intensify and perpetuate poverty,"  the
Farmer for Freedom internet website proclaims, "the poverty would
disappear on its own." [18] Joshi is also the founder of the Swatantra
Bharat Party, a political party "devoted to...minimal government," of
which Kachole is the current president. [19] The marginal position of
these groups and their ideology was revealed when Joshi ran for the Indian
parliament in the mid-90s and received only a few hundred votes. 

EuropaBio was clearly charmed by Joshi's very aggressive line against
those opposing the interests of the biotech companies, whether they are
farmers or environmental groups. "The anti- liberalisation groups of NGOs
and militant farmer groups," Joshi writes in a booklet distributed by
EuropaBio, "have demonstrated a sizeable capacity for misinforming and
misleading of the farmers and the general public against the benefits of
liberalisation in agriculture." [20] The radical farmer's movement in
India is labelled as "a semi-luddite quasi-socialist formation that has no
cohesive basis and is limited to certain castes in the state of
Karnataka..."  [21] This is an attack on the Karnataka-based radical
farmers' union, KRRS, which has built-up its reputation through mass
actions against the WTO and TNCs like Kentucky Fried Chicken, Cargill and
Monsanto. About ecologists, Joshi writes that his group "always keeps a
distance from the environment lobbies as it feels that they do not
understand the ground realities of agriculture." [22]

On the promotion of genetically modified seeds by Western biotech
corporations, Joshi states that, "if the farmers can have immediate access
to frontier technologies on payment for a period of twenty years and free
of cost after that, we ought to be grateful to the developed world for
that." [23] Joshi continues to downplay the well- documented risks
connected with biotechnology, claiming that "any progress creates
environment and health hazards. There is no human intervention which does
not have risk. Luddites will always oppose it." [24]

Despite the very limited media impact, Mrs. Eggenberger of Jäggi
Burson-Marsteller evaluated the pro-biotech tour as successful and wrote a
proposal for follow-up. She envisions the "launch of an international
network for the exchange of biotechnology information, including links on
the internet to farmers organisations, GMO producers, seed companies,
etc., as well as a directory of experts in the different fields, which
should be available to the press." [25] She also daydreams of a "global
meeting in Spain or a developing country with farmer organisations,
scientists, consumers, seed companies etc."  Wishful thinking, or more
likely an attempt to keep up the spirit among her corporate clients who
cannot have been very satisfied with the results of the tour. The biotech
industry tried out a new trick in its attempt to counter the rising
anti-biotech tide, but the attempt failed as it didn't wash with the
European media.


A month after the EuropaBio tour, some 450 peasants, fisherpeople,
landless farmers and other representatives of peoples' movements arrived
from India, Bangladesh, Nepal, Brazil, Mexico and other countries.
Visiting ten countries, the participants in the Intercontinental Caravan
(ICC-99) confronted the corporations and economic and political
institutions they hold responsible for the current socially and
ecologically destructive economic world order. [26]

Throughout the tour, non-violent actions took place, such as those against
the genetic research centres working for Bayer in Cologne, Germany and
Monsanto in Leuven, Belgium. The action in Leuven was co-organised by the
European farmers' union Coordination Paysanne Europ‚enne and targeted "the
control by Monsanto of necessary resources for agriculture production such
as seeds, and the introduction of genetically modified seeds and
genetically modified agriculture products into the market of countries,
without their agreement." [27]


1. EuropaBio is made up of some 600 companies, ranging from the 
   largest bioindustry companies in Europe (including the
   European offices of US companies such as Monsanto) to
   national biotech  federations representing small and
   medium-sized enterprises. Member companies include all of the
   major European multinationals interested in biotechnology,
   such as Bayer, the Danone Group, Novartis, Monsanto Europe,
   Nestlé, Novo Nordisk, Rhône-Poulenc, Solvay and Unilever.

2. Some of its more notable past 'successes' have included
   'crisis management' for Union Carbide following the Bhopal
   disaster in India and for Exxon after the Exxon Valdez oil
   spill, and it has assisted in upgrading the images of
   dictatorial governments in Indonesia, Argentina and South

3. See also Corporate Europe Observer, Zero Issue, October 1997. 

4. The list of Jäggi Burson-Marsteller's customers includes
   Novartis, Roche, Gen Suisse and many other biotech companies. 

