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Business plea for greater investment in poor nations

JOHANNESBURG, 29 August 2002 - Global business leaders yesterday launched a programme to promote greater investment by multinationals in the world's 50 poorest countries.

Business Action for Sustainable Development (BASD), a grouping of international chambers of commerce, unveiled the initiative at the United Nations World Summit on Sustainable Development.

BASD leaders Sir Mark Moody Stuart, former chairman of Shell International, and Richard Holme, former director of Rio Tinto, will meet African leaders and the UN secretariat in Johannesburg this week to seal a broad international business commitment to the New Partnership for Africa's Development (Nepad).

Nepad is a plan crafted by African leaders to promote democracy and good governance in return for greater aid and private sector commitments.

Lord Holme said the initiative would put pressure on developed countries to give better market access for the developing world's products.

"Business is pushing very hard to bring the barriers down in northern countries. We are absolutely committed to increase access for developing countries into the developed countries," said Lord Holme.

Business organisations are attending the Johannesburg summit in far greater numbers than the Rio Earth Summit 10 years ago. BASD estimates about 700 companies and about 50 chief executives are at the summit. Most of the companies are from Europe and South Africa. Some, like De Beers and information technology company HP, have launched high profile advertising campaigns associating themselves with sustainable development.

One reason for the charm offensive is to answer criticism from non-governmental organisations and campaigners about companies' environmental and social record. Business leaders argue that attending the summit allows them to answer critics by showcasing their partnerships with governments, local communities and NGOs that support sustainable development.

Initiatives include the Africa Energy Fund, which supports power projects in Africa, CropLife International's internet-based agricultural support and a partnership between Unilever and the World Wildlife Fund certifying sustainable fishing practices.

"We would be hammered if we weren't here," said Sir Mark. "Partnerships are essential. But they need clear deliverables decided on by equal partners. We need to build trust," he said.

Some NGOs have welcomed business' greater visibility. Greenpeace, the international environmental pressure group, is sharing a platform with businesses this week to air shared views on climate change. But others, such as Friends of the Earth, have not be so welcoming. They accuse big business of spending more money on high profile green publicity campaigns than on protecting the environment.

But the NGOs are united on what they want business to agree to. Greenpeace and others are putting pressure on the governments to agree a convention upholding rules for international business conduct. But the summit's draft plan of implementation has tended towards voluntary corporate accountability rather than binding rules.

NGOs want a legal framework setting standards regarding environment, labour, human rights and transparency. They are also lobbying for the creation of a UN body to monitor enforcement of the rules.

"The corporate sector is becoming increasingly powerful, partly as a result of consolidation and expanded opportunities in developing countries. Checks and balances in the form of regulation are needed to ensure that companies do not abuse this massive power," said Daniel Graymore of Christian Aid.

Business leaders are vehemently opposed to multilateral rules of corporate responsibility and claim few developing countries support their introduction. They argue that companies should be held to national laws.

Source: Financial Times (London)