Coal Companies Are People Too

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The Wollongong developers’ donations scandal has laid bare one of the ugliest realities of our political system: the corrosive influence of corporations on government decision making.

The link between property developers’ donations to NSW Labor, and the resulting tide of approvals, is now so blatantly corrupt that it has forced the Premier to call for a ban on all donations. But the problem is hardly limited to property developers. Equally dominant — and arguably much more damaging both to democracy and life as we know it — is the coal industry’s lock on not only the Iemma Government, but the Australian political system in general.

The real issue is the influence of large corporations on our democratic system. The modern corporation is such a behemoth of wealth and power that ordinary citizens cannot hope to compete with it. There is no such thing as a level playing field when corporations have direct and protected access to government decision making in a way that ordinary citizens do not.

They have this access because of a centuries old British common law provision called corporate personhood which recognises corporations as having the same legal entitlements as natural persons (citizens). Originally constructed to protect corporations established by the monarchy, corporate personhood is what allows corporations to give donations to political parties and to lobby on or behalf of legislation, just as natural persons are allowed to.

Similarly, just as there are no limits on how much wealth or property a natural person can possess, corporate personhood guarantees that there are no limits on corporations in terms of their size, or the amount of property they are able to acquire. BHP Billiton is therefore allowed to take over other mining giants like WMC and Rio Tinto and hence increase its size, wealth, power and political influence.

Multinational corporations are now such giants of wealth and power that 95 of the world’s 150 largest economic entities are corporations, versus 55 countries. The fossil fuel industry is arguably the most powerful on earth. It certainly is the most powerful in New South Wales judging by the number of coal related projects that continue to be approved by the Iemma Government.

Australians recognise that corporations have too much power. In a significant 2003 poll, over half agreed that Federal Parliament was run entirely, or at least mostly, for the benefit of big business. Eighteen months ago 70 per cent agreed that government and big business are in bed with each other to ignore climate change.

Image thanks to Lukas.

Banning political donations will not fix the problem of corporate influence. In the United States, corporations are banned from giving campaign contributions. But like Australia, corporations are recognised in the US as having the same rights as people, and as a result have found legal loopholes. Corporations give millions of dollars to the Democrats and Republicans via Political Action Committees. Given the close ties of the NSW Labor Party to corporate Australia (in particular property developers and coal miners), it’s a safe bet there will also be loopholes in any NSW legislation. There will be loopholes because corporations exist exclusively for one purpose: profit. They will spend millions (which incidentally they will be able to write off as a business expense) figuring out, creating, and then exploiting, these loopholes.

That’s why a ban on donations should be viewed as an important first step, and not a solution in and of itself. Ultimately corporate political influence can only be addressed by removing corporate access to the political system. As long as our legal system recognises corporations as being entitled to the same privileges and protections as flesh and blood human citizens, these corporate excesses will continue.

Banning donations does not address other areas of corporate influence like lobbying, funding of think tanks and political front groups, or financing ads to influence policy debates — like the Minerals Council’s "Life Brought to You by Mining" campaign. These are all examples of how corporate personhood allows corporations to influence crucial decisions in ways that ordinary citizens cannot possibly compete with.

These, as well as donations, have allowed the carbon industry to block any meaningful engagement in Australia taking action on climate change until the Rudd Government finally ratified the Kyoto Protocol. But Kyoto is not enough. Scientific consensus is now calling for emissions to peak globally by 2015 — seven years from now.

Coal is the number one contributor to climate change globally, and is the primary reason that Australia is the world’s biggest per capita emitter of greenhouse emissions. Yet the Iemma Government continues to facilitate the expansion of coal mining in NSW. And it has substantially reduced the public’s say in the approvals process of these new mines and related infrastructure by pre-approving many of them as major projects. In the last year it has approved the Moolarben and Anvil Hill mines, both controversial and both ecologically sensitive, and both huge in terms of greenhouse emissions.

It, along with Federal Labor, is heavily subsidising clean coal technology, which at the very earliest might be available by 2020 — way too late. And Iemma is set on giving more power to the coal industry by privatising electricity generation.

In his recent book Supercapitalism, former US Clinton Administration Secretary of Labor Robert Reich has called for the end of corporate personhood as a crucial starting point to establish democratic control over corporate excess. Throughout the US, citizens are challenging corporate power and the legal concept of corporate personhood. In Humboldt County in northern California, citizens have passed a referendum overturning corporate personhood by banning corporate access to the local political system. Non local corporations are now prohibited from giving campaign contributions, from lobbying, from advertising on social issues, and from funding political front groups.

Corporations are supposed to be regulated by the representatives we elect, not the other way around. Entities established exclusively for the purpose of generating profit via the burning of fossil fuels should not have a dominant political voice regarding crucial decisions impacting society.

Because it is society’s — and the planet’s — actual survival that is now at stake.

New Matilda

New Matilda is independent journalism at its finest. The site has been publishing intelligent coverage of Australian and international politics, media and culture since 2004.

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