POLITICS: Report Faults Global Bodies for Transparency Deficit

Jim Lobe

WASHINGTON, Jan 20 (IPS) - As the world's economic and progressive elites gather in Switzerland and Brazil this week to discuss globalisation, a first-of-its-kind analysis of the accountability of the world's most powerful organisations concludes that a lot of work remains to be done.

The major shapers of globalisation - some 60,000 transnational corporations (TNCs), more than 300 inter-governmental organisations (IGOs) and 40,000 international non-governmental organisations (NGOs) - are simply not as accountable as they should be to their members and stakeholders, says the report released Monday by the British-based One World Trust (OWT).

''This reports makes it clear that global organisations, which have a very direct impact upon our lives, are not always sufficiently accountable,'' according to Hetty Kovach, who managed the two-year pilot project that led to Monday's publication of the 'Global Accountability Report: Power Without Accountability'.

The U.K.-based OWT has been lobbying for world government for more than 50 years.

''What is particularly worrying is that many of the organisations assessed are not even accountable to those individuals, groups and states which have the formal authority to hold them to account,'' she added. ''This begs the question of how they can ever be accountable to individuals and communities who have no formal connection to the organisation, but who are nevertheless affected by their decisions.''

The report, which focused on 18 global entities, found that IGOs and TNCs tend to be dominated by powerful minorities among their members or shareholders, while NGOs generally did a much better job of ensuring a voice for their members.

On the other hand, with the exception of the International Federation of Red Cross and Red Crescent Societies (IFRC), NGOs were relatively lacking in transparency about their own operations compared to the IGOs and TNCs, although all the groups generally failed to provide adequate information about their decision-making processes.

The report was released on the eve of this week's high-powered annual gatherings of the world's biggest boosters of globalisation at the World Economic Forum (WEF) in Davos and its most prominent critics at the World Social Forum in Port Alegre. Accountability of global institutions will be high on the agenda in both fora.

In advance of its meeting in Davos, the WEF released a Gallup International poll that measured public confidence in a number of national and international institutions, including the three types covered in the OWT study.

The survey, which covered 15 countries, found that NGOs, particularly environmental and social advocacy groups such as those that will be meeting at Porto Alegre, were the most highly regarded among global institutions, followed closely by the United Nations.

At the bottom in the confidence rankings were the TNCs, although those IGOs that are responsible for regulating the global economy - such as the World Bank and the World Trade Organisation (WTO) - fared almost as poorly.

The 18 bodies covered by the OWT study included five IGOs - the Bank for International Settlements (BIS), the World Bank, the WTO, the U.N. High Commission for Refugees (UNHCR), and the Organisation for Economic Co-operation and Development (OECD).

The TNCs are pharmaceutical giants Aventis and GlaxoSmithKline, Microsoft, Nestle and Rio Tinto, and the Shell group. The NGOs rated were Amnesty International, CARE International, the International Chamber of Commerce (ICC), the IFRC, Oxfam International and World Wide Fund for Nature.

Each of these was rated according to two criteria: the degree to which members or shareholders control or have a voice in the governance structures of the organisation; and the amount of information about its operations that the organisation provides on the Internet.

OWT found that only a minority of states - mostly the industrialised western countries - dominate decision-making in IGOs, at the expense of the majority of members. This was particularly the case with those IGOs whose charters required weighted-voting systems.

In that respect, the BIS, the agency used by the world's central banks to set standards and regulations over the global banking system, was the most undemocratic, because the governing mechanisms were all controlled by the Group of Ten western industrialised nations.

The study found that the same western dominance was true, albeit to a lesser degree, in the World Bank. And, despite its charter guaranteeing one vote to all member-states, the same countries were found to be able to exert a similar dominance in the WTO, the report said.

TNCs similarly suffer from a form of minority control, largely due to the rise in recent decades of huge institutional investors, such as pension funds or large investment firms, that often act not only as a voting bloc but also use their leverage to approach management or directors informally to press their concerns.

With the exception of the ICC, on the other hand, the NGOs covered by the study performed much better in ensuring that a minority of members cannot dominate organisations. Amnesty, CARE, Oxfam and IFRC claimed the top four spots in this category among all 18 organisations.

With respect to providing information on-line about their operations, the top spots were claimed by UNHCR, IFRC, the WTO, and the World Bank. In general, NGOs were much less transparent than the TNCs and the IGOs, particularly with respect to reporting how they spend their money or how well they achieve their goals and purposes, the study found. The one exception was the IFRC, which reported such information regularly.

The report noted that the NGOs' relatively poor performance on transparency was ironic in view of their long-standing demand that TNCs and IGOs become more transparent.

All of the organisations were lacking on-line information about their decision-making processes. Only a handful of the 18, according to the report, provided the agenda, draft papers, or minutes of their executive or board meetings, for example.

Overall, the IFRC, Amnesty, the OECD, the WTO, and Rio Tinto, in that order, received the highest accountability scores in the survey. (END/2003)