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Holding Corporations Accountable

Holding Corporations Accountable

Judith Richter


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At a time when the gigantic transnationals have a huge impact on human health, the environment, working conditions and the economic prospects of nations, this book explores whether it is sufficient to continue to rely on industry self-regulation alone. Before widening her focus to the general issues, the author examines the now famous case of the infant food industry. Almost two decades after the introduction of the WHO/Unicef Code seeking to regulate the marketing of formula milk substitutes, an estimated one and a half million babies die unnecessarily every year as a result of formula feeding. How effective, therefore, has the Code been in changing industry behaviour? The author argues that a key question today is how to foster a political climate favourable to practical institutional arrangements for the better regulation of TNCs. Recognizing the tension between global governance on the one hand and the globalized free market on the other, she urges that close attention be given to corporate conduct and TNC compliance with what regulatory codes exist. A range of relevant questions is explored, including the roles of citizen action, national governments and international agencies. A host of public concerns - for example, job losses when industries migrate or the introduction of GM crops without public consultation - point to corporate regulation as a looming political issue. This book contributes to the debate about how powerful corporations can pay regard not only to the bottom line, but also take more seriously their social responsibilities.
Judith Richter was born in Germany. She is a sociologist specialising in international development and has also qualified as a pharmacist. She has lived and worked in a number of countries. Since 1991 she has worked as a freelance researcher, writer and lecturer, and more recently as a consultant for UN agencies such as UNICEF and WHO. Much of her work over the last fifteen years has centred on the social, political and ethical aspects of communication and democratic decisionmaking, infant feeding, pharmaceutical policies, and contraceptive research. She is also actively involved in various social movements, including Health Action International (HAI) and the Women's Global Network for Reproductive Rights (WGNRR). Her previous book was Vaccination Against Pregnancy: Miracle or Menace? (Zed 1996).
'A provocative and detailed account of corporate involvement in infant feeding. This book is comprehensive, cogently argued and clearly written. It should become a key reference for anyone interested in this topic or, in this era of globalization, the issue of corporate responsibility and accountability more generally.' Sofia Gruskin, FXB Centre 'The battle for meaningful corporate accountability is one the citizens of the world cannot afford to lose. Richter's book will be a great help to the world's civil society organizations as they develop effective strategies to control the dominant form of artificial life on the planet, the transnational corporation, for the sake of the lives, health and welfare of real people.' George J. Annas, Global Lawyers and Physicians 'Judith Richer raises important questions about curbing corporate power in an expert manner and in highly accessible language.' Cees J. Hamelink, University of Amsterdam 'Richter presents a strong case for the need for corporate accountability, in the infant feeding industry.' Journal of Human Lactation 'This readable and well-documeted study is recommended for international business and business ethics collections.' R.H. Dekmejian, Choice

Table of Contents

Section Title Page Action Price
Cover Cover
About this Book i
About the Author ii
Title iii
Copyright iv
Contents v
Boxes and Table viii
Acknowledgements ix
Abbreviations and Acronyms xi
Introduction: Globalization and Infant Feeding 1
1 Regulation of Transnational Corporations: A Historical Perspective 6
National regulation of corporations 6
International regulation of transnational corporations 8
De-regulation and re-regulation worldwide 15
2 Democratic Global Governance: Regulation of the Corporate Sector 28
Governance and the 'rule of law' 28
Key questions on regulation 31
Context and relationships of power in international regulation 32
3 'Commerciogenic Malnutrition': The 'Bottle Baby Disease' 44
The birth of a market 45
Marketing methods 47
'Dialogues' with no effects 49
The industry under public scrutiny 51
Shareholder resolutions, a consumer boycott and a US Senate hearing 53
WHO and UNICEF become involved 55
Citizen networks and corporate counter-actions 57
4 Formulation and Adoption of the International Code of Marketing of Breast-milk Substitutes 60
A breakthrough in the debate 60
Conflicts in developing the Code 61
The USA's volte-face 66
Today's question about yesterday's trade-offs 67
5 Implementing the Code 70
Obstacle 1: legacies of the process of Code formulation and adoption 71
Obstacle 2: industry interpretations of the Code 77
Obstacle 3: changes in political climate 79
Moving Code implementation forward 81
A multi-pronged approach 82
Human rights: the avenue of the future? 87
Overcoming obstacles to Code implementation I 90
6 Corporate Conduct: Socially Responsible Marketing? 98
Statements and questions 99
Summary of the Code's provisions 100
Corporate practice 103
HIV and the regulation of the marketing of breast-milk substitutes 107
Words versus deeds 117
7 Corporate Conduct: Acceptance of Outside Regulation? 123
Interference with national Code implementation 124
Issues for effective national Code implementation 136
8 Corporate Conduct: Managing International Issues - Engineering of Consent 144
Corporate PR: a tool of power 146
Infant feeding and corporate PR 147
Issues management / engineering of consent 149
'Dialogues' or intelligence-gathering, image transfer, diversion and division? 159
Ruling by consent? A new phase of industry lobbying 162
Round­table discussions and Code implementation 165
Industry's reaction to the WHO initiative 166
Corporate engineering of Consent and Democratic Global Governance 169
Regaining transparency and space for democratic debate 170
9 Civil Society and the Code 178
What are civil society organizations? 179
IBFAN: a transnational citizen action network 181
The impact of IBFAN 187
Codes as means of raising public awareness and debates 191
Corporate watchdog groups and the state 193
Civil society organizations and the regulation of corporations 197
10 International Regulation of TNCs: Issues Raised by the Infant Food Debate 202
The regulation of marketing of breast-milk substitutes: selected conclusions 203
International regulation of TN Cs: issues for further consideration 206
Regulation and global democratic decision-making 209
Useful Websites 211
Bibliography 212
Index 233