Ethical Consumer Manifesto

At this critical time in our political culture, we have sought to identify ten key issues which could each have a transformative effect on the economic systems within which we live, and which are illustrative of the kind of broader change we are seeking.

Infographic: Ethical Consumer manifesto

Ten key steps from Ethical Consumer’s 2018 manifesto

Reforming corporate power

1. Ban government contracts with companies engaged in tax avoidance.

2. Support a binding international treaty on corporate human rights responsibilities.

3. Eliminate the use and inclusion of ‘corporate courts’ in trade deals.

Reforming finance and economics

4. Make ethical buying and alternative business models part of the educational curriculum.

5. Introduce a ‘Robin Hood Tax’ on financial transactions.

6. Make disclosure of lending and share ownership by financial institutions mandatory.

Reforming consumer markets

7. Break up technology monopolies into separate businesses and democratise ownership.

8. Create a Fair Food Act recognising food sovereignty in national law.

9. Phase out animal testing by 2025, as the Netherlands is planning.

10. Ban single-use plastic packaging by 2021.

Background

Many ethical consumer campaigns are about making markets less damaging because governments are not really stepping in to prevent abuses. Nevertheless, when governments are persuaded to regulate in a supportive way, the impact can be huge. Because of this, Ethical Consumer published its first ‘Manifesto for Government’ in 2001.

Since then, the world of ethical consumption and corporate power has changed significantly. Some of these developments have been positive, with a few of the ideas we were talking about then becoming adopted by governments at least somewhere in the world. See our 2007 Manifesto update for what these were. However, in other areas, matters appear to have become worse and we, therefore, decided that an update was needed.

For our 2018 list, we have looked to combine issues around which powerful coalitions are already forming with those to which we can uniquely contribute. At least seven of our demands are, therefore, backed by global campaigns, many of which have gained momentum in recent years. International movements have made food sovereignty, a Robin Hood Tax, a UN Treaty on corporate human rights responsibilities, and a ban on corporate courts seem like increasingly realistic alternative approaches.

We also surveyed our own readers and stakeholders in May 2018. They particularly encouraged us to include requests for regulations addressing tax avoidance, plastic packaging, animal testing and making ethical consumption part of the educational curriculum.

Our original manifesto contained 46 separate suggestions and, although comprehensive, was hard to communicate. It still contains key insights about the role governments can play in intervening positively around procurement, information disclosure, fiscal policy, regulation and controlling corporate power.

At this critical time in our political culture, we have sought to identify ten key issues which could each have a transformative effect on the economic systems within which we live, and which are illustrative of the kind of broader change we are seeking. The section below looks at each of the ten demands in turn explaining what it is that we want, why we want it, and who else is working on it.

Our Manifesto

1. Ban government contracts with companies engaged in tax avoidance.

What do we want?

The government should prohibit any future public-sector contracts with companies engaged in tax avoidance. This should include companies with subsidiaries in tax havens which do not have full, public, country-by-country reporting demonstrating fair payment of taxes. This should apply to both contracts for outsourcing services (such as to health care providers) and procurement contracts for items used by councils and other public-sector organisations.

Why do we want it?

In 2017, it was estimated that tax avoidance was losing nations over $500 billion a year. Governments struggling to maintain public services lose this tax income each year, as profits are channelled abroad. Alternatively, they are forced to ‘liberalise’ their own tax laws, adding to the problem.

In the UK, tax avoidance is channelling much needed money away from the NHS, housing and other vital forms of public infrastructure. But, if looked at in proportion to GDP, the countries that lose the most from tax shifting are consistently the poorest. In Chad, in 2017, the estimated losses to profit shifting were larger than all of the (non-resource) taxes collected in the country that year. In Pakistan, the losses were 40% of tax revenues.

In 2016, 300 leading economists wrote to the world’s leaders saying that there is no economic justification for allowing tax havens at all. The government should not be encouraging this behaviour with its own contracts.

Councils in England alone spend around £45 billion a year buying goods and services from companies. This gives them a lot of influence over suppliers. The prospect of losing a multi-million-pound contract will force a company to reconsider avoiding its taxes, here or in a developing country. Over 15 councils in England and Northern Ireland have already pledged not to fund companies involved in avoiding taxes. We believe that this should be a national law.

