The U.N.'s Corporate Cronies?

On the day before he died last July, Eric Jacoby, a leading expert on agrarian reform, dictated an address delivered on his behalf at a rural development conference in Rome. Jacoby's words belied his guarded physical condition. The statement, a blistering attack on corporate influence in the United Nations, has become the most dramatic chapter of a growing controversy at the UN.

At the center of the controversy is the Industry Council for Development (ICD), a non-profit organization funded by 32 multinationals. Following a June 1979

meeting of the United Nations Development Program (UNDP), UNDP established a "working relationship" with the corporate group, permitting it to collaborate on UNDP projects. While representatives from ICD insist their intentions are honorable, public interest groups and labor unions as well as some U.N, officials have sharply criticized the development program's decision.

Critics contend that the Industry Council for Development is simply a reconstituted version of the Industry Cooperative Program (ICP), which the UN. Food and Agriculture Organization (FAO) ejected from its ranks in 1978. FAO Director-General Edouard Saouma expelled that group, supporting the increasingly vocal claims that corporations reaped substantial financial benefits from their position inside his agency.

Founded in 1966 to provide industry, expertise on agriculture to developing countries, ICP maintained a secretariat in the development department of FAO. Its more than 100 member corporations vowed to accelerate the transfer of technology and recommend products and machinery to increase rural productivity, paying careful attention to local development priorities.

But Jacoby and Susan George, author of How the Other Half Dies, for years charged that ICP had abused its position, furthering the interests of agribusiness corporations at the o expense of Third' World cultivators. Observers claimed that member companies used information provided by FAO to make profitable investments that often displaced and impoverished smallholding farmers. George singled out ICP's Pesticides Working Group for criticism, charging that the committee irresponsibly advocated wide spread use of pesticides without providing sufficient information about health and safety hazards.

Professor Louis Solomon of George Washington University has documented the activities of the Industry Cooperative Program. According to Solomon, ICP "produced few concrete results in the form of factories yielding economic and. social benefits for the Third World." Yet the group's work most certainly benefited member corporations. Consider these specific cases cited by Solomon:

• In 1978, executives from Italian and French corporations affiliated with ICP traveled to the Cameroon on an ICP "country mission." Jacques Bertrand, a senior ICP official on leave from the French multinational Sodeteg, supervised follow-up for the trip. It is not hard to understand why. Soon after the visit, the Cameroon awarded Sodeteg's parent firm contracts for satellite training and research on television systems. Sodeteg itself clinched a deal to assess poultry production in the country, with an eye toward increased commercialization of the industry.

• ICP organized conferences from 1971 through 1974 on the use of pesticides. The group paid travel expenses for governmental representatives and supplied airplanes to demonstrate spraying techniques. These conferences "stimulated countries to increase their pesticide programs." But while the Pesticides Working Group was arranging lavish conferences to extoll the virtues of pesticides, ICP's environmental subcommittee remained inactive. Asked about projects the environmental group had organized, subcommittee chairman J.I. Hendrie replied that it had "done nothing."

• ICP officials received detailed economic reports by FAO field personnel that non-members could not obtain. The organization utilized FAO's computerized information system containing economic and social data on nearly every developing country. For example, FAO's representative in Nigeria regularly provided the agency with studies on Nigerian fruit and vegetable processing. Multinationals affiliated with ICP received these reports free of charge, thereby learning of investment opportunities in that sector. "No system existed to provide similar information to Nigerian companies.

Development experts point to obvious links between the Industry Council for Development and the Industry Cooperative Program, warning that ICD will continue to promote the interests of member corporations. The World Confederation of Labor, an international trade union secretariat based in Brussels, recently called for an end to collaboration between ICD and UNDP. In a letter to UN. Secretary General Kurt Waldheim, the Confederation charged that the corporate group "intends to secure a decisive influence within the United Nations, where the large number of technical assistance projects show promise of substantial [financial] benefits."

ICD's work with the development program has generated criticism inside the United Nations as well. One UN. official remarked that "although ICD will have less authoritative respectability than ICP, it will also have a broader range of issues to advise on." And a "broader range of issues" can translate into larger profits for member companies, the official noted.

Walter Simons, executive director of the new corporate group, dismisses such criticism. "We are trying to make our expertise available for development, not for any commercial purposes," Simons insists. And although he readily admits there is some overlap of personnel between the two corporate organizations, he is quick to identify substantive differences. "What we do has certain similarities to what ICP did; the form is obviously completely changed."

ICD's detractors are not convinced. "So many directors of the new organization were directors of ICP that their interests are obviously the same," says Frances Moore Lappe, author of Food First and co-founder of the Institute for Food and Development, Policy. Indeed, the background of leading ICD officials reveals their ties to the old organization. Simons, formerly of Caltex Corporation and now the full-time executive director of ICD, served as deputy director of the Industry Cooperative Program. J.C. Ramear, an executive from the Dutch multinational Phillips and a former vice-president of ICP, occupies an identical position with the Industry Council for Development. And A.A. Thornbrough, reportedly the most influential official behind ICP, is a director of ICD.

