Category Archives: TNCs

TTIP – Putting Profit before People

The government is about to sign up to a treaty which will would allow companies like Sports Direct (just a random example) to sue a future government for increasing the minimum wage, if introducing such a policy damaged corporate profits.

The treaty’s called the Transatlantic Trade and Investment Partnership – And it’s seems to be primarily about shafting the 300 or so million citizens of European countries so that Transnational Corporations can make even more profit.

CORP

 

Having clicked around a few web sites which try to summarise what the TTIP is, I think I’ve done a better job below – down to just FIVE KEY POINTS… (Handily for anyone studying Global Development, this also reads like a ‘what is neoliberalism’ check llist).

1. The Transatlantic Trade and Investment Partnership (TTIP) is a free trade treaty currently being negotiated – in secret – between the European Union and the USA.

2.  The main goal of TTIP is to remove regulatory ‘barriers’ which restrict the potential profits to be made by transnational corporations on both sides of the  Atlantic.

3. These ‘barriers’ are basically social and environmental protections currently enforced through the laws of various nation states within Europe and include the following:

  • labour rights (e.g. Minimum wages, holiday pay, public sector pensions)
  • food safety rules (including restrictions on GMOs),
  • regulations on the use of toxic chemicals
  • digital privacy laws
  • new banking safeguards introduced to prevent a repeat of the 2008 financial crisis.

4.  TTIP also seeks to create new markets by opening up public services  to competition from transnational corporations, threatening to introduce a further wave of privatizations in key sectors, health and education.

5. Most worrying of all, TTIP seeks to grant foreign investors a new right to sue sovereign governments in front of ad hoc arbitration tribunals for loss of profits resulting from public policy decisions.

So here we go again – a further wave of neoliberalisation, given that it looks like many Nation States in Europe are about to agree to a set of international rules which put Corporate profits before the well-being of their citizens.

Of course you’ve probably never heard of this treaty, it’s firmly off the news agenda, even though, right now, your democratic rights are being undermined and this treaty will almost certainly mean that you are worse off in the future in terms of your labour rights, environmental protection, and quality of public services.

If you want to sign a petition to get Vince Cable to fix or scrap the deal then click here

This post is mainly summarised from this nice document – TTIP – A Charter for Deregulation, an Attack on Jobs and an End to Democracy

Gender representation in the FTSE

Latest Figures show that there are now 163 women in executive positions in the FTSE 100 and 189 in the FTSE 250.  While this does represent an increase on 2010 figures (an additional 25 women being added to the FTSE 100 director posititions) representation remains poor – Only 15% of directorships in the FTSE 100 are female, and this figure drops to 4.6% of executive directorships of the FTSE 250.  

 

What’s of further interest is that you can pretty much forget any hope that the (very gradual) feminisation of business will herald in a new age of ethical business practices – There are some real ‘corporate clangers’ in the top 17 list of FTSE companies with female representation.

Top 17 FTSE companies with female representation on the board (2012)

 

Imperal Tobacco and BAE systems really stand out – It seems there are plenty of women out there just as willing as men to run companies that make their money out of encouraging weak minded, poor, low-status, and/ or ignorant people to shove a cancer sticks down their throats and plenty of even ‘harder women’ happy with making their bonuses out of selling even more storm shadow missiles to governments so they can kill relatively powerless people who might dare do things such as try to put their interests before those of Western Corporations.

Source of the TablesThe Female FTSE Board Report 2012 – Cranfield University School of Management

Related Links

Useful comments on methology here!

Broader knowledge on women in the labour force (UK) here (2010)

Putting DRC Poverty in context (2)

My first ever infographic!

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Not perfect I know, and maybe a bit tedious in terms of the ‘same old theme’ again, but I’m pretty pleased for a first effort…

Disclaimer – The relative sizes might be a bit skewed, I square rooted the relative numbers and then ‘tweaked’ so they looked about right. Anyways, it’s just a first effort, defo more to come. Hopefully one day I can figure out a way to get paid to knock (much more professional versions) of these up.

I made it in inkscape  – Pretty easy to get the basics, even for a total novice like me!