Who else is working on this?

 

2. Support a binding international treaty on corporate human rights responsibilities.

What do we want?

The UK should support existing proposals for a UN treaty making companies legally accountable for human rights abuses in their supply chains. The treaty should cover companies’ direct operations, their supply chains and any projects that they are funding (in the case of financial institutions). Corporations should be responsible for paying reparations to victims of human rights abuses and, where they fail to do so, countries should be able to impose sanctions on the company (just as we expect them to do with regard to nations) by denying them future government contracts. Victims should be given access to justice free of charge.

Why do we want it?

Despite international agreements to protect human rights, corporations cannot currently be held accountable for the abuses that they perpetrate, under international law. This means that, not only do companies continue to commit abuses – from polluting to employing child labour – around the world, they continue to profit from doing so.

We do not accept such violations when they occur at the hands of public authorities. Countries can face sanctions for breaking human rights law. Companies should be subject to the same expectations. A robust treaty on transnational corporations and human rights could make existing accords on human rights meaningful, and protect the most vulnerable individuals and communities.

The UN has committed to establishing a treaty on transnational corporations and human rights, but many fear that it will not be effective in tackling powerful corporations. Critics suggest that the UN will privilege arguments from commercial law over and above the concerns of civil society groups. The treaty should ensure that international agreements on human rights will supersede protections for corporations in national law or international trade agreements.

As it currently stands, victims find it difficult to pursue companies for human rights abuses. Legal recognition that companies are responsible for such areas will force them to conduct proper due diligence. The treaty should also restrict corporations from collaborating with, or investing in, companies known to be involved in abuses.

In order to be effective, the UN must also establish access to justice, free of charge, which allows for class actions and which limits the use of transactions remedies or out of court settlements.

Who else is working on this?

 

3. Eliminate the use and inclusion of ‘corporate courts’ in trade deals.

What do we want?

The UK Government should commit to ending the use of corporate courts: Investor-State Dispute Settlement (ISDS) clauses should not be accepted as part of any new trade deals, and actions should be taken towards renegotiating or terminating current treaties containing ISDS provisions.

The UK Government should seek to redesign the dispute system within trade-deals so that:

  • disputes are dealt with through the official court system of the country challenged, rather than through separate arbitration;

  • mechanisms are provided for citizens to challenge corporations for infringements of their rights.

 

Why do we want it?

Also known as Investor-State Dispute Settlement Tribunals, corporate courts are courts through which corporations can sue states for lost future profits if laws are changed. The corporate court system is now an integral part of many trade-deals, which have corporations’ right to sue written into the terms.

This system represents a serious threat to the democratic process. For example, the government of Canada is currently being sued by a mining company due to the government’s decision to put a moratorium on fracking as a result of a referendum held on the subject. Governments have also been sued for acting to ban nuclear power, safeguarding the human right to water, and lowering the price of medicine, among many other things. Often, even the threat of a lawsuit can persuade poorer countries to back down, thereby allowing companies to shape regulations. On top of this, corporate courts usually meet secretly, are presided over by corporate lawyers, and provide no right to appeal once a verdict has been made. This is a system clearly designed to favour corporations over nations and their people.

As well as helping protect the democratic process in the UK, eradicating corporate courts would also prevent UK companies utilising ISDS clauses in other countries. Other governments have already started taking such action. Corporate courts were recently dealt a blow in Europe after a landmark ruling by the European Court of Justice in March 2018, which stated that corporate courts were unlawful due to the fact that they were incompatible with EU law. South Africa, Indonesia, India and Ecuador are also working on terminating or renegotiating their treaties with ISDS provisions. Venezuela and Bolivia have already done so.

Who else is working on this?

4. Make ethical buying and alternative business models part of the educational curriculum.

What do we want?

The government should provide incentives to include teaching on ethical buying and alternative business models across the education system. This should stretch from PSHE and citizenship courses in secondary schools, to courses on purchasing and company law at universities and business schools . Teaching should cover ideas around environmental, animal and human rights issues in supply chains. It should also look at models such as co-operatives, social enterprises, and other mission-led businesses.

Why do we want it?

