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Transnational Corporations and Environmental Concerns in Less Developed Countries Transnational Corporations and Environmental Concerns in Less Developed Countries Can cross border environmental management systems achieve public policy goals? by Audun Ruud A dissertation submitted to the Department of Political Science, Faculty of Social Sciences, University of Oslo, in partial fulfilment of the requirement for the Degree of doctor rerum politicarum Date: August 2001 ISBN 82-570-4784-1 ii Acknowledgements Thanks to the Centre for Development and Environment (SUM) I got an excellent and most stimulating working environment. SUM was established to promote research in accordance with the recommendation made by the World Commission on Environment and Development. In chapter eight, page 231 of Our Common Future it is explicitly referred to the responsibility of TNCs: “….The transnationals should also institute environmental and safety audits of their plants measured against standards of other subsidiaries, not just against those of other local companies, which may have less stringent requirements”. I took this request at face value, and SUM and its staff motivated me to work on these issues of concern. At SUM Professor Helge Hveem - from the Department of Political Science - introduced me to the complex world of international political economy. As part of his accommodating academic style, he also promoted collaboration among his master students from which I have benefited greatly. In addition to Helge, who later became my formal advisor, Professor Jan Hesselberg was instrumental in establishing SUMs research orientation towards the theme; “production and trade: environment and development”. Together with his colleagues and students of Human Geography, Jan provided very important input into my initial work. Despite that his general approach towards changes in the International Location of Polluting Industries (the F-I-L project) made me somewhat anxious, my chosen analytical orientation would not have been possible without the material provided by the human geographers working on the F-I-L project. Early in the process I approached the United Nations Centre on Transnational Corporations (UNCTC) located in New York. The UNCTC soon became history, but I got in tough with a forthcoming Dane; Michael W. Hansen who was responsible for a very first benchmark survey on TNCs’ environmental management (UNCTAD 1993a). Some of the UNCTC staff became integrated into UNCTADs activities in Geneva, but Michael achieved an academic affiliation with the Copenhagen Business School. Michael became a good, reliable colleague and friend that really inspired my to finalize the thesis. In a period when other interesting tasks were tempting me to deviate my attention from the dissertation, he helped me putting some of my last pieces together. The pieces that had to be put together were related to India. Eldrid, my wife, presented me to India. She convinced me that I could manage the challenge. We stayed nine months in the “city of joy” that sometimes can be experienced as the “junction of hell”. However, I got in touch with the environmental manager of ICI India, Mr. P.J.Nag. Thanks to him, his staff and his contacts within the eastern cell of the Indian Chemical Manufacturers Association (ICMA), my stay became more than mere frustrations. Actually, the field working in India became very exiting. Thanks to Nita and Kalyan Mukerji we were well settled in a nice flat in the outskirts of Calcutta. This city, however, is rapidly becoming a de-industrialized area. Firms have shifted to other Indian states. Despite the academic consciousness of the Bengali capital, few within the academia took any interest in my issues of concern. The Institute for Studies in Industrial Development (ISID) does not focus on environmental issues, but in contrast to some of the work being done in Calcutta, this Delhi located research centre headed by Prof. S.K.Goyal, is concerned with Foreign Direct Investment (FDI) and contemporary economic policy questions. Thanks to ISID I got a marvellous opportunity to understand relevant impacts of the Indian policy reforms launched in 1991. On environmental issues I further benefited from contacts at the Institute of Economic Growth at the Delhi University and particularly Prof. M.N.Murti. ISID also provided me with reasonable accommodation. However, it is located close to one of the most congested areas of Delhi, the Indraprastha Marg. Thus, a visit to the Norwegian embassy compound located in New Delhi, was refreshing. Further when Thorbjørn Holthe offered me a beer at the poolside, I really got my batteries reloaded. During subsequent stays in Delhi I was even invited by some of his colleagues such as Tore Hattrem and iii Bjørn Midthun to stay overnight at the embassy. The Norwegian embassy compound is definitely not India, but I am not an Indian neither. Thank you. The field working in Jamaica that took place prior to my Indian experiences, was conducted in a completely different manner. I went alone to Jamaica for a total of three short stays. Thanks to Arne Nielsen a former sailor who has settled in Kingston, nice accommodation was provided. The availability of relevant corporate data is always limited, but thanks to the forthcoming attitude of Jon Arild Larsen and Ståle Jørgensen of Hydro Aluminium, I got access to information concerning Alpart. The focus on Alpart, however, became challenging due to the less forthcoming attitude of the majority owner and managing partner, Kaiser Chemical and Aluminium Corp. After repeated requests for information, I was forced to reorient my focus to another bauxite/alumina project; Jamalcan, in which the cross border environmental management system of Alcan was more easily available for further studies. I feel privileged having got the opportunity through a grant (rekrutteringsstipend for utviklingsforskning) from the Environment and Development divisions of the Norwegian Research Council to learn about various relevant issues referred to in Brundtland report. But the funding ended, while the thesis was still not ready. Again, thanks to SUM and the Department of Political Science I got new opportunities. During the spring of 2000, Professor William Lafferty, the research director of ProSus, offered me an affiliation with his programme. Thanks to Bill I got an opportunity to finish the PhD journey. I look very much forward to be part of ProSus, particularly as the activities are explicitly oriented towards documentation, research and information for a sustainable society. There are others who deserve my appreciation. In the end, however, the most influential person is the one that “forced” me to go to India. Thanks to my wife and very best friend Eldrid - who has managed to submit her own doctoral dissertation despite giving birth to our three great children – we manage to combine our private and professional lives. I really appreciate her commitment and support. You gave me a lot of frustration by forcing me to extend the Caribbean and Latin American focus to India. However it turned out to be a positive experience. Today, quite surprisingly, sometimes it is the nice even beautiful aspects of India and Indians that remain in my memory. This is happening despite the fact that TNCs’ cross border environmental management systems seem to create islands of environmental excellence in an Indian “sea” that unfortunately becomes more dirty! Oslo, August 2001 Audun Ruud iv Table of Contents: ACKNOWLEDGEMENTS ......................................................................................................................... III TABLE OF CONTENTS: .............................................................................................................................. V LIST OF TABLES....................................................................................................................................... VII LIST OF FIGURES .......................................................................................................................................IX LIST OF TEXTBOXES ................................................................................................................................XI LIST OF ACRONYMS ..............................................................................................................................XIII 1. INTRODUCTION ....................................................................................................................................... 1 1.1 RESEARCH QUESTIONS............................................................................................................................. 5 1.2 EMERGENCE OF TRIANGULAR ENVIRONMENTAL DIPLOMACY?............................................................. 11 1.3 JUSTIFICATION FOR THE RESEARCH QUESTIONS.................................................................................... 16 1.4 SOME CONCEPTUAL REFLECTIONS......................................................................................................... 19 1.5 METHODOLOGICAL REFLECTIONS ......................................................................................................... 23 1.6 THE ARGUMENTATION AND STRUCTURE OF THE THESIS ....................................................................... 30 2. THE INCREASING ROLE OF TNCS IN INTERNATIONAL AFFAIRS ......................................... 35 2.1 ECONOMIC GLOBALISATION - WHAT IS TAKING PLACE? ....................................................................... 36 2.1.1 The growing role of FDI flows and TNCs.............................................................................................
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