Wednesday, April 28, 2010

corporate personhood: the idea that corporations are "persons"

"The folly at the root of this foolish economy began with the idea that a corporation should be regarded, legally, as "a person" But the limitless destructiveness of this economy comes about precisely because a corporation is not a person. A corporation, essentially, is a pile of money to which a number of persons have sold their moral allegiance. As such, unlike a person, a corporation does not age. It does not arrive, as most persons finally do, at a realization of the shortness and smallness of human lives; it does not come to see the future as the lifetime of the children and grandchildren of anybody in particular. It can experience no personal hope or remorse, no change of heart. It cannot humble itself. It goes about its business as if it were immortal, with the single purpose of becoming a bigger pile of money.

The stockholders essentially are usurers, people who "let their money work for them", expecting high pay in return for low pay. The World Trade Organization enlarges the old idea of the corporation-as-a-person by giving the global corporate economy the status of a super government with the power to overrule nations.

I don't mean to say, of course, that all corporate executives and stockholders are bad people. I am only saying that all of them are very seriously implicated in a bad economy

Wendell Berry: In the Presence of Fear

Corporate incompetence, corporate profits and explosions on offshore oil rigs

(image courtesy of the NY Times)

There are eerie similarities between last weeks explosion on the BP run Deepwater Horizon oil rig in the Gulf of Mexico that killed 11 workers and the oil leak and explosion at the Montara (West Atlas) oil rig off the WA coast in late 2009.

As we await the Report of the Rudd Government initiated Montara Commission of Inquiry into the 10 week long oil leak from the West Atlas Oil rig owned and run by PTTEP Australasia, the shocking explosion and sinking of BP's Deepwater Horizon rig in the Gulf of Mexico reminds us one again of the environmental and safety disasters caused by offshore drilling.

The explosion and subsequent sinking of the Deepwater Horizon rig killed 11 workers and is now pumping 42,000 litres of crude oil into the Gulf of Mexico. The oil has reached the Louisiana coast and threatens marine environments, marine life (including fish and birdlife) high value coastal wetlands and various industries.

The cause of the explosion in the Gulf of Mexico is not known, although an inquiry is investigating civil or criminal violations by the rig operators. As in the West Atlas case, the responsible company failed to activate devices to stop oil flowing in an emergency.

Only recently the US Government considered imposing tougher safety and environmental regulation, however the industry objected strenuously, claiming its voluntary programs were successful. It is also worth noting that in the same week as the explosion BP announced that its profits in the first quarter of last year doubled to $6.08 billion (from $2.56 billion).

Worth noting as well is that the loss of life and environmental catastrophe in the Gulf of Mexico is causing trouble for the Obama administration which was looking to expand off shore drilling without adequate safeguards.

Friday, April 23, 2010

Taking money that belongs to others: the criminality of excessive executive compensation

image copyright of Bruce Petty

In mainstream Australia there continues to be galvanized anger about the exorbitant salary packages corporate executives are paying themselves, in defiance of public opinion, economic realities and the public interest.

As public outrage grows and more shareholders revolt about excessive executive salary packages its time to break through the web of illusions and justifications about excessive executive compensation presented by corporate Australia, political leaders, the corporate media and given credence by bodies such as the Productivity Commission.

In a recent paper titled "Exorbitant CEO compensation: Just reward or grand theft" in the Journal Crime, Law and Social Change criminologist David Friedrichs argues that executive compensation packages should be considered as a form of white collar crime. For Friederichs it is time to criminalize this behaviour. He calls it a form of robbery.

Friederichs is Professor and Distinguished University Fellow, Sociology/Criminal Justice, The University of Scranton and a lifelong researcher on corporate and white collar crime.

He argues that the corporate culture and practices that provide for and justify excessive executive compensation for corporate executives not only creates what he calls "crimogenic conditions" but are likely to lead to the taking of money that belongs to others.

Friederichs writes:
""Walking into a bank with a gun and demanding money from a teller is one way to steal money... Walking into a corporate boardroom and securing from the board's compensation committee, made up of cronies, paid consultants, and even relatives, compensation of millions sometimes tens of millions or hundreds of millions is another way to steal money. The principal differences are that the second way of stealing money pays much better, is all too often legal, and does not result in criminal prosecution and imprisonment. This needs to change"
The practices of excessive compensation have come to be viewed as standard business practice rather than as part of a spectrum of corporate criminal behaviour that goes unrecognized and unpunished. That is how corporate power works. It redefines reality to serve corporate and private interests. Its time to challenge that.

Tuesday, April 20, 2010

Corporate Power and the corporate aristocracy

" Wealth privilege remains embedded in the ancient institution of the corporation. It is a privilege out of step with market ideals, which has led to wealth disparities that threaten our political ideals. We can never really have political democracy without economic democracy"
Marjorie Kelly The Divine Right of Capital

I am currently re reading Majorie Kelly's devastating critique of the corporate economy and of corporations. Kelly exposes six aristocratic principles that corporations are built on, and shows how wealth bias is embedded in the structure and operations of corporations.

It is interesting to read Kelly's book in light of the recent failures by the Australian corporate regulator ASIC to prosecute corporate malfeasance and criminality. Recent cases pursued by ASIC against high profile corporations and corporate leaders have been thrown out of the courts.

ASIC seems more interested in pursuing individual culpability than in addressing the institutional and systemic causes of corporate malfeasance and corporate criminality.

Kelly's book is a reminder that it is the systemic dynamics of corporations and the corporate economy, rather than the action of individuals, that is the root cause of corporate collapses, corporate scandals, corporate criminality, massive executive salaries and remuneration, and the appalling behaviour of Australia's corporate elite.

Monday, April 19, 2010

When governments turn a blind eye to the "social harm" mining companies cause

Thanks goodness for the ABC's 4 Corners program. It continues to undertake essential investigative journalism, often shining the light on the murky world of corporate and government power in Australia.

Monday night's program "A Dirty Business" sheds light on the appalling silence and inaction by the NSW Government and the mining and power generation industries about the negative health and social consequences of their activities in the Upper Hunter Valley. Andrew Fowler's report asks whether emissions from coal mining and power generation are the cause of serious illness including serious respiratory problems, nervous system diseases, cardiovascular disease and liver disorders.

Andrew Fowler's report documents and describes what many in WA know well- the real social, human and environmental costs of this country's mining economy. What the program demonstrates once again, is the complete and utter disregard that governments and the mining and resources industry have for the the social harms the industry causes.

The desire of governments for mining royalties and of mining companies for massive profits overrides any other consideration, even people's health.