|The European Network of Corporate Observatories (ENCO) is pleased to invite you to a webinar on its new publication “European multinationals and authortarian regimes”, on Thursday 21 October 5-6.30 pm CET. To attend, please register by email: contact (at) corpwatchers (dot) eu|
In the past few years, the world has witnessed the rise of a new generation of authoritarian strongmen. In the Philippines, in Brazil, in India, in Hungary, in the United States for a while - among other examples -, political leaders have come to power who share similar traits: praises for violence, displays of toxic masculinity, hate speech against migrants and against Muslims in particular. With an authoritarian leader holding similar views holding grip on power in Russia and the very specific kind of authoritarian regime in place in China, it seemed that the planet was on a very dangerous slope – an outlook which was only partly changed by the election of Joe Biden as US President in 2020.
This phenomenon is new in many respects: the rise of these new authoritarian leaders reflects the growing hold of Big Tech platforms and social media on public opinion, as well as a general backlash against the apparent progress of such causes as climate action, feminism and LGBTQ rights. But there are also many strong continuities between them and older ’older’ types of authoritarians leaders, such as the dictators who took power in South American in the 1960s and 1970s, or some of the autocrats who were propped up in Africa or Asia following decolonisation - in both cases with the support of Western governments keen on protecting their geopolitical interests and that of their corporations.
Doing business with authoritarian leaders
This research project was initiated by the European Network of Corporate Observatories to take a deeper look at the relationships between European multinationals and authoritarian regimes. Indeed, corporations with headquarters in Europe are still very present and active - probably even more than 50 years ago – in countries under authoritarian or neo-fascistic regimes.
Their presence underscores a deep contradiction in how Europe views itself on the international scene. European political and business leaders claim to be different from China and Russia, and even from the United States. Even European corporations tend to act as if they were obviously more progressive and responsible than their global counterparts. They are keen to present themselves as a force for good, upholding human rights and democracy and actually willing to fight off climate change – in stark contrast to the views expressed by authoritarian leaders, some of whom have made the EU a favourite target.
On the other hand, however, European corporations are happy to do business with these same leaders or with their allies. This often means becoming involved in corruption, crony capitalism or other practices that actually contribute to reinforcing them and their hold on power. And European corporations are equally happy, in many cases, to contribute actively to industrial projects pushed by authoritarian leaders that are in deliberate contradiction to any genuine climate action or to the protection of the environment and communities – for instance projects that contribute, directly and indirectly to developing new coal, oil and gas reserves in Russia or the US, or to actively accelerating deforestation in the Amazon in the name of development. Participating in projects such as these – as they have been promoted by Trump, Putin and Bolsonaro – is by no way ’apolitical’. It is a form of support to their regimes and their agenda.
What is perhaps worse is that in many cases, Western governments are still blindly promoting and defending the interests of “their” corporations, in blatant contradiction with their official values and objectives. They do this by mobilising political and diplomatic support for their “national champions”, but also by promoting and enforcing international rules which protect the interests of corporations against communities.
Some of the core policies of the European Union at international level have a clear focus on helping European corporations expand and of sheltering them from any social, environmental or political risk that might come with the expansion. This is obviously the case of trade and investment agreements, that are meant to open new markets, protect the interests and investments of European corporations, secure access to critical natural resources. But this is also – less obviously perhaps – of Europe’s development and cooperation policies, insofar as they are increasingly channelled through public-private partnerships or financial institutions that promote large infrastructure projects integrated into global trade circuits. And it is also the case of some aspects of Europe’s climate policy, particularly its focus on “market-based solutions” such as compensation and carbon markets, that allow European corporations to externalise their carbon footprint and encourage a process of “green grabbing” in the global South as a compensation for not changing much to their operations and their fossil fuel-based business models.
This is illustrated by the three case studies that are published simultaneously for the launch of this new ENCO research project:
– The report “Invisible hands?” European corporations and the deforestation of the Amazon and Cerrado biomes, by Vigência, offers a survey of the involvement of European firms – including banks - at different stages of the supply chain of soy, meat and metal – industries which are the main drivers of the deforestation of the Amazon and Cerrado regions in Brazil. “While the national private sector has been driving a destructive process in both biomes (through many corporate capture mechanisms), their power is leveraged by the support of transnational corporations, which invest and import those commodities into global value chains, the authors argue. In 2008, the European Union was the second largest foreign driver of deforestation in Brazil and until 2006, it was even the largest.”
– In The Case Congo, ReCommon investigates the relationships between Italian oil company ENI and its executives and the political elites of Congo. Very close to the Italian government, ENI has been the object of a judicial proceeding for bribery in relation to the renewal of some of its licenses in the country in 2014 – which resulted in a plea bargaining sentence. As neither the company, nor its CEO have admitted responsibility, there is a sense that not much will change in the way the company handles its relations with foreign governments in countries such as Congo.
– Finally, the essay “So that everything can stay the same” Could Europe’s “Green Deal” end up fuelling human rights and environmental abuse?, by Observatoire des multinationales, explores one of the dark sides of the much vaunted European Green Deal: how it could, in the name of helping Europe achieve its climate goals, encourage a corporate grab of critical resources in the global South - including minerals or land for large-scale renewables projects or reforestation projects. The essay goes on to argue that from that perspective, there is little change from the past: Europe appears still as dependent as ever on resources from the global South, particularly Africa, for its prosperity, at the cost of hindering democracy and of a further dispossession of communities.
All three case studies show how, in practice, European corporations, with the active or passive support of governments and/or the European Union, are actively undermining what they are claiming to be standing for. And the reason for this is simple: the pro-corporate bias that is at the heart of much European policy-making. Addressing this pro-corporate bias involves doing away with the policies that are designed to facilitate corporate expansion regardless of the social, environmental and political consequences, including trade agreements. It also requires dismantling the “architecture of impunity” which shelters them from judicial accountability. The proposed EU legislation on mandatory due diligence currently under discussion could be either a first step in this direction. Alternatively, if it is too weak, and in the absence of changes to the wider framework of EU policies, it could just be turned into just another occasion to showcase the "social responsibility" of European corporations without any substance in fact.
As long as big business will be allowed to capture public processes and decisions at national and EU level, and as long as it will be able to shape national and international rules in its favour, there is no way Europe will ever be credible in its claims of virtue on the international stage. Which is another way of making authoritarian leaders stronger and more credible themselves.