Putting DRC Poverty in Context

DRC – Resource Rich but ‘dirt poor’

The GDP of The Democratic Republic of Congo is $15 billion. GDP (Gross Domestic Product) is the total value of goods and services produced within a country in one year, and so is roughly equivalent to the amount of money that will be spent in total on everything by everyone in one year in that country.**

You might find it difficult to put this amount of money in context, so to give you an idea of how little this it’s useful to think about how we spend similar amounts of money in the UK….

The GDP of the DRC is equivalent to less than half the amount of money the UK Government spends on Housing Benefit per year – (average per year prediction for next four years – $38.1bn (£23.75).

UK government housing benefit expenditure is about 2.5 times greater than the DRC’s GDP

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The entire population of the DRC have about half as much money to spend as BP.’s profits for 2011 ($25.7 Billion) – (BP. Is the UK’s most profitable company).

BP.’s 2011 profits were nearly twice the GDP of the DRC

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The UK population spend $9 billion more on their pets than the entire population of the DRC spend on themselves – Total UK pet expenditure per year stands at £14.9 Billion or $23.9bn

People in the UK spend $9 billion more on their pets every year than DRC’s GDP

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Britain’s second most profitable company, Royal Dutch Shell, made $5 billion more in profit than the total GDP of the DRC – Shell’s 2011 profits were $20 billion.

Shell’s profits in 2011 amounted to $5 billion more than DRC’s GDP

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Finally, and depressingly, the closest equivalent I could find is that DRC GDP is roughly equivalent the amount that UK adults spend on Christmas presents this year – An amount which stands at $13.6bn or £8.5bn.

‘Please sir, I want some more’

 

Merry Christmas!

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**Yes I know there’s probably quite a lot of additional money floating about because of the massive corruption in DRC, but I have to go with official figures because at least they exist!

 

 

The growing power of corporations?

In the last seven years the revenues and profits of the world’s largest corporations have grown at twice the rate of the GNI of the world’s largest economies (and a lot faster than the flat-lining Euro economies.)

NB – There’s no actual analysis here (yet) – make of it what you will!

  2005 2011/12 %change
Total GNI top 5 economies $23.8 trillion $34.7 trillion 45%
Total Revenue top 5 global companies $1.3 trillion $2.4 trillion 85%
% of revenue as % of total GNI of top five countries 5.4% 6.9% 1.5%
Total Profit top 10 companies $151 billion $295 billion 95%

See below for the evidence base – I’m aware of the problems of comparing Revenue/ profits with GNI as a measure of ‘Corporate power’ in relation to Nation State power, but I’m not actually doing that here, am I – I’m doing a historical comparison… 

Global 500 Companies by Revenue in 2012

  1. Royal Dutch Shell – $485 billion
  2. Exxon-Mobile – $452 billion
  3. Wall-Mart – $446 billion
  4. BP. $386 billion
  5. Sinopec Group – $375 billion
Total Revenue of Top five Global Companies 2012 = $2.14 Trillion

The Most Profitable Companies in the world 2011

  1. Gazprom – $44 billion
  2. Exxon-Mobile – $41 billion
  3. Industrial and Commercial Bank of China – $32 billion
  4. Shell – $30 billion
  5. Chevron – $26 billion
  6. China Construction Bank – $26 billion
  7. Apple – $25 Billion
  8. BP. – $25 Billion
  9. BHP Billiton – $23 billion
  10. Microsoft – $23 Billion
Total Profit 2005 for top 10 companies = $295 billion
Let’s look at the same figures for 2005 (Revenue on left, profit on right)
1 Wal-Mart Stores 287,989.0 10,267.0
2 BP 285,059.0 15,371.0
3 Exxon Mobil 270,772.0 25,330.0
4 Royal Dutch/Shell Group 268,690.0 18,183.0
5 General Motors 193,517.0 2,805.0
6 DaimlerChrysler 176,687.5 3,067.1
7 Toyota Motor 172,616.3 10,898.2
8 Ford Motor 172,233.0 3,487.0
9 General Electric 152,866.0 16,819.0
10 Total 152,609.5 11,955.0
Revenue for top 5 companies in 2005 = $1.30 trillion

Profit for top 10 companies  = $151 billion (Roughly – you’ll need to go to the top 100 list on the link above!)

