Dirty profits – How companies and financial institutions gain billions at the expense of people and the environment and shirk their responsibilities
Thomas Küchenmeister
Facing Finance e.V.
Schönhauser Allee 141 - Hinterhaus 2
10437 Berlin
0049 (0)175 - 4964 082
www.facing-finance.org
kuechenmeister@facing-finance.org
Thomas Küchenmeister
Facing Finance e.V.
Schönhauser Allee 141 - Hinterhaus 2
10437 Berlin
0049 (0)175 - 4964 082
www.facing-finance.org
kuechenmeister@facing-finance.org
In anticipation of the International Day of Human Rights (10.12). FACING FINANCE is launching their new report entitled DIRTY PROFITS 3. The report is a joint project by civil society organisations, with research and information provided by over 30 authors from 10 countries.
The report documents sample cases of serious violations of
internationally established norms and standards. It investigates 25
controversial companies that in 2013 had a joint revenue of approx.
€4.196 trillion and achieved net profits of €450 billion. Companies that
have been selected include some that are blacklisted on investors
exclusion lists, others that do not comply with international or
national law, or those that face serious allegations by the media or
civil society. DIRTY PROFITS 3 also investigates the extent to which
these companies are supported by European financial institutions.
"It is apparent that human rights violations, corruption, exploitation
and environmental and climate destruction still form part of the
business models of multinational corporations and their financial
investors" states Thomas Kuechenmeister of the NGO Facing Finance, an
organisation that stands up for human rights and environmental concerns.
The report documents pharmaceutical companies, which have been involved
in serious and widespread corruption, and whose poor clinical trials in
India resulted in thousands of victims. The report also looks at
companies that are responsible for massive CO2 emissions contributing to
the destruction of the earth's climate. "Companies such as Chevron,
Shell, Gazprom and Coal India belong to a global group of companies
producing some of the highest CO2 emissions. Those who accept and
finance these business practices say goodbye to limiting global warming
at a maximum of two degrees. It is time for banks and investors to stop
financing those companies" stressed Regine Richter, of urgewald.
Moreover, the NGO criticises the abuse of labour rights in the textile
industry. "As long as textile companies such as GAP or Walmart shirk
their responsibility for the workers in their supply chain and as long
as they continue to undermine sector-wide reforms, the workers will
continue to toil under inhumane conditions in unsafe factories with
poverty wages", stressed Silvie Lang of the Clean Clothes Campaign
Switzerland, in relation to the refusal of numerous brands to commit to
the Bangladesh Accord on Fire and Building Safety or to provide
compensation to victims of factory accidents.
Furthermore, the report also looks at the soaring demand for
agricultural land. Since 2000, more than 49 million hectares of land in
developing countries have either been leased to companies, or are
currently being negotiated. "We urgently need legal protocols which
ensure that banks, pension funds and other investors no longer provide
financial services to companies engaged in illegal land-grabbing or
environmental destruction" , says Anne van Schaik of Friends of the
Earth Europe.
Using the example of the company SodaStream, the report discusses the
operations of international business enterprises and Israeli companies
operating in the Israeli settlements in the Occupied Palestinian
Territory, described as illegal under international law. "Israeli and
international companies profit from the occupation, strengthen Israeli
hold over Palestinian lands and inhibit or even prevent the development
of independent Palestinian businesses in the occupied territories",
claims Rona Moran of the Tel Aviv based Research Center - Who Profits.
The report analyses legal sentences and fines levied on banks, such as
BNP Paribas and criticises the concurrent lack of control over financial
institutions. " If we want to prevent the banking crisis of 2008 coming
back and the many other banking scandals, we need reforms of the
banking system and more civil oversight of financial decision makers",
claims Frank Vanaerschot of the organisation FairFin from Belgium.
DIRTY PROFITS 3 analyses the role the European financial institutions
play for these companies. On the one hand, through their financing,
financial institutions such as Barclays, Deutsche Bank, HSBC or BNP
Paribas benefit from and enable the implementation of projects that
abuse human rights and environmental standards. On the other hand,
through their share- and bond holdings, financial institutions and their
customers also profit from these abuses.
During the research period (January 2012 - August 2014) the financial
ties between the 25 companies and the 24 financial institutions amounted
to approx. €144 billion, as is shown in the research provided by the
Dutch organisation PROFUNDO. Of that amount, €67 billion can be
attributed to the major carbon emitters and a further €29 billion to
controversial mining and commodity companies.
The FIs' own internal guidelines do not prevent such investments, as
they are too often non-binding, or not applied. In addition, binding
legal regulation is currently lacking. DIRTY PROFITS 3 documents an
array of voluntary commitments of companies and financial institutions
that they consider sufficient. "Unfortunately the voluntary commitments
of financial institutions and companies are not sufficient to prevent
massive human rights abuses and environmental destruction," argues
Thomas Kuechenmeister who supports the creation of further legal
provisions for corporations and financial institutions to ensure human
rights issues are incorporated into global business and financial
decision making. DIRTY PROFITS 3 advocates for a rapid implementation of
the UN Guiding Principles on Business and Human Rights.