FRANCAISComité International de la Croix Rouge - Comments
9) Links to economic circles
-The ICRC also has links to economic powers, as its programmes inevitably interact with private companies. In an article published in 2001, general manager Paul Grossrieder stressed that humanitarian organisations’ ties to business should not be limited to commercial transactions with suppliers or sponsors. Since 1999, for instance, the Committee has attempted to encourage codes of conduct for multinational companies involved in armed conflicts. In addition to promoting international humanitarian law, the institution supports the resumption of commerce, the reconstruction of infrastructure, the development of transport and the free circulation of aid in war torn areas. While it rarely condemns economic sanctions openly, the Committee disapproves of their application in situations where this would have adverse effects on civilians. After Kuwait was liberated in 1991, for example, the ICRC questioned the necessity of an embargo that had initially been put in place to force Iraq out of the occupied territories. According to Christophe Girod, it would have been better to lift sanctions after the cease-fire was declared, even if this meant imposing them again at a later date when and if Saddam Hussein’s regime failed to respect its obligations.
-The Committee was itself a product of Geneva’s business and financial community. Its members included several important manufacturers and investors, descendants of the city’s protestant banking dynasties. While Henry Dunant’s business was a failure, his successors, Gustave Moynier and Gustave Ador, were much more fortunate. On his father’s death in 1881, Gustave Ador, in particular, inherited shares in the French and Swiss energy and transports sectors, including in PLM (Paris-Lyon-Méditerranée) railways and the Geneva gas industry company (Compagnie genevoise pour l’industrie du gaz), which had subsidiaries in Naples and Marseille. Sometimes, members even had common interests. Guillaume-Henri Dufour, for instance, headed the board of directors of the Geneva company for gas lighting (Société genevoise pour l’éclairage au gaz) between 1848 and 1875. He was followed by Gustave Ador, who joined the company in 1881 and directed it from 1891 until its liquidation in 1895, due to increased competition from electricity. Given their ties to business, the ICRC’s first leaders also developed an economic rationale to justify humanitarian activities. In their book on war and charity, Louis Appia and Gustave Moynier reasoned that it was less expensive to treat the war wounded than to train new recruits.
-The ICRC is not the only humanitarian organisation to have ties to the business world. Within the movement itself, national societies have also worked closely with this sector. The American Red Cross, for instance, has often been led by businessmen like: Henry Davison, a banker in the John Pierpont Morgan group, from 1917 to 1919; Roland Harriman, a railroad executive, from 1950 to 1953; Norman Davis, a property developer in Cuba, from 1938 to 1944; Ellsworth Bunker, who inherited a fortune made in the sugar industry, from 1954 to 1956; Frank Stanton, a broadcasting executive, from 1973 to 1979; Richard Schubert, the director of a law firm, from 1983 to 1989; George Moody, a Californian investor, from 1985 to 1992; David McLaughlin, a director of ARCO (Atlantic Richfield Company) petrol company, from 2001 to 2004; Bonnie McElveen-Hunter, the founder of an advertising agency (Pace Communications) from 2004; and Mark Everson, an auditor at Arthur Andersen, from 2007 onwards.
