Johann Hari: Payback time for corporate villains?

At the moment, foreign victims of UK corporations are left with almost no ability to answer back
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The Independent Online

At first glance, it seems almost comically boring, a triple dose of political Mogadon. The Company Law Reform Bill appeared for its second reading in the House of Commons yesterday, and although it's easy to see why the biggest reform of Britain's corporate rules in 150 years is a big deal, it's hard to keep your mind focussed on the 900 pages of mind-numbing detail - until you realise one thing. There is a clear path running from these dry, jargon-packed pages to a human rights campaigner hanging by his neck on a rope in Nigeria and to the trashed rainforests of Indonesia.

The best guide on this long and bloody road is Hannah Ellis, chair of Britain's Corporate Responsibility Coalition (Core). She is campaigning - with the support of more than 200 MPs and all the major human rights organisations - to have the Bill amended to include a very basic principle. "At the moment, a British company director is held responsible for losing profits, or for being corrupt," she says. "So why shouldn't he be held responsible for environmental or human rights abuses his company commits too?" Ellis wants to see every British company legally required to audit the impact they have on human rights and the environment every year - at the moment, many don't even bother to look - and, crucially, for the victims of any abuses to be able to sue them in a British court.

Enter bloodied victims, stage left. At the moment, the foreign victims of British corporations are left with almost no ability to answer back. Ellis suggests a crop of corporations which might face legal action if the law was amended to make them answerable for killings and burnings abroad.

One of the most obvious contenders is Shell for its oily behaviour in the Niger Delta. Ken Saro-Wiwa, a human rights campaigner, described the effect Shell had on his community back in 1992: "Oil exploration has turned Ogoni into a wasteland: lands, stream and creeks are totally and continually polluted; the atmosphere has been poisoned.

"Acid rain, oil spillages and oil blowouts have devastated Ogonia territory."

Not only has their environment been destroyed; the people of the Niger Delta have seen none of the profits. Although Shell has extracted more than £30bn from the area, the people who live on the land survive on less than 60 pence a day, with barely any roads, schools or hospitals. Many of the Ogoni people who have spoken out against this scandal have been killed by the Nigerian state. Shortly before he was seized on ludicrous trumped-up charges, Saro-Wiwa said: "This is it. They are going to arrest us all and execute us all for Shell." Although Shell vociferously denies responsibility, their close business partner swiftly hanged Saro-Wiwa, and a major critic of the corporation was conveniently silenced.

It has not stopped. In a recent report, Amnesty International said that 10 years on, government security forces - protecting the interests of Shell and other oil companies - are still destroying villages that cause trouble. Even Shell Nigeria's own former head of environmental studies, J P Van Dessel, said in 1996: "It is clear to me that Shell was devastating the area." If the Company Law Reform Bill is amended," Ellis says, "the Ogoni people could begin to make Shell answer their charges in a British court. There are other alleged crimes being committed by British corporations, Ellis says, that will rebound even more terribly on us at home. For example, the world's second-largest rainforests, in Indonesia, are being systematically destroyed by British corporations, in an act of environmental vandalism that will make the effects of global warming on our rainy island even more extreme.

Friends of the Earth recently documented that the Indonesian island of Sumatra has lost 70 per cent of its rainforest cover in the past few decades due to logging - and for what? To clear space to make palm oil, a product that you certainly have in your lipstick, bars of soap, margarine and bread. Britain is the second-biggest consumer in Europe. At the current rate of destruction, the rainforest will be almost gone in 12 years, and the orang-utan, one of our closest cousins, will be extinct.

But can the corporations responsible be held accountable under British law? No. Not our problem, guv. (Not until hurricane season, anyway). Up until very recently, the UK's largest supermarket, Tesco, did not use any of its £2bn-a-year profits to figure out if the palm oil it sells you is sourced from the wrecked rainforests of Indonesia. They will "be ready to participate" when "the issues are clear", they said in their explanation of why they refused to make the issue clear by checking their own supply lines. Only after massive pressure did they admit that some of their palm oil is from uncertain sources and make rote promises to look into it - but the ongoing ambiguity could make them another candidate for prosecution for potential environmental crimes if the current Bill is reformed.

At the moment, the proposed Bill asks company directors to "consider" the environmental and human rights consequences of their actions, but it puts in place no legal measures - none - to make them do so. This is the classic New Labour approach to corporate abuse, which is to stress voluntary adherence to voluntary codes. But how many people would follow Asbos if they were voluntary? Has anybody suggested the new measures on knife crime should be up to the whim of the offender, on the grounds that young thugs can be "trusted" to see the rules are "in their own best interests"?

Corporate CEOs will only ever respond to the bottom line, and it is preposterously naïve, at best, to suggest otherwise. If they do not deliver maximum profits to their shareholders, they will be sacked and replaced with somebody who will. The only way to make them behave better is to make it cost. A lot. Mega-bucks prosecutions from their victims in the corruption-free British courts are one way to make it happen. But the Government - bowing to corporate pressure - still clings to its belief in a unified globalised economy where there is only fractured, localised legal responsibility. This is virtually a charter for corporate abuse.

At his show-trial, Ken Saro-Wiwa warned: "I and my colleagues are not the only ones on trial. Shell is here on trial too ... for there is no doubt in my mind that the ecological war that the company has waged in the Delta will be called into question sooner or later, and the crimes of that war will be duly punished."

If we amend that dry, dull Bill sitting in the House of Commons, we may yet wring some hope from Wiwa's dying cry.

j.hari@independent.co.uk

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