US Military

published in Indian Express- Saturday, July 23, 2005- URL: http://www.indianexpress.com/full_story.php?content_id=74919


Tough, getting them to sign up

Atul Bharadwaj

The most powerful and technologically advanced army in the world is unable to make it attractive to its citizens to join the all volunteer force (AVF). The US army’s target is to recruit 80,000 troops by the end of 2005, but it is ‘‘more than 15 per cent behind its year-to-date goal’’. In addition to lowering its enlistment standards, the army has unleashed new TV ads targeting reluctant parents — offering sign-up bonuses of up to $20,000 to lure youth to serve in the national army.
The result is that the recruiters are under intense pressure to meet the quota requirements. Among the victims of this stress-laden drive, for instance, are Corporal Pat Tillman’s parents. In the wake of 9/11, Tillman had left his well-paying football career to serve the nation. His death last year was celebrated as an act of great patriotism. But the recent revelation of the true story — the young footballer was killed due to ‘‘friendly fire’’ by one of his buddies in Afghanistan — has shattered Tillman’s parents, who now complain that an “army worried about the crippling recruitment” concocted a story about their son’s death and lied to the country.
On May 20 this year, the US army had to suspend its recruitment drive for a day. The reason was not to give rest and recuperation to 7,500 army recruiters, but to reflect on their recruitment techniques which have come under intense scrutiny due to allegations of regular misconduct. The immediate context for the one-day suspension was a recruiter threatening to call the police to arrest a young man who had resisted recruitment.
Coercion and intimidation is not only being employed against individuals resisting enlistment but also against academic institutions and student groups involved in anti-war protests. Earlier in November 2004, the Federal Court of Appeals in Philadelphia blocked the government from enforcing the Solomon Amendment. According to this law, universities which refuse to allow military recruiters on campus could be denied federal funding.
The law was originally passed by Congress in 1996 but was not actively enforced before the beginning of President Bush’s administration. A network of 25 law schools and about 900 law professors had filed a complaint against the Solomon amendment, which violated the free speech rights of schools that restricted on-campus recruitment in response to the US military’s ban on gays and lesbians. The army’s discrimination against women and homosexuals is not the only reason for the low levels of recruitment. According to Jamie Weinstein, a right-wing scholar, the protest against discriminatory policies is just a facade. The anti-war Left radicals are primarily campaigning because they consider the army to be perpetuating the interests of US imperialism.
If this proposition is true, the civil society’s refusal to provide the foot soldiers to its army represents a growing civil-military divide. To obviate this civil-military gap, the US has three options. The first is the reintroduction of conscription. This option may not appeal to the neo-cons because of their ideological opposition to mass conscript armies containing reluctant soldiers. The second option is to follow the prescription proposed in Samuel Huntington’s book, The Soldier and the State (1957) — instil conservative values in a liberal society in consonance with military needs. This the neo-cons are pursuing through various measures, including the heightening of the fear element. However, this is a long-term option and cannot be easily achieved in US society, with its strong liberal moorings. The third option — Rumsfeld’s ‘military transformation’ doctrine — means maintaining a lean, mean and thin fighting machine.
But it is important to understand the “unknown unknowns” in this doctrine. Disregarding General Eric Shinseki’s advice, Rumsfeld sent a comparatively small number of fighters to Iraq. The shortfall was filled by raising the Iraqi armed forces. It is primarily as a result of this policy that compared to 700 Iraqi casualties, only 70 US soldiers were killed in the one month of violence that had erupted after the formation of Iraq government.
More numbers of Americans in the war zone means more casualties and therefore greater resistance to war at home. Making the Iraqi soldiers man the frontlines against insurgents and keeping the US forces to rear-guard action posts is a sound policy to keep the US casualties at manageable levels. For instance, had the US succeeded in getting one army division from another country, like India for instance, the US casualties in Iraq might have been lower than 1,700. But that did not happen. In many ways, then, the US army’s recruitment problems become the world’s concern too.

The writer is a war studies scholar at King’s College, London

London football

Published in Indian Express- May 24, 2005-URL: http://www.indianexpress.com/full_story.php?content_id=70902

Football, for love or for money?

Man Untd fans have been vociferously protesting the takeover by an American

Atul Bharadwaj

Besides the firebrand MP George Galloway, the other person who has been hogging the headlines in Britain is Malcolm Glazer. He is an American sports tycoon, whose claim to fame is that much against the wishes of football fans, he has managed to take over the ‘‘crown jewel’’ of British football — the Manchester United club. The tension generated by the liberalisation of football trade in Britain is almost a repeat of the stories one hears whenever foreign capital encroaches upon locals’ rights.
Last week, Malcolm Glazer became the owner of Man Untd., after securing 75 per cent of the club’s shares. He has bought the club at a cost of 800 million sterling pounds. Glazer has mortgaged the club’s assets, notably the Old Trafford stadium, to borrow 265 million from the US investment bank JP Morgan. Man Untd fans have been vociferously protesting the takeover by an American. The main point of contention between Glazer and fans is that the new owner is seen to be an outsider, with no love for the sport. Glazer is viewed as a profit seeking monster, whose quest for making millions out of the club is likely to ruin the club’s fortunes and future.
Six years ago, Rupert Murdoch had attempted to take over the club. Murdoch’s bid was thwarted by the anti-monopoly rules which are no longer in place. Therefore, the only option left with fans in a free market set-up, (apart from burning Glazer’s effigies) is to boycott the club, akin to not consuming coke to protest against the MNC. They are planning a Gandhi-esque sit-down in the middle of the pitch during next week’s FA cup final.
How far this will be feasible is difficult to assess primarily because football along with associated club activities is almost like opium for the British football fans. Glazer is not the first to commercialise the British working class game. Last year, a 37 year old Russian business tycoon Roman Abmramovich bought the Chelsea club for 250m pounds. Abmramovich is one of the chosen few Russian entrepreneurs who took advantage of the privatisation of Russia’s state assets in the mid-1990s. He is the core shareholder of Sibneft, the Russian oil company that owns the burovaya in western Siberia and 9,999 more oil rigs like it. His company Millhouse Capital is registered in Weybridge, Surrey, UK. According to The Guardian, Abmramovich has close connections with the British elite and Kent aristocracy. After Putin’s drive against the beneficiaries of the post-Soviet sell-out of state assets, Abmramovich shifted base to London.
Abmramovich is not as detested in Britain as Glazer is. One reason for this is that the Russian has invested in the club not for profit motive. May be, it is a gesture to the British, who may have backed the young man to be counted in the list of richest men in the world. Glazer, on the other hand, is seen to be using the club to fill his own coffers. Moreover, it is felt that the Russian may be more easily tamed.
The Russian owner of Chelsea invested huge sums to buy players from football markets around the globe. The result is that Chelsea has won the British Premiership league for the first time in 50 years. This should signal to the fans that free market mechanisms do act in the interest of the sport. However, the basic fear stems from the fact that the market’s penchant for procuring talent from other countries to boost profits adversely impacts on the growth of local talent. Quentin Letts argues in The Wall Street Journal that such an attitude of the Man Untd fans is a result of their failure to ‘‘accept the realities of capitalism’’.
This suggests that the fight is not just about football rights but also about principles of ownership of land and resources. Football is no longer a poor man’s game. It is a part and parcel of the global political economy, where oil is a precious commodity and hegemony is often resisted. It is neither the players nor the manufacturers of sports goods who form the backbone of the sports industry. People’s sentimental attachment and unqualified love for the sport is the basic raw material. It is this love which nurtures future players and takes it to the heights of popularity.
The problem is that the insatiable quest for profits leads one to neglect this support base forgetting that public involvement is a perishable commodity. Neither capital nor technology is capable of sustaining the continuous flow of this raw material. For example, the current communication technology brings the best global football actions into our drawing rooms. But has this been able to sustain Kolkata’s love for football? Kolkatans do watch the game, but with indifference. The result is that they have switched their loyalties to cricket, where their local hero Sourav Ganguly fulfills their spiritual needs.

The writer is a scholar at King’s College, London

Indian Politics & Cricket

Test or Twenty20 ?

The days left to go for next election coming closer

When the Congress and the Left got together in 2004, the BJP had thought that the two would play a 'Twenty-20' game at best- the inherent contradictions in their ideological posturing, would make the UPA government unstable. The Congress on the other hand was confident-Congress-Left alliance were in for a 5-year long test match. The non-committal left, extending issue based support said that they would be in the field for as long they did not feel exhausted of supporting the neo-liberal policies of the Congress. Interestingly, the Left seems to be fast approaching their 'prudent limit of endurance' and the possibilities of the UPA alliance completing the test match (full term) seem remote.
With the 12th man (the Left) just refusing to catch the Indo-US nuclear deal, and openly declaring it's dislike for the Captain's (Manmohan Singh) strategy of subverting the Indian national interests at the altar of economic gains from the US, the odds are certainly tilting against the UPA. This was made abundantly clear by the CPI(M) General Secretary Prakash Karat (an orthodox batter). Using the resignation of Japanese Prime Minister Shinzo Abe, he warned the Prime Minister to be more judicious in selecting shot (read friends)- Abe, Pervaiz Musharraf, John Howard, friends of US President George Bush were all on their way out, primarily because they had compromised their teams (nation's) interest and tried to play extravagant shots at the insistence of Bush administration. What this literally meant was that unless the captain mended his match-fixing ways in cahoots with the global empire-the left fast approaching its saturation level would precipitate, leading to the fall of UPA government.
Both cricket and politics are so much in common with the chameleon, which changes colour at the drop of a hat, merely to camouflage its existence & enhance chances of survival in a highly competitive jungle environment. Now, whether Manmohan bids bye Bush or Karat walks out of the field only time will tell, but one thing is certain the Congress- Left alliance would not complete the test match in the true cricketing spirit.

Both cricket and politics are so much in common with the chameleon, which changes colour at the drop of a hat, merely to camouflage its existence & enhance chances of survival in a highly competitive jungle environment. Now, whether Manmohan bids bye Bush or Karat walks out of the field only time will tell, but one thing is certain the Congress- Left alliance would not complete the test match in the true cricketing spirit.

Business & Human Rights

WILL GRANT OF INTERNATIONAL PERSONALITY TO TRANSNATIONAL CORPORATIONS PROMOTE THEIR RIGHTS TO USE ORGANIZED VIOLENCE?