5. Indian Farmers demand access to modern biotechnology,
   EuropaBio press release, Brussels May 11th, 1999. 

6. Selling Suicide - farming, false promises and genetic
   engineering in developing countries, Christian Aid, May 1999. 

7. Genetic Engineering and World Hunger. The Cornerhouse,
   Briefing # 10, October 1998, page 3. 

8. "I think that the pro-GMOs Indian farmers have met 2 or 3
   French journalists, including me, which is very few. And not
   all of them wrote articles," said Coroller when asked about
   the impact the tour has had in France. Letter to Corporate
   Europe Observatory, June 30th, 1999. 

9. Ibid.

10. Interview with Arnaud Apotheker, September 3rd, 1999. 

11. Indian Group in Switzerland, email report 22nd of May 1999 by
    Ursula Eggenberger, Jäggi Burson-Marsteller. 

12. Verwirr spiel der Gentech-Lobby, Joint press release by
    Greenpeace Switzerland and SWISSAID, May 21st, 1999.

13. Ibid. Greenpeace and SWISSAID made clear that the event was
    "to be interpreted as counter-demonstration against the
    upcoming Intercontinental Caravan of around 400 Indian
    farmers... that will protest against the WTO's agricultural
    policies and the activities of the biotech industry in

14. Indian Farmers demand access to modern biotechnology. 
    EuropaBio press release, Brussels May 11th, 1999. 

15. Ibid. KCC "represents farmers organisations that demand
    freedom of trade"; claimed to have 55 organisations from 14
    states as members; "The intellectual leadership is provided
    by the Shetkari Sandhatana in Maharashtra" 

16. Telephone interview with Kavaljit Singh, September 2nd, 1999. 

17. The full name of the grouping is; Farmers for Freedom, for
    Free Economy, and for Minimum Political Governance. 

18. Economic Doctrine of The New Farmer's Movement, website
    Farmers for Freedom:

19. See Mr. Joshi's website: <>

20. Visionaries of a new 'Bharat', p. 13.

21. Kisan Co-ordination Committee India Brief.

22. Ibid. Page 16.

23. Ibid. 

24. Ibid. Page 17.

25. Indian Group in Switzerland, email report 22nd of May 1999 by
    Ursula Eggenberger, Jäggi Burson-Marsteller. 

26. The ICC-99 visited Austria, Belgium, Germany, France, Italy,
    the Netherlands, Norway, Spain, Switzerland and the UK. For
    more information, see the website: 

27. Coordination Paysanne Européenne, Press Release,
    May 28, 1999. 



"The worst case for industry is to act in a world where it has no
influence." [1]

- REC-ERT Report on EU Enlargement

The European Roundtable of Industrialists (ERT) has stepped up its
activities on EU enlargement towards Central and Eastern Europe (CEE),
manoeuvring itself into a comfortable agenda-shaping position where it can
play an influential role in promoting industry- friendly policy and
development. To aid it in this endeavour, the ERT has joined forces with
the Regional Environment Centre (REC) for Central and Eastern Europe - one
of the largest CEE-based environmental organisations. Together, these
strange bedfellows organised a seminar last Spring on "Industry-Government
Dialogue on EU Accession" [2] where they came with recommended "key-
actions" to be undertaken by governments, industry and NGOs "to build up
an atmosphere of trust between stakeholders, which is still missing in the
CEE region." [3]


The Regional Environment Centre (REC) for Central and Eastern Europe is
largely indistinguishable from some governmental institutions. Setup in
1990 by the European Commission, the United States and Hungary, it has an
annual budget of approximately 5-6 million euro [4] largely from various
European governments, the European Commission, the US, Japan and
organisations such as the United Nations Development Program (UNDP). With
a board of directors made up of representatives from the major donors [5]
and a general assembly composed of governmental bodies (mostly ministries
of environment) and some large conservation NGOs, it is easy to see why
the REC maintains a weak stance on the environment.