The average child in the UK is thought to see 10,000 advertisements on TV each year. Encouraged to become consumers from a young age, corporations work hard to establish patterns of behaviour that will last throughout the child’s life.

In order to counterbalance this influence, children and teenagers need to be equipped with adequate education about the impact of their consumption and what they can do to make positive changes. Curricula can be designed to help children and teenagers discuss normalised consumer behaviours and introduce ideas like organic and fair trade.

Covering alternative business models, such as social enterprise and co-operative, will help challenge the current destructively narrow focus on profit maximisation within much of the business world.

Who else is working on this?

 

5. Introduce a ‘Robin Hood Tax’ on financial transactions.

What do we want?

The government should introduce a tax on financial transactions (FTT), of about 0.05% per transaction, to increase collective resources to combat worsening inequality and man-made climate change. Originally known as a ‘Tobin Tax’ after the economist who first suggested it, a campaign around it has grown up in the UK renaming it the ‘Robin Hood Tax’.

Why do we want it?

The financial sector is currently under-taxed, despite the billions such a tiny tax would generate annually. These low taxes are, in part, the cause of disastrous financial crises like the 2008 crash. Bankers have been paid £100 billion in bonuses since then, amassing great power and enormous wealth for themselves, while important services like the NHS have been hit hard by under-funding.

We understand that our precious services like the NHS cannot function with insecure funding and uncertain futures. The funding for them is out there, but remains untapped because of the political power of banking interests.

A FTT may also disincentivise and thereby slow down the vast amounts of speculative capital flowing round the world and encourage the financial sector to look at investing in productive resources instead. A FTT tax would not undermine banking activity but simply ensure sustainability, and ultimately enforce a stronger contribution to the society it is an essential part of.

Support for this tax includes major trade unions, churches, and over a thousand economists.

Who else is working on this?

 

6. Make disclosure of lending and ownership by financial institutions mandatory.

What do we want?

The government should make disclosure of lending by financial institutions to corporate entities compulsory. The disclosure of share ownership by financial institutions should also be publicly reported. In addition, financial institutions should be required to disclose at least annually: how they voted, and the reasons for their voting choice, for all resolutions in companies in which they held beneficial shares.

Why do we want it?

Financial institutions continue to fund companies involved in human rights and environmental abuses. Between January 2014 and October 2017, financial institutions invested $525 billion in the top 20 producers of nuclear weapons. In 2017 alone, HSBC invested $5.6 billion in the top extreme fossil fuel companies. Without access to capital, these nuclear weapons and fossil-fuel companies would find trading increasingly difficult.

More often than not, banks’ loans and investments are not a matter of public record. This makes it very difficult for campaigners to challenge those that fund abuses and for consumers to ensure that they are not funding such companies in turn. Transparency over lending and investments would return some degree of control to customers.

As major investors, financial institutions can also wield a significant amount of financial control within companies where they hold shares. Just 30 financial institutions control over half the shares in the world’s largest companies.

Shareholders have the power to vote in company resolutions. Such resolutions include ethical as well as business or financial decisions. We believe that financial institutions should have to report on their votes. For example, they should have to disclose whether they voted for or against a resolution to pay living wages, and why they chose to do so. This would allow individuals and campaign groups to pressure financial institutions to push for positive change.

Who else is working on this

The best performing companies in this sector are some way along on this journey already.

7. Break up technology monopolies into separate businesses and democratise ownership

What do we want

Anti-monopoly laws should be enforced to break up current tech monopolies into companies separated by their business type, and to prevent new monopolies from forming. These tech businesses should then be incentivised to democratise their ownership.

Why do we want it?

Google and Facebook accounted for two thirds of US online advertising spending in 2017, while Amazon was responsible for 75% of book sales. The profits of these corporations have enabled them to create billionaires, lobby governments, and eliminate competition around the world by either bankrupting or acquiring smaller businesses. Recent data scandals have shown just how dangerous this power can be.

Developments in technology will only exacerbate these issues. In a future where AI may begin to deploy our personal data for our own benefit and the public good (for example using medical analytics to determine the most effective healthcare), control over the information that we do or don’t share will be absolutely crucial to maintaining privacy and democratic control.

