24.04.2017

Transnational Corporations: beneficiaries and driving forces of globalisation – Corporate Capture or Capturing the Corporate?

The roughly 80,000 transnational corporations (TNCs) operating throughout the world are the global players par excellence. They are responsible for approximately 80% of global trade flows. Their economic and financial strategies have massive economic, social, environmental and political effects at the local and national levels.

See the full concept and program here

The roughly 80,000 transnational corporations (TNCs) operating throughout the world are the global players par excellence. They are responsible for approximately 80% of global trade flows. Their economic and financial strategies have massive economic, social, environmental and political effects at the local and national levels.The relationship between multinational enterprises and national and local actors has been characterised by a significant asymmetry to date. TNCs' interests have been secured along a broad front, for instance, in the guise of applicable investment protection rules. This situation stands in stark contrast to protection of human rights and labour standards affected by TNC activities. This is particularly the case in countries with weak state structures or poor governance. To live up to this responsibility, multinational enterprises have to identify and disclose the consequences and risks of their activities as well as business relations along the entire value-added chain, ensure that there are mechanisms for negatively affected persons to lodge complaints, secure free interest representation of employees and accept the right of trade unions to organise work forces. But in contrast to the issue of investment protection, when it comes to human rights TNCs generally call for self regulation and as few contractual obligations as possible. As practice shows, voluntariness only works to a very limited degree, however. And the contribution to the common weal also usually proves to be modest. This goes for the industrialised countries as well as developing and emerging economies. The financial crisis of 2008 at the latest underscored that national regulatory tools and instruments are unable to guide and steer global financial flows. A lack of transparency and woefully inadequate regulation allow not only for a legal reductionof the tax burden, but for tax avoidance and tax evasion on a massive scale as well.

As a consequence, not only is economic growth constrained and economic inequality exacerbated.Governments also forfeit the possibility to shape political and social development. The results are dramatic, as results of surveys and elections in the industrialised countries show. The population is disenchanted over the cosy ties between policy-making and business spheres and the preferential treatment afforded multinational enterprises. Some are calling it a refeudalisation of politics, in which sealed-off economic elites and lobbyists are able to exert direct influence on government policy. The excesses of capitalism are now threatening the very foundations of democracy itself.

Political and regulatory solutions aimed at protecting employees and human rights, ensuring just taxation and combating tax evasion along with balanced protection for investment are urgently needed. There have been promising initiatives at regional and international levels over the last few years. We want to discuss the range and impact of these initiatives, explore perspectives of the North and the South in terms of commonalities and differences and analyse ways and means to implement and deepen the reform agenda in spite of adverse global trends and tendencies.

See the full concept and program here

Friedrich-Ebert-Stiftung African Union Cooperation

Arada Kifleketema

Queen Elizabeth II street

P.O. Box 8786

Addis Ababa, Ethiopia    

00251 11-1233245/46

00251 11-1233855

info(at)fes-au.org

www.fes-au.org

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