Corporate Responsibility: ActionAid report blasts food market abuses

Joe Gill

Tesco, Unilever, Nestle and Monsanto are among the food retail and manufacturing giants accused of abusing their dominant position in food markets in a report from ActionAid, published on the eve of the World Economic Forum in the Swiss town of Davos and the World Social Forum in Porto Allegre, Brazil.

ActionAid is calling for changes to the law in the UK to make business directors legally accountable for the impact of their business activities on small farmers and communities in the developing world.

The report, Power Hungry: Stop Corporate Abuse, launched simultaneously in Switzerland and Brazil, points to the domination of the pesticides, grain and food retailing markets by a handful of multinationals. It argues that these companies are using their power to squeeze small producers and workers in developing countries, increasing the gap between the prices paid to producers of commodities such as cocoa and tea, and those paid by consumers in western shops.

Companies are alleged to be violating human rights through practices such as the pollution or siphoning off of water supplies and the use of child labour by suppliers.

The report includes case studies from countries such as India, Brazil and Ivory Coast. Tea prices in southern India fell by 40 per cent between 1998 and 2002; consumer prices in rich countries increased during the same period.

The World Bank estimates the gap between commodity prices and consumer prices could cost commodity-exporting countries more than £50bn a year.

"National laws in many countries are often patchy and unenforced, and transnational companies can move their investments between countries and avoid regulations," says the report.

ActionAid is calling for reforms to the global food market to halt the commodity price crisis and stop the abuse of market power by food transnationals.

ActionAid policy officer for corporate accountability Julian Oram said some loss of competitive advantage caused by mandatory reporting and benchmarking of social responsibility was a price worth paying.

"To those who say that introducing laws on mandatory CSR will mean some loss of competitive advantage, we have to ask if we are comfortable with the alternative of letting the situation continue to exist to retain that advantage," he said. "ActionAid would say no."

Oram added that the Government had "unfortunately thus far resisted using law to get companies even to report mandatorily on corporate responsibility. We hope the rise of public sympathy after the tsunami will carry over, and that the Government will listen to this and address the food market issue as part of poverty alleviation".

Among the other companies named in the report are Asda-Walmart, Safeway, Parmalat and Bayer.

Oram said the report aimed to put the food market on the agenda of the G8 and the public. "The purpose is to call for regulation to address the main instruments of power in the global food markets, and to make people aware that we are complicit in this through our shopping habits," he said.

"It is also to show that the Government's approach of voluntary corporate social responsibility is not having the desired effect."

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