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Saturday, January 14, 2006

Between a rock and a hard place

When Governments from Victoria to California compete for investment in their turf within a globalized economy, they can find themselves - as the Bracks Govt has done - between a rock and hard place: corporations getting government encouragement and incentive in real and financial terms and then, when their circumstances change within a short space of time, corporations up stakes and move. It is understandable that corporations will go where the best deal serves their own self-interest - but time and again taxpayers are left with a poor return on their dollar. VicGov says it is unrealistic to expect companies to return the money. But there are two things that are realistic to expect, ask for and get:
  1. a good return for taxpayers' dollars so that money has not gone down the drain on a poor bet;
  2. modern globalised corporations have to be accountable.

Corporations say they are accountable: but they are accountable on a very narrow base while ranging over vast distances. Corporations have to recognise their employees as stakeholders in the same way as shareholders are (not that they can't become part of the mushroom club too) and they have to be held accountable to the governments and communities in which they have their corporate base and in which they establish their business.

It has always bugged me that Australian corporations can pollute and deforest other nations in a manner that would not be permitted under Australian law without being held accountable at home. Not only should there be strong domestic accountability but there must be international accountability as well. You can't be a fine corporate citizen at home while being delinquent in responsibilities overseas - as BHP found at Ok Tedi.