International Chamber of Commerce

Background

The International Chamber of Commerce (ICC) describes itself as 'the voice of world business' They describe that as national economies are now so closely interwoven, government decisions have far stronger international repercussions than they have in the past. The ICC states that they respond to this by 'being more assertive in expressing business views'. They advertise how they have direct access to national governments all over the world and that they feed business views into intergovernmental organizations on issues that directly affect business operations.

The ICC plays an active role in forging internationally agreed rules and standards and act as advocates on behalf of business 'whenever governments make decisions that crucially affect corporate strategies and the bottom line'. They influence the United Nations, the World Trade Organization 'and many other intergovernmental bodies, both international and regional'.

The ICC advertise that they have thousands of member companies and associations in around 130 countries. Members of the ICC 'include many of the world's most influential companies and represent every major industrial and service sector'.

Biographical Information

History

The ICC was founded in 1919 with the aim of serving world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. Its establishment was heavily influence by its first president Etienne Clémentel who was a former French minister of commerce. He set up the organization's international secretariat in Paris and facilitated the creation of the ICC International Court of Arbitration in 1923.

In 1924 ICC members were to be found influencing the Dawes Commission which established the international treaty on war reparations. They have also been a strong influence on the United Nations. As far back as 1945, only a year after the UN was established, the ICC gained the 'highest level consultative status' with the UN and its specialized agencies. Since this time, they have worked to ensure that the business agenda has been a strong influence in the UN, as well as through taking part and pushing their agenda with intergovernmental bodies and at other meetings such as those of the G8.

Current activities

As we reach in to the 21st Century, the ICC are reporting that they are working to build a stronger presence in Asia, Africa, Latin America, the Middle East, and the emerging economies of eastern and central Europe.

Shipping Jobs and Stashing Profits Overseas: The Coalition to Defend Tax Loopholes

In 2009, American President Obama announced measures to reform U.S. tax laws to restrict business from taking advantage of "loopholes that let companies ship jobs and stash profits overseas" .

The proposals are described as 'to crack down on illegal overseas tax evasion, close loopholes, and make it more profitable for companies to create jobs here in the United States.' As Obama states "Even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs,"... "And many are aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals." Obama describes the present system as allowing companies that create jobs overseas to take deductions on their expenses when they do not pay any American taxes on their profits. He goes on to describe how it also allows company's subsidiaries to report to the IRS that they are paying their taxes abroad, whilst telling the foreign government that they are paying it elsewhere, which results in the avoidance of paying tax anywhere at all.

Big business immediately responded to the proposals by setting up a coalition comprising large multinationals such as McDonald's, Dell and Prudential, along side about 200 trade associations which includes the American Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable. This coalition, known as Promote America's Competitive Edge (PACE), have been 'holding nonstop meetings on Capitol Hill' since the plans were revealed in March 2009. Their strategy is described as being to 'localize the fear of job losses by having companies reach out to home-state senators and representatives. After that, the companies branch out to lawmakers from states where they have employees'. The coalition describe their lobbying as being 'educational', however the spin used is laden with threats. They argue that if the proposed changes go ahead, that 'multinationals would most likely choose to move their headquarters elsewhere — taking the jobs and capital out of the United States'.

"We're going to spend whatever it takes," said Brigitte Schmidt Gwyn, senior director of congressional relations for the Business Roundtable

It is reported that the main argument used by big business is that closing these loopholes would be bad for the American economy as it would weaken business by causing a decrease in their stock value. This leads to the threat of businesses being taken over by foreign companies or of leaving the country altogether. Ensuring that a company pays its fair share in taxes may result in a dent in their bottom line, but as Obama argues, the 'way to make American businesses competitive is not to let some citizens and businesses dodge their responsibilities while ordinary Americans pick up the slack.' At present, the top corporate tax rate is 35%, yet according to the Treasury Department it is estimated that in 2004 (the most recent year for which data is available), American multinationals paid $16 billion in taxes on $700 billion in foreign income. This translates into an effective tax rate averaging at 2.3%. Closing these loopholes and ensuring that big business pays it dues like everyone else is estimated to save American taxpayers $210 billion over the next 10 years, it is proposed that the changes take effect from 2011. Two examples of companies avoiding American taxes are given by the New York Times. These are General Electric who, according to their 2008 annual report, has deferred American taxes on $75 billion in foreign profits by keeping them outside the United States (they say they have no plans to ever repatriate that money) and Citigroup, which has deferred taxes on $22.8 billion in foreign income.

