09 March 2006

As Fairtrade Fortnight, the annual focus on suppliers in poor countries, gets into its stride, revelations that Gordon Brown has scrapped companies' reporting obligations couldn’t have come at a more timely moment, highlighting the need to increase pressure on politicians over corporate responsibility.

The Chancellor’s decision has caused alarm among anti-poverty, human rights and environmental campaigners petitioning the government to make companies more accountable for their actions.

The influence exerted by the CBI and fund managers Hermes in the decision to scrap the operating and financial review raises fears that Mr Brown may favour the interests of big business over the interests of poverty campaigners.

ActionAid worries that he preferred to hear the corporate world more than the many voices – including those from within government and the business community – who back stronger reporting guidelines for companies.

It says he should throw his weight behind amendments to the company law reform bill, proposed by ActionAid and other organisations within the Trade Justice Movement and Corporate Responsibility (CORE) coalition.

These proposals would embed a thorough annual review of firms’ social and environmental performance in developing countries into company law.

Resistance to these proposals by Mr Brown and his cabinet colleagues would seriously undermine their credibility as a government committed to making poverty history.

Meantime ActionAid warns that the global trade deal to be discussed by the G6 group of nations at a secretive meeting in London this weekend could cost poor countries $63 billion and hundreds of thousands of jobs.

Poor states will lose out as rich nations and their corporations reap the benefits, unless the talks take a radical change in direction from the framework agreed at last December’s WTO ministerial in Hong Kong,

Despite the fact that this round of talks is meant to help combat poverty, new research suggests the benefits of the talks to poor countries have been grossly exaggerated and are almost non-existent.

The World Bank is now forecasting only a penny-a-day more per person in the developing world under the trade deal that is currently being negotiated.

The United Nations predicts that poor countries could lose up to $63 billion in revenue from cuts to taxes on international trade alone.

This represents a stark contrast to the $96 billion rich countries are set to secure – 83 per cent of the total gains from the round of talks.

While Fairtrade Fortnight shines a clear spotlight on the developing world, the weeks and months which follow will decide if Britain merits a global award on corporate regulation – or a wooden spoon.