WCC warns churches on MAI moves

by Chakravarthi Raghavan

GENEVA: The General Secretary of the World Council of Churches (WCC), Rev. Dr. Konrad Raiser, has alerted the Council's 332 member churches to the dangers inherent in the proposed Multilateral Agreement on Investment (MAI), currently being negotiated by the Organization for Economic Cooperation and Development (OECD).

In response to a request from the WCC's Executive Committee, Raiser sent a briefing document on the MAI, tabled at the recent (17-20 February) meeting of the Committee, to all member churches.

In an accompanying letter, Raiser described the contents and implications of the proposed MAI as "alarming".

In a further move, also in response to a request by the Executive Committee, Raiser wrote to member churches in the 29 countries belonging to the OECD, which the Executive Committee says have a special responsibility to act on the issue. In his letter, Raiser explained, "This Agreement will have far-reaching effects not only on those countries which are involved in the negotiations and which will be the first signatories, but also on the countries of the South and those 'transition' countries not involved in the OECD."

"The MAI, which is expected to become the international framework for foreign direct investment, is being negotiated by representatives of the OECD economies without the participation of representatives of the majority of the countries of the world. Moreover the Agreement, as it stands, could threaten efforts to create sustainable communities. There are reasons to be concerned about the implications for the environment, working conditions and human rights."

Reminding member churches that OECD government representatives will meet in Paris from 27-28 April to discuss the Agreement further, Raiser said the Executive Committee has urged churches in OECD countries firstly to inform themselves about the issue and find out the positions of their governments, trade unions and employers' organizations.

Then, churches are urged to approach their respective governments and "to press for a framework for international investment which is balanced and which protects the interests of people, communities and the environment."

Tony Addy and Eduard Dommen coordinate the WCC work on the MAI. They say that "because of the dangers of the current proposal, [the] OECD should not press ahead at its April meeting with plans for the signing of the agreement".

Addy and Dommen explain that "WCC concern on the issue stems from work the Council is doing in the search for alternatives to the present damaging processes of globalization, particularly as it affects investment, trade and financial transactions."

"Globalization, as presently understood, leads to marginalization and exclusion as well as to environmental destruction."

"We believe a multilateral framework to control foreign direct investment is necessary rather than the MAI which gives multinational companies the freedom to impose their own agendas on the rest of the world."

"The MAI," the WCC notes, "says foreign investors must be treated as well as or better than domestic companies; national and local governments cannot restrict foreign investment in any form or in any sector except defence, and governments cannot impose 'performance requirements' to ensure local employment, control currency speculation or require a minimum period for investment."

"Further, the MAI gives multinational companies additional powers to sue governments and local municipal authorities in cases where the 'rules' of the MAI have not been kept; citizens will once again lose democratic rights over how they wish business to be conducted within their own borders."

"We hope churches will join with others in OECD countries and urge their governments to withdraw from the MAI as it is presently conceived, and that churches in non-OECD countries will call upon their governments to object to the proposed agreement." (Third World Economics No. 182, 1-15 April 1998)

Chakravarthi Raghavan is the Chief Editor of the South-North Development Monitor (SUNS).