$86.5 billion would be raised by ending the practice of companies creating foreign subsidiaries to shift income in ways that avoid taxes.. The business lobbyists argue that businesses 'locate overseas not to cheat on their taxes but because that's where the growth markets are'. However a prime example which contradicts this argument is given by Obama when he describes one building in the Cayman Islands that houses the headquarters of over 12,000 business. As he states, 'either this is the largest building in the world or the largest tax scam in the world... And I think the American people know which it is. It's the kind of tax scam that we need to end'.

The New York Times reports that companies that would be especially hit by the proposals are pharmaceutical, technology, financial and consumer goods companies. They named Goldman Sachs, Microsoft, Pfizer and Procter & Gamble (who have major overseas operations or subsidiaries in tax havens like the Cayman Islands) as being amongst the most affected. The Government Accountability Office is reported to have found that 83 of the 100 largest American companies have subsidiaries in tax havens. The report listed 83 subsidiaries for Procter & Gamble alone, and Financial services companies were shown to have even more: with Citigroup showing 427 and Morgan Stanley 273.

Views

The ICC are advocates and champions of the self-regulation model of business. They advocate that business operates most effectively with a minimum of government intervention and that codes of conduct and the likes should be purely voluntary agreements.

Subsidiaries

• The International Chamber of Commerce United Kingdom is the ICC's UK arm and one of many chambers across the globe which makes up the International Chambers of Commerce. In 2006, the ICC-UK is governed by Chairman Paul Skinner, who is also Chairman for Rio Tinto. Other governing members include Jan du Plessis Chairman of British American Tobacco, Gavin Neath Chairman of Unilever UK and Pauline Neville-Jones Chairman of the Information Assurance Advisory Agency (IAAC)

• International Court of Arbitration - The ICC International Court of Arbitration is the longest established institution of the ICC network. It was formed in 1923 and is described as 'the world's leading body for resolving international commercial disputes by arbitration'. It is reported that in 2004, 561 Requests for Arbitration were filed with the ICC Court concerning 1,682 parties from 116 different countries and independent territories.

• The World Chambers Federation - (formerly known as the International Bureau of Chambers of Commerce) was set up in 1951 to represent and strengthen links between chambers worldwide and in doing so promote the view of the Chamber of Commerce as an 'essential intermediary between business and government and between business and the general public'.

• Institute of World Business Law - this ICC institution acts as a think-tank which works closely with the ICC policy commissions and the ICC's International Court of Arbitration. This institute holds an Annual Meeting which brings together 'some of the world's leading legal experts' to network on a chosen topical issue with the aim of establishing a 'doctrine'. The Chairman of this institute is Serge Lazareff.

• The International Maritime Bureau, the Counterfeiting Intelligence Bureau and the Financial Investigation Bureau are London based services which were set up by the ICC in the early 1980's to combat commerical crime. In 1998 a cybercrime unit was also established. These services are coordinated by an umbrella organization, the ICC Commercial Crime Services and they work to fulfill the ICC's pledge of ensuring 'effective and consistent action in the economic and legal fields in order to contribute to the harmonious growth and the freedom of international commerce'.

Affiliations

UN Global Compact and the 'creeping corporate takeover of the UN'

The UN Global Compact was established in 2000 with the stated aims of encouraging companies to sign up to agreements of principles relating to human rights, labour standards, environmental protection and anti-corruption. This is a voluntary initiative which states one of its aims as to work towards the UN's Millennium Development Goals.

In 2002, Jupiter wrote in the Guardian of how the creation of the Compact reflected a 'creeping corporate takeover of the UN itself'. One of the key players instrumental in setting up the Compact was the International Chamber of Commerce (ICC), the world business organisation which describes itself as 'the voice of world business'. In the words of Jupiter:

'The ICC has been involved with blocking the agreement of several international environmental standards, including the Kyoto protocol on climate change, the Basel convention on toxic waste and the convention on biological diversity. Given this environmentally challenged track record, the fact that the ICC played an instrumental role in setting up the compact should set the alarm bells ringing. After the Seattle protests in 1999, the momentum for corporate globalisation was in danger of stalling. Campaigners pressing the case for international regulation on the environment, labour standards and human rights, staged highly effective protests against the way businesses had acted to craft an international economic order to promote their own ends. For defusing this pressure, what better remedy than to co-opt the UN through firms adopting aims apparently aligned to its peace, security and environment agenda?'

