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Ethical Consumerism is an important movement toward corporate reform, through which individuals recognize their own role in systems of oppression, and take personal steps toward resistance and  positive change.

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From Knowmore.org

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[edit] Criticism

[edit] Human Rights

• US banks named in Holocaust suit: "A week ago, the United Kingdom's Barclays Bank agreed to a $3.6m payout to compensate the families of those whose assets were seized by Barclays branches in France during the Nazi occupation."

Barclays 2007 Sustainability Report stated that “We also want to ensure that we uphold human rights, in the projects that we finance, the communities in which we operate and among our employees.”[1] In the past Barclays Bank has not had the same focus and even today cases arise that question Barclays commitment to being a responsible company.

Its history is not short on controversy with it being complicit in the slave trade, a decades long tie with South Africa’s apartheid regime and its financial support for Zimbabwe’s Robert Mugabe.

Barclays 2007 Sustainability Report stated that “We also want to ensure that we uphold human rights, in the projects that we finance, the communities in which we operate and among our employees.” In the past Barclays Bank has not had the same focus and even today cases arise that question Barclays commitment to being a responsible company.

SOUTH AFRICA:

Barclays were under intense scrutiny in the 1980s for its financial support for South Africa’s racist apartheid regime. The company legacy was re-evaluated in 2005 when it attempted to purchase one of South Africa’s largest banks, Absa. Activist groups ‘Jubilee South Africa’ and Khulumani organized large-scale protests and marches against the potential purchase and reminded observers of Barclays’ past support for the apartheid regime. Citigroup, Commerzbank, Duetsche Bank AG, JP Morgan Chase, Credit Suisse Bank were also guilty of providing funding for the regime at a time when embargoes were in place to delegitimise the racist regime. Khulumani writes, “in 1980, for example, the South African Government issued a DM120 million public bond on the Eurobond Market. The response from the banks was enthusiastic, oversubscribing the bond by 25%. Funding repression was extremely profitable.” Barclays denied and continues to deny any wrongdoing, even up to and beyond the Khulumani v. Barclays lawsuit. The original documents and the case for Barclays’ guilt can be found at http://www.cmht.com/cases_apartheid.php.[See ‘Funding Repression: How International Finance Gave Life to Apartheid’ pdf at http://www.apartheid-reparations.ch/en/suedafrika.php]

Segregation and repression requires money. Barclays and many other banks were willing to oblige and provided money for segregation (Group Areas Act). However, Barclays went beyond this and actually funded armed repression. “In 1976, the year when South African rose up in rebellion and struggle for freedom, Barclays National Bank held a public ceremony and handed a cheque for 10 million rand to the head of the of the Defense Force. At that same ceremony, the head of Barclays National Bank's managing director, Bob Aldworth stated that "the bank regards the subscription [the 10 million rands] as part of its social responsibility not only to the country at a particular stage in its history, but also to our staff members who have been called up.”[2] Furthermore, Barclays were part of the US$14 billion debt repayment standstill developed by 260 banks. Its criminal support for a condemned regime continued for many years. Between 1972 and 1979, Barclays helped South Africa obtain nearly US$500 million in loans, it participated in a US$15 million Eskom Eurobond issue, purchased R20 million of SASOL shares. Barclays’ loans to South Africa in just two years between 1982 and 1984 totaled US$725.4 million.[3] Barclays Bank only withdrew its support when it was forced to. A student boycott of the corrupt bank in 1986 eventually forced Barclays to withdraw from the country, only after the boycott damaged Barclays’ profits. Barclays’ share in the UK student market dropped from 27 to 15 per cent.[4] For further information concerning South African protests against Barclays re-intrusion into the country please see ‘Jubilee Grabs Barclays and Absa by the Horns!’ at http://www.apartheid-reparations.ch/en/suedafrika.php

Jubilee and the Khulumani Support Group filed a lawsuit against Barclays and many other Western banks for their support for apartheid.[5] The Khulumani Support Group asserts, "This is the only route left open to us to ensure that the truth is known about the extent of corporate complicity in apartheid abuses and that justice is delivered to those who suffered. The victims cannot be left to pay for their own suffering. Multinational corporations must be put on notice that complicity in crimes against humanity does not pay."[6] On October 12, 2007, the Second Circuit Court of Appeal in New York issued its ruling in the Khulumani et al v. Barclays et al lawsuit. The U.S. court stated that the case would be allowed to proceed, it set a precedent for those seeking reparations for unlawful or unjust conduct of corporations in other nations.[Khulumani et al v. Barclays et al, ‘Brief of Amici Curiae International Human Rights Organisations, TRC Commissioners, and Others in Support of the Plaintiffs,’ United States District Court Southern District of New York, 29 September 2004, accessed at http://www.cmht.com/pdfs/AmicusBriefAsFiledSeptember292004.PDF]

