Corporations: Linking You to the World

International corporations provide most, if not all, of the goods and services that people around the world need and use every day. The corporation is the most common form of business organization, and in the U.S., corporations enjoy the same legal rights and protections as individual citizens. The activities of corporations link governments, economies, workers, global and local communities to you – the individual consumer. In the United States, corporations produce most of the food people eat, the electricity they use in their homes, the cars they drive, and the clothes they wear.

Because of their great size and financial strength, corporations wield a significant amount of power in the world economy. 51 of the top 100 economies in the world are corporations. Royal Dutch Shell’s revenues are greater than Venezuela’s gross domestic product (GDP), the total value of all goods and services produced in a country in a year. Using this comparison, Walmart is bigger than the economy of Indonesia. In terms of dollars, General Motors is roughly the same size as the economies of Ireland, New Zealand, and Hungary combined.[1]

Increasingly, the activities of international corporations are guided by a desire to maximize profits at almost any cost. Between 1983 and 1999, the number of people employed by the Top 200 corporations grew by 14.4%, while their profits grew by 362.4%.[2] In order to maximize profits, corporations seek to cut costs wherever they can. Often this has devastating consequences for public health and safety, the environment, and human rights, particularly in the developing world where more and more corporations are choosing to do business.

Here are ways that you – the U.S. consumer – are linked to corporations and the effects they have on local and global communities:

Your Morning Coffee: Coffee is the U.S.’s second largest import after oil. The U.S. is the

largest consumer of coffee in the world, and consumes one-fifth of all the world’s coffee.[3] However, farmers that grow coffee in countries like Nicaragua and Guatemala, often work in sweatshop-like conditions and live in extreme poverty. Coffee prices are currently at an all-time low, with farmers receiving roughly $.50 a pound for coffee beans which cost much more to produce.[4] When coffee prices are low, corporations like Starbucks keep prices for the U.S. consumer high and pocket the extra profits.

Your Weekly Groceries:

Most of the food consumed in the U.S. is produced by corporations using large-scale agriculture, which keeps food prices low. American consumers spend approximately 10% of their after-taxes income on food – a lower percentage than any other country in the world.[5] However, low prices at the grocery store do not reflect the other costs associated with growing “cheap food.” Cultivation of four crops — soybeans, wheat, cotton and corn — consumes around 75% of the pesticides in the U.S. Today about 2.5 million tons of pesticides are used worldwide.[6] Pesticides pollute the soil and water supply and have been linked to cancer and Parkinson’s disease. Industrial agriculture creates unsanitary conditions that pose a threat to public health. In October 2002, Pilgrim’s Pride Corporation (Wampler Foods, Inc.), the nation’s second largest poultry producer, recalled 27.4 million pounds of fresh and frozen poultry products after a bacterial outbreak killed 20 people and sickened 120 others.[7]

Your Car: According to CNN, for the first time in U.S. history cars and trucks outnumber drivers. There are 204 million vehicles for 191 million U.S. drivers.[8] In 1990, U.S. oil consumption was 17 million barrels per day, and in 2000 it was more than 19.5 million barrels per day. The U.S. spends nearly $200,000 per minute overseas to buy foreign oil.[9]

The corporations supplying U.S. oil often do business with undemocratic governments with poor human rights records. For its project to develop the Yadana gas pipeline in Burma in the mid-1990’s, the California-based Unocal Corporation hired the Burmese military, with its history of torture, murder, and rape, to provide security and other service for the pipeline project. While working for Unocal, the Burmese military forced the relocation of entire villages and committed acts of violence.[10]

Corporations, with their global scope and financial strength, have tremendous potential for advancing the cause of social justice in the world. However, “[t]oo often, when U.S. corporations have set up shop overseas, they’ve brought with them environmental degradation, mistreatment of workers and human rights violations,” says Folabi Olagbaju of Amnesty International USA, a human rights advocacy organization[11]. With the 100 largest U.S.-based multinationals taking in $1.44 trillion in combined revenue from overseas operations in 2000, according to Forbes Magazine, and with America responsible for about one quarter of all natural resource consumption on the planet,[12] American consumers have the responsibility to transform “business as usual.” By educating yourself about the products you buy – where they come from, who made them and under what conditions, how much workers were paid – you can hold corporations accountable for their actions in the U.S. and abroad.

ACTION:

Read the resolution on the Global Economy and the Environment (#288, BOR 2000)

Co-op America provides a variety of resources on sustainable living, environmentally- friendly businesses, corporate responsibility, and consumer education. Contact Co-op America for information on how to become a socially-responsible shopper

Co-op America

1612 K Street, NW Suite 600

Washington, DC 20006

(800) 584-7336

http://www.coopamerica.org

• The International Right to Know Campaign is a coalition of social justice organizations that are pressing for regulations requiring U.S.-based companies to disclose information to the public about their activities abroad (emissions, labor relations, etc.) This would enable U.S. consumers to monitor how the products they buy are manufactured abroad. For more information, contact the International Right To Know Campaign:

Colleen Freeman
International Program
Friends of the Earth - United States
1025 Vermont Ave., NW
Washington, DC 20005
202-783-7400 x121
cfreeman@foe.org

http://www.irtk.org

September 2003

---

[1] Corpwatch, “Corporate Globalization Fact Sheet,” March 22, 2001, http://www.corpwatch.org

[2] Ibid.

[3] “Fair Trade Coffee Campaign,” Global Exchange, http://www.globalexchange.org/campaigns/fairtrade/coffee/index.html.

[4] Ibid.

[5] “Fact Sheet: The Costs of Cheap Food,” Institute for Agriculture and Trade Policy, http://www.iatp/enviroag/factsheets.cfm

[6] “Commercial Agriculture: Facts and Figures,” EarthSave, http://www.earthsave.org/environment/commag.htm

[7] Ibid.

[8] Associated Press, “Cars and trucks now outnumber drivers,” CNN.com, August 29, 2003, http://us.cnn.com

[9] “Chained: America’s Vehicles Today,” National Resources Defense Council, http://www.nrdc.org/breakthechain/chained.asp

[10] International Right To Know Campaign, “International Right to Know: Empowering Communities Through Corporate Transparency,” January 2003, http://www.irtk.org

[11] “Economic Rights: International Right to Know,” Global Exchange, http://www.globalexchange.org/campaigns.irtk.html

[12] “What Is International Right To Know,” International Right To Know Campaign, http://www.irtk.org/what_is_irtk.html#consumer