As Annan himself has acknowledged in addressing the UN's general assembly, "The global compact is not intended as, and does not have the capacity to be, a corporate code of conduct or global standard,". There is no systematic scrutiny of corporate performance against the Compact's principles and Juniper reports that the ICC had 'been at pains to prevent the compact from having compliance or monitoring mechanisms'.

Juniper describes the Compact as acting as a smokescreen for corporations to hide behind, an effective method of positive PR with little cost or effort. The article reports that the actions of companies reinforce the strong impression that the Compact is little more that a 'public relations vehicle for companies'. DaimlerChrysler is one example given when the 'automotive mammoth' published a booklet with a picture of one of its senior executives, Matthias Kleinert, shaking hands with Annan in front of the UN flag. The article continues by stating that, 'they are not alone in exploiting this opportunity for public relations purposes: Nike's Phil Knight pulled off a similar photographic coup, while chemicals giant Bayer has cited its membership of the compact as a means of dealing with public criticisms. It is thus difficult not to see the compact as providing a very effective (and cheap) public relations vehicle for international business, while requiring executives to do nothing more.'

Clients

The ICC website states that 'through membership of ICC, companies shape rules and policies that stimulate international trade and investment. These companies in turn count on the prestige and expertise of ICC to get business views across to governments and intergovernmental organizations, whose decisions affect corporate finances and operations worldwide'. In 2009, their members are listed as:

3M | ABB | Ahold | AIG | Akzo Nobel | Aracruz | Areva | Ariel Finance | AT&T | Baker & McKenzie | Banco Bilbao Vizcaya Argentaria | Bank of Tokyo-Mitsubishi UFJ | Barclays Bank | British American Tobacco | Bata | Becker Consulting | BG Group | British Telecom | Byucksan | Cadbury Schweppes | Canon | Chevron | China Construction Bank | China Ocean Shipping Co. (COSCO) | Chinese International Trust & Investment Corp. (CITIC) | Citigroup | Clifford Chance | Coca-Cola | CRA International | Crédit Suisse | Daimler | Danske Bank | Deloitte & Touche | Dentsu | DHL | Diageo | Dow Chemical | Du Pont de Nemours | Eastman Kodak | Ebay | El Corte Inglés | Electrolux | Ericsson | Ernst & Young | ExxonMobil | Federal Express | Fiat | First Gulf Bank | Ford | Fujifilm | Gas Natural | GCC Cementos SA | General Electric | General Motors | Georgia-Pacific | GlaxoSmithKline | Groupe Office Chérifien des Phosphates (OCP) | Groupe ONA | Handelsbanken | Hewlett-Packard | Hitachi | HSBC | Hyundai Corporation | Iberdrola | IBM | ICI | Imtech | ING | Jardine Matheson | Johnson & Johnson | JK Organisation | J.P. Morgan Chase | Kajima | Kesko Corporation | Kikkoman | Koç Holding | Kone | KPMG Peat Marwick | KPN | La Caixa | Leo Burnett | LG Electronics Inc. | Lockheed Martin | MAPFRE | Marubeni | Matsushita Electric | Mattel | McDonald’s | McGraw-Hill | Merck | Metso | Microsoft | Mitsubishi | Mitsui & Co | Monsanto | Motorola | NEC | Nedlloyd | Nestlé | Nissan Motor | Nokia | Nordea | Norsk Hydro | Novartis | NYK Line | OCBC | Oracle | Osaka Gas | Pfizer | Philips | PricewaterhouseCoopers | Procter & Gamble | Rabobank | Randstad | Renault | Rio Tinto | Rizal Commercial Banking Corporation | Robert Bosch | Romanian Commercial Bank | RWE | Samsung | Sara Lee | Sberbank | SCA | SEB | Shell International | Skanska | SKF | Sony | Standard Chartered Bank | Swedbank | Tata Group | Telecom Italia | Telefonica S.A. | TeliaSonera | Time Warner | Tokio Marine & Nichido Fire Insurance | Tokyo Electric Power | Toshiba | Total | Toyota | UBS AG | Unicredit Bank | Czech Republic | Unicredit Bank Russia | Unilever | UPM-Kymmene | UPS | US West | Vattenfall | Veolia | Vnesheconombank | Visa International | Vivendi | Volvo | VTB Bank | Wärtsilä Corporation | Westinghouse | Westpac Banking | Wimm-Bill-Dann Foods | Wing Lung Bank | Xerox

Publications, Contact, Resources and Notes

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