With its headquarters in Szentendre, Hungary, and local offices in 15 CEE
countries, [6] the hundred-staffed REC has the mission of "assisting in
solving environmental problems in CEE" and aims to achieve it by
"encouraging cooperation among NGOs, governments and business, supporting
the free exchange of information and promoting public participation in
decision-making." [7]

Despite the lofty aims, REC is under much criticism from environmental
groups in CEE. Many criticise the control and influence it leverages over
almost every official environmental initiative affecting CEE countries,
from climate change activities to post-war reconstruction of the region.
As one Eastern environmentalist puts it, "REC is becoming now like an
octopus, monopolising all the funding and initiatives for CEE."  [8] Local
groups also complain about REC becoming "unaccountably huge" [9] while at
the same time decreasing its funding role for local groups and working
more as a consultancy for government and industry.

Now that funding is drying up, the REC is turning to industry seeking to
attract "important industrial leaders to become involved in the structure
of the Center." [10] Businesses and their lobby groups are attracted to
the REC for its ability to facilitate gaining access to governments and
related agencies about environmental issues such as standards,
implementation schedules and incentives. Through its 'Business and
Environment Program', the REC has been developing partnerships with the
likes of the ERT and the World Business Council for Sustainable
Development (WBCSD), as well as with the OECD, UN agencies and CEE
organisations such as Cleaner Production Centres and Pollution Prevention
Centres. It was through this program, that the ERT-REC seminar came to be.

The seminar brought together more than 80 participants "from business,
government and non-profit organisations, representing the three main
stakeholders in environmental decision-making."  [11] Participants were
mainly from government and industry, including representatives of ERT
companies BP, Lafarge, Pilkington, Pirelli, Shell and Veba, and corporate
lobby groups such as the ERT and the WBCSD. Only a few participants were
from NGOs, and these included such dubious groups as the European Partners
for the Environment (EPE). 

The substance of the meeting - as gauged from the various workshops,
discussions and case studies discussed - reflected some of the ERT's major
goals and strategies. Some of the main recommendations for environmental
policy in CEE included age-old ERT favourites such as industry
self-regulation and "industry- government dialogue"- ERT-speak for
unhampered business access to decision-makers and involvement and shaping
of major policies.

Workshops were organised in six issues of relevance to industry: 
eco-efficiency; EU environmental legislation; pollution prevention;
compliance costs of accession; promoting industry-government dialogue; and
voluntary agreements. The report featured case studies on how
environmental practices are good for business- in other words, how to make
more money out of the environmental crisis. For instance, Philips' Herman
Meinders presented how the company 'successfully' changed from a reactive
to a proactive environmental strategy. "Consumers are only too pleased
with the firm's new environmental image," [12] said Meinders, going on to
boast about the number of environmental awards the company has been given
from various governments and referring to increased cooperation with the
UN. Peter Gill listed BP Oil's current environmental activities which
focus on climate change, reduction of hydrocarbons, improving clean fuels
and "leadership in industry bodies to help ensure legislation is
technically sound and cost- based," [13] - a clear reference to its lobby
efforts to promote self- regulation and market-based `solutions' to
climate change. The same goes for Lafarge's Frederic Fleuret who boasted
of having the company's investment in the Czech Cizkovica Cementarna plant
registered as an Action Implemented Jointly with the UN Climate
Convention, as a result of its voluntary agreement with the Czech and
French governments to cut greenhouse gas emissions. [14] Raymond van
Ermen, EPE's Executive Director and partner of the WBCSD in the European
Eco-Efficiency Initiative (EEEI) - aimed at introducing this business
concept into the EU industrial and economic policies - also contributed to
spread the self-regulation gospel by asking for "a new generation of
voluntary initiatives." [15]

The report also presents some "key-actions" to be adopted by governments,
industry and "supporting organisations" such as NGOs, ERT and REC, with
the core message of promoting industry-business dialogue. All in all, the
seminar can be seen as another feather in the hat of the ERT in preparing
the ground for its envisioned enlargement of the EU. The REC should be
aware of the consequences of promoting a highly unsustainable development
model for Central and Eastern Europe.


