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Mr. Corbyn: I must admit that I have never noticed the charitable nature of multinational corporations in their activities around the world, to which my hon. Friend refers. I am concerned that multinational corporations behave in a manner that is unaccountable to national Governments of any country. They have the power to control the destiny of whole economies and entire peoples. If all national Governments are told that they must treat multinational corporations in the same way as they treat local companies, they cannot provide for local initiatives or promote the development of local co-ops at the expense of multinationals. The MAI would also protect the rights of foreign investors as to intellectual property, physical property speculation and land ownership. National Governments simply cannot enter the argument about developing economies for the benefit of local people rather than of transnational corporations if they are forced to join the MAI.
The notion that improving foreign investment in the third world will put everything right flies in the face of reality in many countries. In 1995, the deputy Finance Minister of Malaysia said:
Mr. Forth:
I am fascinated by the hon. Gentleman's comments. He seems to believe that a temporary trade surplus is a more desirable objective for developing
Mr. Corbyn:
The hon. Gentleman will be aware that long-term investment can disappear after three years. Governments have no control over what happens to such investment or over the repatriation of profits. My point is that the involvement of multinational corporations in Malaysia is not necessarily wholly beneficial to the local economy, as its Finance Minister pointed out. He is particularly concerned about those companies' purchasing practices, but there is nothing that he or any other Finance Minister in any developing country can do about it if they sign the MAI.
As to poverty in the world's poorest countries, the World Development Movement has highlighted an interesting quotation from the Ugandan Finance Minister, Basoga Nsadhu. He pointed out that African countries were put under enormous pressure to introduce democracy, structural adjustment programmes, liberalisation and privatisation. They were told that if that happened they would receive the investment and the advantages that they needed, but they have not received those benefits: instead, they are under constant pressure to repay a debt that is unpayable because of the way in which it was incurred and because they have no control over interest rates or oil and commodity prices.
In this debate, I would prefer to see hon. Members addressing the problems of environmental stability and poverty on the planet and the need for an inclusive economic strategy involving the poorest people in the poorest countries. I do not believe that the MAI will address any of those problems because the multinational corporations are not of that ilk.
My hon. Friend the Member for Rotherham(Mr. MacShane) referred to labour rights and conditions, and I agree with him, but why do the MAI and the World Trade Organisation not insist upon every country's implementing the absolute minimum of International Labour Organisation conditions? They do not propose to do that. Multinational corporations tend to operate to the lowest common denominator in every country. The MAI will make illegal any attempt to impose trade union rights as the basis for investment by multinational companies. That would have many repercussions.
In the latter part of the 20th century, we should address issues of poverty and accountability around the world and the need for technology transfer. All countries were represented at the Rio conference in 1992 because the world recognised that there were limits to growth and to exploitation of the natural environment, which had climatic implications. Five years on, the overseas aid has not been provided and the technology transfers that could have helped to lower pollution in poorer countries have not occurred. Liberalisation of trade has increased air and sea pollution and the dumping of toxic and other waste in poorer countries, where disposal is cheaper than in northern countries.
The New York environment summit almost collapsed because of the intellectual property rights issue. Northern countries, acting on behalf of multinational corporations, refused to agree to transfer the necessary technology to poorer countries to enable them to introduce refrigeration
systems and vehicles that are less polluting. The OECD countries are absolutely determined that the only model that matters is the power of multinational corporations to go where they will, invest where they will and produce what they will--indeed, to run the world's economy.
Surely to God, at the end of this century, we should look for some form of global arrangement that provides for democracy and the transfer of wealth from the richest to the poorest rather than vice versa. We should surely not sign a charter that gives multinational corporations everything they want and diminishes the power of democratically elected Governments to take action to control the activities of those companies in exploiting and damaging the environment.
