The 'Black Book' on the Corporate Agenda of the Barroso II Commission
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The record of a Captive Commission The ‘black book’ on the corporate agenda of the Barroso II Commission Corporate Europe Observatory Table of contents Introduction 3 1. Trade 5 2. Economic policy 7 3. Finance 9 4. Climate change 12 5. Agriculture 15 6. Water privatisation 18 7. The citizens initiative 20 8. Regulation 22 9. Lobbying ethics and transparency 23 Conclusion 27 Cover picture: Group photo of the ERT, from left to right, in the 1st row: Wim Philippa, Secretary General of the ERT, Leif Johansson, President of AB Volvo and CEO of Volvo Group and Chairman of the ERT, José Manuel Barroso, Gerard Kleisterlee, CEO and Chairman of the Board of Management of Royal Philips Electronics and Vice-Chairman of the ERT, and Paolo Scaroni, CEO of Eni, in the 2nd row: Aloïs Michielsen, Chairman of the Board of Directors of Solvay, César Alierta Izuel, Executive Chairman and CEO of Telefónica, Zsolt Hernádi, Chairman and CEO of MOL and Chairman of the Board of Directors of MOL, Paulo Azevedo, CEO of Sonae, and Bruno Lafont, CEO of Lafarge (Photo: EC Audiovisual Services/European Commission) Published by Corporate Europe Observatory (CEO), May 2014 Written by Corporate Europe Observatory Editing: Katharine Ainger Design: Stijn Vanhandsaeme Contents of the report may be quoted or reproduced for non-commercial purposes, provided that the source of information is acknowledged 2 The record of a captive Commission Introduction With the upcoming European elections, the term of the Thus an increase in the competence of the Commission European Commission is coming to an end, and it has been tends to be directly proportional with corporate capture a term like few others. Since it took office in early 2010, of EU decision making, which is why the current trend in the European Union has experienced a severe financial that direction should raise concern. From the very begin- and economic crisis that has transformed the bloc signifi- ning the Barroso II Commission has followed a corporate cantly. More competence over economic and fiscal policies agenda, and its close links to the biggest corporations and has been given to the EU institutions in general, and the banks in the European Union is a key trait of the current power of the Commission in particular has been boosted. European project. Through the course of the crisis, attempts by corporations and corporate lobby groups to influence EU policies have This report is released at a time when these issues should probably been more successful than ever, in part due to a be debated broadly. As if the Commission itself has real- close relationship with the Commission. ised it has an urgent need for a stronger legitimacy, it has played its part in helping the European Parliament stage Corporate Europe Observatory has gathered a lot of ev- a kind of indirect election for the Commission President idence over time and covering many different areas that for the first time. Whichever political group in Parliament shows how the Commission is easily captured by corporate wins the most support will elect the Commission President. interests. This report is an attempt to produce a condensed What remains to be seen is whether the other actor in the version of how the Commission has come to act on behalf selection of the President, the Council, will play along with of corporations over the past five years, focusing on climate their choice. policies, agriculture and food, finance, economic, and fiscal policies. In any case, we believe such an indirect election will do little if anything to fix the democratic deficit of the Commission. In short, European corporations have been very successful More fundamental problems are at play, and those prob- in exploiting the crisis to forward their own agendas, and lems are the topic of this report. the help of the European Commission has been instrumen- tal in that effort. That is partly due to the composition of The report attempts to capture the key experiences the Commission, but there is more to it than that. of Corporate Europe Observatory with the outgoing Commission in the core areas covered by our research, The European Commission is a very powerful body. It has including trade, agriculture/agribusiness, finance, climate the monopoly on legislative proposals – all suggestions ta- change, water privatization, and economic policies, par- bled in the European Union come from the Commission. ticularly policies adopted in response to the eurocrisis. In And yet it is unelected, and not directly accountable to an- all these areas the presence and influence of corporate lob- yone. Also, the Commission generally lives its life at a com- by groups on the Commission has been a key feature of its fortable distance to public debate. There is little chance actions all along. that the concerns of citizens will reach the chambers of the Commission unfiltered. But despite