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Do Corporations Have Human Rights?

 

When Mammon Comes Marching in…

 

Challenging the Claim of Corporate “Human” Rights

 

 

 

In the press earlier this month Alastair McIntosh from North Lochs described the Lafarge Redland Aggregates’ lawsuit as “blasphemous and idolatrous.” In this essay, he explains why.

 

 

Published in The Stornoway Gazette, 28 September 2000, p. 4. 

 

Click here for George Monbiot's Guardian column based on this essay

 

Click here for main superquarry index on this website.

 

Click here for Lord Hardie's Court of Session ruling, and discussion

 

 

It was 1989 and I was visiting Bougainville Island in the Solomon Sea. I’d gone there as a director of the Pacific Regional Sustainable Forestry Programme. This trained village business groups to manage their forests sustainably, running their own small-scale, locally manufactured, portable sawmills.

 

My role had been to get funds for training from organisations like Christian Aid and the British government’s Overseas Development Administration. The programme spanned three newly independent nations - Papua New Guinea, the Solomon Islands and Vanuatu. Under joint French-British colonial rule, Vanuatu had previously been called the “New Hebrides.”

 

The sustainable forestry programme helped communities to mill timber for their own needs. It built schools, hospitals, churches and homes. The cash flow of these projects, once people had been trained, was so positive that young men no longer had to seek work in the cities away from home. What’s more, pioneering European companies like B & Q, the DIY superstore, took a genuine interest. They developed the idea of marketing “ecotimber.” So, next time you go into B & Q, remember that their environmental policy owes something to the Hebrides on both sides of the world!

 

In the South Pacific local communities nearly always own the land. This, as it happens, contributed some of the inspiration that went into my own involvement with the Isle of Eigg land reform campaign back here. But community land ownership alone was not enough to prevent multinational corporations seeking ways to corrupt, or to exploit trust and manipulate ignorance. If they could once get in to a place, they’d clearfell forests like the warm-up for Armageddon.

 

The twenty volume 1989 Barnett Report by Supreme Court Justice Tos Barnett found that all 18 of the logging multinationals operating in Papua New Guinea were corrupt. Indeed, corruption was funding the perversion of democracy all the way up to deputy prime-ministerial level. Little wonder Tos Barnett was stabbed in an assassination attempt probably linked to his report.

 

By helping village communities to manage their own forest resources, our programme reduced the temptation to sell out to overseas companies. That’s how I came to be on Bougainville. The programme was particularly well developed there, with over 100 village sawmills operational and world-class expertise being developed in sustainable management techniques that took out the mature trees but took care of the young ones coming up, leaving the forest relatively undisturbed.

 

But in the course of 1989, literally while I was visiting, I saw the Bougainville programme completely collapse. Why? Because a civil war had started after years of mounting tension. The cause was the island’s Rio Tinto controlled copper mine – the largest in the world. Problems ranging from pollution to prostitution had spilled out over a much larger area than the islanders had originally anticipated. And to this day, Bougainville remains in a state of turmoil. Indeed, the islanders’ most recent move has been to fight the corporation in the American courts using an obscure piece of anti-piracy legislation, the Alien Tort Claims Act of 1789.

 

So, why had things gone so badly wrong? Well, the copper mine dominated the economy. The island had become a company town. Basil Peutalo, a leading churchman from Bougainville summed up the situation in the following words to a 1989 gathering of the Melanesian, Indonesian and Australian Council of Churches. He said:

 

“Here is a people who fear that they are no longer in control of their destiny and land. They are losing control of the patrimony of their children.  For thousands of years, our ancestors lived out their interconnectedness with the natural world.  However, this view of nature and the relationship of the human person with it is challenged today by a spirit of utility which views the earth as property to be used.  The huge amount of money that goes with such destructive activities has become an attractive wrapping around the negotiations with local peoples.”

