Public documents resulting from the presidential summits are usually boring and predictable, but the Santiago Declaration, issued on Sunday, January 27 following the EU-Latin American summit stunned diplomatic circles with a new consensus on the state’s role and responsibilities of transnational corporations.
Summit declarations are not passed by a majority. As consensus documents they are carefully negotiated, have to be accepted by all and as a result they tend to reflect the minimum level of agreement and they frequently result in a list of good intentions, often repeating in the same words what has already been agreed in previous meetings. At a summit between a region of the so-called “developed world” (in this case the EU) and a group of countries formerly called “underdeveloped” and now considered “developing” or “emerging”, it is usual for the latter to remember the former of their old and still unfulfilled promise to provide 0.7% of their income as development aid. Donors in turn will pontificate about respecting human rights and fighting corruption (in a veiled inference that more help is not provided because the potential beneficiaries are corrupt, human rights abusers, or both).
Following the “Washington consensus”, the usual and predictable demand for more investment by the poor countries would be responded by the rich recalling that investment results from private decisions, but investors would be attracted if they are guaranteed favorable rules, tax exemptions and protections against future expropriation. In this thought system, human rights and corporate rights are one and the same. Mitt Romney, the defeated republican candidate in the U.S. elections of last November, summed this logic up: “Corporations are people, my friend.”
But the Santiago Declaration made public by right-leaning Chilean president Sebastián Piñeira surprised all observers by including a paragraph 10, which reverses the traditional terms. After the usual praises of the benefits of free trade, the leaders said that “we commit to maintain a supportive business environment for investors, recognizing nonetheless the right of countries to regulate in order to meet their national policy objectives in accordance with their international commitments and obligations”. They add that “it is also vital that investors comply with national and international law, in particular, inter alia, on taxes, transparency, protection of the environment, social security and labour.”
We do not find here Old Europe lecturing former colonies on moral and civic education, but rather New World democracies taking seriously their “commitments and obligations” to respect and promote human rights (which include economic, social and cultural rights as well as civil and political liberties). So seriously, in fact, that to realize those rights the greed of investors needs to be limited and regulated.
In Uruguay the defense of the human right to health is being challenged by the tobacco company Philip Morris, which admits no restrictions on the promotion of carcinogens. Ecuador tries to get compensation from Chevron for its destruction of the rainforest and indigenous communities. Bolivia began the year nationalizing the electricity company and Argentina has recovered its oil from Spain and its training tall ship from an attempted seizure by “vulture funds.”
But consensus is not reached on only one side, as shown in the case of the Falklands, where the unanimous Latin American position in favour of Argentinian sovereignty failed to gain a single mention in the document, as Europe sympathized with the British position. The real surprise of the Santiago Consensus is the European governments accepting this slap on the wrist to the business sector.
Europe cannot be complacent with the vulture funds, because if they win over Argentina today they can torpedo tomorrow any solution to the debt problems of Greece, Cyprus or any other country. Instead of closing ranks around the defense of nationalized Spanish corporations, the euro countries want understanding and support for the decision they made last week to introduce a financial transaction tax. And even the conservative British Prime Minister David Cameron, who did not want to hear about the euro or Tobin Tax said these days in Davos that companies need to “wake up and smell the coffee, because the public who buy from them have had enough.” The British public is outraged since a parliamentary inquiry showed that Amazon, Starbucks and Google do not pay taxes, at a time when the country is suffering from severe austerity measures.
The difference between a corporation and a person, according to the Santiago consensus, is that humans have rights and they are inalienable. Companies have privileges and they are revocable.
Roberto Bissio is the Executive Director of Social Watch.