To find further information on the court case and recent activism against Barclays please contact:

USA: Salih Booker, Director: Africa Action, tel. +1 202 546 7961; Bill Fletcher, Director: TransAfrica, tel. +1 202 223 1960; Michael Hausfeld, Cohen, Milstein, Hausfeld & Toll PLLC, tel. +1 202 408 4600

Britain: Euan Wilmshurst, Director: Action for Southern Africa (ACTSA), tel. +44 20 7833 3133; Aditi Sharma, Campaigns Manager: Action for Southern Africa (ACTSA), tel. +44 20 7833 3133

ZIMBABWE:

While past actions may be dismissed due to archaic business practices, criticism of Barclays continues today in the era of supposed corporate responsibility. For instance, Barclays explains:

“During 2007, we worked with a team of 11 other financial institutions to develop an online resource for banks on the human rights issues associated with lending. This is a complex area covering many different issues. The resource is designed to be practically structured and commercial, helping lenders identify potential risks and evaluate ways they might be reduced or managed. It covers the issues to watch for in specific sectors, which might range from health and safety, to poverty and sustainable development.”[7]

Despite claims of high ethical and human-rights standards it is not difficult to highlight cases of Barclays’ hypocrisy and unethical actions. Recently it has provided £30 million to financially aid Robert Mugabe’s seizure of white-owned farms and the expulsion of 100,000 black workers from their homes.[8] Facing widespread criticism, Barclays could only offer a meek response that failed to apologize for its complicity in human rights abuses. “Barclays spokesmen say the bank has had customers in Zimbabwe for decades and abandoning them now would make matters worse, 'We are committed to continuing to provide a service to those customers in what is clearly a difficult operating environment."[9]

Furthermore, The Guardian and The Zimbabwe Times reports that Barclays have illegally ignored European Union sanctions against Mugabe’s corrupt regime by supplying two of Mugabe’s most senior henchmen bank accounts. Liberal Democrat M.P. Norman Lamb remarks that, “there are at least two members - and I understand maybe four - of Mugabe's regime on the sanctions list who have received personal banking services from Barclays. [These are] individuals who are involved in the land-grab strategy, which has wreaked economic havoc on the country. One individual faces serious accusations of personal involvement in that process."[10]

Barclays Bank was able to avoid sanctions by providing funds through a local Zimbabwean branch. Local companies escape the net of European sanctions. “Mr Lamb said: "Had these services been provided by an EU-based company, there would have been a clear breach, but Barclays managed to avoid the sanctions regime…Surely it is scandalous that a British company – via a local subsidiary – is providing financial support and sustenance to this brutal regime and to key figures within it.””[11] These figures include Didymus Mutasa, the national security minister, Elliot Manyika, a key figure in the violence surrounding the 2008 elections, and Nicholas Goche, minister of public service, who is said to have masterminded seizure of white farmlands.[12]

It is with this in mind that we get a clearer picture of what Barclays human-rights efforts involve, if you remember the bank helped “develop an online resource for banks on the human rights issues associated with lending. The resource is designed to be practically structured and commercial, helping lenders identify potential risks and evaluate ways they might be reduced or managed.” This online resource may not even be for the prevention of human rights abuses or to strengthen corporate responsibility but to aid the P.R. response to corporate criminality. Norman Lamb also claims Barclays bank had lent Mugabe’s regime £110 million for the use in its tobacco, mining, sugar, manufacturing and horticulture industries.[13] There are further suggestions that Barclays Bank have handled more than $170m of corrupt Nigerian General Abacha's personal funds.[14]

You can take action against Barclays’ funding of Mugabe by signing an online petition at: http://www.thepetitionsite.com/takeaction/141545352

Tanzania

Barclays claims it scrutinizes and evaluates any business deal before proceeding. Nevertheless, in 2001 Barclays Bank was happy to provide a loan for Tanzania’s government in order to purchase a highly unnecessary and exorbitant military air defence system from BAE for £28m.[15] Norman Lamb explains the unethical behaviour surrounding the deal: "A modern civilian air traffic control system can cost as little as £3.5m… The Department of Trade and Industry, with the apparent support of the prime minister, has colluded with British Aerospace and Barclays Bank in foisting an expensive and unnecessary arms deal on the desperately poor people of Tanzania.”[16] Oxfam’s Head of Policy, Julian Forsyth, believes “It is outrageous that Tanzania’s debt relief will go towards bolstering the profits of BAE and Barclays bank, rather than helping the poor people of Tanzania.”[17]

• US banks named in Holocaust suit

"A week ago, the United Kingdom's Barclays Bank agreed to a $3.6m payout to compensate the families of those whose assets were seized by Barclays branches in France during the Nazi occupation."

