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Environmental Responsibilities of Multinational Corporations

Anonyme, Viernes, Enero 17, 2003 - 14:52

Dan Marques

The 21st century has had a significant impact on the way national and local governments, high-finance institutions, policymakers and especially multinationals should face economic development. The gravity of social and environmental problems has gotten to the point that the amoral leading elite of the planet cannot ignore them anymore. Problems such as food security, biodiversity losses, agricultural land degradation, water scarcity, and cultural losses have just started to be treated a little more carefully by the media. In other words, neo-liberal globalization is bringing many controversies regarding the traditional view of economic development. The big issue is how to manage well forces such as technological innovation and transfer, the spread of knowledge, the world’s growing population vis-à-vis the aging population, and the increasing pressure for political and human rights, accordingly to the challenges cited above.

Among these new trends, there is one that has been particularly affected over the last decades, the environment. Driven by their profits and motivated by the lack of laws and regulations by governments, transnational corporations have been playing around with the environment in the way it serves them best.

This paper will show how multinational corporations are acting towards mother nature by making a link with management practices and the consequences for the environment which directly and indirectly impacts on our lives.

Brief Review of Multinational Corporations’ Roles in the World Today:
It is not new that today the so called transnational giants, or multinational corporations, are expanding fairly rapidly and increasing their lobbying power at the same rate. Tariff (TB) and non-tariff barriers (NTB) are disappearing with preferential trade agreements (PTAs) becoming stronger and more powerful; governments, especially in third world countries, are concentrating all their efforts to attract these companies by deregulating their industries; technology and its transfer is evolving very fast with a significant impact on flow of capital; 150,000 huge financial transactions are made every day all over the planet , making them very hard to track. All these factors contribute significantly to the empowerment of such companies. These huge corporations, which target the sky as their profit limit, are strongly favored by governments and international financial institutions such as the International Monetary Fund (IMF), the World Bank (WB), and the World Trade Organization (WTO). These institutions, led by the elite of world society, have worked with the multinational corporations (MNCs) always with the same goal: to make money. This goal has so far been attained, as shown by comparing multinational corporations’ annual profits to national GNPs; fifty-one of the world's top 100 economies are corporations ; the top 10 companies today have their annual sales much bigger than the GDP of countries such as New Zealand, Denmark, Poland, Venezuela, Indonesia, and Portugal, just to name a few.

Guided by this mentality of a neo-liberal capitalist money-driven society, protected by the claim of supporting economic development and some seeing themselves as targets of the structural adjustment policy (SAP) of the IMF, States and these high finance organizations are giving these companies all they need to accomplish their goal. Therefore, these transnational firms play a crucial role in our system today with power to make decisions almost above the law.

Effects of MNCs Practices on the Environment:
Society and the media have always emphasized potential environmental problems as being, for example, the special care that we are supposed to give to our non-renewable resources, such as oil; or the scarcity of gold and other minerals that we will face in a couple of hundred years. These problems have of course to be considered, but in fact there are much more important aspects of which the impact will be felt much sooner. That is to say, the scarcity of drinking water, global warming, deforestation, scarcity of space for toxic waste, such as nuclear and industrialized, just to cite some. Such problems are already being felt in several countries, and their cause is mostly due to multinational firms.

Examples of What MNCs Do To Harm the Environment:
1- Wood Industry: there are many construction companies, for which wood is the main raw material, that have been exploiting rain forests all over the world without replanting for years (e.g., The cutting of trees today threatens 70% of the virgin forest ).
2- Hydroelectric dams, which of course produce energy for the “well being



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