The joint report by the European Roundtable of Industrialists (ERT) and
the Regional Environmental Centre (REC) hails the Business Enlargement
Councils (BECs) [16] as a positive example of dialogue between governments
and industry in Central and Eastern Europe. [17] As described in Issue 3
of the Corporate Europe Observer, Business Enlargement Councils (BECs)
involving government and ERT representatives are being set up by ERT
companies, with the aim of steering the EU enlargement and the related
economic adjustment process in line with corporate interests. 

The ERT launched the first BEC in Bulgaria, in November 1998, with an
event attended by the Bulgarian President. Chaired by Baron Daniel Janssen
of Solvay, the Bulgarian Business Enlargement Council brings together
senior government officials and representatives of corporations like BAT,
Danône, Ericsson, Nestlé, Norsk Hydro, Philips, Shell, Siemens, Solvay,
Suez Lyonnaise des Eaux, Unilever and Union Miniere. The Bulgarian BEC
focuses on various hot issues for Western TNCs investing in the country,
such as key legislation, privatisation, ' level playing field' for
investors, infrastructure priorities and closer government- business
consultation. The Hungarian Business Enlargement Council was launched in
May 1999 together with the ERT report on enlargement, receiving a "very
extensive and enthusiastic media coverage and an excellent feedback from
the Hungarian government". [18] Chaired by ABB's Peter A. Hegedus, and
with most corporate members coming from the ERT, [19] the group zooms in
on issues which might have an impact on business competiteveness. 

The BEC sees itself as a link between the Hungarian government, business
and EU policy makers. It has also prepared a special Hungarian version of
the ERT Enlargement report with 10 case studies, which was "very well
received by the Hungarian government."[20] The most recent BEC was
established in Romania.  The Romanian BEC is chaired by ERT veteran Jerome
Monod, CEO of Suez Lyonnaise des Eaux and co-chair of the Trans-Atlantic
Business Dialogue (TABD). ABB, BAT, Delta Dairy, Krupp, Lafarge, Nestlé,
Philips, Rhône Poulenc, Shell and Unilever are the corporate members of
this BEC which benefit from "an excellent network with the Romanian
government officials."[21] Not surprisingly, the ERT seems satisfied with
the results of the initiative, of which "the EU Commission is very
supportive," and the Roundtable plans to set up BECs in other Central and
Eastern European countries in the near future.[22]


1. REC-ERT, "Industry-Government Dialogue on EU Accession. 
   Business opportunities for best environmental practices",
   Report on the Seminar, Szentendre, Hungary, 17-19 March 1999,

2. This joint seminar was the first initiative of the "business-
   government dialogue" springing from the Ministerial Conference
   "Environment for Europe", held in Århus, Denmark, in June
   1998. At the first of the "Environment for Europe"
   conferences, which took place in Czechoslovakia in April 1991,
   ministers of environment from Europe, US and Canada, decided
   to prepare an Environmental Action Program (EAP) for Central
   and Eastern Europe. Following conferences took place in
   Lucerne, Switzerland, in 1993 and in Sofia, Bulgaria, in 1995.
   To facilitate the implementation of the EAP, it was decided in
   Lucerne to establish an EAP Task Force, co-chaired by the
   European Commission and a CEE country on a rotating basis.
   Since Århus the OECD shares the Secretariat with the REC. The
   ERT laid the ground with a paper presented to the Århus
   Ministerial Conference stressing the benefits of the good
   environmental practices, where they committed among other
   things to "participate openly in discussions with local
   environmental regulators on environmental improvements and
   cost-benefit analysis". Source: ERT, "The East-West Win-Win
   Business Experience", Brussels, February 1999, p.13. 

3. REC-ERT "Industry-Government Dialogue on EU Accession. 
   Business opportunities for best environmental practices",
   Report on the Seminar, Szentendre, Hungary, 17-19 March 1999,

4. REC's web page publishes detailed contributions only for 1996
   (5.525.258 euros). It also states total contributions for the
   period 1990-96, amounting to 21.426.915 euros). REC's web
   site: <>

5. REC's Chairman is since 1993 Dr. Bedrich Moldan, first Czech
   Minister of Environment, later Chairman of the Union of Nature
   Conservation and vice-president of the UN Commission on
   Sustainable Development. Jernej Stritih is REC's Executive
   Director, he is also member of the EBRD Environmental Advisory
   Committee, former State of Secretary of Ministry of
   Environment in Slovenia and he has been working for various
   Slovenian conservationist organisations. 

6. Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech
   Republic, Estonia, Hungary, Latvia, Lithuania, FYR Macedonia,
   Poland, Romania, Slovakia, Slovenia and Yugoslavia. 

7. REC, "What is REC", REC web site.

8. Confidential source. 

9. Ibid.

10. REC, "Strategy 1997-2000", REC web site.

11. REC-ERT "Industry-Government Dialogue on EU Accession.
    Business opportunities for best environmental practices", 
    Report on the Seminar, Szentendre, Hungary, 17-19 March 1999,

12. Ibid, p.5.

13. Ibid, p. 7.

14. Ibid, p. 11.

15. Ibid, p.12.

16. See Corporate Europe Observer Issue # 3.

17. REC-ERT "Industry-Government Dialogue on EU Accession. 
    Business opportunities for best environmental practices",
    Report on the Seminar, Szentendre, Hungary, 17-19 March 1999. 

18. Communication by Joanna Rau, ERT, September 1999.

19. Members are ABB, BAT, Ericsson, Fiat, Nestlé, Suez Lyonnaise
    des Eaux, Philips, Unilever, Pirelli, Power & Gas Hungary and

20. Ibid.

21. Ibid.

22. Ibid.


        European Think-Tanks Series - Part Three

                  THRIVING IN BRUSSELS:

The third article of this series features the Centre for European Policy
Studies (CEPS)- a classic example of think-tanks funded by large
corporations, which play an influential agenda-setting role by promoting
various aspects of European unification to policy- makers, the media and
the public. As with other EU-focused corporate think-tanks, its influence
and authority is to a large degree evident from the ample coverage it
receives in the European media. 

Founded in 1982, the Centre for European Policy Studies (CEPS)  has a
network of chapters in a number of European countries, 40 employees
working from its Brussels headquarters, and an annual turnover of
approximately 4 million euro.[1] The bulk of its funding comes from its
membership fees- particularly from corporate members. Annual fees start at
24,000 euro for ordinary membership, and are as high as 60,000 euro for
exclusive "Inner Circle" members.[2] Such disbursements do not come
without reward, and CEPS claims to give its members "an opportunity to
prepare their own positions and influence policy choices."[3] Although
CEPS prides itself on having an independent position, it is clearly biased
towards industry interests. Board members, a majority of whom are
corporate representatives, include ERT (European Roundtable of
Industrialists) members Etienne Davignon [4] and Repsol's Alfonso Cortina,
as well as Erik Belfrage, CEO of Investor AB.

Membership in CEPS is also available to non-corporate members, such as law
firms, consultancies, trade unions, embassies or academics, but it grants
them meagre services (reduction in participation fees at CEPS conferences,
publications and access to its library) in comparison with those offered
to corporations.  Corporate members enjoy a special programme that
"concentrates on the interface between EU policies and business
strategies," [5] under which CEPS organises regular activities around six
areas of relevance to industry: financial markets; energy and environment; 
network industries and infrastructures; agriculture; regulation and
competitiveness; and trade and investment. 

A sample of this are the activities around climate change planned by CEPS
for 1999 and 2000. Launched with a meeting on July 16th with key speakers
from the Climate Change Unit of the European Commission, activities are
planned around a number of workshops and meetings on issues such as the
role of business initiatives;  the facilitation of the market-based
"solutions" Clean Development Mechanism (CDM) and Joint Implementation
(JI); the role of nuclear energy in climate change; the negotiating
position of the EU for COP-6 and EU-business consultations. "To ensure
coherence, the meetings will be chaired by Barbara Koryks, Head of
Environment, BP Amoco." [6] This highly business-oriented perception of
climate policies will be reflected in various reports containing policy
recommendations to EU decision-makers.