Atul Bharadwaj
September 2005


Dissertation submitted for MA in War Studies
King’s College, London

Contents
Chapter 1: Introduction……………………………………………………… 3
What is International Personality?..................................................... ………7
The Purpose of Study…………………………………………………………… 10
Structure and Research Method………………………………………. 11

Chapter 2: Understanding Corporate Personhood……………………..13
Legal Theories………………………………………………………………….. 13
Political Dimensions of Corporate Personhood……………………………. 16

Chapter 3: Corporation- A Greedy Man…………………………………….22
The Congo Conflict and Corporations…………………………………………22
Are Corporations Different From Other Greedy Actors?..............................26
The Columbian Example……………………………………………………….. 30
Why Do Corporations Incorporate the Means of Coercion?........................31
The East India Company and Military…………………………………………33
Is East India Company’s Example Relevant Today?..................................37
Chapter4: Corporations and International Arena………………………..43
Corporation as a Political Person……………………………………………… 43
Making Corporations Responsible………………………………………………49
Problems Associated with Treating TNCs as ‘Subjects’………………………52
Conclusion…………………………………………………………………………57
Bibliography…………………………………………………………………….. 61

Chapter One: Introduction


Individuals and companies take advantage of, maintain and have even initiated armed conflicts in order to plunder destabilized countries to enrich themselves, with devastating consequences for civilian populations.

UN Secretary-General Kofi Aanan [1]

This essay argues that the grant of international personality to transnational corporation (TNCs) will lead to their greater participation in the international politics and provide them with the legitimacy to use organized violence.

There has been an exponential increase in the global reach and range of TNCs in the past two decades. This has been even more pronounced in the 1990s.[2] Global business actors encounter myriad forms of friction in the course of their pursuit of profits. It is alleged that TNCs on occasion use illegal and harsh means to overcome such friction generated by local forces opposed to their operations. The means that TNCs are known to adopt are two-fold: one, the appropriation of local military forces provided by the states; and secondly, the use of warlords and own security agencies to secure their business interests. This is one of the causes for economic conflict, and often leads to human rights violation. The not-so-benevolent corporations have consequently been attracting protests from civil societies in advanced countries and backlash from natives in the developing world.[3]

Civil rights movements, aided by modern communication technologies, have been quick to spot the human rights violations, especially in the developing world, where TNCs engaged in the business of extracting of mineral resources are active. This has raised the level of concern within the international community, on how to balance the TNCs quest for profits with their social responsibility.

A moderate attempt at regulating the TNCs global activities is based on moral appeal. The endeavour is to instill a sense of social responsibility in corporations. The not- so-moderate proposal aims to make TNCs subjects of international law and hold them accountable for any violation of human rights.[4] That there is something amiss in the way corporations are operating is duly acknowledged by some corporate leaders. Some scholars view this challenge as a threat to the sustainability of corporations and capitalism.[5] According to Klaus M. Leisinger of Novartis Foundation for Sustainable Development, ‘If they [TNCs] do not observe these most essential elements of their social responsibility, they surely risk their societal (if not legal) license to operate’. [6]

The concept of corporate social responsibility (CSR), has gained salience over the past few years.[7] CSR is a voluntary attempt by corporations to cater to public concerns about environmental degradation; violation of labour rights; use of child labour and abuse of human rights, while still retaining its primary obligations towards its shareholders. CSR is therefore, seen as a moral effort towards increasing the shelf life of corporations in the wake of the growing backlash against TNCs. However, the regulatory response to the human rights violations by corporations envisages bringing them under the ambit of international law for criminal offences against humanity. The basic difference between the two view points is that the former sees it as a force capable of solving the social and environmental problems through its moral capabilities and organizational skills, while the latter sees TNCs as a necessary evil. It is this belief in the omnipotent powers of the corporations that leads to the argument that the TNCs should fill the political void in nations, where the state has failed to meet the expectations of good governance.[8]

It is important to see the underlying assumptions in both the above mentioned efforts to tame corporate behaviour. Both the moderate and not-so-moderate responses to mend corporate behaviour are based on the assumption that TNCs are the primary engines of the global economy and they are needed to spread economic benefits to the under developed parts of the globe. The second assumption underpinning both propositions is that the relationship between the regulator and the corporations will remain static at current levels and the corporations will continue play a subordinate role to the regulatory bodies (national or supranational).

The essay will discuss these assumptions in detail to show that the basis for both these assumptions is flawed, primarily because; it is inherent in the nature of corporations to grow bigger and ultimately gain political powers in order to manage their possessions and property. Here the essay will use the example of the East India Company and its relationship with the British parliament to show how corporate bodies form alliances with the political elite in their home base to perpetuate their empire elsewhere. The pace at which the state-market relations have altered in the past decade should be indicative of the power and potential of the TNCs to gain greater political leverage in the international political arena.
At one level, majority of the corporations are now beginning to pay due cognizance to environmental and social concerns in their areas of operations. However, at the other end of the spectrum, one observes that corporations are enhancing their lethal powers through acquisition of greater stakes in the means of conducting organized violence.[9] These efforts to enhance the corporate appeal and armoury are not unprecedented. As will be shown later, both these methodologies were adopted by corporations in the past to increase their power base. The concern now, however, is will the TNCs grow big enough to challenge the very essence of statehood and the prerogative to make war?

What is International Personality?

Alexander Wendt is credited with bringing the subject of ‘state as person in international theory’. Wendt suggests that ‘states are real actors to which we can attribute anthropomorphic qualities like desires, beliefs and intentionality’.[10] Wendt recognizes three kinds of persons: ‘psychological person (with mental attributes), legal person (with rights and obligation) and moral person (accountable to a moral code)’.[11] He considers state to be a psychological person but denies this distinction to corporation, which is merely a moral personality.[12] Contesting the division of an individual along psychological, moral and legal lines, Peter Loams says that ‘in actual human beings these identities are undivided’.[13] Defending his argument Wendt posits that ‘even in individuals empirical (psychological) and normative (legal and moral) personhood are separate and irreducible to each other’.[14] Lomas is right in saying that a person is an undivided personality. However, which particular personality trait of a person predominate his behaviour is what defines his relationship to the society. For example, according to corporate citizenship concept, corporate person is a good moral being. However, when we see the corporation from close quarter we find that it is greedy and selfish and it is this particular personality trait, which overshadows its good conduct. Therefore, when we talk about granting corporations with international responsibilities, its dominant trait has to be borne in mind.

CSR aims to highlight the moral aspects of corporate personality, primarily to gain international legitimacy and therefore, international personhood for corporations.[15] Under the international legal regimes states are the only entities with a legal personality. States are subjects of international law. More recently, the formation of the International Criminal Court (ICC) has conferred this status on individuals, who are now liable to be tried internationally for crimes against humanity. Apart from States and individuals, transnational corporations are the other main international actors that communicate at the global level; however TNCs do not enjoy the status of subjects under international law. One cannot say that throughout the Westaphalian era only states have enjoyed this exclusive status, because, earlier even non-state entities like ‘Holy See, charted companies and belligerents’ have enjoyed this status.[16]

The argument that TNCs should be treated as subjects of international law is aimed at holding them accountable for human rights violations or crimes against humanity. Majority of the argument for subjecting TNCs to international legal jurisdiction, talks only about their obligations under the international law, while neglecting the rights that will accrue to TNCs through this legal mechanism. The question is- will the obligation of preserving ethical business practices and care for human rights by the TNCs, also lead to legitimization of their right to use organized violence for protection of their business interests in a globalized world?

Upgrading the MNCs from the status of being ‘objects’ to ‘subjects’ under international law could directly bring them in competition for international legal rights, which currently are the sole preserve of the states.[17] This essay attempts to discuss the dilemma associated with conferring international legal personhood upon TNCs. As Mark B Taylor argues,

On the one hand, we find it absurd that there are few norms and no mechanism through which companies can be held accountable for participation in human rights abuse. On the other hand, it seems ridiculous that companies should be held to account for violations that have always been the responsibility of governments to control and that have thus been none of their business.[18]

The Purpose of Study

Corporations are playing an important role in the global economic milieu. Will they continue to be benign economic players or occupy an increasingly greater political space? According to John Ruggie, TNCs will play an increasing role in the international public domain, where states are failing to meet the challenges.[19] What will be the nature of engagement of TNCs within the larger political space thus – will they be granted the legitimacy use organized violence to protect human rights? Will the grant of public space lead to greater privatization of security?

The essay is based on the study of negative aspects of corporate personality rather than its positive aspects, because it is the negative aspects of this personality which are more germane to the issue of use and misuse of organized violence. In short this essay will emphasizes more on the ‘masculine’ aspects of the corporate personality, which give it a propensity to indulge in use of violence rather than on its more ‘feminine’ characteristics commonly associated with social responsibility. The essay does not discuss the privatization of security normally associated with the increased role of contractors in war. It is a discussion about the next stage in privatization of war- the grant of legitimacy by international authority to corporations to operate independently as a protective force.
‘
Structure and Research Method

The first part of the essay attempts to understand legal and the political dimensions of the concept of corporate personhood. It is considered important to explore the legal person status, which the corporations enjoy under the domestic laws of Western countries, because this leads us to a better understanding of its emerging personality in the international context.

The third chapter begins by exploring the negative side of the corporate personality and its propensity to appropriate the means of coercion by taking up the examples of corporate involvement in human rights violations in the Democratic Republic of Congo (DRC) and Columbia. We then ask the question as to why does a typically business enterprise need the support of coercion to advance its interests? The essay compares the East India Company with modern TNCs to show that expansionist tendencies are an inherent part of any economic organization.
Chapter four discusses the corporation as a political person and moves on to explore the current debates about expanding their international responsibilities. In the end the essay discusses whether the TNC involvement in international governance structures and protection of human rights will lead towards granting them the legitimacy to use private military means?