 

There are, of course, both similarities and differences between Bougainville and Lingerbay. Roadstone does not cause the same toxic pollution that copper tailings create. Bougainvillians are the blackest people in the world, and most of us are amongst the whitest. But that apart, the parallels are pronounced. They show particularly in corporate attitude – high-handedness, presenting themselves as “the only salvation” of the community, funding local supporters’ groups, and splitting communities in ways that achieve divide-and-rule.

 

In the case of Bougainville Copper Ltd., a Harvard University anthropologist, Prof. Douglas Oliver, was hired to tell government planners that they were dealing with a primitive and superstitious people, "who would probably get used to the company's presence.” This caricature might seem remote from Lingerbay, as indeed it ought to be, until we remember that the pro-quarry QC, Robert Reed, famously summed up in June 1995 by saying: “One of the most worrying aspects of the inquiry has been the gloomy and despairing attitude of many of the Harris natives who have given evidence, and their suspicion of outsiders, commerce and enterprise.”

 

In short, if you’re one of the “natives” and not on-side with the corporation, you must be backward and superstitious. Doubtless Lafarge Redland would include me likewise in such a category because I am, frankly, outraged at their latest move to try and force the hand of the Scottish Parliament. Look at what they did in the Court of Session in Edinburgh earlier this month. They brought a lawsuit claiming that the Scottish Executive – our own democratically elected representatives - were in contravention of the company’s rights under Article Six of the European Convention of Human Rights.

 

Now, Article Six, reads: “In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

 

I happen to be in complete sympathy with Lafarge Redland over the amount of time the public inquiry process has taken. However, by invoking human rights law in defence of what are only actually only corporate rights – rights of property - they reveal the sinister face of globalisation.

 

To understand the gravity of what it means for a man-made wealth-production machine, a corporation, to claim “human” rights, we need to look at the history of how corporations came into being. This is fascinating, because in ways that have implications far beyond Lingerbay, but which are possibly most clearly seen with a Hebridean eye, it sheds light on the kind of world that globalisation is moving us all into.

 

The first corporation, we are told by Blackstone in his Commentaries on the Laws of England, was the church. Being comprised of people who had renounced personal wealth, monastic orders needed a legal device by which to hold property in perpetuity for the community as a whole. At its best, then, monastic corporate identity was based on both community and co-operation. It served a higher principle: it attempted to serve God.

 

However, later in history the idea came about of using corporate legal entities for competitive domination. The idea is generally attributed to the members of the East India Company. In 1600 Elizabeth had granted this a Royal Charter giving, “exclusive trading rights with all countries beyond the Cape of Good Hope for an initial period of fifteen years.” In the years that followed the company became possibly the first joint-stock corporation. This differed from a trade guild partnership in that it introduced the idea that a company could be owned by people whose sole role was to provide capital. In other words, the rise of “capitalism” had begun.

 

By the mid-1850’s the East India Company had become virtually a sovereign power. By the illegial export to China of opium, it came to dominate the China tea trade. The Chinese authorities’ opposition to such “free trade” precipitated the first Opium War. This, of course, was what also generated the wealth by which Sir James Matheson built his castle in Stornoway. Indeed, Disraili in Sybil describes Sir James, the proprietor of all Lewis, as having been: “A dreadful man, richer than Croesus, one MacDrug, fresh from Canton with a million in opium in each pocket.”

 

But back to the East India Company. Only the British navy had more ships. Only the Emperor of China and the Czar of Russia ruled over more people than its Governor-General. However, in 1858 it was dissolved by Royal Decree, finally ceasing to exist as a legal entity in 1873. The ill-feeling its power had stirred up had contributed towards the Great Indian Mutiny. Shutting it down was supposed to make the natives feel less restless. The irony is that such control of corporation by state would not be possible with most of today’s multinationals. If they have trouble in one spot of the world – like Union Carbide had after the Bhopal disaster – they just shift footing elsewhere. And note how on Harris, we thought we were dealing with the English company, Redlands, but now it has become the French Lafarge.

