Tony Blair once reminded a Labour Party conference that more than half the world's top 100 economies are corporations, not countries.
The power these giant businesses wield is awesome: they have consolidated economic power in boardrooms remote from the communities where they are located; they are unaccountable to anyone other than those who make decisions for large institutional investors; they have also transmuted economic power into political power through institutions such as the World Trade Organization, which limit the political autonomy of states in favor of the economic freedom of large companies. But are they using their power responsibly? And can they be held to account?
Exxon plotted to destroy the best hope of international action on climate change -the Kyoto protocol - by backing President Bush's election campaign and helping found the Global Climate Coalition lobby group. Bush is now demanding the opening up of the Arctic and Florida coastlines for oil exploration.
US gardening giant Scotts digs up protected wildlife areas in Britain for compost. British-based oil firm Premier plans to take gas from Kirthar, Pakistan's oldest National Park. Balfour Beatty wants to build the Ilisu Dam in Turkey, displacing 60,000 Kurds, inundating villages and sites of world historic importance. Often the reality is overwhelming corporate irresponsibility. These corporations are funded through our pensions and investments, and sell us their goods and services. That's why the new rhetoric about corporate social responsibility needs to be treated with great care. Communities in the South wonder why their local resources should be given away by overwhelmed or corrupt governments to multinational giants for the benefit of shareholders in London and consumption in the North. They are left with the social and environmental consequences.
Corporations can contribute to solutions rather than cause problems. B&Q, for instance, has played a key role in the Forest Stewardship Council, the world's best - and most credible - scheme promoting well managed forestry. Public pressure from campaigners, shareholders and consumers can lead to private dialogue and to real progress. In the long run, there need be no conflict between the needs of communities and responsible investors.
But how long will more progressive firms be prepared to tolerate the bottom-feeders? It must be in their interests, as well as those of ordinary citizens, for governments to set tough but fair rules to ensure corporations are accountable to the public and act in a socially and environmentally responsible way. Citizens and progressive businesses need to resist the rush to unregulated global free markets and reclaim a political space for regulation, intervention and sustainable development. Blair needs to recognize not just the scale of corporate power, but the need to curb its excesses.
Matt Phillips is senior campaigner at Friends of the Earth
© Guardian Newspapers Limited 2001