The impact of corporations on our lives

Large multinational corporations continue to wield their power on the lives of local communities and the environment around the world.

The true progenitors of modern corporations emerged as the “chartered company” during the time of the colonial expansion in the 17th century. Of the 100 largest economies in the world today, 41 are corporations, not countries. Their enormous wealth carries immense impact on our lives.

These incredibly wealthy and powerful multinationals, through their activities, can harm our health, determine our working conditions, decide to neglect the hazards we face as workers or consumers and devastate our natural environments.

It is interesting to see what some of these giant multinationals are doing around the world. A few days ago, The Democracy Center released their scathing report by Thomas McDonagh on corporate activities globally. The report describes many of the incidents of corporations’ nefarious activities and their ridiculous claims.

According to this report, in 2009, when the government of El Salvador refused to issue an environmental permit to a Canadian mining corporation, people of Las Cabanas rejoiced. The community activists there for years were fighting a pitched battle against the company, to mine for gold in their region. Their plans included dumping of toxic arsenic in the rivers.

The campaign was fraught with risks. In the course of their courageous campaign, four Salvadoran anti-mining activists had been murdered. For the poor people of El Salvador, this victory will be costly.

In a legal assault filed in a World Bank trade court, the company is now demanding $315 million in compensation payments from the Salvadoran government, an amount equal to one third of the country’s annual education budget.

Huge victory

In 2010, public health campaigners in Uruguay won a huge victory when the national government passed new health laws to discourage tobacco consumption. Even though these new laws - including aggressive new warnings on cigarette packages – had directly followed the guidelines of the World Health Organization, a tobacco giant retaliated with a $2 billion legal action against the government.

The trade under globalisation today is controlled by an expanding web of over 3,000 bilateral and multilateral trade and investment agreements. The cases are argued behind closed doors by a handful of lawyers, most of them from North America and Europe.

Most respondents are governments from the global South. Under these unfair agreements, the corporations are granted rights to sue governments for policy initiatives that they claim interfere with their profits. The resulting legal cases, though they pose far-reaching local consequences, are settled far away and behind closed doors by a small group of unaccountable private lawyers in international dispute arbitration tribunals. With no democratic principles or judicial independence, these tribunals operate under little or no public scrutiny. The community directly affected is denied any voice.

As globalisation is increasingly facing staunch opposition from Third World countries, Western powers have created ICSID and have proposed the Transpacific Partnership (TPP), bilateral trade agreements between two countries that include provisions that allow corporations to sue governments if they feel their rights are breached by the government’s action even though the individual government’s action is based on the local community’s welfare and for the protection of the local environment.

Concerned solely for their shareholders’ profits and growth, these multinationals in many instances are hurting the local communities around the world, devastating the earth’s environment while the planet is hurtling towards a series of ominous environmental tipping points that will surely culminate into the greatest disaster humanity has ever faced.

-Third World Network Features