Profits of top ten companies change in 7 years –

  • 2005 – $151 billion
  • 2007 – $295 billion
  • Change = 95%

Revenue of top five global companies change in 7 years –

  • 2005 – $1.3 trillion
  • 2007 – $2.4 trillion
  • Growth = 85%
  1. USA – 12 – 15 trillion
  2. China 2.24 trillion – 7.30 trillion
  3. Japan 4.6 -6.0 trillion
  4. Germany 2.79 – 3.63 trillion
  5. France 2.17 – 2.82 trillion
  6. Brazil 856 bn  – 2.42 trillion
  7. UK 2.38 – 2.4 trillion (Thanks George, you f******* twatt)
  8. Italy 1.78  -2.18 trillion
  9. India 828bn  -1.83 trillion
  10. Canada -1.11 -1.70 trillion
Total increase GNI – Top five economies 2005 compared to 2011 –
  • 2005 – 23.8 Trillion
  • 2007 – 34.7 Trillion
  • Growth – 45%
  • (Growth top ten = 62%)

 

Adidas – still responsible for sweat shop labour in Cambodia

Garment workers’ unions and human rights groups recently held a people’s tribunal in Feburary to investigate the state of povery pay in the Cambodia garment industry.  The tribunal called for evidence from a wide variety of stakeholders  including over 200 workers who work for factories manufacturing clothes for Adidas and Puma.

All of this follows strikes involving 200 000 workers, dismissals of 1000 union leaders and mass faintings induced by malnutrition of garment workers.

The tribunal concluded that workers are not being paid sufficient wages to lift them out of poverty, one of the main causes being that massive inflation in Cambodia has seen a real wage of loss of over 14% in real terms.

The problem today is that “Despite experiencing sustained growth in the sector, Cambodia’s minimum wage allowance is US $66 a month and is currently the lowest of all its neighbouring states. This wage amounts to around half that required to adequately meet the average worker’s basic needs.”

It also concluded that despite their PR talk, big clothing manufacturers are still failing to do enough to sort out ‘supply side issues’

Just thought I’d post this briefly as a succinct update on the latests evidence of sweat shop labour – students can obviously use the example in any essay on the failure of TNCs,  the downsides of economic globalisation, or the continued relevance of dependency theory.

The above is summarised from an extract in the latest consumer magazine. 

$40 000/ year – what Apple’s ipod city labourers could be earning

Apple recently reported $13.06 billion in profits on $46.3 billion in sales – and these are just the figures for the last three months alone!
 
This is, of course, thanks to the iphone and ipad – (Apple has sold 183 million iphones since its launch 5 years ago) which together now make up about 70% of the companies revenue.
 
There is mounting evidence that the chinese workers who manufacture apple products aren’t exactly benefitting from that £13 billion profit – in fact, it’s becoming apparent that many of them suffer human rights abuses – To list just a selection of the mounting evidence – (much of which is take from this New York Times Report and this summary from digital journey)
  • 17 Foxconn employees have killed themselves in the past 7 decades
  • Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms
  • Some workers say they stand so long that their legs swell until they can hardly walk.
  • Under-age workers have helped build Apple’s products
  • Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iphone screens.
  • Within seven months last year, two explosions at iPad factories, including in Chengdu, killed four people and injured 77. Before those blasts, Apple had been alerted to hazardous conditions.
  • Finally – A message displayed on a banner above one ‘ipod factory’ reads “Work hard on the job today or work hard to find a job tomorrow.”  

The scary thing about all of the above is that we probably only know about these abuses because the iphone is so high profile – the actual company that manufactures the ipad concerned, its actually a Taiwanese company called Foxconn  

Foxconn's Chengdu plant

Foxconn happens to manufacture a whole load of other well- known brands – including the Kindle, the Xbox, and Playstation 3, and its customers also include other big name phone manufacturers – such as Motorola, Nokia, and Samsung

Foxconn has an annual revenue around $60 billion dollars, employs about 1 million people and has factories in China, India, the Czech Republic, Mexico and Brazil, but the bulk of its manufacturing is based in China where it has 11 factories – the biggest of which is estimated to have between 250 – 400 000 workers in residence. 

Now if we know that Foxconn and Chinese government collude to allow worker-abuse in the manufacture of apple products, my suspicion is that it probably goes on with other products too…!