this, there has been very little progress on lobby- ing transparency and ethics, as this report shows. CEO and On the other hand, it is a body that is easy to penetrate for many other public interest groups have worked throughout corporate lobby groups with ample financial resources, for the term of this Commission to strengthen the rules on various reasons. For instance, the fact that the Commission transparency and ethics in order to erect some obstacles to has relatively few economic resources itself, with little in- excessive lobbying influence and open the Brussels scene house expertise, makes it all the more easy for corporate to greater public scrutiny. We have campaigned for trans- lobby groups to step in and influence the agenda. parency via a mandatory register for lobbyists, on ethical The record of a captive Commission Introduction 3 conduct, against imbalanced advisory structures, on “revolving doors”, and many other issues. This report looks at the most important issues with the Commission in this regard, and it reveals a rather bleak picture. The chapters can be read separately, but they all form part of the same story: that of corporate capture of the Barroso II Commission. We are not reviewing this for sentimental reasons, nor to close the book on past events, but rather to examine the long term and fundamental prob- lems, and look ahead to explain the potential challenges of the incoming European Parliament and Commission to reverse this trend. The top- ic of the conclusion covers some of the steps that need to be taken to address this corporate capture. 4 Introduction The record of a captive Commission 1. Trade The corporate trade and investment agenda Soon after the European Commissioner for International business the right to claim multi-million dollar compen- Trade, the Belgian liberal Karel de Gucht, took office in 2010, sations for democratic laws to protect the environment or he made it clear that he considered himself a servant of big public health – just because these laws allegedly reduced business. During a Commission Civil Society Dialogue in business profits. The EU’s Lisbon Treaty opened a window June 2010, when de Gucht was asked if he would break with of opportunity to learn from the negative experience with his predecessors’ open-door policy towards the business these excessive corporate rights that other parts of the sector, he responded: “My job description is ‘open new mar- world experienced. The Commission could have adopted a kets for the European industry and the European services fresh approach to the issue, without so called investor-state sector’.”1 And this is exactly what de Gucht and his team at dispute settlement which allow corporations to sue govern- the Commission’s Directorate General for Trade (DG Trade) ments, and with obligations for corporations going abroad. have done over the past four years – all too often to the det- Trade unions and NGOs had called for such a u-turn. But riment of people and the environment around the world. instead, DG Trade opted to side with the business lobbies and EU member states, and is now negotiating dangerous During the past four years, DG Trade has negotiated corporate rights with many countries – including the US, far-reaching free trade agreements for their friends in the Canada and China. business sector with nearly the whole of the rest of the world. Some negotiations have been concluded: the controversial EU-Colombia-Peru trade deal, for example, which implies EU trade negotiations: putting big gross violations of human rights, and the rights of trade un- business in the driving seat ionists in particular (Colombia has the highest number of trade union murders in the world);2 or the infamous Anti- The ongoing trade negotiations between the EU and India Counterfeiting Trade Agreement (ACTA) which was even- are one of many examples of how DG Trade puts big busi- tually axed by the European Parliament when millions took ness in the driving seat. If the deal is secured, it will threat- to the streets fearing that ACTA would allow corporations en the livelihoods of millions of small farmers, fisherfolk, to censor the internet.3 Other trade negotiations are ongo- street vendors, and indigenous people in India. For exam- ing, amidst fierce resistance to the EU’s aggressive market ple, the Indian retail sector will be opened to competition opening agenda – from India to the African, Caribbean, from EU supermarket giants such as Tesco and Carrefour. and Pacific group of states; from Canada to the Arab spring There are 33 million small scale traders in India. How can countries; from the US to the ASEAN region (Association of they compete with cost-cutting, supermarket style? South East Asian Nations). The Commission has assured European retail and other in- In the past four years DG Trade has also embraced sweep- dustries that, “we must decide together what we want, then ing powers for foreign investors.4 They have granted big work out how to get it” from India.