Chapter 2: Understanding Corporate Personhood

Legal theories

Corporations have been in existence for over 150 years. This economic body has shown tremendous resilience and withstood numerous attacks, questioning the very legitimacy of its being. The fact that it has weathered the onslaught of political forces to re-emerge as a dominant historical actor intending to once again play a critical role in shaping human history in the 21st century, demands that its past and emerging personality be subjected to intense academic scrutiny. Corporate law recognizes business corporations as a legal person.[20] This view considers corporations to be entities independent of the members, who own it. The independent identity conferred on corporations by law has been a subject of debate over the past century. Is corporation, an imaginary or an artificial person? Is it a creation of the state or a progeny of markets? Is it merely an economic actor or does it harbour political ambitions too? Does corporate personality remain static or is it subject to evolutionary changes in the politico-economic landscape on earth? Is it a benign peace loving personality or a violent pathological person? A survey of the existing theories and debates about corporate personhood will help us throw some light on the above mentioned questions.
.
A ‘person’ in the legal world is understood as a human being endowed with economic, civil and political rights.[21] According to an American lawyer’s article in Harvard Law Review, 1911, the ‘scientific and metaphysical’ study of corporate personality was first undertaken by Savigny in Germany.[22] The basic question which Savigny posed was who owns the corporate property? Savigny’s answer was that the property belonged to a ‘fictitious being and not to any real person or entity’. This fictitious being devoid of a ‘will’ was corporation itself.[23] Later French writers accorded the fictitious being with a modicum of reality by imputing its origin to the will of the state. Without contesting the basic concept of a fictitious corporate personality created by the state, another German, Brinz propounded the “Zweckvermogen” theory which argued that the fictitious property belonged to none-‘it is not a property of a person but of a purpose’.[24]

Soon a rival theory emerged, which contested the basic tenets of fiction theory and argued that corporations were ‘real and natural persons, recognized but not created by law’[25] The realist theory even went to the extent of ascribing sex to the corporate personality, by suggesting that some ‘corporate bodies were feminine like church and others were more masculine like the state’.[26] Another school of thought simply dismissed the realist theory and propounded that the ‘corporation is merely an abbreviated way of writing the names of several members’.[27]

The realist conception of corporation comes closest to understanding the nature of corporation as politico-economic player, because corporations in the past have managed colonies and exercised their masculinity by indulging in violence. However, the realist theory which defined corporations in unambiguous terms was ignored and the terms of reference of the debate were altered. The current debate on the subject revolves around the question- should the corporation’s chief concern be shareholders or stakeholders?[28] According to Kent Greenfield for the last half a century the corporate scholarship has been dominated by the property theorists and the contractarians.[29] To understand the shift in the debate, it is important to understand the political context in which it is conducted.

Political Dimensions of Corporate Personhood

David Million offers a convincing understanding of the subject of corporate personhood by locating the debate in the political context. [30] According to Million, the questions which need to be addressed with regard to corporate personhood are, ‘individual responsibility and obligation, distribution of wealth and state power’.[31] By failing to address these questions the legal debates about corporate personhood remain devoid of any conclusive evidence of corporate behaviour and the very nature of the corporate person.

Million traces the history of the corporate personality debate from 1886, when the identity of corporations was meshed with the identity of its owners. The ‘aggregate theory’ denied that the corporation is a person created by the state. According to Million, the ‘aggregate theory’ was a response to 19th century state regulatory mechanisms, which defined the limits on ‘corporate size, wealth and longevity’.[32] However, by the end of the 19th century, with the expansion of business activity, state restrictions were considered inimical to the growth of corporations. It is during this particular stage that the aggregate theory with its ‘anti-regulatory stance’ began to gain currency. However, the aggregate theory too was found to be a hindrance to the growth of large enterprises, because of its insistence on viewing corporations as large partnership firms. Corporations as partnership firms meant that the shareholders were liable to bear the losses in case of insolvency of the firm. This was the concept of ‘unlimited liability’ of the shareholders, which acted as deterrence against investments.[33] Moreover, the excessive involvement of shareholders in the management of the firm was not conducive for its expansion.

The emergence of economies of scale in the late nineteenth century led to the demand for reduced state controls. This marked the emergence of fresh ideas about the corporation being a natural person created by the market forces as opposed to an artificial person created by the state. This conceptualization of the corporation as an entity also reflected the altered relationship between the shareholders and the company. To encourage risk-free investments, the ‘unlimited liability’ clause in respect of the shareholder was changed to ‘limited liability’, making the shareholder a passive investor in a company. Therefore, the conceptualization of corporation as a natural and private identity helped it to break two regulatory bonds imposed on it by the state and the investors. This primarily meant that the corporation was no longer an artificial person, remote controlled by the dictates of the state nor was it a ‘thing’ tied to its owners (investors). It was now a free flowing person with unlimited ambition to achieve its growth objectives. [34]

These changes in legal conceptualizations were much in tune with changing dynamics of the global economics. The corporation as a free flowing natural person coincided with the high growth in free trade and industrialization. However, with the advent of the great depression in the early 1930s different tunes on the subject began to appear. In 1932 E. Merrick Dodd, a professor at Harvard Law School, advocated greater social responsibility without tampering with the concept of the corporation as a natural entity. Associating the need to alter corporate behaviour to meet challenges to the longevity of corporations, Dodd argued that:

Recent economic events suggest that the day may not be far distant when public opinion will demand a much greater degree of protection of workers. There is a widespread and growing feeling that industry owes its employees not merely the negative duties of refraining from overworking or injuring them, but the affirmative duty of providing them so far as possible with economic security. [35]

Dodd’s concerns grew from the political and economic conditions prevalent at that juncture in history. The workers’ movements were acquiring greater militancy against the big business. This was also a time when the US President Franklin D Roosevelt, designed the ‘New Deal’ aimed at restricting the powers of the corporations.[36] In the 1960s with the ideology of socialism gaining salience in political thought, the concept of corporate social responsibility with an added emphasis on environmental concerns began to surface. During the 1970s the shareholders concern and their stake in corporate profits came up high on the agenda. The logic was that after the post war lull, business needed to expand and expansion required investments, which could be procured only by restoring the confidence of the shareholders in markets. During the 1980s and early 1990s corporations adopted an approach to silently leap ahead without advertising their ambitions. Milton Friedman, along with other ‘nexus of contract’ theorists advocated shareholder primacy in all corporate dealings and has tried to de-reify corporate personhood by showing it to be devoid of any moral or societal obligations.[37]
As opposed to contractarians, the communitarian brand of theorists see corporate interest as laying in the good of the much larger corporate community, covering the whole gamut of corporate activity rather than limiting it to shareholders. The communitarians believe that corporation is an aggregate of interest holders in the company rather than being a single entity.[38] Both the communitarians and contractraians defy the corporate personhood concept, the only difference between the two being that the former includes workers, shareholders, sub-contractors and others remotely connected with the corporate activities within its ambit, while the contractarians limit themselves to the wealth maximization of shareholders. The communitarians come closer to the concept of corporate social reasonability than the contractarians. The contractarians present an isolationist face of the corporations; the communitarians depict expansionist traits. Our main concern here will be with the corporate expansionists, because it this stream of thought, which is most likely to endeavour for political legitimacy to use organized violence and demand an increased role in global public domain.

Advocates of CSR, the UN Global Compact mission, OECD, World Bank, IMF and many concerned NGOs (like Amnesty International, Oxfam, etc.) consider corporations to be a Janus-faced person. The people involved in promoting the idea of CSR and corporate involvement in promotion of human rights are fully aware of the fact that corporations do behave awkwardly sometimes, and they therefore need to be regularly imparted with lessons in good behaviour. Their efforts are directed towards toning down the negative aspects of the corporate personality, in order to project its more responsible face, which according to these organizations is endowed with great potential and capabilities to perform critical missions to save the world.

On the other end of the spectrum, we have left activists and some NGOs (Corporate Watch, Counterpunch, Platform etc), who define the corporate personality in unambiguous terms by identifying it as a ‘pathological person’ engaged in ‘pursuit of power and profits’. This essay uses this negative aspect of corporate personality to show their behaviour in conflict zones and tendency to appropriate military forces to achieve their ends. Here we take up the example of economic conflict in Congo and Columbia to bring home the point, of corporate involvement in conflict.


Chapter 3: Corporation- A Greedy Man


The Congo Conflict and Corporations

The Democratic Republic of Congo (DRC), an erstwhile Belgian colony, gained independence in 1960. It has currently been in news, not for being a most preferred destination for foreign direct investments or for registering any stupendous economic growth, but for internal war and gross violations of human rights. Its current history, since the early 1990s, continues to be plagued by war associated with loot of its natural resources. It is estimated that the death toll in its recent ongoing war is roughly four million.[39]

There are three major players involved in the game to extract gold from Congo’s mine. One is the vast majority of people segregated along tribal and ethnic lines. The second crucial player is the elite formations in Congo (government officials, political and rebel leaders) aided by their own mercenary or militia forces. The third player in this resource war matrix is foreign transnational companies. People palpably lie at the bottom of this pyramid. They fill the militia army as warriors and TNC- run mining industry as workers. Paradoxically, it is the same people and their families who either get exploited as workers or become victims of war related killings and atrocities. Incidentally, it is same exploited masses, which feed the global media with their horrific stories and provide the international community with a reason to intervene. The other two players sit in the position of power and enjoy the maximum benefits of Congo’s gold reserves.[40] Therefore, when we discuss war in DRC our focus will be on the role of these two players in causing the war.
In 1996, Mobutu Sese Seko, Congo’s leader since 1965 was forced out of power through an armed invasion by Rwandan and Ugandan forces.[41] Laurent Desiré Kabila acquired the reins of power. In July 1998, Congo got engaged in a second war against the combined strength of Rwandan and Ugandans forces. With Zimbabwe, Angola, Namibia joining the war to support Kabila and Burundi proving support to Rwandan and Ugandan, the scope of the war enlarged, resulting in numerous killings. In November 1999, the UN established a peace keeping force in Congo after brokering a peace agreement between the warring countries. In June 2003, a transitional government was established. Despite the efforts of international organizations, lasting and durable peace continued to evade large parts of Eastern Congo.[42] The war in the northeastern part of Congo, specifically in Ituri, got exacerbated due to ethnic divisions and the support that some of these factions received from across the border.[43] These ethnically based armed groups were continuously engaged in a power struggle, to gain monopoly rights to exploit the natural resources in region. According to a UN report, two phases were distinct during the resource war – ‘mass scale looting and the systematic and systemic exploitation of natural resources’. Mass looting was resorted to by the armies of Burundi, Rwanda and Uganda, which transferred the loot to their respective countries and exported it to international markets. [44] The systemic exploitation was carried out using pre-existing channels and the main players in this organized loot were primarily top army commanders and businessmen and government structures.[45]
We now come to the role of TNCs in exploiting both the conflict situation as well as the Gold resources in Congo. The Multinational Company, Anglo Ashanti Gold has emerged as one of the main actors in the Gold exploitation game.[46]. The company had been active in trying to procure mining contract since 1996, when the process of disinvestment in the state-owned gold mining agency OKIMO had started to gain momentum.[47] In 2003 after the formation of transnational government, the company along with many other international companies entered into the fray for mining rights. The company discussed gold exploration work in Mongbwalu region with the transitional government. However, this region had come under the de-facto control of Nationalist and Integrationist Front (FNI) and the transitional government did not exercise any control in the area. Furthermore, FNI was known to be causing atrocities against the civilian populations. Knowing this fully well the company started negotiating with FNI to begin mining in the area. The charge leveled against Ashanti Gold by human rights groups is that, the company hobnobbed with a known human rights abuser in the region just to make profits. It is also alleged the company paid a sum of US$ 9000 to FNI. The company has acknowledged that these payments to FNI,[48] which it stated were made to protect its staff.[49]

Are Corporations Different From Other Greedy Actors?