 

The corporation in its modern incarnation came about with the Joint Stock Companies Act of 1844. This furthered progression of the notion that a corporation was a “fictitious person” with rights and responsibilities in law. However, an indication of the balance between corporate rights and responsibilities can be gleaned from Gladstone’s comment during the House of Commons debate that: “Under this Bill, there would be a power for the first time, for persons to associate themselves in companies, for the purpose of commercial pursuits, without the fear of interference from any human being whatsoever.”

 

A subsequent 1855 act granted shareholders limited liability. This meant that shareholders could not be subjected to losses greater than their capital investment. Of course, if you or I as individuals harm somebody or something, we can be taken to the cleaners. But if we do it via a corporation, we find ourselves protected from the full consequences of our actions. Too easily, therefore, limited liability equates with limited responsibility. In a competitive advanced capitalist world a corporation, after all, thrives or gets swallowed-up (like the Redland of public inquiry days did) according to how well its share price is doing. A mainstream corporation can, therefore, only be ethical inasmuch as it is profitable to do so. In theory shareholders control what is going on, but when they number perhaps tens of thousands, the idea of “shareholder democracy” makes little sense in terms of owning responsibility. At the end of the day the shots are called by one consideration – Mammon – and those shots have a single target – the bottom line. [Afterthought (29-9-00): the Thatcherite notion of "shareholder democracy" is actually a perversion of the meaning of the word democracy. Democracy is usually taken to mean "one person; one vote." However, in company law, voting rights are not equal, but are weighted according to the quantity of shareholding. This allows just a few, or in the event of a majority shareholding, only one interest to control a company - especially now that corporate law has been loosened up to allow for such abstract control features as proxy voting. In other words, we are talking not of democracy but oligarchy - government by the few - and indeed, an oligarchy defined by plutocracy - government by the rich. To refer to "shareholder democracy" in contexts other than certain co-operative forms is, therefore, to demonstrate a presumption that democracy can be bought and sold. Add to this the fact that many large shareholders these days are institutional (investment houses such as pension companies), and that, like every other company, their survival in a competitive environment depends to a very fine degree on the bottom line, then the picture emerges of a global economy in which priorities are controlled primarily by anticipated rate of return on investment in a trade that has become, in substantial measure, driven by computerised portfolio managment programs, for our plutocracy boils down to an empty, mechanical process of cold  calculation, 100% "rational," of course. This is what is so frightening and "out-of-control" about the advanced capitalist world, and what distinguishes it from the "family firm" dynamic of entrepreneurship, where there is still manifest space for heart. This is why a theological critique that understands the psychology of idolatry - of worshipping "false gods" - is so relevant to our modern times, and arguably deserves to be heard beyond the generous columns of the Stornoway Gazette. Ethical investment is one approach to resolving this conundrum, but going deeper than that, we need to reappraise the ethics of second order characteristics of money per se - i.e. expecting a return on investment. That is to say, we need to reappraise the fact that our economy is substantially driven, in one way or another, by usury, and to understand this in a psychospiritual framework capable of seeing money not as a "commodity," but as a manifestation of power in human culture. Click here to see my paper with Wayne Visser in the journal, Accounting, Business & Financial History, giving an historical critique of usury.]

 

Due to the influence of Empire, variations on British corporate law have replicated throughout much of the world. America was particularly influential in the development of the modern corporation because, as the Encyclopaedia Britannica puts it, “powers of incorporation were largely reserved to the individual states under the Constitution, which led in the late 19th century to a competition among the states for liberalisation of their respective incorporation laws. Given the freedom of interstate commerce guaranteed under the Constitution, would-be incorporators could choose which state in which they wished to incorporate without compromising their freedom to transact business in any other state.”

 

Under the World Trade Organisation, this lowest-common-denominator process is today replicating itself worldwide. In short, it means that corporations controlled by wealth are becoming more powerful than governments controlled by democracy. Indeed, before his death, President Abraham Lincoln warned: “Corporations have been enthroned… An era of corruption in high places will follow and the money power will endeavour to prolong its reign by working on the people … until wealth is aggregated in a few hands … and the Republic is destroyed.”