Breaking up tech monopolies is the first step towards ensuring democratic control. The biggest firms could be broken up by business type or into existing platforms. For example, Facebook could be divorced from WhatsApp, Instagram and Messenger.

These independent businesses should then be incentivised to design democratic control into their constitutions. There are many ways in which this could be done. Platform users could become members of a co-operative, for example, which could hold shares and a seat on the board.

Other models have been emerging which help users to regain control of their data and how it is shared. Several enterprises, such as Commodify.us, The Good Data and Solid, are already providing services through which internet and social media users are able to do this.

Who else is working on this?

 

8. Create a Fair Food Act recognising food sovereignty in national law

What do we want?

The UK should recognise food sovereignty in law, and integrate it into policy planning for agriculture, health, education and trade.

Why do we want it?

Malnutrition, food bank usage, obesity and hunger are all increasing in the UK. Meanwhile, over 33,000 small to medium farms closed down in the past decade, indicating what Global Justice Now calls “a series of crises in how we produce, distribute and sell food”. Under UK law, food is currently treated as a commodity rather than a basic human right.

England lacks a unified food and farming plan, with policy falling under the remit of different government departments including agriculture, health, education and trade. Key policy aims, to date, have been to maintain low prices and high yields: short-term targets that result in intensive farming and an unsustainable reliance on the fossil-fuel-based agrochemical industry.

A Fair Food Act should be created, taking a rights-based approach to food from the concept of food sovereignty, which La Via Campesina defines as: “the right of peoples to healthy and culturally appropriate food produced through ecologically sound and sustainable methods, and their right to define their own food and agriculture systems”.

National legislation has already recognised food sovereignty in Ecuador, Bolivia, Nepal, Nicaragua, Senegal, Uruguay, Venezuela and Mali; movements in Canada, Australia, Europe and Scotland, are pursuing similar goals. The UN Declaration on the rights of peasants and other people working in rural areas was drafted by food sovereignty group La Via Campesina. Such legal protections could help farmers and consumers alike to regain community control over the food system and ensure that it is both sustainable and accessible for all.

Who else is working on this?

 

9. Phase out animal testing by 2025, as the Netherlands is planning.

What do we want?

The government should introduce a complete ban on all animal testing for chemical safety, to come into effect by 2025.

Why do we want it?

In 2016, the Dutch government announced a plan to phase out animal testing by 2025, providing an example of what was possible in this space.

The US Food and Drug Administration reports that 92 out of every 100 drugs that pass animal testing fail for humans. The biochemistry of animals varies, to the point where testing on them for human benefit has little worth. Crude skin allergy tests in guinea pigs only predict reactions in humans 72% of the time, yet a combination of chemical analysis and cell-based alternative methods predict reactions 90% of the time. Developments in non-animal alternatives such as ‘organ on a chip’ have demonstrated that cruelty-free testing is viable. The growing use of AI will only accelerate this transition. Ending animal testing means more reliable, humane, and cost-effective research.

The US National Research Council called for a move away from animal testing to make toxicity “more directly relevant to human exposures.” This step would be widely popular, humane, and is becoming increasingly realistic.

Animal testing for chemical safety also affects around 115 million animals per year and is usually done without anaesthetic. It causes immense suffering as well as fear and distress.

Who else is working on this?

 

10. Ban single use plastic packaging by 2021.

What do we want?

The government should ban all single-use plastic packaging by 2021.

Why do we want it?

Global annual plastic production has reached over 300 million tonnes. A sea of plastic roughly the size of France is occupying the Atlantic Ocean – and plastic is made to last. Each year that goes by, the size of this symbolic plastic island grows. Plastic pollution affects the food chain and water sources, threatens wildlife, attracts pollutants and affects our health. Moving away from a disposable mentality and reducing consumption is key to improving the health of our environment. Reducing plastic use, adopting recycling methods, using more ‘sustainable’ biodegradable materials and moving away from single use materials can lead to cleaner oceans and less landfill.

Tesco have committed to banning single use plastic by 2019, while Costa Rica have made plans to ban it by 2021. Although other supermarkets and governments have committed to implementing a ban within ten or even twenty years, we believe it both necessary and possible to implement a ban much earlier than this. In fact, Maharashtra, a state in India the size of Japan, has already implemented a total ban.

Who else is working on this?