Global Corporate Accountability

The recent debacle in Côte d’Ivoire highlights the need for global social and environmental standards for companies.

A ship carrying toxic waste dumped its contents around the capital city of Abidjan last week causing 6 deaths and prompting 9,000 people to seek treatment so far. In an unprecedented move, the fragile government resigned in response to widespread protests, putting in jeopardy the stability of a country that is already teetering on the precipice of a shaky 2003 peace agreement between the rebel-held north and the ruling party in the south.

While sharply bringing into focus the powerful impact that environmental disasters can have on fragile economies, failed states, and countries in transition, this incident also raises the issue of global corporate accountability.

According to news reports, various companies were involved from the Greek company, Prime Marine Management that owned the Panamanian-registered vessel sailed by a Russian crew to the Netherlands-based company, Trafigura, that chartered the ship through its wholly-owned subsidiary in Abidjan, Puma Energy, and the Ivorian company, Tommy, that had been entrusted with handling the toxic waste after it was unloaded.

So who is responsible for this mess? Trafigura claims to have operated “lawfully”, however, the laws on pollution in Africa as in many developing countries are notoriously weak, not enforced, or non-existent. In such situations it is not enough for a company to say, “we comply with the laws in all countries where we operate”. Corporations have an added responsibility, I believe, to operate according to the highest global standards where there is a regulatory void. The problem with this stance, of course, is that there are no universally agreed upon standards for companies. We have the Universal Declaration of Human Rights that has been widely agreed to by governments but this only loosely applies to ‘non-state actors’, i.e. companies and other non-governmental entities.

In the US, this kind of environmental negligence would no doubt lead to numerous lawsuits and victims would seek compensation for their losses. In Côte d’Ivoire, however, it is unclear what legal recourse Ivorian victims would have. Even if their case was justiciable under Ivorian law and assuming a functioning court system, the web of companies and ownership structures involved could restrict domestic prosecution to the Ivorian company and possibly the wholly-owned subsidiary.

Although locals have decried the contamination as a “crime against humanity”, as yet, courts in the US have not interpreted the Alien Tort Statute to encompass environmental crimes. Furthermore, unless the Netherlands has an extra-territorial law on pollution that applies to corporations, it would be impossible to bring a case in the company’s home country.

Meanwhile, Ivorians are left to suffer the short- and long-term effects of toxic waste in a place where the life expectancy is already barely reaching the mid-fourties and the average salary is $840 a year. And regulatory debates aside, is it ethical for Western companies to be dumping toxic waste in developing countries even if it is legal? I’ll leave that question for a future post…

Sources:

• ‘Ivory Coast PM to form new cabinet after toxic scandal’, Emmanuel Duparcq, Agence France-Presse (AFP), 07 Sep 2006
• ‘More die from Ivory Coast waste’, BBC News, 12 Sep 2006
• GNI Per Capita, 2005, World Bank
  http://siteresources.worldbank.org/DATASTATISTICS/Resources/GNIPC.pdf (accessed 9/18/06)