The issue raised by most of the human rights watchdogs and UN reports is about the company’s complicity in human rights abuses in the region by paying money to local warlords. The questions which obviously flow from the above discussion are-what is the role of corporations in fuelling conflicts? Are these human rights violations and their illicit connections with warlords’ mere ‘externalities’ associated with business activity? Does their illicit involvement prove their complicity in human rights violations? Are TNCs any different from other local economic players? These questions become important to our discussion, because of TNCs connection to the emerging global power structure. What role will corporations be assigned in the new power structure? Will they be pampered or pushed to conform to international legal and political norms?

A World Bank study on the factors leading to civil wars suggests that it is the greed rather than grievances which increase the risk of civil war.[50] As opposed to the political science literature, which ‘explains conflict in terms of motive’ (high inequality; lack of political rights; or ethnic and religious divisions in society), the study develops an econometric model to explain the ‘rebellion in terms of opportunity (the scope for extortion of natural resources, and for donations from a diaspora population). Firstly, the main problem with the study is mixing of the term rebellion with conflict. According to the World Bank report:

The political science literature explains conflict in terms of motive: the circumstances in which people want to rebel (emphasis added) are viewed as sufficiently rare to constitute the explanation… contrast this with economic accounts which explain rebellion (emphasis added) in terms of opportunity.[51]

Rebellion is against an authority, whereas conflict is between two or more opposing forces. Rebellion is by the oppressed against the oppressor, whereas, conflict often involves the elite who may not be oppressed. Furthermore, ethnic and religious divisions can be used by the elite to reduce the chances of a rebellion. Ethnic divisions do aid the conflict environment but they are counterproductive to the forces seeking to rebel against an established order. Homogenous societies have a greater potential to rebel as opposed to divided societies. The World Bank study is confusing, because it liberally misuses the concept of ‘class conflict’ and rebellion based on grievances and juxtaposes it with ‘predatory conflict’ in which both the ruling elite and people’s predatory quest for seeking rents from natural resources becomes the main reason for conflict. Therefore, both the oppressed and the oppressor become conflated into one category.[52] The World Bank study by Paul Collier and Anke Hoeffler’s also brings out the dependence on primary commodity export; support by hostile governments in the neighbourhood; and money provided by the diaspora. Surprisingly, the study completely omits the role of international business players in fomenting conflict. The UN Panel’s report on the subject named 85 companies considered to have been a part and parcel of the conflict, including American-owned Cabot Corporation, Eagle Wings Resources International, Trinitech International Inc, Kemet Electronics Corporation, OM Group Inc, and Vishay Sprague. The report, published in October 2002, brought out how “elite networks” consisting of key political and military elites and business persons plundered the country’s natural resources and public finances with impunity.[53]

The World Bank report gives an impression that the cause of conflict in Congo lies in the predatory nature of the locals to garner natural resources for their selfish ends. This shows that the outside players, barring neighbouring predators (Rwanda and Uganda in this case) no other international business players have any role in the conflict.[54] Such reports tend to prove that the involvement of TNCs in human rights violations in such conflict zones are merely externalities associated with operating in conflict zones. Such arguments make the local people engaged in war crimes appear as savages. On the other hand, TNCs operating behind the scenes are made to appear merely as errant individuals, for violating ‘OECD Guidelines’ on good corporate behaviour.[55] Their powerful personality often helps them to be pardoned, after all to ‘to err is human’. One common factor among all the persons’ party to the crime against humanity in Congo, is that they are all driven by greed, therefore why should one differentiate between FNI and Anglo Ashanti Gold? The former directly used coercion to secure its business motives, the latter hired coercion to provide security to its business.[56] Before discussing as to why company’s often get embroiled in violence, we take another example to show the military- market nexus.

The Columbian Example

Columbia is an oil rich country in Latin America. Majority of its oil production is directed towards US markets. Currently more than fifty foreign companies are operating in Colombia in the oil and extractive resource sector’. Apart from the U.S. oil corporation Occidental Petroleum the other companies active in Colombia include Harken, Triton, and BP-Amoco (a U.S.-U.K. merger)[57] Add to this mixture of foreign business corporations, the Colombian business and military elite and you get a perfect recipe for conflict garnished with human rights violations and crimes against humanity.

The military-market in Columbia is simple to understand. We discuss here one such case in which the multinational corporation used the local military and paramilitary forces as well as a private military company to secure and promote their interests. A widely publicized case has been aerial bombardment of civilians in the village of Santo Domingo, Arauca on 13 December 1998. 17 people, including six children were killed in the attack. The bombardment was carried out by Columbian helicopters, which dropped a cluster bomb on the village, the coordinates for which were transmitted by the AirScan (A private military Company) pilots, flying the plane provided by Occidental. This coordinated attack was planned in the operations rooms of Occidental’s Caño Limón complex ostensibly to save a military unit entrapped by rebel gurillea forces.[58]
This is not the only incident in which private military company was used in Columbia. Earlier in 1992, BP-Amoco, Colombia’s largest foreign oil company hired a London based Anglo-American security company, Defence Systems Limited. DSL’s subsidiary in Colombia-Defense Systems Colombia- provided training to Colombian security forces in counter-insurgency tactics and also supplied arms to them.[59]
According to the American Friends Service Committee (AFSC) report, Occidental aided by the U.S. Colombia Business Partnership consortium has lobbied with the U.S. government to increase military aid to Columbia.[60] In short, multinational oil corporations provided funding to all of the armed actors in the Colombian conflict, thus not only aiding it but fueling the conflict in the region.

Why Do Corporations Incorporate the Means of Coercion?

The two brief examples give us evidence about the corporations’ involvement in using and maintaining the means of coercion. The question is- do TNCs follow conflict or conflict follows them?
Minerals are considered a precious commodity by the locals to improve their living conditions. The natives consider this to be nature’s gift to them for their survival and well being. TNCs see mineral extraction as a lucrative source for profits. The foreign corporations enter the oil rich areas promising to extract minerals for mutual benefit of their company as well as the natives. However, soon the natives discover that they are being shortchanged. The natives begin to protest. To contain dissent, the powerful forces often divide the natives along ethnic or religious lines. Corporations aid this process by feeding the greed of few and distancing them from the common cause of the natives, forming an elite class, which identifies its interests to lay in the well being of the company. These elite groups are empowered through money and arms to act in the company’s interests. The process of militarization leads to the growth of small scale war industry, which breeds many local warlords too. Conflict thrives in a situation, where society is divided and war industry is growing.[61] With the natives busy in making war, corporations profit by extracting more minerals from their soil, while continuously feeding the local war industry. If the locals become united and peaceful, they will demand more and dent the company’s profits considerably. This situation cannot be conducive for business. Let us take a historical example to substantiate our argument that companies have a particular affinity to adopt military means.

The East India Company and Military

The history of imperialism is replete with examples of the ugly face of corporations operating in cahoots with military forces to extend their metropolitan property rights to various parts of the world. Business personality is always shaped by aggressive instincts to continuously add wealth into its coffers. If the East India Company had been devoid of these instincts, it would never have ventured into the high seas to reach India. According to business logic everything and anything can be used to create wealth. Who would have thought a few decades ago that drinking water would be sold in bottles? To understand this let’s see the East India Company’s forays into India.

The company moved into India in the 17th century, maintained a low profile initially because it was a late entrant into an area where the Dutch and Portuguese had already established themselves. The company befriended the Mughal ruler to establish its first settlement in Surat in 1613, and declared that it was different from Dutch businessmen because of its firm belief that war is incompatible with trade.[62] Gradually the company started expanding to the peripheries of the Mughal empire and setting up the basic infrastructure for settlements. As the Mughal rule weakened, the true colours of the company began coming to the forefront. Soon the company realized that the time had come to use the ‘sword’ to manage their commercial transactions.[63] In the mid 17th century, the company began its quest for greater control through indulgence in wars on Indian land in the name of protecting its trade.
The 1661 Charter emboldened the company to extend its power in India under the guise of ‘delegated sovereignty’.[64] In 1680, under the stewardship of Sir Josia Child the company had embarked on a military mission against the Mughal emperor Aurangzeb, but was defeated. After this the company followed a more measured political approach. The mid 1700s marked a shift in the company’s agenda; it began to strengthen its commercial foothold through the acquisition of territorial control. Territorial control required the displacement of the established political configuration. This required the use of violence. The company was engaged in wars with the Mughal ruler Siraj-ud-daula during this period. The ongoing tussle with the Mughal ruler in Bengal prompted the company to send one of its veterans from the Seven Years’ War, Robert Clive, to take control of the situation. The timing of Clive’s arrival and his subsequent military adventures were a part of the company’s policy and the changing political equations in its home country rather than any peculiarity in Clive’s personality.[65] According to Douglas M Peers, the penetration of the Indian body politic by the army was a result of the growing militarization of the British ruling eliteThe period 1790 to 1815 witnessed the emergence of new mentalities and institutions that came about following an alliance between traditional landed interests, the monarchy and the church and the increasingly powerful commercial and financial interests… One of the consequences of this was the militarization of British elite… Hence domestic changes reinforced the values of Anglo–Indian society.[66]

Elaborating on the primacy of violence in monopolistic structure, Mukerjee argues: Violence it must be emphasized, was an essential element of the British presence in India, It was violence that served as the ultimate imprimatur of colonialism…… A dominant power is always uneasy with violence directed against it, since non-reciprocal violence is one of the necessary conditions of its reproduction. The right to violence is, therefore, everywhere a privilege that authority enjoys and refuses to share with those under it: power always insists on violence as its exclusive monopoly.[67]

It is to be understood that acquisition of political power and the monopoly over the means of coercion by the company in the 19th century was not just a means to discipline people; it was also a source of revenue and knowledge. The 1813 and 1833 amendments to the charter opened trade to India, which hit the company’s monopoly over Indian trade. Under such circumstances, the revenue from taxes became the mainstay of company’s profits. According to Douglas M Peers, in order to protect their main revenue base, the company’s reliance on military support increased, resulting in the development of a ‘symbiotic relationship between the army and the territorial revenues’. The army insured stability and timely collection of revenue and in turn large chunks of revenues were dedicated for its upkeep.[68]

The increase in importance of the army within the company was not something, which happened unexpectedly. It was not an outcome of the violent nature of the natives, which forced the company to monopolize the means of violence, rather it was a policy. Just as ships help the trade to wade through the resistance offered by sea, similarly the army is needed to overcome the resistance caused by the multitudes. The East India Company used the military to not only secure but also to enforce trading monopoly. However, to maintain the extensive military infrastructure, the company needed to expand its revenue base and this could happen only by acquiring political power.[69] In addition, the army was also of immense value to the company as a knowledge force to establish its political hold.[70]

Is East India Company’s Example Relevant Today?