Connections are key, as Director Peter Ludlow explains: "CEPS is seen as
an insiders' institute and this is crucial. We set out to establish that
we are here to talk at the highest level." [7] This allows CEPS to offer
its corporate members "direct access to EU decision-makers and
opportunities to participate in the policy- making process." [8] On top of
this, corporate clients can benefit from the working parties established
by CEPS to examine particular policy issues, which are claimed to be
"unique", as "they bring together business leaders, the EU Commission and
the Parliament, governments, international organisations and academic
experts." [9] The group proudly boasts that its "policy papers and working
parties on EMU [European Monetary Union], CAP [Common Agricultural Policy]
reform, fiscal policy, institutional reform and enlargement have
contributed ideas that have been adopted by the policy makers in the
Commission, the Council and the European Parliament and in the governments
of the member states." [10]

Other services include the "European Business Strategy Group" to help
"thinking creatively" on major issues; hard-hitting reports on various
timely EU topics; seminars on issues such as "The emerging EU Tax Policy"
or "Public Awareness of Biotechnology in the EU"; roundtables and luncheon
meetings and access to CEPS research staff. The exclusive "Inner Circle"
membership fees entitle one to, among other services, "tailor-made board
room briefings twice a year on topics of their choice." [11]

Another source of money and influence are the numerous contracts awarded
to CEPS by public bodies such as the European Commission and the
Parliament. Between 1996 and 1999, CEPS carried out 21 projects for the
controversial Commission aid- programme for Central and Eastern European
(CEE) countries - Phare and Tacis.  Indeed, the ongoing process of
enlargement of the EU towards the East, is one area where CEPS has shown
itself to be particularly active. Not only has enlargement, together with
the EMU, been the issue chosen in 1999 by the International Advisory
Council (IAC)  of CEPS, [12] but a "Business Policy Forum" composed of
representatives of the Commission, EU and candidate governments,
development banks and more than 25 companies, has been established to make
policy recommendations in various sectors such as transport
infrastructure, energy reform, trade and investment and agricultural

CEPS has also proven itself to be very opportunistic through its promotion
of business opportunities in the reconstruction of the Balkans after the
war. The group can be satisfied that its paper containing ideas for the
restructuring of the region, focused on customs unions and steps for
integrating in the EU, has been adopted and actively promoted by the
Hungarian billionaire and financial speculator George Soros. [13]
Recently, CEPS has been granted US$ 100,000 by the German Marshall Fund,
to strengthen the transatlantic dimension of among other things, its
programme on "Post War Reconstruction in South East Europe."

It can be said that CEPS is successfully working for the implementation of
its corporate members' wish lists, while cultivating an image of
objectivity and independence. More public awareness is needed about the
biased roles played by CEPS and other corporate think-tanks in the
European Union. 


1. Rory Watson, "Crossing the Business and Political Divide", 
   European Voice, 9 July 1998.
2. CEPS, "CEPS Corporate and Inner Circle Members", CEPS web
   site: <>

3. CEPS, "What is CEPS?", CEPS web site. 

4. Etienne Davignon, Chairman of Soci‚t‚ G‚n‚rale de Belgique and
   President of AMUE (Association for the Monetary Union of
   Europe), is also a former Industry commissioner. 

5. CEPS, "CEPS Corporate and Inner Circle Members", CEPS web

6. CEPS, "Climate Change Activities 1999-2000", CEPS web site. 

7. Quote taken from: Rory Watson, "Crossing the Business and
   Political Divide", European Voice, 9 July 1998. 

8. CEPS, "CEPS Corporate and Inner Circle Members", CEPS web

9. Ibid. 

10. CEPS, "What is CEPS?", CEPS web site.

11. CEPS, "CEPS Corporate and Inner Circle Members", CEPS 
    web site.

12. The International Advisory Council is the "core of CEPS'
    network of eminent individuals drawn from government,
    business, the diplomatic community, academics and the media".
    It meets once a year in Brussels and "is an invaluable source
    of information and advice to decision-makers and authorities
    in the EU institutions". It concentrates on strategic ideas
    for the EU and produces and annual publication "integral to
    the policy-formation process of the EU". 

13. George Soros, "Breaking down the borders", Financial Times
    Limited, 6 July 1999.

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