Like Simons, UNDP Administrator Brad Morse downplays the similarities between the two groups. According to Morse, the relationship between ICD and his program differs fundamentally from the role of the Industry Cooperative Program inside FAO. "ICP was an integral part of FAO," Morse says. "They were integrated into FAO as if they were one of its divisions: The present ICD is as remote from UNDP as the Ford Foundation or the University of Paris. They are no part of the mechanism itself."

It remains to be seen whether Morse's sharp distinction between the two groups is well founded. One thing is certain. Events between June 1978-when FAO chief Saouma evicted ICP-and January 1979-when ICD registered as an indepen dent non-profit organization-show clearly that this new status was thrust upon the group against its will.

ICP officials learned of Saouma's intentions well before he expelled the organization; in early 1978, they began searching for a new home at the United Nations. In a letter to Secretary General Waldheim dated February 16, Thornbrough and Ramear suggested that ICP "could be more effective if it were based in a central position in the UN. system,' requesting that Waldheim "take whatever measures you think appropriate to relocate the program."

The letter must have been persuasive. At the 1978 meeting of UNDP's Governing Council-hardly a month after Saouma expelled ICP-Waldheim recommended that a similar organization be created within the United Nations Development Program. The delegates refused.

Frustrated in their attempts to secure a second foothold in the United Nations, ICP officials, led by Walter Simons, formed the new body headquartered in New York. At UNDP's next annual meeting, in June 1979, the development program officially recognized the Industry Council for Development as a "cooperating organization." One day later Morse wrote to ICD's chairman, expressing hopes that the two groups would "establish routine linkages . . . so that active cooperation may be expanded as quickly as possible."

Morse emphasizes he will require that ICP strictly adhere to guidelines developed ,at the June meeting to govern UNDP's relationships with outside organizations. And he predicts that other private organizations will soon begin collaborating with the development program. The status of ICD, he insists, is no different from the relationship between UNDP and two other "cooperating organizations"-the International Federation of Institutes of Advanced Studies (IFIAS) and the International Council of Scientific Unions (ICSU).

It is clear, however, that UNDP established the guidelines with ICD foremost in mind. According to minutes from the June governing council meeting, a delegate from Sweden reminded his colleagues that the Industry Council for Development, "the successor of an organization discussed in the same context at the previous session," is "keenly interested in cooperation with UNDP." And he stressed that the guidelines should eliminate suspicions that UNDP is "merely continuing the UN: s cooperation with ICP in a different form."

Critics contend that the industry Council for -Development will play a unique advisory role in UNDP. "ICD still has a knowledge monopoly," Lappe asserts. "They are still in control of information, and information is, power. They can outspend any group whose views might be different, and they will be able to persuade governments."

Lappe has a point. member corporations pay yearly fees of $7,500, furnishing ICD with a hefty annual budget of nearly $250,000. And corporate executives serve as officials and directors of the body. While other "cooperating organizations" might occasionally collaborate with UNDP, ICD's primary function is to work with the United Nations, coordinating its international activities from a suite of offices in the United Nations Plaza.

Laurence Simon, director of development education for OXFAM-America, emphasizes the need to distinguish between ICD and other "cooperating organizations." "It's not a matter of multinationals being all evil," Simon says. "ICD's priorities are different and will lead to further distortion of weaker economies if considered in the same working relationship to UNDP as other more genuine non-profit groups."

Until now, critics of the new corporate group have based their reservations largely on the dubious record of ICP. However, ICD's preliminary plans promise to generate even further conflict with development organizations close to the UN. Notes from ICD's first annual meeting clearly show that the projects proposed by the group constitute a near carbon copy of activities organized by the Industry Cooperative Program. Agriculture remains ICD's main concern, and the organization is focusing its work with UNDP in areas traditionally fraught with controversy between corporate and non-corporate bodies.

For instance, with the help of an $825,000 grant from the US. Agency for International Development, ICD has launched the Commercial Seeds Industry Development Project, designed to make "national seed programs more effective." The curious choice to direct the project is J.I. Hendrie, an executive from Shell International Chemical Company (a leading producer of pesticides) and former chairman of the less than active environmental subcommittee of ICP.

Susan George has promised to monitor closely ICD's recommendations on the use of seeds. According to George, the interests of small farmers diverge sharply from the interests of multinationals when it comes to seed utilization. George predicts that ICD will urge the use of so-called high yield seeds requiring large amounts of pesticides-an agricultural package out of the reach of most Third World smallholders. And Hendrie's position with the pesticide company Shell constitutes a conflict of interest typical of the operations of ICD.:

ICD's means of collaboration are sharply reminiscent of tactics employed by the Industry Cooperative Program. The group plans to initiate "country missions" which proved so lucrative for member corporations in ICP. And ICD will soon institute regular "seminars and workshops" comparable to the extravagant pesticide conferences held between 1971 and 1974.

Public interest groups and labor unions will continue to scrutinize the performance of the Industry Council for Development. Observers fear that collaboration with ICD will lead to an ever increasing corporate role within the United Nations, a trend they deem unacceptable. According to Larry Simon, "governments can develop appropriate criteria for multinational corporate investment. But the decision-making process and discussion of goals is best left to organizations and governing bodies representative of and responsive to the just aspirations of the poor."