It could be argued that modern TNCs are vastly different from the East India Company. For one, modern means of communication enable corporations to monitor the activities of their managers more minutely. Moreover, modern companies are willing participants in social up-liftment; human rights and environmental protection movements across the globe. Furthermore, TNCs have no intention of using either politics or violence to serve their business. Therefore, the history of East India Company has no relevance in the 21st century. In the succeeding paragraphs we will see the similarities between the East India Company and modern corporations.

To say that the East India Company and its managers were totally oblivious of the importance of social responsibility and the dangers of mixing business and politics would be wrong. In 1767, speaking to the British Parliament, the Secretary of the East India company had categorically mentioned that ‘the general tenor of companies orders were not to act offensively… We don’t want conquest and power; it is the commercial interests only that we look for’.[71] Just as modern TNCs are fully aware of the problem of bribing the corrupt regimes, the East India Company too was aware of the benefits and problems associated with such modes of business transactions.[72] Even in the seventeenth century the British were seized with the issue of corruption among company officials, who were commonly known as ‘nabobs’. But nothing much could be done about this issues, primarily because, the power of the company was so strong and its agents were so deeply entrenched within the political structures of British politics that it was difficult to control it.[73] According to Marshall, in 1767 and in 1783, the British state was prevented from openly declaring its authority over the new provinces, because of the internal political equations.[74] The argument forwarded by the supporters of the company’s charter rights were no different from the arguments we hear today in support of virtues of privatization of industry. [75] This parliament –company nexus can be understood using the theory of ‘gentlemanly capitalism’. Douglas M Peers explains the theory of ‘gentlemanly capitalism’ as:

The political, social and economic hegemony that the landed, commercial, financial and some service and professional elites in Britain obtained at home and pursued abroad…. It was an alliance that was based upon the diffusion of benefits of financial capitalism and held together on a cultural plane by the values and codes of English gentleman.

When we look at the situation in present day context, things are not vastly different. A lot is being written about the growing reach of TNCs and their efforts to make inroads into positions from where they can exercise control over government policies. George Monbiot, in his book Captive State (2000) provides an extensive list of corporate heads represented in the British government institutions. [76] Similarly, Noreena Hertz has argued that since the 1970s the TNCs have been silently taking over the powers of the state. The over dependence of politicians on corporate money to meet their election expenses has rendered them powerless against corporate might. [77] The most recent example of the corporate power’s influence over policy matters is provided by the revelations about Exxon Mobil’s role in persuading George Bush to refrain form signing the Kyoto Protocol. [78]

It would be wrong to say that East India company managers could easily monopolize the means of violence in India, because there were no human rights activists keeping a sharp eye on company’s activities, as human rights watchdogs do in the 21st century. There were many concerned British citizens, who opposed the oppression of native Indians by the company. One such, a poet William Cowper wrote in 1784:

The potentates of this country they dash in pieces like a potter’s vessel, as often as they please,, making happiness of thirty millions of mankind a consideration subordinate to that of their own emoluments, oppressing them as often as it may serve a lucrative purpose.[79]
Another interesting example of the anti-corporation consciousness among the public and how a giant Japanese multinational corporation incorporated the growing dissent into its own scheme, shows the similarities between approach of companies then and now. In 1907, The Japanese South Manchurian Railway Company (known as Mentetsu) set up a research department to study the Chinese socio-political environment. The research department based in Manchuria was staffed with leading anti-colonial Marxist intellectuals from Japan.[80] Why did an imperial company tolerate and nurture left intellectuals? One reason could be to gain whatever little it could from their intellectual expertise. Another reason could be to keep them away from influencing the home country, because any revolution in the home state could have adversely affected the company’s longevity in the foreign land. Therefore, it was best to keep them under a watchful eye away from the homeland. This strategy of managing dissent through funding education and NGO activities is followed by many TNCs even today.[81] Since the 1970s a small group of privately funded organizations have been active in the field of shaping the public opinion on international security matters. These privately funded think-tanks include ‘Ford, Mac Arthur and W Alton Jones Foundations; the Rockefellers brothers fund and John Merck Fund and the Carnegie Corporation of New York.’[82] This private involvement in military software industry is now being expanded to make inroads into direct military operations through private military companies. The stupendous growth of private military companies in the mid 1990s is another phenomenon which takes the 21st century TNCs closer to their imperial-era predecessors.
Summing up our discussion of TNCs now and then, it is argued that just as modern day service industry is now engaged in the whole gamut of functions, which were previously considered to be the sole preserve of the governments (for example, policing, tax collection, maintaining prisons, national security etc.). Similarly, the erstwhile imperial companies expanded from being mere trading companies to become large service company managing a country as vast as India and a continent as large as Africa. The only difference is that while the East India Company and other Multinational companies acted on behalf of the British Crown and their respective home governments, the modern service industry is yet to acquire the legal legitimacy to overtly exercise its military muscle in the third world countries.


Chapter4: Corporations and International Arena


Corporation as a Political Person

Do corporations get sucked into the political mess and are forced to monopolize the means of coercion or do they deliberately unleash the coercive forces and control the political process for their own benefit? According to Daniel Litvin, corporations often get sucked into local politics. He gives examples of the East India Company and United Fruits and argues that financial success and ‘strong internal culture also blinds a company to the effect of its actions on local societies’.[83] Much of Daniels argument rests on the belief that there is nothing inherently wrong with the corporation as a person. It is mainly in the bad hands of overambitious managers that it gets diverted from its core competencies to dabble into politics. He therefore, largely lays the blame for the excesses committed by the East India Company, on Robert Clive’s ‘unstable personality’ and Cecil Rhode’s ‘unrelenting drive’ in Africa.[84] Daniel presents a typical liberal view point, which considers politics and economics to be two distinct spheres, that need to refrain from encroaching into each others domain. As Claire Cutler argues:

Liberal Thinking works against recognizing the authority of private corporations. The liberal faith in free economic markets and in representative democracy presents barriers to conceiving private relations or entities as politically authoritative or representative. [85]

Commenting on the pluralistic nature of the liberal state and why it is hard for such a state to contain the growing power of corporations, Stephen Gill, argues that the liberal state is subordinated to the civil society in which the rule of law based on ‘freedom of enterprise’ determines the actions of the state. In the context of the global political economy, Gill further argues that since ‘in a liberal constitution the state is subordinated to civil society…. it cannot monopolise power and authority’ over the ‘vast corporations operating in oligopolistic markets’.[86]

It is primarily because of this constructed distinction between liberal politics and economics that the developed capitalist world is identified by twin names in international politics. According to Barkawi, in ‘matters of culture, war and peace, or human rights and liberation’ the world identifies the capitalist economies as the ‘West’, when it comes to the ‘issues of wealth and power’, the identity of the West changes to that of ‘global north’.[87] Sandra Halperin clarifies the relationship between liberalism and capitalism using Karl Polyani’s analysis to explain ‘embedded and dis-embedded markets’.[88] Before the end of the 18th century, market exchanges were largely regulated through society and politics and therefore, the markets were embedded. In the 19th century the industrial expansion in Europe reduced state regulations on markets, which began to dis-embed itself from politics. By World War II the collapse of the 19th century free market system led to a new equation between capital and labour. This compromise resulted in the markets re-embedding to societal needs. However, the collapse of the Soviet Union and the defeat of communism have once again emboldened corporate capitalism to dis-embed itself from state controls and emerge as an independent player in the global public domain.

In order to emerge as an independent player, transnational corporations need to discredit the old system based on state-centrism and displace the state from the position of pre-eminence that it occupies in the international political discourse. This is achieved by dis-embedding from the state controls and by appearing to be apolitical. As Suman Gupta, commenting on the evasiveness of corporate capitalism to political philosophy, explains:

In fact, the system and processes of contemporary corporate capitalism are such that they undermine politics, subvert political philosophy, and disable the political philosopher and political activist in some essential sense, even when appearing not to. [89]

That transnational corporations have a global political agenda is borne out by the fact that they have been able to consolidate the transnational capitalist class.[90] This class occupies the ruling positions in large parts of the world and is the main driver of neo-liberal globalization. It advocates a reduced role for the state in almost all spheres of activity. States still appear to be present as main actors on the international stage for two reasons. One, the entire state bureaucracy has not yet been converted to serve the interests of corporations and secondly, corporations do not have a legal cover to operate as legitimate international political actors.

Elaborating further on the political project of neo-liberal globalization, Stephen Gill posits that the 1990s has witnessed a counter-revolution by the capital against the weak on a global scale. This counter-revolution is being protected through ‘disciplinary neo-liberalism’ (its dominant socio-economic form) and constitutionalism (its dominant political-juridical form)’[91]. The primary agents spearheading the neo-liberal political agenda are organizations like The Global Economic Forum, international finance institutions, the World Trade Organization (WTO) and transnational corporations. These organizations are the meeting grounds for the global capitalist class to design and formulate policies on a global scale.