I started off this post wanting to calculate how much surplus value is being extracted by Apple from its workers, but I quickly realised this is impossible – In order to calculate this accurately we’d have to know precisely what proportion of workers in those Foxconn factories are working exlusively on apple products – rather than making products for all the other companies that Foxconn supplies. This, along with the actual numbers of workers in these factories, are not available.

What I can do, however, is calculate how much apple could afford to give to each worker if we assume that every Foxconn worker works on apple products – and that figure stands at about $13 000 – for the last quarter! – based on

  • $13 000 000 000 – Apple’s profits for one quarter – divided by
  • 1 000 000- the global total of Foxconn employees

If you quadruple that – and reduce it slightly to reflect the fact that last quarter was ‘Christmas quarter’ – you end up with the $40 000 figure at the top of this post. Obviously these stats underemphasise what each worker could be paid out of that profit pool – if you factor in the profits from Foxconn itself and all the other electronics ‘branding companies’ the figure would increase!

To finish, just a final postscript on surpluss value. If you didn’t already hate Apple enough –  if you just look at Apple employees – Apple extracted more than $400 000 from each employee last year…

How BP and other oil companies get away with murder….

Tar Sands in Alberta

Do you know where the USA gets most of its oil from – It’s not Saudi Arabia, it’s not South America, not Nigeria – no, its Alberta, Canada, and Dirty Oil is a thoroughly depressing documentary that looks at the devastating environmental and social impacts of tar sands extraction from a region the size of the state of Florida.

Probably the most depressing scene focusses on Fort Chipewyn, a native community who have lived for thousands of years on the Athabasca river, which, according community Elders, had never experienced cancer deaths until, that is, the arrival of tar sands extraction companies such as BP into the vincinity. The community doctor noted a 30% higher incidence in Cancer rates in this community compared to similar communities.

As any scientifically minded person would do, this Doctor started asking questions about why there was such a sudden and dramatic increase in the Cancer rate, and, without even mentioning oil, the provincial government warned him off publisicing the cancer deaths because he risked causing a ‘panic’ over public health, and he was also threatened with having his medical license revoked, so he backed off.

Suspecting the cancer deaths were linked to pollution due to Tar sands extraction, the community then paid for an independent consultant to measure pollution in the river, and he verified that levels were consistent with an increase cancer risk.

The oil companies response was, in addition to the obvious strategy of criticising his researhc methodology, to point out that because the pollution levels in the river had never been measured before Tar sands extraction took place, it was actually not possible to prove that extraction pollution had caused increases in cancer levels – it could just be natural seepage.

The problem with this arguement is, of course, that the Elders testimony that there were no cancer deaths before tar sands extraction, strongly suggests (unless there was some massive environmental shift in the last ten years) that the oil extraction industry is causing pollution that is literally killing people in Fort Chip.  

So here we have a nice example of how a company is legally allowed to murder people – basically all you have to do is to not make it a requirement for a company to do environmental measurements on an area before they pollute it – that way they can get away with murder.

So at the end of the day this is a depressing example of how oil companies can manipulate the political agenda and how crime is socially constructed by the elite – not only does oil money (the local government is set to receive $40 billion in coming years in taxes) shape environmental law (the company doesn’t have to monitor pollution effectively) it also at the end of the day enables companies to kill people in the process of maximising their profit.

Crude – The real cost of oil

This documentary is the story of a lawsuit by tens of thousands of Ecuadorans against Chevron over contamination of the Ecuadorean Amazon.The case, worth $27 billion is one of the largest and most controversial legal cases on the planet.

The Plaintiffs are suing Chevron for damage cause by 30 years of operation in the Amazon between 1960-1990. The plaintiffs claim that Texaco – which merged with Chevron in 2001 – spent three decades systematically contaminating one of the most biodiverse regions on Earth, poisoning the water, air and land. The plaintiffs allege that the pollution has created a “death zone” in an area the size of the Rhode Island, resulting in increased rates of cancer, leukemia, birth defects, and a multiplicity of other health ailments. They further allege that the oil operations in the region contributed to the destruction of indigenous peoples and irrevocably impacted their traditional way of life.

