Friends of the Earth Press Briefing

BUSINESS BREAKS PROMISE TO CLEAN-UP ACT - Multinationals share fondue with world leaders at World Economic Forum in Davos

22 January 2003 - Business leaders, politicians and the rich converge on the Swiss ski resort of Davos today (23 January) for the start of the World Economic Forum (WEF) - the annual gathering of the powerful which plays an important role in discussions of world economic and social policy.

But the meeting takes place amidst growing criticism of corporate greenwash. Despite a high profile pledge made a year ago at the WEF in New York, WEF corporations have already demonstrated their unwillingness to embrace sustainability if it gets in the way of more profits. Friends of the Earth is highlighting cases of bad practices in the year since WEF 2002 [1].

The international environmental network will call on world leaders attending the WEF to act to establish rules for big business and rights for citizens affected by bad business practice, rather than accept more greenwash promises. Friends of the Earth and a coalition of organisations is holding a counter-conference called the Public Eye on Davos, which will cast a critical eye on the WEF agenda[2].

Last year the WEF moved abruptly to New York - reportedly because of security concerns in the Alpine location. The Swiss government has attracted the Forum back to Davos, but security is expected to be intense. In previous years, attendees have been enclosed in a ring of steel, with all access to

Davos cut off. This year for the first time in Swiss history airspace is to be closed over Davos during the WEF and the Swiss military will be there in force. But following criticism of the unsubtle clampdown on protests in 2001, there is a permitted public protest expected on Saturday 25th January.

Friends of the Earth will be seeking out politicians at the WEF to ask them for new international commitments on rights for citizens and communities to protect them from bad practices.

The invited “community of top decision makers” - including senior business leaders from corporations such as Nestle; Shell, Vivendi Universal, British American Tobacco, BP, Nike and Tyumen Oil (involved in the Prestige disaster) - will benefit from “a unique club atmosphere” [3] to talk to world leaders about the way forward for the world.

Previous WEF meetings have paved the way for the creation of the World Trade Organisation (WTO) and North American Free Trade Agreement (NAFTA) - both of which have been severely criticised for contributing to global inequality through their damaging impacts on poor communities.

While the WEF guests hold private discussions, representatives from non-governmental organisations, including Friends of the Earth International, and representatives from developing and developed countries will present an alternative vision in a public forum, just a few blocks away. The Public Eye on Davos International Conference takes place from Thursday 23rd January until Monday 27th January - with all sessions open to the public and the press.

The WEF, which is funded by contributions from the world's foremost 1000 companies, used its 2002 appearance in New York to exploit the memory of the September 11 tragedy while promoting its usual agenda: that the “alliance between the world's largest trading partners today is more important than ever”. It called for an end to political posturing and regulatory divergence, which stand as a barrier to free trade [4].

Friends of the Earth challenged the corporations at last year’s Forum to support civil society calls for binding international rules on multinationals under the UN. The issue was a major feature of the Johannesburg World Summit on Sustainable Development in August 2002. Friends of the Earth wrote to all the chief executives at the Forum and will reveal their responses during this year’s event.

Tony Juniper, vice chair of Friends of the Earth International, said: “The World Economic Forum's slogan this year is ‘Building Trust’ yet many of its participants are chief executives of the companies responsible for the very worst ravages of corporate globalisation. It is a bitter irony that many people cannot swallow. How can Galician fisherfolk trust the corporations which participate in the WEF that have damaged their environment and livelihoods?

“If politicians at the World Economic Forum are serious about improving the state of the world, they should accept Friends of the Earth International's challenge and support a global regime to curb corporate power, with guaranteed rights for citizens and communities, and protection for the environment where we all live. We will also ask politicians to call the bluff on corporate greenwash.”

Friends of the Earth International will have spokespeople available in Davos throughout the meeting.

Updates will also be available at www.foe.co.uk/campaigns/corporates/

Bobby Peek, of groundWork, the Friends of the Earth affiliate in South Africa, will be in Davos throughout the WEF gathering, and will be available for interviews on 0824641363.