However, to say that states have been relegated to the dustbin of history would be wrong. The state in its present form is being reconfigured to meet the demands of the markets. Members of the global capitalist class in the developing world are aiding the process by transforming the states as security provider to the corporations. In sharp contrast with the developed world, where the government is outsourcing certain security functions to private security corporations, in the developing world a reverse trend is visible, here corporations in addition to creating their own security networks are also outsourcing security jobs to state armies and police. For example, in Myanmar, the state military is directly involved in protecting the corporation’s property as well as ensuring that the local labour behaves in the manner expected of them by the investing company.[92] Similarly, in Aceh, a predominantly Muslim province of Indonesia, the Indonesian state military has dovetailed its corporate interests with that of the foreign oil company, Exxon Mobil to discipline the native labour force from causing disruptions to TNCs interests in the region.[93]

The story in Nigeria is no different. In the oil rich Niger Delta, a constant struggle is on between the local population and the TNCs. The local population sees the companies encroaching upon their land without giving them adequate economic benefits flowing from the oil trade. The result is protests and agitations by locals, which sometime disrupts the company’s work. Locals also complain that TNCs operations in their area are the cause of environmental degradation. What did the Shell oil company do to contain these agitations? It hired the Nigerian military and police to discipline the people and stop them from causing delays and monetary losses to the company.[94]

The national military and state police (primarily created to protect the interests of the weak against the powerful) are continuously being profaned by acting at the behest of the powerful economic players. This represents a break from the traditional role of national security and also the growing power of the TNCs vis-à-vis the weak states. Therefore, while the corporations are seen to be dis-embedding themselves from regulatory mechanisms in their home country (predominantly Western countries) to expand their power into the global arena, in the less developed part of the world corporations are embedding the weak governments into following their agenda.

Making Corporations Responsible

The international community is well aware of the problems associated with corporate bad behaviour. Therefore, one finds two kinds of responses emerging from corporations as well the international community including the international civil society represented by NGOs.
In 1999 the UN Secretary General, Kofi Aanan established the Global Compact mission which laid down nine guidelines, which the corporations operating in foreign lands should follow to protect the human rights. All these measures are aimed at inducing a sense of voluntarism in corporate minds towards concern for the larger good of humanity.[95] More recently The UN Secretary General Kofi Annan has appointed John Ruggie, a Harvard professor as the special representative on human rights and transnational corporations. [96]

On August 13, 2003, The United Nations Sub-Commission on the promotion and protection of Human rights adopted a resolution approving the ‘Norms on the Responsibilities of Transnational Corporations and Other Business Enterprise with Regard to Human Rights’.[97] According to David Weissbrodt and Muria Kruger, these norms are more elaborate and ‘more focused on the human rights than any of the international legal or voluntary code of conduct drawn up by the ILO, OECD, the European parliament and the UN Global Compact’.[98] Unlike the Global Compact principles, these norms are not voluntary in nature. The norms are involuntary to the extent that they envisage NGOs and other agencies to report the non-observance of norms by the companies. However, the norms do not constitute a treaty and can therefore be considered as ‘soft law’, which may or may not metamorphose into customary law.[99]

Abandoning the soft approach, the other response rests on imposing greater regulatory mechanisms on the corporate actions and determining their criminal liability in cases of human rights violations. Corporation escapes falling under the purview of international legal jurisdictions because it is considered a legal person as opposed to a natural person. This means that only natural persons (managers of the company) can be held accountable under the international law and not the company as an entity. Although many developed countries like the U.K. and U.S.A have laws to treat violations of human rights by corporations but these domestic legislations are considered inadequate as an international response.[100] As Fafo study indicates that ‘unless the international norms are formally integrated into domestic legal system …. Some of the most important jus cogens violations cannot be applied to private sector malfeasance’.[101] The study reveals that countries do not pursue the criminal cases against TNCs with the same vigour as they deal with individual offenders.[102] Furthermore, ‘piercing the corporate veil or following the liability upstream, beyond the acts of individual within the corporate subsidiary to the parent multinational company’ is often the most difficult job’.[103] Under such circumstances ‘complicity’ is the only clause under which the companies can be held liable to international crimes.[104] The US courts have been using the international law to define corporate complicity. However, the general feeling is that corporations are wielding power without any accountability.

Problems Associated with Treating TNCs as ‘Subjects’

Although the option of holding corporations criminally liable under international law seems to be the most attractive proposal to contain the growing power of the corporations, but it is also fraught with some dangers of enhancing the TNCs powers in the process. Firstly, making the corporations answerable to international jurisdictions would make them ‘subjects’ under international law. As we have seen in the case of states, subjects of international law are also granted certain rights. It could be argued that individuals have also been made the subjects of international law, but this does not grant them the rights to challenge the powers of the state.[105] Therefore, TNCs as subjects of international law too would not pose any challenge to the state authority. The problem with this argument is that it compares an ant with an elephant. The power of an individual vis-a-vis that of a state is minimal. An armed individual can create only limited chaos and mayhem. Such an errant individual can easily be contained by the use of state force. However, if a powerful TNC, (which in many cases has become more powerful than many of the states), decides to use a legitimate army then it would raise an altogether different situation. It would cause a far bigger international crisis than what an individual is capable of creating.

A powerful international personality, subjected to certain obligations can also demand certain rights. TNCs as an international person can demand the guarantee of its own human rights. It can demand the legitimization of the use of force in self defence. Here it could be argued that private military companies (PMCs) are already operating in the world and they are adhering to the norms laid out by the party (mainly states) hiring them. These PMCs are operating under contract from the states and international organizations primarily because they do not enjoy the political legitimacy to act independently. If granted an international personality, TNCs will demand right to use coercion to protect their body (property) as well as the human rights of those falling within their ‘sphere of influence’. [106] It would be naïve to imagine that this ‘sphere of influence’ would remain limited to their employees, workers, shareholders, suppliers, sub-contractors. As argued earlier, TNCs ‘sphere of influence’ will continuously increase to take maximum portions of earth under its sovereign command. The issue is that an international personality conferred upon TNCs would give rise to an alternative sovereign power. Whether this new sovereign power will eventually displace the state or not is beyond the purview of this essay. What is of relevance is that an armed entity other than the state will emerge with legitimate rights to use the means of violence.

That there exists a possibility for such an international entity to emerge is not merely a figment of a paranoid anti-imperial imagination. International theorists are already talking in terms of enhancing the scope of TNCs to play a larger role in the international public domain. Theories about private government and governance are already floating in the academic literature. Critical theorists are also concerned about these developments. Much of the resistance in accepting the growing and the future role of TNCs in international politics is related to the dominant discourse being shaped by the realist paradigms based on the Westaphalian world order. As Tarak Barkawi and Mark Laffey posit:

Sovereignty and statehood, as understood in disciplinary narratives derived from Westphalia, apply only to limited periods of history and in particular regions, principally Europe. The central categories of IR have been developed without sufficient attention to the nature and character of the international relations governing most of the planet and its populations at one point or another, namely imperial relations of diverse kinds.[107]

What, the critical theorists, identify as the re-birth of imperial tendencies, other international theorists like John Ruggie see it as ‘the beginnings of a fundamental reconstitution of the global public domain — away from one that equated the ‘public’ in international politics with states’.[108] Unlike Susan Strange, (who sees the ‘retreat of the state’ under the growing power of the TNCs) Ruggie sees the state getting ‘embedded’ in the widening web of transnational networks.[109] According to Ruggie this transnational space is not only guided by states but also by other transnational influential actors like civil society organizations (CSOs) and TNCs. The problem with Ruggie’s formulation is that it clubs the CSOs and TNCs together. Irrespective of their funding sources, CSOs are primarily seen as pressure groups speaking on moral issues through the internet, public protests or street action. TNCs, on the other hand, are more sophisticated actors, whose influence in the global arena is directly proportional to their financial power. Unlike the CSOs, TNCs primary motivation is not to fight for a more humane world. A fact which Ruggie ignores is that it is this public domain or politics which created the states and endowed it with legitimate powers, whereas TNCs want to buy an entry into this space merely to legitimize their existing power. How can one disregard history and forget that merely half a century ago it is the same TNCs, which were driven out of this public domain and confined to economic arena.

Ruggie understands that TNCs have the propensity and power to harm, but what he fails to acknowledge is that this power to harm will not subside with added responsibility to protect human rights.[110] The most critical right granted to the occupants of the international public domain is the right to make war. A forced entry into the political domain through the UN doors could legitimize the corporation’s right to maintain and use military force. Ever since the end of World War I, first through the 1928 Kellogg Briand pact and then through the 1945 UN charter, the international community has been trying to proscribe war. Acceptance of state monopoly of violence was considered to be one the best methods of reducing violence. The entry of armed TNCs into the public domain will splinter the state monopoly over organised violence[111]. How this will impact on international peace and security has to be dealt separately.
Conclusion

Using the past and current history of corporate behaviour, this essay has tried to analyze a particular negative trait in the corporate personality, which is detrimental to the establishment of peace and security in the world. Though corporate involvement in environmental degradation is an aspect closely related to human security, the essay has steered clear of it for lack of space; and the issue demands a separate treatment.

Corporate potential to exercise power without accountability on the global stage has grown exponentially over the last decade. It is now in the process of playing a more proactive role in the international political domain, According to Robert Davies, the chief executive of the Prince of Wales Business Leaders Forum:

Clearly business is not a stranger to conflict; conflict and business seem to have gone together ever since there was international trade; but the role business can play in conflict prevention and post-conflict reconstruction I think is something which is a much newer idea.[112]

As discussed earlier, the talk of making room for TNCs in the public domain is no longer confined to academic and corporate circles; it is being discussed by corporate leaders and policy makers at highest levels.[113]

This demands that the ambiguity surrounding the corporate persona be clearly defined, to enable the international community to determine the degree of legitimacy which can be accorded to TNCs within the public domain. The basic question, which needs to be addressed is should the corporations be entrusted with protecting or respecting human rights?[114] Protecting human rights may involve the use of coercion.

The crucial issue related to use of force is one of political legitimacy and democratic accountability.[115] Who will grant this political legitimacy to TNCs to maintain stability and peace in a troubled region of the world or a failed state? For obvious reasons a failed state cannot be expected to hire a TNC to resolve its problems. An international organization like the United Nations may hire a TNC to run the administration in a failed state on its behalf. But how will this arrangement be different from the one adopted by the British crown of delegating sovereign powers to a company in distant lands?

The question is why would a corporation, which does not have a business interest in a conflict ridden country, like to venture into harm’s way? It could be argued that a corporation dealing purely in the provision of security and administrative services may like to get such a contract for business purposes and prove its worth in order to get more contracts. The problem is that the corporate personality defies all such altruistic and simplistic expectations. Corporate DNA strands are networked to provide it with extra sensory perceptions to multiply money. It is for this reason that one cannot trust a service company to maintain the purity of its business.[116] What can stop a security company from acquiring stakes in the mining or oil industry in a troubled region entrusted to it? Again it could be argued, why should there be any limits on the growth of the company? If a service company diverts from its core competencies, then it may find itself in a situation similar to what the East India Company faced, when from a trading company it became a private military company exploiting the Indian military labour market.