Chevron fights the claims, charging that the case is a complete fabrication, perpetrated by “environmental con men” who are seeking to line their pockets with the company’s billions.

In some respects the film is depressing, in others enlightening – it’s only being fought in Ecuador because Chevron demanded so, after spending 9 years dillydallying in American courtrooms, to get the case moved from the USA to Ecuador.

The film mostly follows the legal team representing the Indians – and it’s a bleak picture – we learn, for example, that the brother of one of them was tortured and  murdered, and we also get see what a drawn out process this legal battle is – most of the time this team looks on the edge of exhaustion – but not as exhausted as some of the people living near Chevron’s oil spills who are suffering from Cancer.

You also get to see and hear from Chevron’s lawyers – who play a cunning game of ‘it’s  not our fault, you have to blame the government that allowed us to drill here’ or ‘OK –  we see that there’s oil here – but how can you prove it’s a result of our drilling processes rather than just natural seepage’? and similarly ‘how can you prove the skin rashes are due to oil and not just poor sanitation’?

The Movie doesn’t conclude, as at the time of production the legal battle was ongoing – but in Feburary 2011 Chevron were found guilty of environmental damage and slapped with a $9 billion dollar fine – only 1/3rd of what the Plaintiffs were asking for.

Chevron of course, rather than pay the fine are fighting back – arguing that the lawyers in the Movie have been engaged in Fraud in that they’v emade false allegations against Chevron, and they hold the state owned oil company of Equador, which took over prodcution since 1990, responsible for the pollution.

This is just about the perfect resource for teaching ‘environmental crime’ in the A2 Criminology course!

Oil and Globalisation – not working for Equitorial Guinea

This extract from Peter Maas’ excellent ‘Crude World’ illustrates how Equitorial Guinea hasn’t benefitted from ‘capital-intensive invesment’ by the oil industry – – I’m sure  this kind of thing is pretty much what’s going on with China’s expansion into Africa…

The book obviously talks about a lot more than what’s below, focussing on how the extraction and export of oil has affected a range of countries and not always in beneficial ways,  but I was struck by this extract as an excellent example of how Transnational Companies and economic globalisation don’t necessarily result in ‘development’ because those companies import help from outsdie the areas in which they are based rather than integrating into local communities. One assumes, that once the oil has run out, they will just disappear without a trace – other than the legacy of pollution and corruption left in their wake of course…  

From the book –

Even if Mother Teressa were president of Equatorial Guinea, the odds would be stacked against her subjects getting rich from the country’s mineral wealth. That’s because it is not just the thieving of the government officials that make it hard for average citizens to benefit from oil booms. The globalisation of labour, combined with the small number of workers needed for capital-intensive oil projects, ensured that most Equatorial Guineans would watch others profit from that boom.

Let’s begin at Marathon’s natural gas facility, the one whose immense flares brightened (and polluted) the nigh sky. Little of the $1.5 billion Marathon spent on the facility entered the local economy because the plant was built by foreign workers who lived on the construction site and sent their pay packets home to Manila and Houston. Even for manual labour – digging ditches and the like – workers were flown in from India and Sri-Lanka.

As we moved around the plant I noticed that almost all the workers were South Asian, while managers were American and European… Indians and Filipinos had previous experience and knew how to use welding torches and wre not hobbled by Malaria or yellow feavour which were rife among the native population.

The plant – like many oil installations in the developing world – would have been on teh moon for all the benefit it offered local businesses. Thanks to just-in-time supply networks that span the globe, Marathon saved money by iumporting what it needed rather than working with unfamiliar local suppliers. Instead of buying cement locally, Marathon set up its own cement factory on site. The plant has its own satellite network, power plant and sewage system.. it existed off the local grid.

Almost everything has to be imported – Paces (the author’s guide) explained

‘How about paint?’ I asked

‘Imported he replied’

‘Portable Toilets?’

‘Imported’

‘Yes’

Equatorial Guinea had a lumber industry so I asked whether the wood was at least local

‘No Imported’

‘Food?’

‘Most of it gets imported’

I pointed to the small rocks that had been lined up to denoted the shoulders of a small road

‘Those are local rocks, but importing them would have been cheaper’ he said.

Definately worth a read this book!