Posted on 31-8-2002

Rules For Companies So We Can Live
by Alan Marston (Photo shows tailings dam failure at the Aurul S.A. plant
in Baia Mare, Romania released 100,000 cubic meters of cyanide contaminated
liquid)

Friends of the Earth International have put out a set of rules for
corporations to live within so that the environment and people can live
with them, so have Greenpeace (see PTV this coming week) and now at the
WSSD in Johannesburg so have the Regional Environmental Center for Central
and Eastern Europe (REC).

The need to regulate commerce at the international level has almost (but
not quite) penetrated the dense fog of corporate sponsered misinformation
and right-wing philosophy centered around voluntary codes for environmental
and social behaviour. The transnational corporations have been trying, and
succeeding, for 25 years to avoid regulation, they sense regulation time is
nigh and the WSSD is the scene for a propaganda battle of global
proportions around national and international compulsory, regulatory laws
in respect of environmental and social standards and accountability to them.

The REC is the latest, and probably not the last, organisation to push for
environmental and social regulations over commerce. Stephen Stec, a senior
legal specialist with the REC, presented a set of environmental governance
principles for foreign direct investors in hazardous activities. Operation
in accordance with the precautionary principle, and assumption of
cradle-to-grave responsibility for all hazardous substances are among REC's
recommended standards for foreign companies operating in countries in
transition. Stec was a keynote speaker Wednesday during the Governance and
Self Determination session at the Global Forum, an NGO series of events
taking place at the Nasrec Exhibit Hall in Johannesburg in parallel to the
official World Summit on Sustainable Development. The session was organized
by the REC and the International Forum for Globalization.

According to Stec, accidents such as the spills at the Australian-Romanian
Aurul Baia Mare company can in future be avoided if the principles from
this recently drafted paper will be respected. Some 100 metric tons of
wastewater laced with cyanide, a deadly chemical substance used in the gold
industry, were released in January 2000 from the Aurul company. The
contaminated water polluted about 2000 kilometers of rivers in six
countries in the Tisa and the Danube River basins before reaching the Black
Sea. No human casualty was recorded, but the natural environment sustained
severe damage, and affected nations experienced large economic losses due
to the disruption of fishing activities, tourism, and costs of cleanup. The
risk of accidents in the area remains high according to the International
Commission for the Protection of the Danube Region, as another 42 similar
industrial facilities using cyanide exist in the Tisa River Basin alone.

The environmental governance principles developed by REC "are intended to
apply to foreign direct investors who invest in potentially hazardous
industrial activities," said Stec. They "have been designed to complement
other voluntary codes of conduct, compacts, and other voluntary
instruments," he said. The principles cover corporate good citizenship,
responsibilities to host countries and relations with them, company
environmental policy, public participation and stakeholder relations, and
environmentally responsible corporate values, as well as accident
prevention and management.

According to these principles, the foreign direct investors "should
assiduously apply accepted international standards for corporate good
citizenship to their investment projects in countries in transition."

Good corporate citizenship requires an approach to doing business that
integrates recognized ethical standards in the areas of environment, human
rights, labor, and community relations."

Foreign direct investors must also "ensure that their operations meet
international standards," in addition to taking "all legal and regulatory
steps required under the laws" of the recipient country.

Foreign direct investors should "assume cradle-to-grave responsibility for
all hazardous substances produced."

They should "ensure full life cycle operation of facilities, including
closure and remediation to original state," and "adopt a precautionary
approach to environmental challenges and environment related decisions."

Companies should "build partnerships with the public, take advantage of
local knowledge, and ensure that the public has a voice in environmental
decision-making."

While foreign direct investors should "take all reasonable and prudent
steps necessary to prevent industrial accidents," Stec told the session
that they should also "be able to demonstrate sufficient financial
assurance for the full and fair costs of compensation and remediation in
the event of an accident or other damage, applying the worst case scenario
approach."