-Inevitably, these ties have led to conflicts of interest, especially in national societies. Rebecca Gill gives the example of the British Red Cross’ predecessor, which, after the Franco-Prussian War of 1870, invested its surplus in a weapons manufacture, Vickers Son & Maxim. Henry Davison, the leader of the “war council” at the American Red Cross (ARC) in 1917, then supported giving to France and Great Britain loans that benefited his bank, John Pierpont Morgan. Later on, the non-profit organisation was also called to account over commercial rivalries and unfair competition. In 2007, it was sued in New York by a pharmaceutical company, Johnson & Johnson, for renting its logo to traders in sanitary products. The plaintiff had exclusive rights to sell medicine carrying the red cross symbol since 1887: only in 1905 was a law passed fixing the ARC’s monopoly over the emblem for purely humanitarian purposes and confirming previous exemptions. As for the British Red Cross, it used its status as a charity to circumvent economic regulations. During World War Two, mentions Dermot Morrah, it got around the authorities’ food rationing and price controls by selling donated goods for profit, including jewellery, cigars and vintage wines. With the support of churches, schools, colonial lobbies and trade unions, which accepted automatic deductions from workers’ salaries, the organisation was able to collect tax-free donations from members of the public until June 1945. During this period, the British Red Cross accumulated £64.4 million, compared to £19.9 million during World War One…
-The ICRC also experienced conflicts of interest. During World War Two, for instance, its Central Tracing Agency (CTA) established identification files for missing persons using perforated cards and electromagnetic Hollerith machines donated by IBM (International Business Machine Corporation). As one of the few American companies that continued to do business with Nazi Germany, IBM had helped build the information system necessary to register… and eliminate Jewish populations. Another example is in the ICRC’s purchasing policies, which have been influenced by its sponsors. Thus funds provided by the Empress Shoken Kotaigo were used to buy Japanese vehicles. Likewise, the Committee assisted the Swiss dairy industry in getting rid of excess products, and sent two tons of melted cheese to Taiz Hospital in North Yemen in November 1970.
-Since then, the ICRC introduced ethical guidelines to regulate relationships with suppliers and funders. According to its president Cornelio Sommaruga as quoted by journalist Massimo Lorenzi in 1998, Committee members can no longer hold executive positions in companies that are likely to contradict the Geneva Conventions. “Imagine if a Committee member was on the board of a firm producing weapons , he said!” His comment wa s particularly relevant when examining the past of Cornelio Sommaruga’s predecessor, Max Huber. Max Huber was first attacked by the Swiss communist press in July 1936, because his firm’s subsidiary in Venetia, the SAVA (Società Alluminio Veneto Anonima), was producing aluminium and trading with the defence industry in Italy as the fascists invaded Ethiopia. From 1929 onwards, Max Huber also directed his father’s metallurgical company, Alusuisse & Oerlikon, which manufactured weapons for Nazi Germany during World War Two. When conflict broke out in 1939, Max Huber decided to donate his salary to the ICRC, but did not resign from his position. Meanwhile, his company’s factory in Singen, Germany, violated the Geneva Conventions by using OST (Ostarbeiter) labour provided by deported persons and Soviet prisoners of war captured after 1941. From an ethical point of view, Max Huber’s position was much more shocking than Norman Augustine’s, an engineer who took the reins of the American Red Cross between 1992 and 2001 after retiring from the aeronautical weapons industry, where he worked for Douglas Aircraft, LTV (Ling-Temco-Vought) and Lockheed Martin.
-The ICRC’s penchant for secrecy means it is difficult to know where things stand today. Its internal code of conduct has not been published . However, it appears that it refuses donations from arms dealers, tobacco companies, alcohol manufacturers and the pornography industry. As far as extractive industries are concerned, the ICRC has sometimes accepted logistical support from companies such as Elf, which provided trucks during the war in Congo-Brazzaville in 1999, and the Gécamines, which transported food supplies in Congo-Kinshasa in 1978. Nevertheless, the Committee has avoided working with overly controversial firms like Nestlé, which was criticised by British and German NGOs in 1974 for producing harmful milk powder for babies in underdeveloped countries. Reflecting the movement’s underlying coordination and synchronisation problems, the IFRC and national societies have not adopted the same ethical standards as the ICRC. Consequently, the Federation has received grants from Nestlé, and national societies have developed their own fundraising criteria, which differ to those of Geneva. Regarding the defence industry, many Red Crosses have logistical – and sometimes financial – support from their national army. Despite IFRC directives to the contrary, others have speculated on companies that harm the environment, present a risk for public health or raise ethical dilemmas. The Russian Red Cross, for instance, was presided by the then President Vladimir Putin’s wife when it bought 20% of the shares in a petrol holding in 2004. As for the Philippines National Red Cross, it received donations from Shell, Chevron, Total, Caltex and Unocal (Union Oil Company of California). Strangely enough, it has even accepted funding from industries that are incompatible with public health objectives, like Philip Morris and the Compania General de Tabacos.