[edit] Environment

Barclays Bank has made a commitment “…to being carbon neutral globally in 2009 and have set tough standards to reduce our waste and increase our recycling. We are also stepping up our efforts to source our goods and services from suppliers that have the highest standards. We also want to ensure that we uphold human rights, in the projects that we finance, the communities in which we operate and among our employees.”[18]

It has already been shown the far from upholding human rights, Barclays have been guilty themselves of supporting human-rights abuses over the course of several decades. Despite a noble goal of attempting to be carbon neutral by 2009 (we have no figures as to whether Barclays is on course for this), Barclays has been shown to actually fund fossil-fuel burning companies such as E.On. While hoping to gain carbon neutrality, its net effect of funding E.On to the tune of $5.79bn will massively counteract the small environmental gains of carbon neutrality. “Coal is the dirtiest and most inefficient fossil fuel there is," said Duncan McLaren, chief executive of Friends of the Earth Scotland, Barclays Bank alongside others are “…providing the financial means for companies to build unabated coal-fired power stations and dig new coal mines all over the world, yet still refuses to disclose full information on the fossil fuel projects it helps finance or to take any responsibility for the emissions that result.”[19]

[edit] Pay Deals and Overcharging

In an era of ‘the credit crunch’ in which families are struggling to pay energy bills (energy prices in the UK have shot up around 50% over the past year), the elderly and poor are finding it difficult to warm their homes, it is outrageous that board director Bob Diamond took home £27 million last year. The Guardian reports that “In addition, the American banker is in line for a further £14.8m this year if a three-year performance pay plan achieves its goal. He could also be awarded shares worth £13m if the bank reaches its performance targets.”[20] It is stated that this is ‘performance-related pay’, however, Bob Diamond preceded over the calamity that was the credit crunch. Profits have slumped, shares have dwindled and Northern Rock Bank has folded, nevertheless, the reward for this is apparently over £50 million. Just don’t hope that Barclays have a good business year.

Before consumers cottoned on and before consumer groups advised consumers how to respond, Barclays was heavily involved in over-charging customers for small mistakes such as temporary stepping over overdraft limits. Penalties were charged to the customer, however, it was eventually found out that the large sums demanded had no relation to the actual cost to the bank. Barclays and similar high-street banks claimed the money was needed for administrative costs. “Managers at Barclays boasted to an undercover reporter that bouncing a cheque or stopping a direct debit costs the bank as little £1.50 or £2 to administer.”[21][22] In spite of this, Barclays still charged customers up to ten times the actual cost. The Office of Fair Trading declared these acts unlawful and suggested ways to claim this money back.

A good summary of world bank’s ethical behaviour is provided by Prem Sikka and is worth quoting at length:

“Anyone visiting the websites of banks or browsing through their annual reports will find no shortage of claims of "corporate social responsibility". Yet their practices rarely come anywhere near their claims.

In pursuit of higher profits and bumper executive rewards, banks have inflicted both the credit crunch and sub-prime crisis on us. Their sub-prime activities may also be steeped infraudand mis-selling of mortgage securities. They have developed onshore and offshore structures and practices to engage in insider trading, corruption, sham tax-avoidance transactions and tax evasion. Money laundering is another money-spinner.

Worldwide over $2tn are estimated to be laundered each year. The laundered amounts fund private armies, terrorism, narcotics, smuggling, corruption, tax evasion and criminal activity and generally threaten quality of life. Large amounts of money cannot be laundered without the involvement of accountants, lawyers, financial advisers and banks… Banks are not going to voluntarily embrace honesty, integrity or social responsibility. Without tougher regulation, breaking of the link between profits and executive remuneration and personal penalties on company executives for wrongdoings there is no chance of banks behaving responsibly. Politicians are doing little to translate public concern into effective policies.”[23]

[edit] Improvements

You have to give praise where praise is due. Barclays Bank in the UK have led the way in their treatment of disabled employees and customers. Indeed, “Barclays Bank has won an award which recognises best practice and innovation on disability by a UK business. The award is part of the Business in the Community Awards for Excellence and aims to profile innovative work by UK business on disability.”[24]

Their goal of carbon neutrality, which has already been noted, is worthy of praise even if its gets near to that goal by 2009. Similar high-street banks have not even begun to look into environmental awareness.

Furthermore, Barclays supports a range of local initiatives:

“Rachael Barber Global Head of Community Investment says: "Banking on Brighter Futures covers a huge range of different projects, from major initiatives such as the £3.5m Barclaycard Horizons programme in the UK which has so far benefited 89,000 lone parents and their children, right through to Barclays Capital’s programme with YWCA in New York which involves 24 employees acting as mentors and has already helped six women find employment."[25] resume writing service