To overcome this problem, the UN could lay down stringent conditions in the contract. But can we forget that we are living in a world, where the corporate world is known to use tax havens, ‘flags of convenience’, and network of contract with subsidiary companies to avoid taxation and criminal liability for its actions. A corporation legitimized to use arms would feel emboldened to duck more rules to earn more profits. Therefore, to think of granting entry to corporations in the public domain could turn out to be an egregious folly. Despite its best efforts to proscribe war the UN has been unable to fully contain state bellicosity. Then how would the entry of an additional actor authorized to use coercion help in maintaining global peace is the moot?

Entry into the international public domain is the equivalent maturing of a person. This person then acquires an international personality, which is expected to maintain certain standards of grace and compassion, because such an international person is granted the right to protect humanity. Can we entrust this responsibility to a corporate person sans grace, filled with insatiate desire for profits. Such an uncompassionate personality is most likely to misuse the right to bear arms.






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[1] UNO publishes Report of the Secretary-General to the Security Council, ‘The Protection of Civilians in Armed Conflict’, Para 58, S/2002/1300, 26 November 2002.
[2] Sklair (2002), Pp. 36-37.Less than sixty countries out of a total of around 200 have GNP of more than US$ 20 billion. By contrast 245 TNCs had annual revenues in excess of US$ 20 billion and the top 50 exceeded US$ 50 billion.
[3] Stilglitz (2002)
[4] International Peace Academy (IPA) and Fafo AIS publishes, ‘Business and International Crime: Assessing the Liability of Business Entities for Grave Violations of International Law’, 01 December, 2004
[5] Elkington (1999), p.17-41
[6] Leisinger, (2004), p.51
[7] World Economic Forum in association with IBFL, U.K. and John F Kennedy School of Government publishes a Report ‘Partnering for Success: Business Perspectives on Multistakeholder Partnerships’, January2005.

[8] Leisinger, Klaus M (2004), p.56
[9] Singer (2001/02)
[10] Wendt (1999), p.197,
[11] Wendt, (2004), p.294
[12] ibid, P.294
[13] Lomas (2005),p. 354
[14] Wendt (2005), p.360
[15] Grant & Keohane (2005), p.35. The authors describe three sets of ‘informal norms’ which grant legitimacy to ‘power wielders’ in international arena. These are ‘conformity to human rights norms’, adherence to ‘normative principles inherent in democracy’ and lastly acknowledging the ill effects of global inequality. By addressing these three issues through CSR initiatives corporations attempt to gain international legitimacy.
[16] Cutler (2001), p. 135
[17] Chatham House publishes ‘Norms on the Human Rights Responsibilities of Transnational Corporations: Where Next? A brief summary of discussion at the International Law Programme Discussion Group, 17 June 2004.
[18] Taylor (2004), p.48.
[19] Ruggie (2004),p. 500

[20] Million (2001), p.39. According to the United States constitution, ‘The corporation can own property in its own right; it can sue or be sued, in contract or trot or any number of other causes of action; it can be prosecuted or punished for criminal activity; it enjoys various rights under the and it is subject to tax liability. In these respects (and others), the corporation bears the legal attributes of a persons who participate or have an interest in the corporation’s activities’. Also see Buchholz & Klein (2004), p.4. The authors describe a legal person as a ‘supra-individual organizational unit, which is assigned its own legal capacity by the legal order. The legal person derives intellectually from the physical person, the human being’

[21] Alpa (2004), p.734
[22] Machen Jr. (1911) p.255
[23] ibid, p.255
[24] ibid, p.256
[25] ibid, p.256
[26] ibid, p.256
[27] ibid, p.257, the names associated with this school was Ihering in Germany, M.de Vareilles Sommiers in France and Schwabe in Switzerland.
[28] Elkington (1999), p.298
[29] Greenfield (2001), p.59-60. ‘Contractarians’ who consider corporations as property opine that ‘corporate surplus’ spent on social causes tantamount to spending the shareholders money and thus ‘imposing an ‘illegal tax on them’. Contractarians define corporations to be exclusively guided by the terms of the contract and are therefore considered free from any ethical duties which do not form a part of the contract.
[30] Million ( 2001), p.40. According to Million the debate about shareholders interests versus the social costs involved in operating a firm is cast in such a legalistic matrix that ‘a descriptive assertion (“the corporation is X”) is advanced on behalf of a normative claim (“therefore Y should follow”) ,. In this way what might otherwise appear to be abstract, purely academic debates about corporate legal theory in fact support controversial political agenda’.
[31] ibid, p.41 Aggregate theory meant that corporation was guided by the aggregate interests os its owners.
[32] ibid, p.42, Also see Bakan (2004), p.6-9. In 1720, the British Parliament banned corporations after the collapse of English South Sea Company through the ‘Bubble act’. ‘Bubble act’ was repealed in 1825, allowing the corporations to reappear in the business world. .
[33] Wheeler (1994), p.9
[34] Bakan (2004), p.16. The end of 19th century marked the resurgence of corporation as a free natural person, ‘Gone was the centuries old “grant theory”, which had conceived corporations as dependent upon government… Along with the Grant theory had also gone all rationales for encumbering corporations with burdensome restrictions’.
[35] Dodd (1932), p.1151
[36] van der, Pijl (2004), p.9
[37] Million (2001), p. 42. Also see Dine (2005), pp.25-26. The usual ‘philosophy underlying the UK company law generally adheres strictly to a contractual theory of companies regarding the company as primarily if not the sole property of and co-extensive with the owners’.
[38] Million (2001), p.44
[39]Amnesty International publishes ‘Democratic Republic of Congo: Arming the East’, AI Index: AFR 62/006/2005, 5 July 2005. The report states that ‘by April 2004 the DRC conflict had cost the lives of nearly four million people, or 31,000 people per month, since the outbreak of fighting in August 1998’
[40]‘The Curse of Gold: Democratic Republic of Congo (2005), A Report published by The Human Rights Watch, http://hrw.org/reports/2005/drc0505/, 25 July 2005. The report provides an insight into the military-market nexus and its adverse impact on human rights. It shows how local armed groups fighting to benefit from exploiting gold mines and trading routes have committed war crimes using the profits from gold to fund their activities and buy weapons. The report provides details about a leading gold mining company, AngloGold Ashanti, part of the international mining conglomerate Anglo American, links with one armed group, the Nationalist and Integrationist Front (FNI).
[41] ibid, p.14. The whole story of intensification of internal war in DRC begins in 1990s. This was also a period marked by economic reforms in which prescriptions laid out in the ‘Washington consensus’ were being adopted. According Human rights report ‘In the early 1990s the state owned company OKIMO started entering into arrangements with multinational corporations to exploit the large mines of northeastern Congo using industrial methods and also licensed local miners to work other areas by artisanal methods’.
[42]UNO publishes Special Report on the events in Ituri, January 2002-December 2003; Letter dated 16 July 2004 from the Secretary-General addressed to the President of the Security Council, S/2004/573.
[43] The Curse of Gold: Democratic Republic of Congo (2005)’, p.8-9. Ethnically armed groups sprang up. The important ones were northern Hema group (UPC), the Lendu faction (FNI), the southern Hema group PUSIC and the more mixed FAPC. Each of these groups received military and political support from either the DRC, Ugandan or Rwandan governments at different times making the region of Ituri into a war zone.
[44]ibid, p.3., The report clarifies the final destination, where the Congo’s gold reached via Uganda. In 2003, an estimated $60 million worth of Congolese gold was exported from Uganda, to Switzerland. A leading Swiss refinery Metalor Technologies was Uganda’s biggest client. The chain of Congolese middlemen, Ugandan traders and multinational corporations formed an important funding network for armed groups operating in northeastern Congo.
[45] UN Security Council publishes Report of the Panel of Experts on ‘The Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo’, S/2001/357,12 April 2001..
[46] AngloGold Ashanti Ltd. is one of the largest gold production companies in the world with the majority of its shares owned by the international conglomerate, Anglo American plc
[47]‘The Curse of Gold: Democratic Republic of Congo (2005)’, p.56 The competition for the control of mining concessions throughout the DRC was intense during the first and second Congo wars in 1996 and in 1998.
[48] Evans, Jenni, ‘Anglo messed up in Congo’, Mail and Guardian Online, 02 June 2005.
[49] The Curse of Gold: Democratic Republic of Congo (2005)’, p.65. The report states that, ‘while AngloGold Ashanti representatives may have been provided with security assurances, the local populations were not. Throughout February 2004 and in the months that followed, FNI combatants frequently arrested civilians for failure to pay ‘taxes’ or participate in forced labor, often beating and torturing their victims’.
[50] Collier & Hoeffler (2001)
[51] ibid, p. 25
[52] Olsson & Fors Congdon (2003)
[53]UN Security Council publishes Report of the Panel of Experts on ‘The Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo’, P. 7, S/2002/1146, 12 April 2001
[54]Lunde, Taylor& Huser (2003), p 15. The report discusses the integration of private military companies with economic activity.
[55] Investment Division, Directorate for Financial and Enterprise Affairs Organisation for Economic Co-operation and Development publishes ‘The UN Global Compact and The OECD Guidelines for Multinational Enterprises: Complementarities and Distinctive Contributions’, 26 April 2005.
[56] UN Security Council publishes Report of the Panel of Experts on ‘The Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo’, P. 12, ,S/2002/1146, 12 April 2001. The report shows how the facade of corporations is used to indulge in criminal activities.
[57] The American Friends Service Committee (AFSC) , publishes ‘The Costs of Doing Business: How Oil, U S. Militarization and Corporate Activity Intersect in Colombia’, p. 10,‘ , AFSC Peace Fellowship Project (2003)
[58] Miller, C (2002), ‘A Colombian Town Caught in a Cross-Fire’ Los Angeles Times 10 March 2002
[59]Gillard, Gomez & Jones, ‘BP hands 'tarred in pipeline dirty war'’, Guardian, October 17, 1998
[60]AFSC Peace Fellowship Project (2003), p. 11. The report states that between 1996 and 2000, Occidental spent more than $8.6 million lobbying the U.S. government. This included pressing for increased U.S. military aid to Colombia.
[61] Muttitt & Marriott(2003). Commenting on the issue of British petroleum’s involvement in Columbia, five British development agencies CAFOD, Christian Aid, CIIR, Oxfam GB and Save the Children Fund UK said, ‘BPXC (BP Exploration Colombia) has seriously underestimated the implications that its Investments in a region of violent conflict would have for the security of the poor in the region… the company’s presence risks polarizing local society, thereby a) creating victims of the armed conflict and b) contributing to increasing poverty, as a result of disputes over distribution of revenues.’
[62] Sutherland (1952), p.2. Sir Thomas Roe James I, the ambassador to Mughals had made a statement that ‘war and traffic are incompatible’.
[63] ibid, p.2
[64] ibid, p.4. The charter gave the company the territorial rights and power to declare war against all non Christians.
[65] Litvin (2003), p.15-18
[66] Peers (1995), p.4 Douglas has identified the symbiotic relationship between army and territorial revenues as ‘military fiscalism’
[67] Mukherjee (1990), p.93
[68] Peers (1995), p.4
[69] Alavi (1998), p. 7
[70] ibid, p.4 The recruitment of soldiers from various backgrounds in India added to the company’s knowledge about the local customs and tradition, which in turn helped in designing political policies.
[71] As quoted in Marshall (1968), p.17
[72] Litvin (2003), p. 21, The Company not only offered bribes to Indian rulers and middlemen but also ‘slipped a payment of £20,000 to King James I in order to dissuade him from granting a charter to rival group of Scottish merchants’
[73] Marshall (1968), p.29 A level of harmony prevailed between the company and the parliament. In 1754-61, two company directors were in parliament. From 1761-68 eight Directors were in parliament and by 1768-74, thirteen company directors sat in the parliament.
[74] ibid, p.22. Numerous attempts were made by the British Sate to contain the company, but all failed.
[75] ibid, p.22, ‘In 1783 one of the company’s defenders warned the house of commons that if the East India Company’s charter were invaded, that of Bank of England would follow and then “what security could any individual have of his private property”.
[76] Monbiot (2000), p.208-224
[77] Hertz (2001), Also see Jacobs &. Page (2005)
[78] John ,Vidal, ‘ White House sought advice from Exxon on Kyoto Stance’, The Guardian, 08 June 2005, Also see Revkin, Andrew C., ‘Bush Aide Softened Greenhouse Gas Links to Global Warming’, The New York Times , 08 June 2005, Before joining the White house as the chief of staff for the White House Council on Environmental Quality, Philip A. Cooney, was the "climate team leader" and a lobbyist at the American Petroleum Institute, the largest trade group representing the interests of the oil industry. Also see Gordon, & Hafer (2005)
[79] Marshall (1968), p.150. The letter of William Cowper to Reverend William Unwin, 03 January 1784, published as appendix
[80] Litvin (2003), p. 97-98
[81]Morgan, Dan ‘Mercenaries For Big Business: Corporate Funding of Think Tanks Raises Question of Credibility, San Francisco Chronicle, February 16, 2000, http://www.globalpolicy.org/ngos/issues/170200.htm, 15 July 2005. NGOs are considered by many as a ‘part of a rent-a-mouthpiece phenomenon or as mercenary groups that function as surrogates when industry feels it's not advantageous for it to speak’. Also see Phinney, Richard, ‘A Model NGO?’, Radio Netherlands, December 5, 2002, http://www.globalpolicy.org/ngos/fund/2002/1205model.htm,, 15 July 2005. Bangladesh Rural Advancement Committee is the headquarters of the largest NGO in the world, with over 100,000 people on the payroll, all of them Bangladeshi. In addition to their schools and the thousands of teachers, BRAC employs health workers, computer analysts and thousands of bankers. Fazle Hasan Abed, founder of BRAC, was a company executive for Shell.
[82]Wallerstein (2002), p.83
[83] Litvin (2003), p. 75
[84] ibid, p. 5 and 45
[85] Cutler (2001), p. 149
[86] Gill, (2000), p.6
[87] Barkawi (2004), p.167-168
[88]Halperin, Sandra, ‘The Eternal Return: Imperialism and ‘Globalisation' Reconsidered’, First Press: Writings in Critical Social Sciences, http://www.theglobalsite.ac.uk/global-library/, 23 June 2005 .‘Throughout the nineteenth century, external markets were developed in lieu of internal ones; capital was largely invested either abroad or in home production that was chiefly for export. It was chiefly in this sense that economic relations were ‘dis-embedded’ in the nineteenth century; and it is in this sense, too that, today through ‘globalisation’, they are becoming dis-embedded, once again’.