 

That is why it is such a serious thing when a major multinational – Lafarge Redland Aggregates – gets up in a Scottish court, as it did earlier this month, and tries to push the Scottish Parliament into making a favourable decision on its behalf by claiming “human” rights for their “corporate personhood.”

 

Astonishingly, this remarkable notion that corporations should be treated the same as people in law is not without legal precedent. The doctrine, known as “corporate personhood,” is generally traced to the case of Santa Clara County v. Southern Pacific Railroad Company, 1886. There Supreme Court Chief Justice Waite announced, "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

 

The Fourteenth Amendment to the US Constitution happens to say much the same thing as Article Six of the European Convention of Human Rights. Ironically, it was originally intended to give legal protection to former slaves and their descendants. Justice Waite, however, converted the justifiable “legal fiction” that a corporation is a “legal person” into an enforceable constitutional reality that was no longer fictitious. The power of the modern American corporation was thus baptised by a handful of corrupt oligarchs. Golem – the man-made man who runs amok in Jewish religious storytelling – was set loose. Mammon became visibly incarnate.

 

That is why I have called Lafarge Redland’s Court of Session lawsuit both “idolatrous and blasphemous.” What has happened is that a man-made entity has sued for “human” rights. Indeed, I am given to understand that the Scottish Executive had to defend themselves – which is to say, ourselves - using a specialist human rights lawyer, and that Lord Hardie accepted that the corporation could take the position they did.

 

Well, as I understand things, the meaning of “idolatry” is to focus “man’s chief end” around the glorification and enjoyment of something other than God – in this case, profit. And the meaning of “blasphemy” is to wilfully misrepresent the nature of God – in this case, implying that something other than God  - shareholders – can create a form of “presonhood” worthy of “human” rights.

 

So, to where might we look to find a defence from such assault? One difference between the American Constitution and ours is that we do not have constitutional separation of church and state. In American law anything might go when it comes to defining what human personhod is. But in Britain and especially Scotland it’s different. The Treaty of Union, the Church of Scotland Act and the Royal Titles Act 1953 all say, whether we agree with it or not, that the basis of the social contract that makes up the state we are in is a Christian one. This in turn must imply that human characteristics are God-given rather than man-made. Ergo, the corporation may be a “fictitious person” in law, but to claim human rights is to chance its luck further than might be good for it.

 

We should remember too that corporations exist in company law solely to provide shareholders with profit. However, if it is argued successfully in law that a corporation is also a “person” with human rights, then such a “person” would, by definition, be one held in the condition of slavery to shareholders. This could place the directors of Lafarge Redland in a most interesting position with respect to Britain’s anti-slavery laws. Perhaps The Financial Times hit the mark when, at the time of the Redland predatory take-over, it described Lafarge as, “a new breed of pan-European monster.”

 

It is one thing for a company to act with humility and in the service of society. This happens, and I have cited B & Q as an example. But by claiming human rights, Lafarge carelessly reveal their true nature. Not only would they take away Mt. Roineabhal; they would even challenge the very basis of what it means to be a “person” in Scots law – a system of law which, let us remember, as Lord Stair asserted in his seminal Institutions of the Laws of Scotland, 1681, is grounded in “divine law.”

 

In my most optimistic moments I ponder that Mammon may yet rue the day he tried to set up his golden throne on the shores of the Western Isles. But maybe that was why God sent him there. Maybe a debate is taking place here that is important in these our modern times. Well, as James Shaw Grant used to say, the columns of the Stornoway Gazette are a ceilidh that reflects the world in microcosm. Accordingly, I trust that Mammon or his diplomats will not shy from contributing a defence.

 

Ahhh … Redland … you could have tried slipping this one one through unnoticed in many parts of the world … but fate would have you choose to behold the Hebrides!

 

 

 

Further material on Bougainville, Lingerbay and the theology of constitutional law may be found on the author’s website, www.AlastairMcIntosh.com.

 

 

Click here for material on Moloch, the bardic tradition and the superquarry

 

Click here to go to main Harris superquarry site

 

 

 

 

 

28-9-00

www.AlastairMcIntosh.com

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