Ultimately, the agreement may be signed. However, many people around the world simply do not accept the global economic argument. Those in the rain forests of Latin America do not accept that multinationals have the right to destroy their rivers and forests, and they are fighting back. People in India are determined to fight the World Trade Organisation. We close our eyes to opposition to the idea of the global free market because we do not want to know about it, but such opposition is growing fast.
Mr. Tony Colman (Putney):
I must declare an interest as chair of the United Kingdom Standing Committee on Local Authority Pension Funds and of Church, Charity and Local Authority Fund Managers Ltd. In that context, I am a former manager of a multinational. I congratulate my hon. Friend the Member for Bury, North (Mr. Chaytor) on securing the debate, on a subject which is extremely important not only in this country but throughout the world.
I begin by complimenting the right hon. Member for Suffolk, Coastal (Mr. Gummer), who is not in the Chamber, who made a very interesting speech at Earth summit 2 last month, a copy of which I believe should be placed in the Library. He referred to the multilateral agreement on investment and the World Trade Organisation, and pointed out clearly that the issues relating to the Rio treaty and process and sustainable development had moved away from the United Nations to the World Trade Organisation and the Organisation for Economic Co-operation and Development. He expressed concern on behalf of all hon. Members--it is interesting that, in the spirit of a new Labour Government, the right hon. Gentleman was a member of that delegation--about the somewhat secret treaty that is being negotiated behind closed doors. He said that it should be brought into the open and become part of the United Nations process.
I support the idea of an international treaty covering the matters that the MAI should be discussing--market access, legal security and those dealing with corruption--but it must be on the essence of sustainable development. The language of Rio, which has been so strongly negotiated around the world, should be within any agreement on investment worldwide.
As has been said by my hon. Friend the Member for Islington, North (Mr. Corbyn), there were real problems at Earth summit 2 in New York. There was particular concern not only about the basis of the transfer of intellectual property rights, but about transfers of investment. I remind the House that the public sector flows that were committed to at Rio have not been achieved. In fact, there has been a dramatic reduction, and the only basis on which this could be made up is through the private sector flows which have increased dramatically, as my hon. Friend the Member for Bury, North pointed out. If we are looking to a combination of public-private partnership in terms of sustainable development, it must be within terms that are acceptable to the United Nations and to the families of nations on this earth.
One of my opponents at the last general election was Sir James Goldsmith, who died last Saturday. I am sure that the condolences of the House go to his family. I owe a great deal to my hon. Friend the Member for Rotherham (Mr. MacShane), who pointed out the differences in "The Trap", a book written by Sir James, in terms of his views on the European Union. The one thing to which he devoted the last 10 years of his life was very much pointing out the effect on the environment, on world issues, of allowing multinationals to do what they will, untrammelled, across the world. I pay tribute to his brother, Edward Goldsmith, who perhaps woke up to this rather earlier than he did. I wish that more people would speak out on this. The chairman of BP made a very impressive speech in June on the same subject.
One of the outcomes of the social summit in 1995 was that the World bank was required to have environmental and social impact assessments. I believe that the MAI should take that on board, as that proposal would have the support of the International Chamber of Commerce, which represents most multinationals across the world. My experience of UK multinationals--I declare my interest as a former manager for Unilever in Africa--is good. We would wish the House to ensure that the DTI, in its new spirit of working with UK multinationals, will perhaps take them on board in discussing how the MAI should be changed.
I shall pick up two points that are in the MAI, the first of which is about prohibiting the hiring of local personnel. One of the great successes of Unilever in the 1960s and 1970s was the movement to local personnel, so that people were not being flown in from the north, from Europe, with cultural standards and interests that did not reflect local concerns. I shall be very concerned if the final MAI has restrictions on the hiring of local personnel.
"The rise in the trade deficit is mainly due to an increase in the import of capital goods brought in by foreign investors. If not for foreign investments in 1995, Malaysia would have recorded a large excess in the trade account."
He, and many others, are concerned that multinational companies pay little regard to developing the local economy: they are interested only in their own global development and improvement.
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