[89] Gupta, Suman (2002), p. 5
[90] Sklair (2002), p.98-100, According to the author, transnational capitalist class consists of four fraction: (a) TNC executives and their local affiliates (corporate fraction), (b) globalizing state and inter-state bureaucrats and politicians (state fraction), (c) globalizing professionals(technical fraction) and (d) merchants and media (consumer fraction). ‘The concept of transnational capitalist class (TCC) implies that there is one central transnational capitalist class that makes system-wide decisions and that it connects with the TCC in each community , region and country’

[91] Gill (2000), p.3 & p.9 The author explains, ‘Disciplinary neo-liberalism’ as a new form of disciplinary structure is being exercised directly and indirectly through market mechanisms. The states are directly targeted by making them yearn for capital investments by proving the ‘credibility and consistency of their policies according to the criterion of the confidence of investors’ And indirect influence is exercised on other elements of the society, for example, dominance of capital over labour, goading or coercing governments to amend labour laws to encourage foreign direct investments. The ‘new constitutional frameworks include multilateral investment agreements and bilateral investment treaties… These agreements have quasi-constitutional status at the global level … – in ways that subordinate the state to elements in civil society, in this case investors and private corporations. Thus new constitutionalism is the primary political project of globalization today’.
[92] Statement of Earth Rights International regarding Chevron Texaco’s acquisition of Unocal ,12 Apr 05, http://earthrights.org/news/Chev_Unocal_Merger.shtml, 12 June 05. Earth Rights International is co-counsel in the human rights case filed against Unocal in American courts. In Mar 2005 Unocal agreed to compensate the plaintiffs in the lawsuit Doe v. Unocal, which challenged Unocal’s complicity in gross human rights abuses associated with the Yadana pipeline in Burma. Unocal was charged with assisting and encouraging the torture, murder and rape of Burmese villagers by government soldiers to assist the Unocal to build a gas pipeline
[93] Cochrane, Joe,’ The Military Market Mix’ , Newsweek , 26August, 2002
[94] Amnesty International publishes ‘Nigeria Are Human Rights in The Pipeline?’ AI Index: AFR 44/020/2004, 9 November, 2004, http://web.amnesty.org/library/Index/ENGAFR440202004, 16 June 2005
nner,Thorsten, ‘The UN Can Help Business Help Itself’, International Herald Tribune, 18August, 2005.
[97] The United Nations Sub-Commission on the promotion and protection of Human Rights Norms on the Responsibilities of Transnational Corporations and Other Business Enterprise with Regard to Human Rights, UN Doc. E/CN.4/Sub.2/2003/Rev.2(2003), http://www.unhchr.ch/html/menu2/2/55sub/55sub.htm, 24 July 2005
[98] David & Muria (2003), p.912.
[99] ibid, p. 913-914
[100] Wells & Elias (2003), p.4 US federal courts apply the ‘agency principle under which the corporation is responsible for anything any of its employees does’. In US ATCA (Alien Tort Claims Act) considers corporations to be natural persons. In UK the ‘identification doctrine’ is applied ‘where liability arises only through the culpability of an individual director. For a detailed discussion on ‘identification doctrine’ see Pinto & Evans(2003), p.39-44
[101] International Peace Academy(IPA) and Fafo AIS, publishes, ‘Business and International Crime: Assessing the Liability of Business Entities for Grave Violations of International Law’, 01 December, 2004, p.9
[102] Ibid, p.9
[103] ibid, p.9
[104] ibid, p.22
[105] Kamminga (2004) ,p. 4.
[106] OHCHR Briefing Paper on The Global Compact and Human Rights: Understanding Sphere of Influence and Complicity, p. 17 ‘The concept of sphere of influence is not defined in detail by international human rights standards; it will tend to include the individuals to whom the company has a certain political, contractual, economic or geographic proximity.’


[107] Barkawi & Laffey (2002), p.110
[108] Ruggie (2004), p.501 Public domain, Ruggie explains is a ‘property of the people’, where authority flows from the mixture of power with legitimate social purposes, this is a space where entry to various ‘sectors and actors’ is granted after thorough scrutiny. He further explains that irrespective of the forms and nature of states and government, which come to occupy it from time to time, this public space, remains intact. The states were the sole occupants of this public property for past half a century, but since the 1990s there are more actors jostling for space within this public arena.
[109] Ibid, p. 504 According to Ruggie, ‘in many instances of ‘private governance’ there has been no actual shift away from public to private sectors. Instead, firms have created a new transnational world of transaction flows that did not exist previously’. Also See Strange (1996)
[110] ibid, p.512.
[111] Kaldor, Mary (2000), p.2. The author brings out the establishment of public monopoly over the means of violence flowed from concentration of taxation of property and income of individual under the central social authority. For continued relevance of State monopoly on legitimate Violence (SMLV) in the sphere of politics Also see Leander (2002)
[112] House of Commons, Select Committee on International Development, Minutes of Evidence, 20, October 1998. Robert Davies accompanied the Chris Gibson-Smith, managing director (policies and regions), British Petroleum, called for enquiry of evidence regarding BP’s connection with the Colombian consortium which bought and supplied military equipment to a Colombian army brigade which was implicated in the massacre of civilians.
[113] For discussion on private governance see Frey (2001), P.100. Also see Hills, Jr. (2001),p.2 Hills explains the concept of ‘private government’ and says that phrase would have been regarded as an oxymoron a century ago. Today, it approaches a Realist truism’.
[114] The first principle of UN Global Compact states that, ‘Businesses should support and respect the protection (emphasis added) of internationally proclaimed human rights’.
[115] For a detailed discussion on political legitimacy and democratic accountability of PMCs see Holmqvist, Caroline (2005)
[116] Singer, P.W. (2004), p.522. Also see. Computer Sciences Corporation (CSC), ‘Computer Sciences Corporation completes acquisition of DynCorp’, CSC press release, 7 Mar. 2004, http://www.csc.com/newsandevents/news/2025.shtml>, 21 May 2005. The Programme of acquisition and mergers of private military companies and their incorporation into firms engaged in other businesses is picking up momentum. Military Professional Resources Inc., (MPRI) a private military firm based in Virginia, has been purchased by a Fortune-500 corporation L-3. In 2003, DynCorp, another major PMC , was acquired by Computer Sciences Corporation (CSC) .