Ends

NOTES:

[1] Last year WEF leaders made a high profile statement on corporate social responsibility. For example, Taizo Nishimuro, Chairman of the Board or Toshiba Corporation, Japan said: "We are moving towards global environmental standards and we have to be responsible as we help governments establish those standards" - See Weforum here.

Examples of WEF corporations not acting in the interests of sustainable development since these statements were made in the last year include:

WestLB [WEF member]The German bank "Westdeutsche Landesbank" (WestLB) is leading a group of international banks providing $900m million to construct of a new crude oil pipeline across the Ecuadorian Mindo-Nambillo cloudforest. The project is expected to result in irreversible damage to large areas of pristine tropical rainforest full of endangered species. The indigenous population (who have been excluded from decision making over the pipeline) fear for their future as their local culture, social networks and communities are threatened. Protests have been met with gunfire and people shot dead during demonstrations. WestLB argued the project would match the World Bank’s environmental principles. When independent studies revealed the contrary, the World Bank publicly expressed serious doubts about the pipeline project. Disregarding such concerns,

the pipeline ploughed through the rainforests of Ecuador last year.

Alfa Group [includes Tyumen Oil a WEF member and Crown Resources] Mikhail Fridman, head of the group that owns Crown Resources and Tyumen Oil, attended last year’s WEF. The oil that spilt off the Galician coast was from an ageing tanker chartered by wholly-owned subsidiary Crown Resources.

Representatives from Alfa companies are expected at this year’s WEF.

Crown Resources operates under a Swiss flag of convenience (it is listed as a company in Zug) although its directors are mostly British and Russian and its largest office is in London. The company chartered the Prestige to carry Tyumen’s oil from St Petersburg to the Far East and the wreck of the Prestige which subsequently sunk continues to leak oil from the seabed off Galicia today. The corporation has been criticised for continuing to charter rustbuckets to carry dangerous cargoes around the World despite the history of major oil spill incidents such as TotalFinaElf’s Erika spill of 1999.

BP [WEF member]

In 2002 BP pressed ahead with its plans to build a pipeline from the Caspian Sea in the East to the Mediterranean in the West. Every year it will transport oil equivalent to nearly a third of the UK's yearly carbon dioxide output. BP has signed so called host government agreements with Azerbaijan, Georgia and Turkey which make it exempt from laws, including environmental and labour, that may affect the profitability of the pipeline. The needs of BP, such as its demand for water, will be put above those of local communities.

Nestle [WEF member]

At the end of 2002 Nestle was exposed for demanding $6m in compensation from the famine struck Ethiopian government. The compensation was for the nationalisation of a subsidiary company many years before under a previous Ethiopian government. Following media attention Nestle has made it clear that it will still demand the compensation, but redirect it towards famine relief in the country. Furthermore Nestle threatened that the failure of Ethiopia to pay up over this issue would

be looked on badly by multinationals who may hold back from future investment.

Shell [WEF member]

Shell’s South Durban refinery was established under South Africa’s apartheid regime and is sited directly next to poor black communities. Shell has allowed the refinery to deteriorate and it has been at the centre of 23 serious pollution incidents and operation problems since 1998. The most

serious being when a Shell fuel pipeline leaked more than a million litres of petrol below people’s residential homes. In 2002 faced with the threat of a legal challenge by the local authority, Shell broke off all dialogue with officials and lobbied Durban’s mayor, who then called for the reconsideration of legal action. Shell has, through its first public environmental report for their refinery in 2002, misinformed the public of the historical pollution. Shell still refuses the local community access to information.

Petronas [WEF member]

The Burmese military government has been at the heart of human rights controversy for many years. The Burmese Democracy Movement has called for multinationals to stop operating in Burma because they fear resulting profits help keep the military in power as well as lending the regime credibility. This year Petronas took over Premier Oil’s entire Burmese operation when the company was split up. The UK Government had asked Premier to pull out of Burma. Petronas has given no indication of its intention to do so.

[2] http://www.evb.ch/index.cfm?page_id=1772&archive=none

[3] World Economic Forum on-line - www.weforum.com

[4] “Charting a new course for transatlantic relations” - www.weforum.com